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Case Study

The Connected Laboratory: A New Approach to Laboratory Billing Services

The Connected Laboratory: A New Approach to Laboratory Billing Services

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(Note: This blog was also published at Today’s Clinical Lab)

If you were to conduct a cross-country poll of clinical laboratory managers, you’d find that the majority of them still deploy two separate stand-alone laboratory software systems: one for laboratory information system functions, and one for laboratory billing, also commonly referred to as laboratory revenue cycle management.

That would be no surprise. Pathology laboratories have traditionally handled lab billing this way, as a distinctly separate laboratory workflow from operations. 

Going even further, it’s a sure bet that most of these same siloed laboratories begin the laboratory billing process after the lab report has been finalized. This often results in a frustratingly high number of denied claims because they were sent to the payer while still missing basic patient and case information.

It’s a common problem for all medical providers, not just laboratories that rarely interact with patients. In fact, across the US, an estimated 35 percent of claims are denied annually due to missing or inaccurate patient data due to clerical error.

Traditional laboratory billing solutions worked just fine when laboratories were more profitable, and margins were high enough to offset the denials and the write-offs that accompany this back-end laboratory billing process. However downward market trends and shrinking margins are forcing labs to consider a new lab billing model - one that connects laboratory information system and lab revenue cycle management workflow on a unified database and software infrastructure.

Bridging the Gap Between Laboratory Information Systems and Lab RCM 

A much-needed paradigm shift within the laboratory industry has begun. The old and disconnected back-end laboratory billing process is being replaced with a new connected one that enables pathology labs to begin the RCM cycle as the order is received. This new laboratory billing system model is supported by innovative RCM tools that optimize cash collection and protect laboratories from reimbursement cuts, fast-changing payer requirements, growing patient responsibility for healthcare costs, and other external threats.

LIS and RCM Systems


Billing Software for Labs that Integrates LIS & RCM Ecosystems

With lab RCM functionality interwoven into the LIS system workflow, labs can efficiently leverage integration with clearinghouses and other third-party lab billing services to automate administrative tasks and receive real-time validations for critical patient and case information like address, demographics, insurance eligibility, insurance discovery, and prior authorization, all as the lab order is created. This captured information is efficiently checked, verified, and instantaneously shared across the entire LIS & RCM informatics platform, removing the need for synchronization of master files and the headaches that come with inconsistent data transferred across multiple laboratory software systems.

With several administrative tasks now automated, the percentage of denied claims going down, and the percentage of first-pass claims accepted by the payer on the rise, the immediate benefit comes in the form of net collection gains for the laboratory shortly after implementation. Additionally, the laboratory billing team that was previously bogged down reworking claims with subpar laboratory billing software is now free to focus on and resolve the more difficult cases promptly, unlocking what could’ve been lost revenue and turning it into profit. 

An added benefit is the operational and financial insight gained through LIS & RCM integration. This integration allows for full visibility of both the laboratory information system and the lab billing workflow on one data-driven platform that provides both high-level and drilled-down snapshots of the business in real-time. Armed with this actionable knowledge, lab managers and CEOs can identify potential problems and bottlenecks and resolve them quickly.

LIS & RCM


Short-Term Lab RCM Solutions to Improve the Laboratory Billing  Process

Deciding to go with an enterprise-level laboratory information system solution that incorporates lab RCM functionality throughout the laboratory workflow is a sizable investment and a major change, so lab ownership is encouraged to do the necessary research and evaluation to find out if upgrading to a fully integrated LIS & RCM platform makes sense for them and their business. In the meantime, there are actionable steps that any laboratory can implement today to help ensure more clean claims and less back-end work for the billing team. To help, we’ve put together a simple RCM Laboratory Billing Solution Checklist of manual administrative steps to be taken at order creation to help improve the bottom line. The checklist is linked here

With a change in mindset and by embracing the laboratory billing solutions that are now available, laboratories can do more than just meet the challenges of today and the future, they can become more efficient and more profitable.

RCM functionality


About LigoLab's Pathology Lab Software

LigoLab is a leading provider of innovative end-to-end laboratory information systems for laboratories, servicing nearly 300 facilities nationwide. As a comprehensive enterprise-grade LIS software solution, the LigoLab LIS & RCM Laboratory Informatics Platform™ includes powerful modules that support all lab workflow, including anatomic pathology, clinical laboratory, molecular diagnostics, lab RCM, and direct-to-consumer lab testing. LigoLab’s all-in-one integrated platform supports every role, every department, and the entire lifecycle of all cases, enabling laboratories to better serve patients, differentiate themselves in the marketplace, scale their operations, and become more profitable. 

LigoLab’s RCM module is deeply integrated into the LIS software. The module automates ICD and CPT coding and many other financial tasks while also mitigating audit risk and increasing margins. Lab billing processes start at order creation with verification, eligibility, and scrubbing components that increase clean claim submissions and revenue, and decrease denials and compliance liability. 

LigoLab thrives on long and mutually beneficial partnerships and takes full responsibility for all of its clients’ laboratory information system-related needs, enabling these laboratories to focus on the diagnostic services that help healthcare providers and patients make informed decisions.

Michael Kalinowski
Author
Michael Handles Marketing and Communications for LigoLab

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