Understanding the Real Costs of Non-Integrated RCM Systems

Understanding the Real Costs of Non-Integrated RCM Systems

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In most cases, two is better than one, but that’s certainly not the case when comparing LigoLab’s fully integrated informatics platform (diagnostic lab software with comprehensive LIS medical and laboratory billing system functionality) against standalone laboratory revenue cycle management systems (laboratory billing solutions) that require interfaces with laboratory information systems (LIS systems) and other laboratory software systems.

In this LigoLab blog post, we’ll deep dive and uncover the deficiencies that plague non-integrated laboratory billing solutions. We’ll also spotlight the many advantages that can be realized soon after independent pathology groups and clinical laboratories move from a legacy laboratory billing system to LigoLab’s all-in-one pathology lab management system

We’ll show you how a non-integrated laboratory billing system requires more labor, has limited scalability, and is subject to data silos and compliance issues. Additionally, we’ll emphasize the risk exposure and opportunity costs such as missed collections, the need for more manual labor, questionable operational and financial visibility, fragmented workflows, and increased maintenance expenses.

We’ll compare that with LigoLab’s interdependent approach to lab revenue cycle management, an approach characterized by integrated LIS system & lab RCM modules powered by automation, customization, and best-in-class support.

Learn More: Stability and Performance: The Two Most Important Aspects of a Modern Laboratory Operation

We’ll explain how this new LIS system vendor's approach to the RCM cycle and pathology lab management creates an efficient and reliable lab billing workflow that significantly decreases denials and stops revenue leakage while at the same time increasing the rate of first-pass claim payments. 

 Lab revenue cycle management

Beware of Low-Cost Laboratory Billing Solutions 

When researching a laboratory billing system 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 laboratory billing system:

Additional Labor Costs: A less expensive laboratory billing system lacks 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 laboratory software 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 spent on denials and write-offs, an infinite loop.

Compliance and Accuracy Issues: Manual data entry is a telling attribute of a less expensive laboratory billing system. This will subject your lab to human errors that lead to billing and coding inaccuracies and possible compliance problems.

Scalability Issues: A less expensive laboratory billing 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 integrate with your lab’s existing LIS system (pathology information system), exposing the lab to inefficiencies and an increased likelihood of errors.

Limited Support and Training: Less expensive laboratory billing solutions likely won’t come with the responsive customer support and continued training needed to effectively use the laboratory billing system, resulting in reduced productivity and more mistakes.

Add-on Costs: The laboratory billing 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 software vendors usually charge substantial amounts for modifications, configurations, and automated clinical lab workflow. This is also typically associated with long project turnaround times, creating a rigid structure with limited flexibility and control over all desired changes.

Data Silos: Cheaper laboratory billing solutions will fail to centralize all your lab data, leading to fragmented and inconsistent information spread across various laboratory software systems. This hinders efficiency, transparency, and decision-making.

When deciding on a laboratory billing system, it’s highly recommended that you consider more than the cost. Look beyond that and assess the laboratory billing solution’s impact on your business's operations and performance. 

The best billing software for labs is an integrated and robust LIS system & laboratory billing system solution that offers seamless automation, enhanced data management, and dedicated support that will significantly improve revenue capture and make common lab billing issues a thing of the past.

LIS & RCM solution

Laboratory Billing System Opportunity Costs 

When exploring laboratory billing solutions 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 laboratory billing system, we’ve compiled a list of opportunity costs that should also be considered:

Time and Efficiency: Operating within isolated laboratory software systems for LIS medical processes and the laboratory revenue cycle management cycle often leads to fragmented clinical lab workflow that demands extra time and resources. 

Data Integrity and Accessibility: When utilizing separate laboratory software systems, conflicting data between your LIS system and laboratory billing system solutions is a constant issue that can result in revenue losses.

Synchronization of Master Files: Master Files must be manually synchronized in standalone laboratory software systems, and this is a process that can trigger unpredictable workflow outcomes, inefficiencies, and potential errors.

Customer Service: Balancing between two disparate laboratory software systems can result in delayed responses and diminished customer service quality.

Maintenance: The cumulative expenses to maintain two separate laboratory software systems can be substantial. 

Innovation: Separate laboratory software systems may impede the adoption of new features or enhancements to clinical lab workflow.

Now compare the above opportunity costs with Ligolab’s integrated laboratory information system and laboratory billing system platform:

  • The platform optimizes clinical lab workflow, preserves time, and maximizes operational efficiency.
  • The platform’s unified laboratory information system software infrastructure guarantees instantaneous data synchronization, elevating data integrity and accessibility. Unlike non-integrated LIS medical and lab billing system solutions, there is no need to synchronize the data - including Master Files - at any stage because all data resides in the same system.
  • The integrated LIS system & laboratory billing system combine to create a seamless customer service experience and complete accessibility and control over all lab data. This customer service includes continuous review of all queues by LigoLab’s RCM team to catch any issues early on and aid lab partners with corrective measures. This is one of many examples where LigoLab, a trusted LIS company, takes full responsibility for all of a lab’s informatics (operational, technical, and financial).
  • Your laboratory can achieve noteworthy cost reductions by consolidating the functionality of two laboratory software systems into a solitary, integrated pathology lab management platform. 
  • Having one pathology lab management system with an interdependent LIS system and lab RCM functionality also provides operational and technical visibility that can’t be matched, creating tremendous opportunities for automation to be added to clinical lab workflow. 
  • The LIS medical and lab billing 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 laboratory information system and lab RCM solution with a proven track record of driving laboratory growth and success.  

Learn More: Documenting the Avero Diagnostics Move From a Legacy Lab RCM System to LigoLab’s All-in-One Lab Informatics Platform

Turn Your Lab Revenue Cycle Management into a Priority 

Operating a successful lab operation is challenging in the best of times, so why make it even harder by continuing to accept an old, disconnected, and costly laboratory billing system and laboratory billing process? 

Conventional wisdom still says that in-house lab billing is a backend process that begins after all 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 medical & lab RCM integration, clinical labs and pathology groups gain upfront access to third-party RCM tools that allow for immediate real-time capture of important lab billing information like patient demographic and address validation, plus insurance discovery and eligibility validation. 
  • Integration between the LIS system and lab RCM 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 optimal for accurate coding and revenue capture. Laboratory billing processes that were once mostly manual and prone to errors are now automated with precise pre-coding in the LIS module, before being accurately transferred to the billing encounter entity within the RCM module. 

Learn More: Maximizing Your Lab’s Profitability: The Case for In-House Lab Billing

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 system & lab RCM 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 LIS laboratory information system that unites LIS & RCM functionality, we’ve included a link to our White Paper on this subject: 

 White Paper: Leveraging LIS & RCM Integration to Improve the Laboratory Billing Process

LIS & RCM system

The LigoLab Difference: Laboratory Billing Solutions to Transform Clinical Lab Workflow 

As highlighted in our White Paper and throughout this blog post, LigoLab’s laboratory billing system outperforms its standalone RCM system competitors by leveraging an integrated approach to diagnostic lab software and technical and financial operations. 

  • LigoLab’s lab partners consistently report an increase in ongoing revenue by 15-35% within three months of implementation. This is a testament to the laboratory information system software's immediate impact and effectiveness and a clear indication of just how much money non-integrated labs are leaving on the table.
  • With the LigoLab platform on average 95% of claims are paid on the first pass. This number represents a dramatic increase in error-free claims that improves cash flow and revenue capture. Time and resources spent on resubmissions and claim follow-ups are also greatly reduced.
  • The LigoLab platform and service team automate tasks wherever and whenever possible, and by doing this the LIS company has consistently managed to reduce manual labor by 30% for its partner labs. This significant reduction leads to a more streamlined, productive, and cost-effective operation, and directly enhances a lab's compliance posture.
  • LigoLab’s dedicated team of RCM experts continuously monitors queues and clinical lab workflow to prevent mistakes and inefficiencies, and its engineers work tirelessly with lab partners to build custom automation and strategies that refine and enhance their lab's operations. LigoLab understands its success is intrinsically aligned with lab partners, and it goes above and beyond to ensure its solutions deliver the desired results. 

At LigoLab, we’ve provided flexible all-in-one LIS laboratory information system & laboratory billing system solutions for growing clinical laboratories and pathology groups since 2006, giving them what they need to modernize and grow efficiently. 

Learn More: Navigating the Future of Pathology: The LigoLab Advantage

Contact us to schedule a brief introductory call or a software demonstration and see how a fully integrated informatics platform can unite and digitally transform a lab’s financial, administrative, and technical operations.


Aram Avakyan
Pharm.D., Health Informatics Technologist at LigoLab.

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