Blog
Laboratory Billing Software
May 14, 2024
Diagnostic testing facilities, such as anatomic pathology groups and clinical labs, experience a constant stream of patient samples. Increasingly, they’re accompanied by associated data that requires automation powered by laboratory software systems to keep the lab running smoothly.
A key laboratory workflow management solution that maximizes a lab’s efficiency is a laboratory billing software program. Laboratory billing software or lab revenue cycle management (lab RCM) software provides a solution for the laboratory billing process, enabling the tracking and submission of bills for services rendered and the collection of payments.
Pathology practices and clinical labs can choose to have a third-party entity handle their laboratory billing or integrate lab RCM software into their existing laboratory information systems (LIS systems). A laboratory information system (LIS abbreviation medical) and a laboratory revenue cycle management (lab RCM) system can interface to track patient reports plus the status of claims and payments.
Based on the scale of a lab’s operations, laboratory billing (pathology) software will process numerous patient claims and build lab revenue cycle management capacity for collecting payments. In the case of pass-through billing for labs, where services are performed by a person or entity other than the lab billing provider, the laboratory billing process can still be interfaced with the lab’s LIS software by LIS system vendors.
Learn More: Reduce Denials and Stop Revenue Leakage With Integrated Laboratory Billing Management
The Outsourced Approach: Laboratory Billing Services
The RCM cycle and laboratory billing process for medical labs includes several complex stages that can last for months and entail multiple interactions between different departments, such as the physician’s office, lab personnel, and the insurance company. A significant portion of lab billing (lab RCM) can come from following up on every claim due to the lab. Such a thorough process, however, demands an advanced and automated laboratory billing system or a large investment of time and labor from the lab personnel.
Billing administrators for pathology practices and clinical labs can lighten the load by employing independent laboratory billing services to handle this key aspect of lab RCM. Like a billing department using billing software for labs, these third-party entities offer support for a wide range of lab RCM services, that include:
- Monitoring patient encounters with the hospital system to confirm every case is covered for reimbursement;
- Verifying eligibility based on the patient’s insurance coverage plan;
- Discovering insurance options for patients who are missing insurance information;
- Ensuring the correct CPT codes are assigned to a procedure through Correct Coding Initiative (CCI) edits;
- Managing and tracking appeals made when a diagnostic test performed by a lab is denied for reimbursement;
- Tracking claims in real-time;
- Automating the laboratory billing process of prior authorization when necessary, where an insurance company requires reports and documentation from prior tests before they provide coverage for a medical procedure or diagnostic lab test;
- Providing patients with guidance on pricing;
- Generating denial alerts, as well as editing and re-submitting denied claims;
- Providing a payment portal option;
- Following up with a balance due statement to ensure that patients are guided to the right payment portal;
- Integrating with other patient record and management systems, such as an Electronic Health Record (EHR), a Laboratory Information System (LIS), or a Laboratory Information Management System (LIMS or lab LIMS);
- And compliance with all laboratory billing regulations.
Lab billing services can help reduce a lab’s overhead costs and ensure a steady flow of resources but have some drawbacks, namely a lack of expertise to handle the most complex cases and not having access to timely customer support when needed. By definition, when outsourcing lab RCM, the lab loses full transparency of the RCM cycle and may not be aware of potential damaging revenue leakage.
Learn More: Understanding the Real Costs of Non-Integrated RCM Systems
The New Lab RCM Alternative: Laboratory Billing Software for Labs
A pathology lab RCM cycle begins with assigning the right CPT code for a test or procedure and linking this data to the patient’s demographics and insurance information. Once a claim is submitted directly or via a clearing house, the insurance provider assesses various factors to determine reimbursement. Factors can include evaluating the necessity of a medical procedure or treatment.
Successful claims will reimburse a lab with an agreed-upon percentage of costs incurred from the medical test or treatment. Denied claims are sent back to the lab – they can be claimed again once the lab edits the required information. These negotiations can take months to settle and it’s on the lab to track and take specific steps at every stage.
Thus, the clinical lab or anatomic pathology RCM cycle is a complex process that typically involves a lot of back-and-forth between the lab and the payer. The deployment of laboratory billing automation can radically improve performance and efficiency.
Lab billing software is a vast improvement over a paper-based laboratory billing system since digitization allows meticulous record-keeping and swift report generation. In a manual lab revenue cycle management system, these processes are often lengthy, confusing, and prone to errors.
The laboratory billing (lab RCM) software available today is designed with several features that simplify the laboratory billing process of keeping track of claims. For example, displaying a dashboard with the status of each claim is a function of an advanced lab RCM system. Other features include denied claim management processes, improved collections, providing guidance on pricing, and interfacing with other laboratory software systems to integrate patient data with a payment schedule.
In addition, advanced laboratory billing solutions help secure payment by directing a patient to a secure payment portal and generating accurate financial reports for each patient.
Learn More: How Billing and Coding Automation Increases Laboratory Revenue
Laboratory Billing Solutions and the RCM Process
Medical labs handle a large amount of patient data and increasingly rely on outsourced clients or automated internal laboratory information system software for a smooth clinical laboratory workflow management experience. Laboratory billing software includes automated lab RCM processes that provide end-to-end solutions for maintaining lab billing needs in-house. This is the opposite of lab billing services, which involve outsourcing the lab RCM process to an external provider.
In addition to tracking claims, laboratory billing software and lab billing services follow up on denied claims and ensure reimbursement of every invoice/bill generated within a hospital and clinical laboratory system, while complying with regulatory guidelines.
Factors to consider before choosing either a lab billing software or lab billing service are the scale and scope of a lab, whether a lab has multiple locations, the infrastructure investments (cloud storage) that a clinical lab has access to, and the ability to integrate laboratory billing solutions into the existing laboratory information system or laboratory information management system (LIS vs LIMS).
Whether it’s a laboratory billing service or lab billing software for labs, the lab RCM solution needs to be patient-focused, and able to verify the eligibility of a patient for insurance coverage, follow-up in real-time on patient claim status, allow immediate edits for errors in either coding or claim submissions, follow up on denied claims and, finally, provide frequent reports on a lab’s financial performance so that areas for improvement can be identified and improved.
The Advantages of One United Laboratory Information System Software for Lab Billing
Analysis shows laboratory decision-makers can choose an in-house laboratory billing software or an external lab billing service. The size of the lab and its growth goals should be factored in when making this decision, as should factors like the benefits of having automated RCM processes, end-to-end data integrity, and control and transparency of the entire organization’s operations and finances.
Those last two points (control and transparency) are important considerations. For an exercise ask yourself who would be motivated more to go after every dollar and work every claim, including the hardest and most complex cases. An in-house billing team with lab RCM expertise or an outsourced lab billing service?
We believe that in-house laboratory billing software represents the best option for lab operators who want to improve their RCM cycle. We developed a powerful laboratory billing software solution with that in mind.
Going further, many substantial advantages come with fully integrated LIS and RCM modules that share the same database (like the LigoLab Informatics Platform). We invite you to read the following case study to learn more. It highlights the benefits of this laboratory information system software and lab billing arrangement.
Ready to see what a fully integrated LIS and RCM platform can do for your laboratory?
Contact us to schedule a software demonstration and see how our informatics platform can unite and digitally transform your lab’s financial, administrative, and technical operations.
