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Boosting Laboratory Revenue with Billing & Coding Automation

Boosting Laboratory Revenue with Billing & Coding Automation

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In the complex landscape of medical laboratories, which includes molecular, clinical, and anatomic pathology labs, stopping revenue leakage can feel like a daunting task. The scrutiny of insurance companies on lab billing and the surge in denials since the pandemic have added to the pressure.

But there's a beacon of hope in this challenging scenario - lab billing and coding automation. 

This isn't just a technical term; it's a transformative laboratory revenue cycle management (RCM) software solution that can help labs navigate these challenges and significantly increase their revenue intake. 

So, let's explore how this powerful RCM process can turn obstacles into opportunities, enhancing your lab's efficiency and profitability.

The Rising Cost of Laboratory Billing Denials

Medical labs are facing an uphill battle with the rising cost of billing denials. According to industry publication Medical Laboratory Observer (MLO), the average denial rates stand at 15 percent for in-network claims and a staggering 30 percent for out-of-network. 

These denials, combined with the following factors, are creating a challenging revenue cycle environment for labs:

  • Reduced reimbursement rates
  • Ever-changing payer rules
  • A growing population of uninsured and underinsured patients
  • Large fluctuations in patient volume
  • Unprecedented staffing shortfalls

Learn More: Leveraging LIS & RCM Integration to Improve the Laboratory Billing Process

The Human Error Factor in Billing Denials

While some denials are an inevitable part of doing business, a significant portion can be attributed to human error, particularly improper coding. 

Farzad Abdi, LigoLab RCM Billing Manager, emphasizes that these issues can be easily rectified with automation.

"Improper coding and other mistakes play a major role in claim denials. But this is easy to fix with automation. By simply automating their billing and coding processes, we’ve helped some labs increase revenue by as much as 30 percent."

- Farzad Abdi, LigoLab RCM Billing Manager

Despite the clear benefits of automation, many lab billing managers are hesitant to change their RCM process. The reluctance often stems from the perceived cost of improving their revenue cycle management (RCM) system. 

However, Abdi warns that the stakes are getting higher for those unwilling to invest in an advanced solution for the RCM Cycle.

"Expenses are going up and reimbursements are going down, so leaving hard-earned money on the table isn’t acceptable. Labs that want to grow and sustain their business have no choice but to innovate, and RCM solutions that offer automatic billing and coding are a step in the right direction."

- Farzad Abdi, LigoLab RCM Billing Manager

Laboratory Billing

The Need for Change in Laboratory Revenue Cycle Management (RCM)

In the face of rising expenses and decreasing reimbursements, the need for change in laboratory revenue cycle management has never been more critical. Despite the potential benefits, many lab managers are hesitant to invest in improving their RCM. 

However, as Abdi emphasizes, labs must innovate to sustain their business.

“If a lab insists on manual billing and coding, they’re still going to have to spend money on training and staff. Coverage policies are constantly evolving and each payer has its unique way of doing things. Even certified coders have a hard time navigating all that is involved.” 

- Farzad Abdi, LigoLab RCM Billing Manager

Embracing Laboratory RCM Solutions: A Step in the Right Direction

Lab RCM software solutions that offer automatic billing and coding, such as LigoLab Informatics Platform, are a step in the right direction. These solutions not only increase productivity but also protect labs from common errors that lead to revenue losses.

"With all that’s at stake when it comes to billing, it’s important for labs to implement systems that not only increase productivity, but that also protect them from errors and losses." 

- Suren Avunjian, LigoLab CEO

The Power of Automation in Lab RCM

Automation in medical lab RCM can lead to significant improvements while also giving the lab a more controlled and transparent operation. 

LigoLab's RCM solution, for instance, includes a rule engine that can create custom rules based on any parameters or combinations of conditions present within the lab data. Next, the platform’s automation engine can link these rules together to create an automated sequence. When combined, these two engines can customize and automate virtually any laboratory workflow.

Cole Diagnostics

The Impact of Automation on Lab Operations

The impact of automation on lab operations can be substantial. 

For instance, Cole Diagnostics, a LigoLab customer now leveraging the power of both the LIS and RCM modules, experienced a significant improvement in their client billing processes after implementing the RCM module features. Soon after the upgrade, the billing processes that had taken several weeks due to constant delays because of clerical errors now took only a few hours.

"Within weeks of deploying our solution, the lab was collecting 20 to 30 percent more every month thanks to a reduction in errors and costly overhead, and this was without an increase in test volume.”

- Farzad Abdi, LigoLab RCM Billing Manager

Learn More: How Cole Diagnostics Streamlined Client Billing with LigoLab’s LIS & RCM Platform

The Return on Investment in RCM Strategies

Investing in RCM strategies can yield a significant return on investment. A recent report found that healthcare companies saved $122 billion in administrative expenses through RCM software in 2020 alone.

"When you consider the increase in productivity and profit, and the decrease in AR and cost with billing and coding automation, any investment in new technology is well worth it.”

- Farzad Abdi, LigoLab RCM Billing Manager

Overcoming Challenges in Laboratory Billing & Coding

Accurate coding and a thorough understanding of payer policies and laboratory billing processes are essential for clean claims. However, these can pose significant challenges, especially for smaller labs that may not have a dedicated billing specialist on staff. 

Timing is also a critical factor in billing, with severe consequences for late claim submissions.

"There is a shelf life on when claims can be submitted. Because of this, lab personnel are often in a rush to get claims out, even if they are incorrectly coded. Unfortunately, this type of approach can result in tens of thousands of dollars lost and hundreds of hours spent on claims appeals."

- Farzad Abdi, LigoLab RCM Billing Manager

The Intricacies of Discounts & Credits

The billing process is further complicated by some payers and high-volume clients requiring volume discounts and other credits on a rolling basis. This was commonplace with COVID-19 testing during the recent pandemic.

"Imagine how difficult it is for labs to calculate and operationalize a tiered structure utilizing manual processes. In addition, some payers want labs to adjust for alternate payment methods. Now, not only does the lab have rolling totals and discounts to contend with, but they also have a variety of payment methods to manage as well."

- Farzad Abdi, LigoLab RCM Billing Manager

With these challenges in mind, labs of any size can benefit from technologies designed to ease billing and coding woes. Platforms like the award-winning LigoLab LIS & RCM Laboratory Informatics Platform help labs save time and increase collectibles by adding easy-to-deploy automation.

RCM Billing Manager

The Power of Automation: Enhancing Quality & Scalability

As the reliance on diagnostic testing within the medical community grows, labs are facing an increasing RCM workload. This growth is pushing the limits of manual processes, making automation a necessity. 

LigoLab's RCM solution demonstrated its value during the COVID-19 pandemic, enabling labs to scale while maintaining a clean claim rate of over 98 percent.

"There is a growing reliance on diagnostic testing within the medical community. Thanks to wider adoption of evidence-based medicine and the demands created by COVID-19, lab services are now in high demand, and will be for the foreseeable future."

- Suren Avunjian, LigoLab CEO

Harnessing the Power of Automation with LigoLab

LigoLab is a leading provider of innovative healthcare LIS software, servicing over 200 pathology laboratories nationwide with the LigoLab LIS & RCM Laboratory Informatics Platform, an all-in-one LIS & RCM software solution that integrates all essential lab services into a single, robust platform, enhancing efficiency and profitability at every stage.

The LigoLab platform offers labs a way to save time and increase collectibles through time-saving automation. This automation is powered by a sophisticated, proprietary rule engine that has evolved from terabits of data analysis and decades of hands-on billing experience to trigger a wide array of actions that remove the potential for clerical errors and support more testing volume without having to completely reshape the lab billing department.

"LigoLab’s automation can accurately assign ICD-10 and CPT codes based on NCD, LCD, or payor specific coverage policy. It also learns from past denials and alerts if a claim has the potential for denial, before being submitted."

- Farzad Abdi, LigoLab RCM Billing Manager

Key Features of LigoLab's RCM Module

  • Automated ICD-10 and CPT coding and client billing
  • Upfront demographic and insurance verification
  • Insurance discovery services
  • Whitepages address look up
  • Automated claim validation and error correction
  • Real-time data processing workflow queues
  • Detailed statistical reports for trend monitoring and RCM KPIs

With LigoLab, labs can automate processes, eliminate human error, support regulatory compliance, drive business growth, improve turnaround time, increase net collections and profit, and reduce labor costs.

"In essence, LigoLab completely automates everything that a billing specialist would do repetitively. The only thing required is some monitoring and some minor adjustments now and again. What’s even better is the fact that the system never gets tired, never asks for days off, never requires training, and never leaves for another job."

- Farzad Abdi, LigoLab RCM Billing Manager

Ashley Ferro
Author
Ashley Ferro is a content writer with 4+ years of experience creating engaging, SEO-friendly content across various topics ranging from service delivery, customer experience, onboarding, to workflow management. When she's not writing, Ashley loves traveling, trying new foods, and playing with her dog!

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