The Connected Laboratory: A New Approach to Laboratory Billing Services

(Note: This blog has also been published at Clinical Lab Manager)

If you were to conduct a cross country poll of clinical laboratory operators, you’d find that the majority of them still deploy two separate stand-alone software solutions: one for laboratory information (LIS), and one for revenue cycle management (billing).

That would be no surprise. Laboratories have traditionally handled billing this way, as a distinctly separate process from operations. 

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

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

The traditional wait-until-the-end approach to laboratory billing 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 model. But downward market trends and shrinking margins are forcing labs to consider a new model - one that connects the laboratory information system and the revenue cycle management workflows onto one common database, one that produces end-to-end data integrity, and one that gives them a headstart on laboratory billing services. 

A Laboratory Billing Solution that Bridges the Gap Between LIS and RCM Systems

Still, in its early stages, a much-needed paradigm shift within the laboratory industry has begun. The old and disconnected back-end billing process is being replaced with a new connected one that enables labs to begin the billing cycle as the order is received. This new laboratory billing solution model is supported by innovative 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. 

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Laboratory Billing Software that Integrates LIS & RCM Ecosystems

With RCM functionality interwoven into the LIS workflow, labs can efficiently leverage integration with clearinghouses and other third-party billing services to automate administrative tasks and receive real-time validations for key patient information like address, demographics, insurance eligibility, insurance discovery, and prior authorization, all at order creation. This captured information is efficiently checked, verified, and instantaneously shared across the entire LIS & RCM platform, removing the need for synchronization and the headaches that come with inconsistent data transferred across multiple 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 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 profit. 

An added benefit is the operational and financial insight gained through LIS & RCM integration. This integration allows for full visibility of both workflows on one powerful and data-driven platform that can provide high-level views or drilled down snapshots of the business in real-time. Armed with this knowledge, lab operators can identify potential problems and bottlenecks and resolve them quickly.  

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

Deciding to go with an enterprise-level software solution that incorporates RCM functionality throughout the laboratory workflow is a sizable investment and a major change, so lab operators are encouraged to do the necessary research to find out if upgrading to a fully integrated LIS & RCM platform makes sense for them and their businesses. 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. Putting together a simple RCM Laboratory Billing Solution Checklist of manual administrative steps to be taken at order creation can also help improve the bottom line.

With a change in mindset and by embracing the laboratory medical 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. 

Michael Kalinowski

Michael Kalinowski is the Director of Communications and Public Relations for LigoLab Information System.

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About LigoLab

LigoLab is a leading provider of innovative end-to-end healthcare software for laboratories, servicing 100+ facilities nationwide. As a comprehensive enterprise-grade solution, the LigoLab LIS & RCM Laboratory Operating Platform™ includes modules for AP, CP, MDx, RCM, and Direct-to-Consumer, all-in-one integrated platform that supports every role, department, and the entire lifecycle of all cases, enabling laboratories to better serve patients, differentiate themselves in the marketplace, scale their operations, become more compliant, and more profitable. 

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

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