Increase Revenue & Improve Patient Care
Increase Revenue & Improve Patient Care: Why Your Practice Should Implement a Physician Office Lab for Preoperative Testing
Capture Lost Revenue & Enhance Efficiency
Specialist surgical groups are currently outsourcing preoperative lab testing, leading to a significant loss of potential revenue. Insurance carriers reimburse millions annually for lab testing, yet most practices fail to benefit from these reimbursements by sending all lab work to third-party providers like Labcorp and Quest Diagnostics.
According to industry data:
Labcorp generated $12.25 billion in revenue in 2023 from laboratory testing.
- Quest Diagnostics reported $9.26 billion in revenue in 2023.
- Practices that implement in-office labs see an increase in annual revenue ranging from $250,000 to $1,000,000+, depending on test volume and patient base.
Key Benefits of a Physician Office Lab (POL):
- Increased Revenue Stream – Capture reimbursements from insurance carriers instead of sending profits to third-party labs.
- Faster Turnaround Time – Receive results within hours instead of days, optimizing surgical scheduling and reducing delays.
- Improved Patient Compliance – Patients are more likely to complete preoperative testing when it’s done in-office, reducing cancellations and rescheduling.
- Enhanced Quality Control – Maintain control over lab accuracy and efficiency, ensuring tests meet your practice’s high standards.
- Seamless Workflow Integration – Reduce administrative burdens by keeping testing within the practice, eliminating follow-up calls and paperwork with external labs.
Financial & Operational Impact
Implementing an in-office lab provides long-term financial sustainability for your practice. Many insurance carriers offer high-margin reimbursements for common preoperative tests, including:
- CBC Panels
- Hormonal studies
- A1c
- Vitamin D
- Comprehensive Metabolic Panels (CMP)
- Electrolyte Panels
- COVID-19 and Infectious Disease Panels
How to Get Started
Setting up a physician office lab is easier than you think. Our team can help with:
- Regulatory Compliance & CLIA Certification
- Lab Equipment Selection & Setup
- Billing & Reimbursement Optimization
- Staff Training & Workflow Integration
Don’t Let Revenue Slip Away! Take control of your preoperative lab testing and start seeing the financial and patient care benefits today.
Contact us to learn more about implementing a POL in your practice!
To determine if your practice has enough volume to justify setting up a Physician Office Lab (POL), let us work with your team while we consider the following key criteria:
- Patient Volume & Testing Demand
- Number of Preoperative Patients – How many surgical patients require lab work per month?
- Total Patient Visits – High patient volume (e.g., 50+ per day) can increase the likelihood of sustainable lab revenue.
- Acute Care —Practices with a high volume of upper respiratory presentation (pediatric, family care, urgent care), STI, Urologic or Gynecologic Infections of the urinary tract
- Chronic Disease Management – If your practice sees patients who require frequent lab tests (e.g., diabetes, wound care, anticoagulation therapy), it strengthens the case for a POL.
- Current Lab Test Orders
- Number of Lab Tests Ordered Per Month – If your practice orders at least 300–500 tests monthly, a POL could be financially viable.
- Types of Tests Ordered – Ensure you are frequently ordering reimbursable, high-margin tests such as CBC, CMP, PT/INR, and lipid panels.
- Reimbursement Potential
- Insurance Carrier Policies – Check reimbursement rates from Medicare and private insurers for in-house testing.
- Revenue Projections – Calculate estimated revenue by multiplying average reimbursement per test by expected monthly test volume.
- Operational & Staffing Feasibility
- Space Availability – Ensure you have room for lab equipment and workflow integration.
- Staffing Requirements – Determine if you can allocate existing staff or need to hire a lab technician
- CLIA Certification & Compliance – Assess if your practice is ready for regulatory compliance requirements.
- Cost vs. Benefit Analysis
- Initial Setup & Equipment Costs – Budget for necessary lab analyzers and operational expenses.
- Break-Even Point – Estimate when your practice will recoup initial investment based on test volume and reimbursements.
If your practice consistently meets these criteria, a POL can be a profitable and efficient addition.
We can perform a feasibility study and develop obvious benchmarks for ROI, procure funding as needed, and develop a plan for ultimate profitability with the opportunity benefit for your practice
In addition, our in house compliance officers will establish guidelines and options to allow physician involvement/investment with a clear understanding of the Stark regulatory framework and individual state and practice management issues.
- Legal Compliance Checklist for Physician Office Labs (POLs)
Ensuring compliance with state and federal laws is essential when establishing a Physician Office Lab (POL). Below is a checklist to help navigate regulatory requirements:
- Regulatory & Licensing Compliance
✅ CLIA Certification – Obtain a Clinical Laboratory Improvement Amendments (CLIA) certificate appropriate for your lab’s complexity level.
✅ State Laboratory Licensure – Check if your state requires additional licensure beyond CLIA. Some states have stricter requirements.
✅ Medicare & Medicaid Enrollment – Register your POL with CMS (Centers for Medicare & Medicaid Services) if you plan to bill for services.
✅ OSHA Compliance – Follow Occupational Safety and Health Administration (OSHA) regulations for lab safety, hazardous materials handling, and workplace exposure control.
✅ HIPAA Compliance – Ensure all patient lab data and results are handled according to Health Insurance Portability and Accountability Act (HIPAA) guidelines.
- Billing & Reimbursement Compliance
✅ Medical Necessity Documentation – Verify that all tests ordered meet medical necessity requirements per Medicare and private insurers.
✅ Proper CPT & ICD-10 Coding – Use accurate procedural and diagnostic codes to prevent claim denials and billing fraud.
✅ Anti-Kickback & Stark Law Compliance – Ensure no financial incentives or improper referrals exist between the lab and physicians in violation of federal laws.
✅ Billing Transparency – Clearly disclose costs to patients and ensure compliance with the No Surprises Act if applicable.
- Lab Operations & Quality Standards
✅ Personnel Qualifications – Ensure staff performing lab tests meet required training and certification standards per CLIA and state law.
✅ Proficiency Testing & Quality Assurance – Enroll in a proficiency testing program to maintain high accuracy and compliance with quality standards.
✅ Equipment Calibration & Maintenance – Maintain and document routine checks and calibrations of lab equipment.
✅ Test Result Reporting & Documentation – Follow guidelines for accurate and timely reporting of lab results to patients and providers.
- Environmental & Waste Disposal Compliance
✅ Biohazard Waste Disposal – Comply with state and federal regulations on proper disposal of biohazardous and medical waste.
✅ Chemical Storage & Safety – Adhere to EPA and OSHA standards for handling and storing hazardous chemicals used in laboratory testing.
- State-Specific Requirements
✅ State-Specific Laboratory Laws – Verify any additional state-specific requirements such as reporting obligations for infectious diseases.
✅ Telemedicine & Lab Testing Laws – If your practice integrates telemedicine, ensure compliance with laws on remote lab test ordering and result sharing.
- Contracts & Vendor Agreements
✅ Vendor & Supplier Compliance – Ensure contracts with lab suppliers, equipment providers, and third-party services comply with federal and state laws.
✅ Business Associate Agreements (BAA) – If working with external lab services or data processors, establish HIPAA-compliant BAAs.
- Risk Management & Legal Consultation
✅ Regular Legal Audits – Conduct periodic audits to ensure ongoing compliance with evolving regulations.
✅ Legal Counsel Consultation – Work with a healthcare attorney or compliance officer to mitigate potential legal risks.
By addressing these legal considerations, your practice can operate a compliant and efficient Physician Office Lab while minimizing risk