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Industry Insights

Watch for Shifts in COVID Testing Pay Ratio as Emergency Ends

By: Ann Lambrix, VP of RCM Consulting, Lighthouse Lab Services.

About this article: Our monthly “RCM Industry Spotlight” series highlights timely findings from Lighthouse’s proprietary RCM Spotlight denial management tool. If you’d like to learn more about how Spotlight utilizes AI to improve your RCM processes and increase your collections, feel free to reach out to us directly to learn more about our free trials.

At Lighthouse RCM Consulting, we find the true measure of your lab or group’s financial well-being is not just how much you are paid, but how often. With this in mind, do you know your pay ratio for your billable procedures?


For this month’s Spotlight, we are focusing on COVID testing and recent coding changes

On May 11 COVID testing codes were changed due to the expiration of the longstanding Public Health Emergency (PHE). HCPCS codes U0003 and U0004, previously used to seek a higher reimbursement for high-throughput testing, are now no longer effective. Billing guidance from CMS now indicates that CPT 87635 should be submitted. We are advising this change is based on Date of Service, not claim submission date.

Understanding a pay ratio is especially important for changes such as these. Benchmarking against a key performance indicator (KPI) or metric allows billing teams to pivot their priority to those codes and payers that may be falling below the average.

Our current data for COVID testing is reflecting a 90% pay ratio. That means that a COVID test is paid 90% of the time. But, with that in mind, what are the top denial trends causing the pay ratio to be below 100% when billing high-throughput codes?

Covid testing pay ratio spotlight on spotlight

However, labs previously utilizing these high-throughput U-codes should be aware our data shows 87635 has a pay ratio of roughly 70%, meaning your collections could be negatively impacted by the elimination of the PHE testing codes.


Looking ahead

RCM Spotlight allows for our team to evaluate this information and identify recoverable or avoidable denials for our clients before they become problem areas. With the end of the PHE and policy changes impacting payments and denials, this tool will help you be proactive in identifying payment and denial trends that can be rectified and turn into additional revenue for your lab.

Interested in learning more about Spotlight and Lighthouse RCM Solutions? Contact us today for a free consultation.


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