Laboratory Billing Software

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May 1, 2022
Diagnostic laboratories, such as anatomic and clinical pathology labs, experience a constant stream of patient samples. Increasingly, they’re accompanied by associated data that requires automation and digital software to keep the lab running smoothly. One such digital solution that maximizes a lab’s efficiency is a laboratory billing software program. Billing software provides an end-to-end solution for tracking every last laboratory bill for services rendered and collecting payments.
Pathology labs can choose to have a third-party entity handle their lab billing system, or they can integrate a billing software into their existing system, such as laboratory information systems (LIS). A laboratory information system and financial management can interface to track patient reports, as well as claims status and payment. Based on the scale of a lab’s operations, lab billing software will process numerous patient claims and build the lab’s revenue cycle management capacity for collecting payments. In the case of pass-through billing for labs, where services were performed by a person or entity other than the billing provider, the bill will still enter into the lab’s billing for pathology services.

The Outsourced Approach: Laboratory Billing Services
Billing cycles are complex processes 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 the lab’s successful billing and revenue can come from following up on every claim due to the lab. But such a thorough process demands a large investment of time and labor from the lab personnel.
Billing administrators for pathology labs can instead choose to lighten the load and still make a significant profit by employing independent laboratory billing services to handle this key aspect of clinical lab financial management. These third-party services offer support for a range of services, that include:
- Monitoring patient encounters with the hospital system to ensure that every case is covered for reimbursement;
- Verifying patient eligibility based on their insurance coverage plan;
- Discovering insurance options for patients who are missing insurance information;
- Ensuring the correct medical code is assigned to a procedure through Correct Coding Initiative (CCI) edits. The billing service ensures that each lab test is billed according to the Current Procedural Terminology (CPT) codes;
- Managing and tracking appeals made when a diagnostic test performed by a pathology lab is denied for reimbursement;
- Tracking claims in real-time;
- Automating the 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);
- Ensuring laboratory billing compliance with the relevant regulations.
Lab billing services help reduce a lab’s overhead costs and ensure a steady flow of resources. Another advantage of outsourcing billing to professional services with updated software is the minimization of billing and coding errors. In addition, most pathology and medical billing services offer cloud storage, which suits labs that have multiple locations.
Finally, when billing for laboratory services is completely automated, a significant delay in the reimbursement process can be avoided.

The In-House Alternative: Medical Laboratory Billing Software for Labs
A pathology billing 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, either directly or via a clearing house, the insurance provider assesses various factors that can influence reimbursement. They 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 require tracking at every stage.
Thus, the clinical or anatomic pathology billing cycle is a complex process that can involve a lot of back-and-forth between the lab and the payer. The deployment of automation within a lab can radically improve performance and efficiency. Laboratory billing software is also an improvement on paper-based systems, since digitization allows meticulous record-keeping and swift report generation. In a manual financial management system, these processes are often lengthy and confusing.
The clinical pathology lab billing software available today is designed with a number of features to simplify the process of keeping track of claims; for example, displaying a dashboard with the status of each claim in the system. Other features include denied claim management processes, improved collections, providing guidance on pricing, and interfacing with other laboratory management systems to integrate patient data with a payment schedule. In addition, they help with securing payment by directing a patient to a secure payment portal, as well as generating accurate financial reports for each patient.
Bottom Line on Laboratory Billing Solutions
Anatomic and Clinical labs handle large sets of patient data and increasingly rely on either outsourced clients or automated solutions for a smooth workflow. Laboratory billing software includes automated processes that provide end-to-end solutions for maintaining a lab’s billing needs in-house. This is different from lab billing services, which involve outsourcing the laboratory billing process to an external provider.
In addition to tracking claims, 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. Other factors to consider before choosing either a billing software or billing service is 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 lab medical billing solutions into the existing laboratory information management systems (LIS or LIMS).
Whether it’s a billing service or software, the solution needs to be patient-focused, verify the eligibility of a patient for insurance coverage, follow-up in real-time on patient claim status, allow immediate edits of 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.
