Mid-Year 2025 Lab Revenue Health Check: Overcoming Denials and Billing Gaps

As 2025 reaches its halfway mark, clinical and pathology labs across the country are asking a critical question: Are we hitting our revenue targets or falling behind?

With rising payer complexity, shrinking reimbursements, and evolving compliance demands, many labs are realizing that the billing processes that worked in the past aren’t working anymore. Without course corrections, the second half of the year could bring even greater financial strain.

Let’s look at the biggest revenue pitfalls facing labs this year and how to address them before Q4.

2025: A Challenging Year for Lab Billing

Recent industry data reveals several worrying trends:

• Denials are increasing
  More than 60% of medical practices have seen an increase in claim denials compared to last year. Labs are among the hardest hit, often due to issues like frequency limitations and missing prior authorizations.
• High-volume test scrutiny is tightening
  Insurers are more aggressively auditing tests like lipids and hormone panels, demanding justification for repeat orders and stricter documentation.
• Reimbursement rates are under pressure
  Medicare payments to pathology groups have dropped 6% since January 2025, and Protecting Access to Medicare Act (PAMA), a U.S. federal law enacted in 2014 related cuts continue to suppress lab test payments.

These challenges make optimizing your revenue cycle operations more critical than ever.

Five Common Revenue Pitfalls for Labs

1. Incomplete Documentation
   Missing orders, and poor clinical documentation consistently trigger denials and payer audits.
2. Coding Errors
   Inaccurate CPT codes, improper modifier use, or ICD mismatches lead to lost payments and rework.
3. Disconnected Systems
   When laboratory information system (LIS), billing, and electronic health record (EHR) platforms don’t sync, it causes submission delays, data errors, and revenue leakage.
4. Cybersecurity Incidents
   Billing operations are increasingly vulnerable to cyber threats, and unprotected systems can lead to complete operational shutdowns
   • Change Healthcare (Feb 2024): Ransomware attack disrupted claims processing nationwide, affecting hospitals and pharmacies. Estimated losses exceeded $1.5B.
   • Ascension Health (May 2024): Ransomware forced 36-day EHR outage; care was delayed across 140+ hospitals.
   • Synnovis Labs – UK (July 2024): Lab disruptions led to 1,000+ canceled surgeries after ransomware attack.
   • Episource (Jan 2025): Breach exposed medical and billing data of 5.4M individuals.
   • Medusind (Dec 2023): Medical billing vendor hacked, impacting over 700,000 patient records.
5. Changing Compliance Rules
   From March 2026, Clinical Laboratory Improvement Amendments (CLIA) labs must proactively adjust workflows to stay compliant and avoid penalties.

Use These Mid-Year KPIs to Protect Your Year-End Revenue

Use these benchmarks to evaluate the health of your lab’s revenue cycle:

If you’re off track in any category, it’s time for a targeted intervention.

Actionable Steps to Boost Revenue

Many labs are achieving measurable improvements within just 60-90 days by focusing on the following key areas:

• Implementing pre-submission validation tools to identify documentation gaps, coding inaccuracies, and modifier errors before claims are submitted.
• Integrating LIS, EHR, and billing platforms to ensure seamless data flow and reduce manual entry errors.
• Providing ongoing staff education and training on current documentation standards, coding guidelines, and payer-specific requirements.
• Leveraging AI-powered denial tracking and root cause analysis to proactively identify patterns and implement corrective actions that reduce recurring denials.

Where HealthRecon Connect Comes In

Labs across the country are feeling the impact of rising denials, delayed reimbursements, and inefficient billing workflows, yet many lack the internal resources to resolve these issues effectively. That’s where HealthRecon Connect delivers measurable value.

We provide tech-enabled, lab-specific RCM solutions that streamline operations, reduce revenue leakage, and offer complete visibility into your financial performance.

Here’s how we support modern labs:

1. Comprehensive RCM for Labs

From eligibility verification and coding to claims submission, follow-ups, and payment posting, we manage every stage of the revenue cycle, allowing your team to focus on diagnostics and delivering quality patient care.

2. LIS and EHR Integration

We integrate directly with your existing Laboratory Information Systems (LIS) and Electronic Health Records (EHR) to enable seamless data sharing, reduce manual entry, and cut down claim submission errors.

3. Denial Prevention & Smarter Prior Authorizations

Our proactive workflow minimizes denials and accelerates prior authorizations for tests requiring payer approval, preventing unnecessary delays in both care and payment.

4. Real-Time KPI Dashboards

With customized reporting, labs can track denial rates, aging AR, collection performance, and claim status, enabling faster and data-driven decisions.

5. Proactive Compliance
   Our experts continuously monitor payer policy changes and regulatory updates to keep your billing practices fully compliant and audit-ready, eliminating guesswork and avoiding unexpected setbacks.

The Results We Deliver

Partnering with HealthRecon Connect has helped lab clients achieve:

• Up to 40% fewer denial-related revenue losses.
• 2x faster claim-to-cash turnaround.
• Shorter AR cycles and stronger overall collections.

Whether you’re a startup lab or a large-scale diagnostic group, we bring the RCM expertise and infrastructure to help your organization thrive in a rapidly evolving healthcare landscape.

Don’t Wait Until Q4 to Fix Q2 Issues

If you’re not confident in your current revenue trajectory, now is the time to act. A mid-year review can help identify inefficiencies, close revenue gaps, and set your lab up for success in the second half of 2025.

HealthRecon Connect partners with labs nationwide to improve financial performance, streamline billing workflows, and reduce denials through expert-led, tech-powered RCM services.

Contact us today to schedule a tailored lab revenue assessment.
Visit: HealthReconConnect.com
Email: sales@healthreconconnect.com