blue connect dots

Myndshft Blog

blue connect dots

July 22, 2019

The Perils of Bad Debt at Diagnostics Labs

by Developer | Revenue Cycle Management

Revenue cycle departments at diagnostics labs face some really daunting challenges when it comes to managing patient copays and billing. 

We wanted to get a better understanding for the pain points that they face on a day-to-day basis, so we commissioned a market research firm to conduct a series of interviews with revenue cycle executives from across a spectrum of lab services types. This is the third in a series of five blog posts that reveals the findings from these interviews. To start reading from the first installment in the series, click here. You can also download the full report

Myndshft Report cover

The Rise of Bad Debt 

As health care costs spiral, the monetary burden for health insurance is shifting from employers to employees. And with it, a rise in health plan members struggling to meet their financial obligation while they also struggle to comprehend the bills they receive.  

As a result, providers now find themselves crushed under billions in write-offs and bad debt, and without the tools to prevent missed collections.

Because diagnostics labs rarely interact directly with patients, the problem is particularly acute. Without an understanding of a patient’s financial situation, propensity to pay or insurance benefit coverage at the point of service, they are often left to provide care and hope that they will be reimbursed. 

Compounding the problem, patients often don’t understand their financial responsibility as it pertains to the lab services performed. Nor are they aware of the payment options available to them that could affect their out-of-pocket liability. Often, they don’t even know which lab conducted their tests. 

Since bills from the rendering lab provider may not be delivered for weeks or months after testing is performed, patients are left scratching their heads trying to figure out to what procedure the invoice correlates. This confusion only serves to make patients more reluctant to pay. 

“Oftentimes, patients don’t know who the testing company is. You have to send out a letter to explain the testing and the billing—and the patient balances are often very high,” explained an Associate Vice President of Revenue Cycle at a global laboratory. “Companies have to decide what they want to do as far as what they will take payment on, or if they’ll process them as in-network, or process them as out-of-network which often leaves patients very upset.” 


The burden of healthcare coverage and payment is shifting from employers to patients and the onus of reimbursement from payers to providers. As healthcare costs rise, this is saddling providers — particularly labs and diagnostics providers — with increasing write-offs and bad debt. 

Lack of visibility to patients prior to service, an excessively complicated prior authorization process, and a lack of time to verify eligibility prior to service combine to hinder diagnostics labs from collecting their rightful share of revenue.

This lost revenue and lost productivity can be significantly reduced by automating processes like eligibility verification, patient financial responsibility, and prior authorization.    

To download our entire report, “Diagnostics Lab Execs Reveal Their Biggest Revenue Cycle Challenges,” click hereTo learn more about how Myndshft automates and accelerates patient intake and revenue cycle management, please click here