Blog
Laboratory Billing Software
December 1, 2025
Diagnostic testing facilities, including anatomic pathology groups and clinical laboratories, continuously receive patient specimens, each of which is increasingly accompanied by critical clinical and demographic data. Managing this volume of information effectively requires advanced automation supported by modern laboratory software systems.
One of the most essential tools driving operational and financial success is laboratory billing software, also known as laboratory revenue cycle management (lab RCM) software. This laboratory workflow management solution streamlines every aspect of the lab billing lifecycle, from tracking services and generating accurate claims to submitting those claims, resolving denials, and collecting payments efficiently.
Discover More: Enhancing Laboratory Workflow Efficiency with Advanced Laboratory Billing Automation
Laboratory Billing Options and Integration with LIS Systems
Pathology practices and clinical laboratories can either outsource their lab billing to a third-party service or integrate in-house lab revenue cycle management directly within their existing laboratory information system (LIS). When an LIS system and a lab RCM platform are properly interfaced, they work together to manage both clinical and financial data, including patient reports, claim statuses, and payment collections.
As organizations grow, their laboratory billing software must handle large volumes of claims while efficiently managing reimbursements and supporting complex end-to-end RCM cycle workflows. In pass-through lab billing scenarios - where services originate from an external provider - the laboratory billing platform can still integrate with the lab information system, typically with technical support from the LIS company to ensure smooth connectivity, accurate data exchange, and full visibility across both clinical and financial operations.
Discover More: Reduce Denials and Stop Revenue Leakage With Integrated Laboratory Billing Management
The Outsourced Pathology Lab Management Approach: Laboratory Billing Services
The RCM cycle and laboratory billing process for pathology lab management comprises several complex stages that unfold over many months and involve multiple interactions across departments, such as the physician’s office, lab personnel, and the insurance company.
A large portion of lab revenue cycle management involves tracking and following up on all claims owed to the laboratory. Executing this thoroughly requires either advanced, automated laboratory billing software or a substantial investment of time and personnel resources.
To reduce this burden, pathology practices and clinical laboratories can choose to outsource key lab RCM functions to independent laboratory billing service providers. Similar to an internal team equipped with lab billing software, these third-party partners support a wide range of revenue cycle management needs, including:
- 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 resubmitting 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 electronic health records (EHR), laboratory information systems, or laboratory information management system (LIMS or lab LIMS)
- And compliance with all laboratory billing regulations
These lab billing services can help reduce overhead costs and ensure a steady flow of resources, but have drawbacks, namely a lack of expertise to handle the most complex cases and no access to timely customer support when needed. By definition, when outsourcing laboratory billing solutions, the lab loses full transparency of the RCM cycle and may not be aware of potentially damaging revenue leakage.
Discover More: Understanding the Real Costs of Non-Integrated RCM Systems
The New Lab RCM Alternative: Laboratory Billing Software for Labs
A medical laboratory’s revenue cycle begins with accurately assigning CPT codes for each test or procedure, then linking those codes to the patient’s demographic and insurance information. After the claim is submitted, either directly or through a clearinghouse, the payer evaluates it based on several criteria, such as medical necessity, coverage rules, and documentation.
Approved claims return reimbursement based on the agreed-upon rate for that specific test or service. Denied claims, however, are returned to the laboratory for correction and resubmission, often requiring additional documentation or clarification. This back-and-forth can take weeks or even months, requiring the laboratory to monitor, respond, and take specific actions at every stage.
Because of this complexity, the RCM cycle for clinical laboratories and anatomic pathology groups involves substantial interaction between the lab and the payer. Implementing automated laboratory billing software for labs can drastically improve accuracy, reduce delays, and enhance operational and financial performance.
Learn More: Laboratory Billing Automation - Boosting Efficiency & Clean Claim Rates
Modern Lab Billing Software vs. Manual Processes
Lab billing software represents a major advancement over traditional paper-based laboratory billing systems. Digitization enables precise record-keeping, faster report generation, and greater visibility across the entire revenue cycle. In contrast, manual lab RCM processes are often time-consuming, error-prone, and difficult to manage at scale.
Today’s laboratory billing platforms have features that streamline claim tracking and improve financial performance. For example, advanced lab RCM systems offer real-time dashboards that display the status of every claim, highlighting those approved, pending, or denied. Additional capabilities include automated denial management, enhanced collections workflows, pricing guidance, and seamless integration with other laboratory software systems, linking patient data, orders, and lab billing schedules in one unified platform.
These modern laboratory billing solutions also support secure payment transactions through patient portals and generate accurate, detailed financial reports, helping laboratories improve operational and revenue-related outcomes.
Discover More: LigoLab Gives Labs a Convenient and User-Friendly Way to Incentivize Patients and Accelerate Payments
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.
Modern laboratory billing software supports end-to-end revenue cycle processes, enabling pathology practices and clinical labs to manage lab RCM in-house. This contrasts with laboratory billing services, where billing responsibilities are outsourced to an external provider.
Whether delivered through software or a service partner, effective laboratory billing solutions track claims, manage denials, and secure full reimbursement for every billable test, while maintaining compliance with industry regulations and payer guidelines.
When deciding between implementing laboratory billing software or partnering with an external billing service, laboratories should consider multiple factors: the size and scope of the organization, whether it operates across multiple locations, available infrastructure and staffing resources, and the ability to integrate lab billing capabilities with existing laboratory information systems or laboratory information management systems (LIS vs. LIMS).
Discover More: Differences Between Laboratory Information Management Systems (LIMS) and Laboratory Information Systems (LIS)
Whether it’s a laboratory billing service or in-house lab billing software for labs, the lab revenue cycle management 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.
Discover More: The Best Laboratory Information Systems - LIS Software Solutions for Clinical and Pathology Labs
LigoLab: United Laboratory Information System and Laboratory Billing Solutions
Analysis indicates that laboratory leaders have two primary options: implementing in-house lab billing software or partnering with an external laboratory billing service. When making this decision, labs should consider their size, growth objectives, and long-term strategic vision. Equally important are the advantages of automated lab RCM processes, end-to-end data integrity, and the level of control and transparency they want to maintain over operational and financial performance.
Discover More: How Advanced and Highly Integrated Billing Automation Can Help Improve Workflow Efficiency and the Clean Claim Pass-through Rate
Control and transparency are especially critical. As a thought exercise, consider this: Who is more likely to pursue every dollar and diligently work every claim - even the most challenging and complex ones? An in-house lab billing team with specialized RCM cycle expertise or an outsourced lab billing service?
We believe in-house laboratory billing software is the best option for operators who want to improve their RCM cycle. That’s why LigoLab developed powerful billing software for labs with advanced RCM cycle solutions as a major part of its all-in-one informatics platform.
In addition, laboratories gain significant advantages when using an integrated medical LIS and lab RCM infrastructure that runs on a single, shared database, ensuring complete operational visibility and optimized billing performance.
To explore this in practice, we invite you to read the following case study, which illustrates how this unified laboratory information system and billing model delivers measurable operational and financial benefits.
Experience the Power of a Unified Medical LIS and Lab RCM Platform
Ready to see what a fully integrated medical LIS software and lab RCM platform can do for your laboratory?
Contact us to schedule a demonstration and discover how LigoLab can digitally unite and transform your lab’s financial, administrative, and technical operations.
