Understanding the Real Costs of Non-Integrated RCM Systems
August 11, 2023
In most cases, two is better than one, but that’s certainly not the case when comparing LigoLab’s fully integrated informatics platform against standalone revenue cycle management systems (RCM) that require interfaces with laboratory information systems (LIS).
In this LigoLab blog post, we’ll do a deep dive and uncover the deficiencies that plague non-integrated RCM systems. We’ll also shine a spotlight on the many advantages that can be realized soon after independent pathology groups and clinical laboratories make the move to LigoLab’s integrated all-in-one LIS software solution.
We’ll show you how non-integrated RCM systems require more labor, have limited scalability, and are subject to data silos and compliance issues. Additionally, we’ll emphasize some of the risk exposure and opportunity costs such as missed collections, manual labor, operational and financial visibility, fragmented workflows, and increased maintenance expenses.
We’ll compare that with LigoLab’s interdependent approach to laboratory billing, an approach characterized by integrated LIS & RCM modules powered by automation, customization, and best-in-class support.
We’ll explain how this new approach to lab revenue cycle management creates an efficient and reliable lab billing workflow that significantly decreases denials and stops revenue leakage while also increasing the rate of first-pass claim payments.
Beware of Low-Cost Laboratory Billing Solutions
When researching lab billing software for your financial operation, it’s important to look beyond the initial cost savings and carefully evaluate the potential long-term implications.
Here are some important factors to consider before moving forward with a non-integrated and less expensive RCM solution:
Additional Labor Costs: Less expensive RCM systems lack automation, resulting in increased manual work for your staff. This not only poses a compliance risk for your organization but also risks potential revenue loss.
Days in AR: This lack of automation and data silos in multiple systems also negatively affects your lab's ability to quickly and accurately submit claims, or take corrective action before a claim is denied. As denials increase, the claims backlog grows, resulting in more time filing of denials and write-offs, an infinite loop.
Compliance and Accuracy Issues: Manual data entry is a signature attribute of less expensive laboratory billing systems. This will subject your lab to human errors that lead to billing and coding inaccuracies and possible compliance problems.
Scalability Issues: A less expensive RCM software system might be able to handle your lab’s current volume, but what about growing volumes and increased complexity? The less expensive option will likely struggle, hindering your lab’s scalability.
Integration Challenges: Simpler laboratory billing solutions will also likely struggle to deeply integrate with your lab’s existing LIS system, exposing the lab to inefficiencies and an increased likelihood of errors.
Limited Support and Training: Less expensive lab revenue cycle management software likely won’t come with the responsive customer support and continued training needed to effectively use the system, resulting in reduced productivity and more mistakes.
Add-on Costs: The RCM system you’re considering may appear less expensive, but that might not be the case when you fully understand the hidden or add-on costs that come with it. For example, RCM system vendors typically charge substantial amounts for modifications, configurations, and automations to the software. This is also usually associated with long project turnaround times, creating a rigid structure with limited flexibility and control of any desired changes.
Data Silos: A cheaper standalone RCM solution will fail to centralize all your lab data, leading to fragmented and inconsistent information spread across various systems. This hinders efficiency, transparency, and decision-making.
When deciding on laboratory billing, it’s highly recommended that you consider more than the cost of the RCM solution. Look beyond that and also assess the RCM solution’s impact on your laboratory's overall operations and performance.
We believe that the best billing software for labs is an integrated and robust LIS & RCM solution that offers seamless automation, enhanced data management, and dedicated support, all of which will significantly improve revenue capture and make common lab billing issues a thing of the past.
The Opportunity Costs of a Siloed RCM System Should Also Be Considered
When exploring laboratory billing options for their lab businesses, lab operators often make the mistake of not examining the total cost of ownership (TCO), which is a method of calculating the overall cost of a product throughout the product’s lifecycle. This is done by taking into account both direct and indirect costs.
To help you better understand the TCO (also known as long-term price) associated with the selection of a siloed RCM system, we’ve compiled a list of opportunity costs that should also be considered:
Time and Efficiency: Operating within isolated software systems for LIS and RCM processes often leads to fragmented workflows that demand extra time and resources.
Data Integrity and Accessibility: When utilizing separate systems, conflicting data between your LIS and RCM solutions is a constant issue that can result in revenue losses.
Synchronization of Master Files: Master Files must be manually synchronized in standalone systems, and this is a process that can trigger unpredictable workflow outcomes, inefficiencies, and potential errors.
Customer Service: Balancing between two disparate systems can result in delayed responses and diminished customer service quality.
Maintenance: The cumulative expenses that come with maintaining two separate systems can be substantial.
Innovation: Separate systems may impede the adoption of new features or enhancements.
Now compare the above opportunity costs with Ligolab’s integrated laboratory information system and revenue cycle management platform:
- The platform optimizes workflows, preserves time, and maximizes operational efficiency.
- The platform’s unified software infrastructure guarantees instantaneous data synchronization, elevating data integrity and accessibility. Unlike non-integrated systems, there is no need for synchronization of data - including Master Files - at any stage because all of the data resides in the same system.
- The integrated LIS & RCM solution provides seamless customer service experiences and complete accessibility and control over all lab data. This customer service includes the continuous review of all queues by our RCM team to catch any issues early on and aid our lab partners with corrective measures. This is one of many examples where LigoLab as a trusted LIS vendor takes full responsibility for the entirety of a lab’s informatics (operational, technical, and financial).
- Your laboratory can achieve noteworthy cost reductions by consolidating the functionality of two systems into a solitary, integrated platform.
- Having one system with interdependent LIS and RCM functionality also provides a level of operational and technical visibility that can’t be matched, and it creates tremendous opportunities for automation to be added to lab workflow.
- The platform is also meticulously crafted with future preparedness in mind, receiving consistent updates to align your lab with the evolving technological landscape.
With LigoLab, opportunity costs become a non-factor as you gain a robust, scalable, and integrated LIS and RCM solution that has a proven track record of driving laboratory growth and success.
Turn Your Lab’s Revenue Cycle Management into a Priority
Operating a successful lab operation is challenging in even the best of times, so why make it even harder by continuing to accept an old, disconnected, and costly laboratory billing process?
Conventional wisdom still says that billing is a backend process that begins after services have been rendered. This is a flawed way of doing business, especially when you consider some of the major advantages that come with an alternative and integrated approach:
- With LIS & RCM integration, medical labs gain upfront access to third-party RCM tools that allow for immediate real-time capture of important billing information like patient demographic and address validation, plus insurance discovery and eligibility validation.
- Integration between the two modules eliminates data silos and facilitates the real-time tracking of each procedure performed by the laboratory.
- Integration coupled with LigoLab’s automation engine creates a transparent and seamless environment that’s optimal for accurate coding and revenue capture. Processes that were once mostly manual and prone to errors are now automated with precise pre-coding taking place in the LIS module, before being accurately transferred to the billing encounter entity within the RCM module.
At LigoLab, we’ve long been a proponent of the paradigm shift that’s taking place in our industry and we’re encouraged as more and more medical labs are beginning to understand the inherent advantages that come with an integrated LIS & RCM system that makes lab billing a priority at order inception. Unfortunately for most, this is out of necessity as shrinking reimbursements, the high cost of labor, unique payer requirements, and increased regulations are taking a heavy toll on labs that stubbornly continue to do things the traditional way.
To learn more about the many advantages that come with an all-in-one system that unites LIS & RCM functionality, we’ve included a link to our White Paper on this subject:
The LigoLab Difference: Laboratory RCM Solutions that Transform Workflow Operations
As highlighted in our White Paper and throughout this blog post, LigoLab’s RCM solution outperforms its standalone RCM competitors by leveraging an integrated approach to technical and financial operations.
- Our lab partners consistently report an increase in ongoing revenue by 15-35% within three months of implementation. This is a testament to the software's immediate impact and effectiveness and a clear indication of the amount of revenue most labs are leaving on the table.
- With our platform, 95% of claims are paid on the first pass. This represents a dramatic increase in error-free claims which in turn enhances cash flow and revenue. Time and resources spent on resubmissions and claim follow-ups are also greatly reduced.
- Our platform and services automate tasks wherever and whenever possible, and by doing this we have consistently managed to reduce manual labor by 30% for our partner labs. This significant reduction leads to a more streamlined, productive, and cost-effective operation, and it also directly enhances a lab's compliance posture.
- Our dedicated team of RCM experts continuously monitors queues and workflows to prevent mistakes and inefficiencies, and our engineers work tirelessly with our lab partners to build custom automation and strategies that refine and enhance their lab's operations. We understand that our success is intrinsically aligned with them, and we go above and beyond to ensure our solutions deliver the desired results.
At LigoLab, we’ve provided flexible all-in-one LIS & RCM solutions for growing clinical laboratories and pathology groups since 2006, giving them what they need to modernize and grow efficiently.
Contact us to schedule a software demonstration and see for yourself how a fully integrated informatics platform can unite and transform a lab’s financial, administrative, and technical operations.