Case Study
In-House vs. Outsourced Laboratory Billing – Navigating the Best Path Forward for Your Lab
May 30, 2025
With today’s complex medical laboratory environment growing more difficult by the day, effectively managing laboratory revenue cycle management (lab RCM) has become both more essential and more challenging than ever. With tighter reimbursement schedules, shifting payer rules, rising operational costs, and alarming staff shortages, the laboratory billing process, once considered a back-office task, has taken center stage.
To address this pressing issue, LigoLab called upon three lab RCM experts to share their insights and thoughts in a discussion focused on one of the most critical decisions labs face today: Whether to outsource or keep their lab billing operations in-house.
The discussion featured:
- Mick Raich, a 22-year lab RCM veteran and founder of Vachette Pathology. He is known for his deep expertise in laboratory billing audits and strategy.
- Denise Mazon, a healthcare RCM cycle leader with over three decades of experience, including 20-plus years covering the intricacies of laboratory billing.
- Aram Avakyan, a former clinical pharmacist and now a specialist on LigoLab’s RCM product team. He is uniquely positioned at the intersection of technology and patient care.
Editor’s Note: All three experts also recently participated in a webinar focused on the same subject. Click below to watch that webinar on-demand.
On-Demand Webinar: Outsourced vs. In-House Laboratory Billing - How to Make the Right Choice for Your Lab
Why Laboratory Billing Matters Now More Than Ever
“RCM is the foundation of the business,” said Mick Raich. “I don’t care if you’re making toasters or lab results - you’ve got to get services billed. If you can’t bill in a correct, legal manner, you won’t be in business for long.”
Denise Mazon echoed that sentiment, stressing that lab billing is not just a technical process, but a strategic function that demands constant attention.
“There’s so much to consider when determining how to tackle this critical function,” she said. “And with payer rules changing more frequently than ever - often without notice - these organizations need lab revenue cycle management systems and teams that are nimble, informed, and responsive.”
Avakyan added that without effective laboratory billing software, labs can’t scale.
“A lot of labs are trying to grow or manage higher volumes,” he said. “But if you’re not collecting properly or efficiently, growth just creates more problems. The first pass rate has to be maximized for sustainable success.”
Case Study: The Connected Laboratory - Examining A New Approach to Laboratory Billing
The State of Lab Billing in 2025
Raich painted a sobering picture of the lab RCM landscape, comparing it to 2020 but with far fewer safety nets.
“Inflation has gone up, costs have risen, but labs are still stuck in fixed payer contracts,” he said. “You’re dealing with hundreds of plans that can change terms twice a year, by newsletter. It’s hard to keep up, and harder to make changes fast. The laboratory billing process needs to be faster and more responsive than ever.”
Mazon highlighted the data dependency challenges labs face.
“Labs rely on requisitions from providers, and often those are incomplete,” she said. “Missing demographics, insurance info, diagnosis codes - it all adds complexity, especially when you’re already short-staffed.”
Industry Insights: Roundtable Discussion - Laboratory Billing Solutions and the Lab RCM Process
Outsourced Lab Billing: Pros, Cons, and Considerations
So, is outsourcing lab billing the answer?
“Outsourcing can reduce the pressure of hiring and managing staff and remove the need for in-house tech investment,” said Mazon. “But you have to choose wisely. You’re not their only client, and you risk deprioritization.”
Raich, who has audited over 80 RCM management company vendors, noted that consolidation among lab billing vendors adds another layer of uncertainty.
“Staff turnover, shifting priorities, and slow response times can all erode trust and results,” he warned. “When you outsource your laboratory billing, you’re handing someone your wallet and saying, ‘Please put money in here.’ So you better know who you’re trusting.”
His advice?
- Visit the RCM vendor’s office.
- Evaluate their technology stack/revenue cycle management tools.
- Review their contract terms carefully, especially their liability limits.
Learn More: Is Your RCM Software Vendor Putting Your Lab’s Needs First?
In-House Lab Billing: Control, Cost, and Commitment
In contrast, in-house lab billing offers transparency and control, if a lab is prepared to invest.
“With in-house lab billing, you can see what’s happening in real time,” said Avakyan. “You control workflows, you can tailor them, and you can react quickly when payers or policies change.”
Raich advised labs to run a detailed ROI analysis, factoring in both direct and indirect costs. He also emphasized the value of autonomy.
“If you can run in-house lab billing for about two percent more than outsourcing, that two percent is the cost of autonomy,” he said. “That’s worth it if you can keep expertise in-house and ensure continuity.”
The downside? You’ll need to invest in a laboratory billing system, training, and staffing, and maintain these investments over time.
Learn More: Understanding the Real Costs of Non-Integrated RCM Systems
Common Laboratory Billing Challenges: What Labs Are Up Against
Whether laboratory billing is handled internally or externally, the challenges are consistent:
- Claims Not Billed: “Three to five percent of claims may never even go out the door,” said Raich.
- Delayed Denials: “The longer a claim sits in AR, the less likely it gets paid,” he added.
- Incomplete Data: “You can’t bill with half a requisition,” Mazon warned.
- Technology Limitations: “Legacy laboratory information systems (LIS software) and lab billing systems often can’t keep up with today’s complexity,” noted Avakyan.
Modern laboratory billing solutions, such as real-time visibility and automated workflows, emerged as essential to these problems.
Learn More: Six Reasons Why You Should Choose an Integrated Laboratory Billing Solution for Your Medical Lab
Automation, Analytics, and the Modern Lab
Laboratory billing automation remains a recurring theme for most lab CFOs.
“Automation removes barriers,” said Mazon. “It allows your team to focus energy on more complex challenges - like retention and compliance.”
Avakyan added that billing software for labs with automation must be paired with configurability.
“You need RCM tools that not only automate but also adapt,” he said. “The payer rules will change. Can your lab billing system keep up?”
He also highlighted dashboards and real-time analytics as critical tools.
“You should be able to break down performance by CPT code, ICD-10, payer, and even draw location,” added Mazon. “That data drives smarter decisions.”
Industry Insights: Navigating the Coding Minefield - Labs Struggle with RCM Rejections Amid Rising Scrutiny from Payers
Growing Labs: Planning for Scalability
When it comes to growth, all three experts were aligned. It’s not just about doing more but about doing better.
“Scalability isn’t just volume,” said Avakyan. “It’s about being prepared, maintaining margins, and knowing where you want to be a year from now.”
Raich advised labs to evaluate each new opportunity critically.
“Bigger isn’t always better,” he said. “You have to understand your margins by payer, by test. If you don’t know your costs, you could be growing into a loss.”
Industry Insights: Tips for Laboratory Billing Reimbursement Challenges
The Power of a Unified LIS System + Lab RCM Platform
A key advantage discussed was LigoLab’s unified platform, an advanced system that features LIS and lab RCM modules integrated in a shared pathology lab software solution.
“For me, the biggest difference is having results, documents, and lab billing all in one place,” said Mazon. “No more jumping between systems. It’s a huge time-saver and a game changer.”
This LIS and RCM integration supports:
- Eligibility Verification
- Real-Time Claim Validation
- Automated Coding and Scrubbing
- Dedicated Denial Management Queues
And most importantly: shared data that ensures end-to-end accuracy and eliminates silos.
Final Expert Takeaways
Here are the key insights drawn from this lab billing discussion:
- Do your homework. Vet lab billing partners thoroughly and know your true internal costs.
- Invest in automation and analytics. These tools are no longer optional.
- Stay nimble. Your workflows must adapt as payers and policies evolve.
- Prioritize real-time visibility. Don’t wait 30 days to identify problems.
- Retain control where it matters. Transparency and autonomy often justify the higher upfront cost of in-house laboratory billing.
“Be innovative,” said Raich. “Think beyond traditional models. The labs that succeed are the ones that aren’t afraid to try something new.”
Learn More: From Claims to Collections - How to Maximize Lab Billing Profitability
Conclusion: Find the Right Laboratory Billing Strategy for Your Lab
Whether outsourced or in-house, the right laboratory billing strategy depends on your lab’s size, resources, goals, and growth plans. What’s clear is that lab RCM is no longer just a back-office function - it’s a mission-critical component that can determine a lab’s long-term viability.
If you're evaluating your current lab billing operations or considering a new approach, LigoLab’s experts are here to help. With an integrated LIS and RCM platform with advanced laboratory billing solutions, decades of combined experience, and a commitment to innovation, LigoLab is uniquely positioned to support your success.
Ready to explore the best lab billing practices for your laboratory?
Contact the LigoLab team today to start the conversation.
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