Best Lab Billing Companies (Outsourced Lab RCM)

Most outsourced lab billing is sold as a share of what the company collects for you. ADS says so on its own lab page: “Outsourced lab billing is usually priced as a percentage of collections.” It adds that ADSRCM uses a sliding scale based on volume and quotes only after reviewing the lab.

The others describe the shape, not the rate. XiFin sells outsourcing as a variable cost that “aligns with testing or device volume changes”, against the fixed cost of an in-house team. PGM calls its fee “incentive-based”. TELCOR describes its own cost model as “Transparent, No Hidden Fees” and says other providers' fees may include a percentage of collections. Quadax publishes no fee basis on the pages we read.

What Medicare says about a percentage fee

Medicare will pay a billing company in the lab's name only if its pay “is not related in any way to the dollar amounts billed or collected” and does not depend on collection (§ 424.73(b)(3), applied to suppliers by § 424.80(b)(5)). The Claims Processing Manual explains that those conditions “do not apply if the agent merely prepares bills for the provider and does not receive and negotiate the checks” (Ch. 1 § 30.2.4). In practice, a percentage deal works when Medicare pays into the lab's own account and the biller only prepares and follows up the claims.

The fee is one line of a billing contract, and rarely the one that hurts. Lighthouse Lab Services, a lab consultancy that audits billing companies for labs, lists the terms it checks in its guide to lab billing contracts. We kept the terms and left out its benchmark figures.

Lighthouse's advice on renewals is specific: an evergreen clause can lock a lab in for years if it misses a notice window months before renewal, so look for the right to leave on 90 days' notice after the first term. Ask too what happens to claims still open on the day you leave; the company will want to keep working them, and the contract should say on what terms.

All five also sell the platform their billers use. Quadax names three models outright: software your staff runs, full-service billing, and a hybrid. XiFin says a lab can outsource all or part of its billing and move between the models as its needs change. TELCOR runs its service team on the software it licenses, ADS runs ADSRCM on MedicsPremier, and PGM licenses its own lab billing software too. The two platforms behind TELCOR's and XiFin's services are set side by side in XiFin vs TELCOR compared.

That matters on the day you want to leave. If the company's software is what you would run in-house, bringing billing back can mean hiring billers rather than migrating systems. If not, plan for a data export and an LIS interface rebuild. The software side of the same vendors is compared in lab billing software compared.

A third option: an auditor, not a biller

Some labs keep their biller and pay someone else to check it. Lighthouse Lab Services sells revenue cycle audits, payer contracting and help choosing a billing company. Its pages describe consulting and audits rather than running claims, so it is not in the table above. Its lab director work is in our lab director and consulting services comparison.

1. Which of our payers will you enroll us with, and who keeps the revalidation dates?
2. How do our accessions reach you: an HL7 interface from our LIS, a file, or keying? Who builds and maintains it?
3. Who on your team codes our claims, and what do you do when a requisition has no diagnosis code?
4. Where do Medicare payments land, and what exactly is your fee a share of?
5. How many appeal levels do you file before writing a claim off, and do you tell us before you do?
6. How many statements does a patient get, and who answers when the patient calls?
7. Which reports do we see without asking, and can we see denials by payer and by test?
8. Where is the work done, and can we audit your coding?
9. If we leave, who works the open A/R, on what terms, and in what format do we get our data back?

Know the lines a biller will put on your claims before the first call: the QW modifier for CLIA-waived tests, CPT 36415 for the blood draw, the rates in the Clinical Laboratory Fee Schedule, and your CLIA number, which CMS asks you to include on all laboratory services claims (look up a CLIA number).