Laboratory Billing 101: The Differences Between In-House Billing and Outsourced Billing Services
November 27, 2023
The challenge? Efficiently managing this data to ensure accurate test results for patients and the capture of all Current Procedural Terminology (CPT) codes for services and procedures rendered.
To meet this challenge, lab’s most often turn to laboratory billing software.
This digital solution to lab revenue cycle management (RCM) not only streamlines financial operations but also maximizes a lab's efficiency by offering a comprehensive and agile laboratory billing system for tracking all test orders and every issued invoice, ensuring prompt collections and maximized revenue.
In-House Laboratory Billing Software: Comprehensive and Agile Laboratory Billing Solutions
Why Consider In-House Laboratory Billing Software?
In-house laboratory billing software provides medical labs with direct control and full transparency over every stage of their laboratory billing process. The best in-house billing software for labs integrates seamlessly with existing Laboratory Information Systems (LIS), and automates several administrative steps that would otherwise be performed manually and be prone to clerical errors. The end result is accurate and timely lab revenue cycle management minus the errors and the revenue leakage that typically result from outsourced lab billing.
Key Features of In-House Laboratory Billing Software
- Dashboard overview: This isn't just a snapshot; it's the pulse of your entire lab billing operations in one convenient and highly accessible place. With real-time updates on the status of each claim, labs can proactively monitor progress and quickly address any issues as they arise.
- Denied claim management: Even with the best laboratory billing process, some denials are inevitable, but they don't have to be final. With robust RCM tools and features residing in an advanced laboratory billing software, labs can swiftly manage, edit, and resubmit denied claims. This not only reduces revenue loss but also streamlines the entire RCM cycle.
- Integrated systems: Cohesion is key. A unified platform ensures that patient data, payment schedules, and other essential laboratory software systems communicate seamlessly. This integration reduces data redundancy and ensures that every piece of information is where it needs to be.
- Secure payment portals: In today's digital age, security and convenience are paramount. Patient payment portals prioritize patient data security, ensuring that sensitive information remains confidential. Additionally, they offer a user-friendly interface, streamlining the RCM process while expediting payments.
Tangible Benefits of In-House Laboratory Billing Software:
- Enhanced efficiency: Time is of the essence lab revenue cycle management. Billing software for labs with automation eliminates tedious manual tasks, allowing personnel to focus on more difficult and strategic activities. This efficiency translates to a faster RCM cycle and improved overall lab performance.
- Digital accuracy: Human errors, while natural, are costly in lab billing. Digital laboratory billing solutions rigorously check for inconsistencies, ensuring that every claim is accurate. This precision improves net collections and also enhances the lab's reputation as a trusted business partner.
- Swift reporting: Knowledge is power. With digital lab RCM solutions, labs can generate detailed financial reports with the simple click of a button. The insights gained by having easy access to high-level or granular information is invaluable for decision-making, helping labs identify trends, challenges, and opportunities.
Outsourced Laboratory Billing Services: An Alternative Approach
Why Consider Outsourcing Lab Billing?
Outsourcing the lab billing process is an option for labs that prefer to focus on the diagnostics aspects of the business and aren’t ready to invest in their own laboratory billing department.
What Do Third-Party Laboratory Billing Services Offer?
- Specialized expertise: Third-party lab billing services offer the specialized knowledge a lab is lacking without its own billing department. The best outsourced billing services employ experienced staff members who intimately understand medical billing codes, regulations, and compliance requirements.
- Software and training: Third-party billing services also offer their clients lab billing software that can integrate with in-house laboratory information systems, plus training for how to use the billing software and work with the outsourced billing team.
The Tangible Benefits of Outsourcing Lab Billing:
- Cost effectiveness: Outsourcing lab billing services can be a cost-effective alternative for smaller medical labs and startups that view an in-house billing department as a prohibitive expense at their current stage of business development.
- Access to expertise: By partnering with third-party lab billing services, labs tap into a reservoir of specialized knowledge. This expertise can be invaluable in navigating the intricate waters of the RCM cycle.
- Scalability: Outsourcing lab billing services allows for the scaling of the service based on the volume of work. Medical labs can adjust their levels of service as needed. This provides flexibility in the management of operational costs.
- Access to Advanced Technology: Lab billing companies often invest in advanced lab billing software that can optimize the billing process. Medical labs may not always have access to such sophisticated lab billing systems if they manage their finances in-house.
Comparing In-House Lab Billing Software vs. Outsourced Billing Services
Every medical laboratory, regardless of its size or specialization, faces the crucial decision of how to manage its RCM cycle.
The choice between adopting an in-house laboratory billing software and outsourcing to specialized services is not just about preference; it's about aligning with the lab's strategic goals, operational needs, and future vision.
Factors to Consider:
1. Scale and Scope
- Larger labs: With a vast volume of patient data and billing requirements, larger labs often require robust, customizable laboratory information systems and lab billing systems that can handle their scale. In-house lab billing solutions, tailored to the lab's specific needs, can offer the features, flexibility, and depth required.
- Smaller labs: With limited resources and a narrower scope, smaller labs might find more value in outsourcing for their lab RCM needs. This allows them to tap into established expertise without the overhead that comes with the setting up and managing of an in-house laboratory billing system.
2. Infrastructure Assessment
- Existing investments: Labs need to evaluate their current technological landscape. If there's already a significant investment in laboratory software systems like cloud storage, or if the lab has a highly interoperable LIS system or LIMS system, an in-house laboratory billing solution might be the best fit.
- Future tech plans: If a lab plans to upgrade its tech infrastructure or expand its digital footprint, it's essential to consider how each of these two billing solutions would fit into those plans.
3. Control vs. Expertise
- In-house solutions: These offer labs unparalleled control over their lab billing processes. From customization to real-time adjustments, labs can shape the lab billing software to their exact needs.
- Outsourcing: While it might seem like ceding control, outsourcing offers labs the advantage of specialized expertise at a reduced cost. Third-party services also have the singular focus of billing, bringing best practices, and updated knowledge to the table.
No matter the choice, certain imperatives are non-negotiable:
- Patient-centricity: The lab billing solution should always prioritize patient needs, ensuring clarity, transparency, and ease in the billing process.
- Real-time responsiveness: In the dynamic world of healthcare, real-time updates are crucial. Whether it's tracking a claim or the validation of patient data, the chosen solution should offer accurate real-time data.
- Actionable insights: Beyond the operational, the solution should provide strategic value. This means detailed financial reports, trend analyses, and insights that can guide decision-making and future strategy.
The Power of Integrated LIS and RCM Systems
The data managed by laboratory information systems (LIS) and revenue cycle management (RCM) systems is interdependent within the lab environment, so why do labs employ two disparate laboratory software systems to handle the data when they no longer have to?
The integration of laboratory information system functions and revenue cycle management system functions within one united all-in-one system offers labs unparalleled benefits.
The Benefits of LIS & RCM Integration
When LIS and RCM modules operate in harmony within the same database and software infrastructure, labs experience a transformative shift in efficiency and profitability.
- Enhanced efficiency: The seamless flow of information between the two modules (minus the data silos created by two separate systems) ensures that data is always accurate and readily available at every stage of lab workflow.
- Optimized revenue management: With a fully integrated LIS & RCM platform, labs can have a holistic view of their entire operations, including the revenue cycle. This means more accurate coding, quicker claim processing, efficient handling of denials, and maximized net collections.
- Strategic decision-making: The combined insights from both modules within this one system provide labs with a wealth of actionable data. This data, when analyzed, offers strategic insights, helping labs identify growth opportunities, areas of improvement, and potential challenges.
LigoLab's Vision of Integrated Excellence
At LigoLab, we're not just observers of this transformative potential; we're active contributors.
Our belief in the power of LIS and RCM integration is deeply ingrained in our informatics platform. Designed meticulously, this platform aims to revolutionize the way labs operate, allowing them to modernize and quickly scale by offering clients the customized services and expanded testing menus that they demand.
If you're curious (like we always are) and want to dig deeper into how all this works, check out our Leveraging LIS & RCM Integration to Improve the Laboratory Billing Process White Paper.
And if you're wondering about the real-world challenges of non-integrated systems, our Case Study on Understanding the Real Costs of Non-Integrated RCM Systems offers some food for thought.
Get Started with LigoLab
Considering a fresh approach for your lab's operations and interested in seeing LigoLab Informatics Platform firsthand? We’re happy to discuss your lab’s current limitations and offer our LIS & RCM solutions. The first step is to set-up a brief discovery call with one of our talented product specialists.