Leveraging LIS System & Lab RCM Integration to Improve the Laboratory Billing Process

Analysis

Most clinical laboratories and pathology groups rely on legacy and standalone laboratory information systems (pathology LIS systems) for operations and testing, and laboratory revenue cycle management (lab RCM). High denial rates and sizable write-offs have long been part of this siloed laboratory billing process. Now, downward market trends and shrinking margins are forcing medical labs to consider changing their approach to LIS systems & lab RCM functionality to get through these challenging times.

What You Will Learn

In this White Paper, we will examine how most medical laboratories continue to handle laboratory billing (along with the pitfalls associated with this conventional approach). We’ll also offer an alternative viewpoint and a new collection model that bridges the lab information system & lab billing workflow and protects these business enterprises from growing external threats.

Learn More: Reduce Denials and Stop Revenue Leakage With Integrated Laboratory Billing Management

A New Laboratory Billing Perspective

Medical labs traditionally have begun the laboratory billing process (RCM cycle) after the lab report has been finalized. This was the accepted way of doing business in the past when budgets and margins were bigger, laboratories were more profitable, and an alternative approach to standalone laboratory billing wasn’t needed.

But those days are fleeting and lab directors and managers, squeezed by market pressures like staffing shortages, reimbursement cuts, unique payer requirements, fast-changing rules, increased regulations, and growing patient responsibility for healthcare costs, are open to change and motivated to find a better way.

Learn More: LIS Webinar Recap - How to Beat Pathologist Burnout and Combat Staffing Shortages

We will highlight the advantages of starting laboratory billing with powerful revenue cycle management tools at order creation, in real-time. We will also discuss how leveraging automation and an end-to-end medical LIS & lab RCM informatics platform allows laboratories to gain maximum efficiency, real-time patient and insurance data verification, clean claim validation, and laboratory insights - all while increasing net collections and improving patient, client, and payer satisfaction.

There is a much-needed paradigm shift taking place within the industry as the accepted, old, and disconnected laboratory billing process is being replaced with a new way of thinking and new powerful laboratory billing solutions that will help organizations meet their present and future challenges, become more profitable, gain an edge over the competition, and steadily grow their technical and financial operations.

Learn More: The Power of Integration: Unleashing the Potential of LigoLab's LIS System & Lab RCM Platform

A Fully Integrated LIS Software & Laboratory Billing System

Across the United States, an estimated 35 percent of all denials and rejections are caused by inaccurate or missing data. Siloed laboratory billing system software and standalone laboratory billing solutions noticeably contribute to this high rate. Lack of transparency and synchronization due to disparate laboratory software systems leads to data inconsistencies, increased denials, and a loss of revenue. Labs that operate this way have traditionally had two choices. Either add more costly resources to rework the claims before submitting them again, or write off the claims as bad debt.

There is a better RCM process and laboratories nationwide are taking notice.

Lab leaders are now replacing old and outdated laboratory billing solutions with highly flexible and comprehensive all-in-one laboratory information system & lab billing platforms that leverage integration and automation to optimize net collections, minimize the need for expensive manual labor, and position laboratories to scale.

Learn More: Understanding the Real Costs of Non-Integrated RCM Systems

‍Avero Diagnostics Laboratory Billing Case Study

Tina Quevedo is the Senior Director of the Business Office for Avero Diagnostics, which runs a full-service high-volume laboratory that supports pathology and clinical laboratory testing in multiple locations across the country. 

Avero has partnered with LigoLab for its LIS lab solution since March 2015 and, as of January 2019, it became fully integrated by switching from its legacy laboratory billing vendor to LigoLab’s all-in-one pathology lab software platform.

Learn More: Best Pathology Lab Reporting Software - 2025 Buyers Guide and Checklist

Within four months of deploying LigoLab’s fully integrated lab billing module, Avero began to experience measurable gains in efficiency, accuracy, and net collections. Quevedo and her team were now armed with effective new lab revenue cycle management tools and full transparency. That gave Avero accurate demographic and lab billing information (in real-time) on the front end of the RCM cycle, something that the business had lacked previously.

Before full integration, LigoLab’s LIS lab module interfaced with Avero’s standalone laboratory billing system provided by a well-known RCM management company. Quevedo said the lab billing arrangement wasn’t user-friendly, particularly for TC/PC splits. The previous laboratory billing system lacked much-needed functionality and transparency. All coding was done in LigoLab’s LIS system module, but the lab billing rules resided within Avero’s legacy laboratory billing system. Often rules set up in the background of the old laboratory billing system prevented her staff from physically being able to submit a claim, even with accurate data. The legacy RCM software lacked real-time claim scrubbing tools, meaning Avero’s lab billing department couldn’t validate information coming into the RCM system. The legacy lab revenue cycle management solution also produced double balances and false refunds, creating accounting headaches and the need for human intervention.

Quevedo said there were many issues with the old laboratory billing software for labs and it was necessary for her staff to manually go through every single payment application on the backend to check for accuracy. It was a slow and inefficient laboratory billing process described as inflexible, and she was also unsatisfied with the help and assistance provided by the RCM management company when problems did occur.

Quevedo said her staff now focuses on appeals management and payment collection rather than wasting time searching for missing and inaccurate patient demographic and insurance information.

As a lab order originates, Avero can now conduct an immediate and automatic demographic look-up, address validation, prior authorization, live eligibility check, and insurance discovery. All lab processes (LIS system and lab RCM workflow) are united on one shared platform. The lab no longer needs to synchronize clients, tests, and payers because all the interdependent information is instantly shared across the LIS and the RCM modules. The all-in-one platform also automatically checks for duplicate demographics and history. Additionally, new provider information can be added quickly and accurately because the platform has a real-time interface with the Centers for Medicare and Medicaid Services and the NPI Registry.

This ultra-modern LIS system & lab RCM diagnostic lab software solution features an “Encounter” data structure that advances transparency by consolidating all relevant information and providing a real-time composition of patient demographic, order, and claim data (all visible within a comprehensive screen). All scanned documents, including requisitions, reports, and test results, are also available for review as the Encounter optimizes laboratory workflow management and seamlessly streamlines the transition from testing and reporting to statement and payment processing.

Learn More: How Best Practices and Advanced Laboratory Information System Technology Help Ensure Lab Workflow Management

A Closer Look

Avero enjoyed unprecedented revenue growth with net collections going up 31 percent year over year (from January 2019 to January 2020). Even more impressive, the explosive growth came without any added operating costs.

Powered by automation, the flexibility to schedule and distribute statements, fully customizable statement templates, and better patient engagement, Avero’s patient net collections jumped 30 percent. 

The lab, equipped with efficient RCM tools created by the shared lab information system & lab billing platform, on average was able to send patient bills three weeks faster than before, and that early outreach accelerated laboratory cash flow. 

The platform also provided a more patient-centered payment experience, making it easier for patients to pay their bills via an online portal that automates posting. Patients received regular notifications through email and SMS and 36 percent of them took advantage of the online portal option to pay their bills.

Learn More: LigoLab Gives Labs a Convenient and User-Friendly Way to Incentivize Patients and Accelerate Payments

Avero’s client net collections grew by 45 percent thanks to the automation, integration, customization, and convenient payment management built into the platform. That also led to a big reduction in the need for manual labor and resulted in fewer clerical errors. 

Another driver was the client notification functionality, an automated process that gave Avero’s clients access to review charges daily instead of going through a lengthy document at the end of the month. Clients could call ahead of their monthly invoice to report errors, dispute a charge, or ask questions. This led to fewer concerns post-receipt, resulting in faster payments.

Net collections from payers increased by 27 percent as Avero’s real-time access to patient demographics, insurance discovery, and insurance eligibility led to optimized claims and a first-pass resolution rate much higher than the year before, and well above the national average. Automated CPT and ICD-10 coding, and real-time rejection and denial queues were other key elements that contributed to the significant growth in this category.

In addition to impressive growth in net collections across the board, Avero benefited from key performance indicators (KPI) that traced directly back to full medical LIS - lab billing integration and improved efficiency.

Avero’s percentage of annual net collections per employee went up 31 percent because the lab’s full-time equivalents didn’t change year-over-year even as net collections went way up, reflecting growth without additional operating costs.

Lastly, thanks to the improvements provided by LigoLab’s all-in-one pathology lab management platform, Avero dramatically increased its output. The lab submitted 22 percent more claims (adjusted for growth) than the previous year.

Case Study: From Launch to Lift-Off: Highlighting Goldfinch Laboratory’s Formula for Rapid Growth

Conclusion

The reality is that several industry challenges and pressures exist and the time to act is now for independent pathology, clinical, and reference labs. By acting now, they can unlock their true potential and not only survive but grow and thrive despite the present threats with a robust and future-ready all-in-one laboratory information system & lab RCM solution.

The platform they choose should be integrated, easily accessible with open architecture, comprehensive, transparent, and secure, providing vital real-time data at the beginning of the laboratory billing process through deep third-party integration and automation. The solution should also propel the lab to a near-perfect clean claims percentage on the first-pass and score much higher than the national average of 91 percent for first-pass payments, dramatically decreasing the need for expensive and time-consuming manual processing of claims.

The right RCM cycle solution should include automatic coding and secure payment processing via an online portal and have the capacity to handle vast amounts of data (and turn that data into currency) as the platform teaches itself in real time and gradually becomes more efficient.

A modern integrated medical LIS & lab RCM solution like the one offered by LigoLab should put the lab in a position to scale due to a spike in net collections, and be engineered to meet the complex and specific needs of all laboratories, no matter their size.

Learn More: The LigoLab Difference: Demonstrating the Power of Lab RCM Automation in the Clinical Laboratory

Laboratory Billing Wish List

With a future-ready LIS system & laboratory billing informatics platform, labs can enhance their RCM cycle in the following ways:

• Gain full control and transparency of operations and finances.
• Capture valuable and accurate information needed for optimized laboratory billing on the front end of the RCM cycle, such as address validation, demographic check, insurance discovery, eligibility verification, prior authorization acquisition, and dynamic procedure send-out logistics, all while utilizing real-time integration and automation.
• Benefit from full bidirectional synchronization with third-party lab billing services such as mailing companies, multiple clearinghouses, the NPI Registry, and payment processors.
• Utilize automation, operational and financial insights, and highly detailed data mining and tracking to streamline medical LIS and lab billing workflow, and curtail clerical errors.
• Benefit from automated CPT coding at various stages in compliance with every known regulation including PTP, MUE, NCCI, and custom payer requirements.
• Use automated policies and statistical analysis for diagnosis (ICD-10) assignments.
• Expedite the collection of claims and appeals while minimizing labor costs by auto-assignment of the rendering provider, the rendering facility, the lab billing facility, and auto TC/PC splitting.
• Address financial regulations during a patient visit, by generating an Advance Beneficiary Notice (ABN) and collecting prepayment.
• Apply QA and QC throughout the RCM cycle with a fully inclusive audit trail.
• Apply machine learning to relevant data and drive continuous process improvement.
• Employ high-visibility components such as real-time laboratory workflow management queues for each lab role.
• Create detailed statistical reports to monitor trends, key performance indicators, and benchmarks within the operation, all from the convenience of an inclusive informatics platform.

Learn More: Understanding the Importance of Real-Time Analytics in the Modern Clinical Laboratory

More Lab Billing Insight To Consider

Once a lab recognizes the need to change its RCM process to remain viable and profitable, the next step is for that lab to look internally to establish goals and objectives.

LigoLab gives forward-thinking clinical laboratories and pathology groups the tools to successfully negotiate these challenging times while also separating itself from other laboratory information systems and laboratory billing solutions in the following ways:

• The LigoLab LIS & RCM Informatics Platform is highly flexible LIS software and can be easily configured to meet the unique needs of any clinical lab or pathology group.

• LigoLab clients can easily add embedded elements of the comprehensive laboratory informatics platform (LIS & RCM modules plus support engines and modules) to their operations at any time without additional servers, hardware, middleware, or interfaces.
• The full suite of LIS system and lab RCM applications is available to customers from day one, positioning them to scale quickly by adding new modules and tests as their business grows without having to move to another pathology software.
• LigoLab works closely with its partner labs at every step of the implementation process. From domain analysis to validation, to go-live and beyond, the LigoLab implementation and support teams guide users throughout configuration while at the same time mitigating risk. In two decades of doing business, LigoLab partner labs have never experienced a rollback after going live or have chosen to migrate to another LIS system after implementing the LigoLab platform.
• The LIS system & lab billing solution is constantly evolving and feature-rich. No day goes by without LigoLab’s talented development team deploying a new feature to benefit its partner labs.
• Traditional laboratory information system companies require capital-intensive or prohibitive upfront licensing fees but LigoLab doesn’t. Instead, the LIS company invests in long-term relationships through an aligned tiered pricing model. Through shared risk and reward, LigoLab and its partner labs grow together.
• LigoLab is headquartered in Los Angeles and the LIS company specializes in developing and licensing LIS laboratory information system software for pathology, clinical, and reference laboratories.
• By partnering with LigoLab, customers gain the deep domain expertise and best practices that come with the best LIS system software developed by pathologists and laboratorians, plus friendly, responsive, and unlimited customer service available 24/7.

Learn More: LigoLab Informatics Platform: Uniquely Designed to Deliver Maximum Value

‍Last Thought

Laboratories using outdated RCM tools and legacy laboratory billing solutions are being left behind because the old laboratory billing process doesn’t have a foundational link and all of the advantages that come with it.

Medical labs that have the wisdom to employ modern all-in-one pathology LIS systems like the LigoLab platform will take pleasure in the benefits that come with an efficient, flexible, and transparent informatics platform, resulting in:

• Accelerated cash flow
• Increased revenue and margins
• Competitive edge in the market

At LigoLab, we’ve provided flexible all-in-one laboratory information system software solutions since 2006, and our comprehensive and agile informatics platform is currently driving efficiency, performance, and growth in 300+ facilities nationwide.

Contact us to schedule a LigoLab pathology software demonstration and experience how a fully integrated LIS system & lab RCM platform can unite and digitally transform your lab’s financial, administrative, and technical operations.

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