Navigating lab claim denials: strategies to minimize revenue loss

In this online exclusive Q&A, Roshan Patel, Founder & CEO of Arrow, discusses laboratory testing claim denials and best practices in minimizing revenue loss with MLO Editor-in-Chief, Christina Wichmann.

Claims denials tied to laboratory testing continue to rise. From your perspective, what are the most common reasons lab claims are being denied today, and where do labs tend to get caught off guard?

Most lab denials still come down to basics breaking at scale. Missing or mismatched diagnosis codes. Medical necessity that technically changed but wasn’t obvious. Incomplete ordering information from referring providers. The test itself is usually fine. The paperwork around it isn’t.

Where labs get caught off guard is how fast payer rules change and how quietly those changes happen. Something that paid reliably a few months ago suddenly needs different documentation or a tighter diagnosis match. No alert. No warning. If you’re relying on manual checks or static rules, you don’t notice the problem until denials start piling up. And by then, a lot of revenue is already at risk.

As billing and coverage rules for laboratory testing continue to change, where are laboratories most at risk of losing revenue, and which errors tend to be the most costly?

The biggest losses don’t usually come from one massive mistake. They come from small errors repeated thousands of times.

Medical necessity failures are a big one. So are outdated payer rules and not realizing that denial behavior has shifted until it’s too late. Another costly issue is treating denials as one-offs instead of signals. When teams appeal claims individually but don’t step back to see patterns, the same problems keep happening across the entire book of business.

That’s when revenue leaks quietly. A/R stretches out. Teams spend more time reworking claims than preventing issues in the first place.

As labs face staffing shortages and growing test volumes, how can automation or smarter revenue cycle tools help reduce denials while improving transparency for patients?

The key is using automation to support billing teams, not replace them.

The best tools help teams see what’s changing. Which payers are denying more. Which codes are suddenly riskier. Which claims are most likely to fail. That allows billers to focus their time where it actually matters instead of chasing everything.

At scale, this means fewer claims falling into limbo and faster resolution when something goes wrong. For patients, that translates into fewer surprise bills, clearer explanations, and faster answers. Transparency improves when claims don’t disappear into black holes.

Looking ahead, what changes do laboratories need to make to protect revenue while delivering a clearer, more patient-friendly testing experience?

Operationally, labs need to stop running the revenue cycle reactively. Waiting for denials and then scrambling isn’t sustainable anymore. Teams need real-time visibility into what’s breaking, faster feedback from payer responses, and tighter coordination between ordering, billing, and follow-up.

Strategically, the shift is toward systems that learn. Payer rules will keep changing. Volumes will keep rising. Labs that invest in tools that adapt over time (not just rules that get outdated) will be able to scale without burning out their teams.

And when the back office runs with more clarity, patients feel it too. Fewer errors. Shorter billing cycles. A testing experience that feels transparent instead of frustrating.