Case Study
The Connected Laboratory: A New Approach to Laboratory Billing Services
July 2, 2024
(Note: A version of this laboratory billing blog was published at Today’s Clinical Lab)
Conduct a cross-country poll of clinical laboratory directors and managers and chances are you’d find the majority of them are still deploying two separate standalone laboratory software systems for their operational needs: one for LIS laboratory information system functions, and one for laboratory billing, also commonly referred to as laboratory revenue cycle management (lab RCM).
That would be no surprise. Pathology practices and clinical laboratories have traditionally handled lab billing this way, with the RCM cycle serving as a separate laboratory workflow from technical operations.
Going further, it’s a sure bet that most of these same siloed organizations begin the laboratory billing process only after the finalized lab report has been distributed. 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.
Learn More: Reduce Denials and Stop Revenue Leakage With Integrated Laboratory Billing Management
It’s a common problem for all medical providers, not just laboratories that rarely interact with patients. In fact, across the U.S., an estimated 35 percent of claims are denied annually due to missing or inaccurate patient data due to manual clerical error.
Traditional laboratory billing solutions worked just fine when laboratories were more profitable, and margins were high enough to offset the denials and write-offs closely associated with this back-end laboratory billing process.
However downward market trends and shrinking margins are forcing labs to consider a new lab billing model that connects medical 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 practices and clinical labs to begin the RCM cycle as the order is received.
This new LIS lab and 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.
Learn More: Leveraging LIS System & Lab RCM Integration to Improve the Laboratory Billing Process
Lab Billing Software and LIS System Integration
With lab RCM functionality interwoven into the laboratory information system (LIS meaning medical) 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 to synchronize master files and the headaches created by 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.
And there’s an added benefit which is the operational and financial insight gained through LIS & RCM integration. This integration allows full visibility of the pathology information system and the lab billing workflow on an all-in-one data-driven platform that provides high-level and drilled-down snapshots of the business on demand.
Armed with this actionable knowledge, lab managers and CEOs can identify potential problems and bottlenecks and resolve them quickly.
Learn More: The Power of Integration: Unleashing the Potential of LigoLab's LIS System & Lab RCM Platform
Other RCM Cycle Solutions to Improve the Laboratory Billing Process
Deciding to go with an enterprise-level all-in-one laboratory information system (LIS software) solution that incorporates lab RCM functionality throughout clinical laboratory management 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.
Learn More: How to Set Up a Committee to Select a Laboratory Information System
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 their in-house lab 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.
LigoLab's All-in-One Pathology Software Solution
LigoLab is a leading provider of innovative end-to-end laboratory information systems for medical laboratories, servicing nearly 300 facilities nationwide.
As a comprehensive enterprise-grade pathology software solution, the LigoLab LIS & RCM Laboratory Informatics Platform™ includes powerful modules that support all clinical laboratory management processes and lab workflow, including anatomic pathology, clinical laboratory, molecular diagnostics, lab revenue cycle management, and direct-to-consumer lab testing.
LigoLab’s integrated platform supports every role, department, and lifecycle of all cases, enabling laboratories to serve their patients better, differentiate in the marketplace, scale their operations, and become more profitable.
LigoLab’s lab RCM module is deeply integrated into the LIS system software. The module automates several tasks (like ICD and CPT coding) while 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 with its customers and takes full responsibility for all laboratory information system-related needs. This enables their lab partners to focus entirely on the diagnostic services that help healthcare providers and patients make informed decisions.
Have you heard about LigoLab’s 99.9 percent uptime guarantee? Read about it here and to learn more about it, we invite you to contact one of our talented LIS system and lab billing product specialists.
