The Fee-for-Service Payment System for Lab Tests: A Challenge for Labs, Patients, Physicians, and Insurers (Half Day)

Sunday, July 28, 2024
1:30 PM – 4:30 PM US Central Time
McCormick Place Chicago


Fair payment for laboratory tests and protection for patients against excessive laboratory bills are both foundational to a laboratory’s success. There is a surprising lack of general knowledge among large groups of laboratorians, from leaders through trainees, regarding the basic functioning and challenges of the fee-for-service system for test payment in the United States. This knowledge gap leads to a range of laboratory financial problems from low profitability to massive financial losses. In this course, the laboratory payment system is described including the costing and pricing of a test; the coding and submission of an insurance claim; the administrative and medical necessity policies used by insurers (private or government) to accept or deny a claim; and the administrative rules determining the payment of claims by insurers and patients. The course material is taught using a combination of lectures, audience polling, and short small-group exercises.

Target Audience

This activity is designed for physicians, advanced practice professionals (NPs, PAs, RNs, etc.), lab directors (and/or assistant directors), lab managers (supervisory and/or non-supervisory), pathologists, in-training individuals, and other laboratory professionals overseeing/conducting within this topic.

Prerequisite Knowledge 

General knowledge regarding the following items will be helpful, but not required:

  • CPT codes and ICD-10 codes
  • Having a medical insurance claim denied
  • How to calculate the cost of a test

What to Bring

A fully-charged personal laptop with Microsoft Excel and an Internet browser could be helpful, but not required.

Learning Objectives

  • Describe two approaches to determining the cost of the test and two considerations for determining the list price of a test.
  • Describe the fee-for-service payment system for lab tests in the United States including several key elements of the insurance claim.
  • Compare and contrast the perspective of patients, clinical laboratories, physicians, and insurers (government and private) as regards the fee-for-service payment system for lab tests.


Michael Astion, MD, PhD | Seattle Children's Hospital

Nikola Baumann, PhD, DABCC | Mayo Clinic 

Course Outline

  1. Foundations of Financial Competence: Costing and Pricing a Laboratory Test (90 mins.)
    Lecture on costing and pricing of a test, mixed with group discussion, and Q and A. A small group exercise regarding costing or pricing will be used to emphasize teaching points.

  2. The Fee-for-Service Payment System for Lab Tests: A Challenge for Patients, Labs, Physicians, and Insurers (90 mins.)
    Lecture on the steps in the insurance claim system, with an emphasis on lab testing. Administrative and medical necessity components including denials will be covered using audience polling, Q and A, and audience and speaker storytelling.