Blog
Laboratory Billing Software
March 26, 2025
Diagnostic testing facilities, such as anatomic pathology groups and clinical labs, constantly receive patient samples. Increasingly, these samples are accompanied by associated data that requires automation powered by laboratory software systems to keep the lab running smoothly.
A critical factor in achieving financial success for laboratories is their lab billing software - a laboratory workflow management platform designed to enhance efficiency. Also known as lab revenue cycle management (lab RCM) software, it supports the entire laboratory billing process, from tracking and submitting claims for services rendered to collecting payments.
Learn More: Enhancing Laboratory Workflow Efficiency with Advanced Laboratory Billing Automation
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 (medical LIS software) and a laboratory revenue cycle management 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 software will process numerous patient claims and build laboratory revenue cycle management capacity for collecting payments. In the case of pass-through lab billing, where services are performed by a person or entity other than the lab billing provider, the laboratory billing process can interface with the lab’s medical LIS software with technical assistance provided by the laboratory information system vendors.
Learn 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 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 RCM activity comes from following up on every claim due to the lab, and such a thorough RCM process demands advanced and automated billing software for labs or a significant investment of time and labor from the lab personnel.
RCM cycle administrators for pathology practices and clinical labs can lighten the load by employing independent laboratory billing services to manage key lab RCM aspects. Like a billing department using billing software for labs, these third-party entities offer support for a wide range of revenue cycle management tools, such as:
- 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
Lab billing services can help reduce 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 laboratory billing solutions, 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 proper 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 and provides the required information. These negotiations can take months to settle, with the lab tracking and taking specific steps at every stage.
Thus, the clinical lab or anatomic pathology group 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.
Learn More: Laboratory Billing Automation: Boosting Efficiency & Clean Claim Rates
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 billing software for labs 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.
Learn More: How Billing and Coding Automation Increases Laboratory Revenue
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: 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 management experience.
Laboratory billing software for labs includes automated RCM cycle 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 laboratory billing solutions 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 while complying with regulatory guidelines.
Factors to consider before choosing either laboratory billing software or lab billing service are scale and scope of a lab, whether a lab has multiple locations, the infrastructure investments 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 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.
Learn More: The Best Laboratory Information Systems: LIS Software Solutions for Clinical and Pathology Labs
LigoLab: United Laboratory Information System and Billing Software for Labs Solutions
Analysis shows that decision-makers can choose in-house billing software for labs or an external laboratory 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 lab RCM processes, end-to-end data integrity, and control and transparency of the entire organization’s operations and finances.
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 represents 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 medical LIS system platform.
Moreover, there are substantial advantages when using integrated LIS systems and lab RCM modules that share the same database.
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 medical LIS software and lab RCM platform can do for your laboratory?
Contact us to schedule a lab pathology software demonstration and see how LigoLab can unite and digitally transform your lab’s financial, administrative, and technical operations.
