Clinical Laboratory Profitability: Top Ways to Increase Your Lab’s Revenue in 2025

Clinical laboratories are facing increased demands each year, from boosting test volumes and reducing turnaround times to controlling costs, all while managing with fewer resources and a shrinking workforce. These growing challenges have pushed lab leaders to seek out new and effective ways of strengthening their financial health.

Although federal actions have temporarily postponed cuts to lab test reimbursement rates, this relief appears to be only temporary. To ensure long-term stability, lab leaders must consider a range of strategies aimed at increasing revenue as they plan for the year ahead.

Five Practical Methods to Boost Laboratory Income

• Target untapped market segments
• Expand service offerings
• Optimize workflow efficiency
• Enhance client relationships
• Focus on transparent, value-driven billing

Creating Diverse Revenue Sources

Laboratories can strengthen their financial footing by upgrading specific test methods. Transitioning to more sophisticated techniques, such as using nucleic acid amplification tests (NAAT) instead of traditional antigen or culture methods for Group A Streptococcus, can result in higher reimbursement rates. While NAAT often comes with increased operating costs, the greater margin between revenue and expenses supports stronger profits. For example, adopting Group A Strep PCR could boost net revenue by six figures while also contributing to operational savings through more efficient staffing.

Implementing universal opt-out screening protocols for infectious diseases is another way to expand revenue. This strategy involves routinely screening all eligible patients for conditions like Hepatitis B, Hepatitis C, and HIV, in accordance with national recommendations. Because these tests have established national coverage, laboratories are positioned to capture substantial volumes for which payment is highly likely. Broad screening not only supports public health initiatives but can also substantially increase test throughput and associated revenue streams.

Adding newly approved FDA assays to the laboratory menu can further diversify income. Tests such as Beta-Amyloid, Total-Tau, Fentanyl, Buprenorphine, Neurofilament Light Chain, and Lipoprotein(a) offer new clinical insights and can attract referrals from providers seeking advanced diagnostics.

Potential Revenue-Generating Test Additions

Expanding offerings to include tests like Apolipoprotein B is especially relevant. As clinical guidelines increasingly support routine lipid testing beyond standard panels, laboratory demand for apoB may rise. By carefully selecting and integrating new tests and optimizing current protocols, laboratories have multiple avenues to enhance revenue and adapt to changes in reimbursement and clinical need.

Strengthening Lab Revenue Accuracy

Effective cooperation between laboratory staff and billing teams helps identify additional income opportunities and ensures that all services are properly recorded. Monitoring denial patterns supports efficient revenue capture.

Key Actions:

• Coordinate efforts between laboratory and billing departments
• Track common denial reasons
• Quickly address billing issues to help sec

Using Modifiers to Recover Denied Claims

Applying the correct modifiers can play a significant role in overturning denied laboratory claims. Modifiers clarify the circumstances under which a service was performed, reducing confusion and improving the likelihood that the service will be reimbursed. Understanding when and how to use these modifiers is a key way for healthcare providers to preserve revenue.

Some of the most relevant modifiers for laboratory services include TC, 59, and 91. Each serves a different purpose:

TC modifier is commonly used to denote that only the technical aspect—such as equipment and supplies—of a procedure was performed. This is especially relevant if the laboratory is not responsible for the professional interpretation.

The 59 modifier can be especially helpful when multiple similar services could appear as duplicates to payers. Using this modifier signals that each specimen is unique and justifies separate billing.

The 91 modifier is intended for cases when a repeat lab procedure is required for patient care on the same day due to clinical necessity. Adding this modifier demonstrates clear medical justification for repeat analyses.

Consistently applying accurate modifiers according to payer policies can turn common denials into paid claims. For comprehensive guidance, providers should refer to authoritative sources on billing rules and modifier use.

Minimizing Unbilled Laboratory Codes

Overview of Frequently Used Codes in This Group

Laboratories handle a large volume of specialized tests, each associated with distinct CPT codes. Some of the frequently used codes are highlighted below for reference:

Ensuring every test and protocol is accompanied by the appropriate CPT code is essential. Periodic audits often reveal gaps, such as instances where codes like 89050 (CSF cell count) and 89051 (CSF differential) are omitted, resulting in missed charges. Proper coding facilitates complete and accurate billing for all laboratory services.

Enhancing Operating Profit Margins

Laboratories have several strategies available to improve their operating profit margins while maintaining service efficiency. One practical method is to evaluate when to bill for tests performed by referral labs versus allowing those labs to bill patient insurance directly. For some specialized procedures, especially in pathology, this assessment may reveal that direct third-party billing results in more favorable financial outcomes.

A straightforward comparison between the funds received for specialty testing and the cost invoiced from referral laboratories can identify chances for shifting billing responsibility. Though such a change might cause laboratory revenue to decrease, expenses associated with processing and administrative tasks can drop even further.

Key considerations include:

• Assessing the cost difference between in-house and referral billing
• Reviewing insurance restrictions and billing policies
• Monitoring shifts in both revenue and expenses

Ultimately, these tactics can yield an improved operating margin through informed financial decisions.

Take Steps Early to Safeguard Laboratory Income

Clinical laboratories can strengthen their financial stability by adopting planned actions to protect revenue. Strategies include:

• Adding new income sources
• Improving current revenue collection
• Reducing costs in operations

These actions help laboratories absorb possible reimbursement changes and allow for ongoing investment in essential services. Consistent monitoring and adaptation ensure that laboratories remain ready for any future payment adjustments.

Frequently Asked Questions

What new developments are shaping lab revenue cycle management in 2025?

Key trends in 2025 include broader adoption of digital solutions, more robust data analytics, and the use of interconnected billing systems. Many labs are enhancing data transparency and automating claims review to speed up payments. There is also increased focus on handling payer policy changes efficiently.

What steps can laboratories take to improve billing and secure higher reimbursements?

Labs can boost their billing performance by streamlining workflows and implementing thorough claim checks before submission. Regular staff training on coding updates is essential. Using a detailed audit process and monitoring denied claims can help labs recover missed revenue.

How can labs build their testing portfolio to support revenue growth?

Expanding a lab’s test menu can be achieved by assessing patient and physician demand, and evaluating gaps in current services. Partnering with reference labs and investing in new equipment allows for the introduction of specialty and esoteric testing. Regularly updating the test menu keeps the lab competitive and attractive to clients.

In what ways can labs use automation and artificial intelligence to enhance financial results?

Automation and AI tools can:

• Reduce manual data entry errors
• Speed up billing cycles
• Automate routine administrative tasks
  Predictive analytics can inform decision-making around test utilization and payer trends, supporting smarter financial planning.

How does adherence to regulations affect lab revenue and how can compliance be maintained cost-effectively?

Strict compliance with billing and privacy regulations is essential to avoid costly penalties that directly impact profitability. Labs should maintain updated documentation, conduct regular internal audits, and use compliance software to track regulatory changes. Training staff periodically helps ensure consistent adherence to requirements.

What collaborative approaches with healthcare providers can boost laboratory income?

Partnership models such as direct contracting, value-based care arrangements, and joint ventures offer ways for labs to access new patient populations and share resources. Clear communication and defined roles in these partnerships support long-term financial stability. Coordination on test utilization and reporting also supports mutually beneficial revenue growth.

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