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Why Automated Client Billing is a Must-Have for Medical Labs

Why Automated Client Billing is a Must-Have for Medical Labs
September 25, 2021

Breaking with tradition is never easy, especially when something is unfamiliar. But for Molecular, Clinical, and Anatomic Pathology laboratories that want to scale their businesses, reduce accounting errors and improve the bottom line, “we’ve always done it this way” just doesn’t cut it anymore. Increasing client demands, changing policies, and the steady movement toward digitization has made operational transformation a necessary outcome rather than an option for most labs. Central to this is a lab’s client billing operations.   

If manual processes still drive your lab’s client billing operations then you are doing your clients and your business a huge disservice. Not only are you subjecting yourself to inevitable accounting errors, but you are also hindering your lab’s growth by leaving revenue on the table due to leakage and manual processes that waste time and resources. With labs across the country being short-staffed and overworked already, forward-thinking lab managers understand the value that comes with mustering every bit of efficiency that they can get out of their operations. The entire health delivery ecosystem is counting on it. 

The Growing Need to Automate Billing Processes

“Labs that do client billing can no longer afford to utilize mainly manual processes,” said Farzad Abdi, LigoLab’s Billing Manager. “Even before the pandemic, labs were overloaded with burdensome administrative tasks. Tiered payments, volume discounting, complicated reimbursement structures, and extreme workloads were already making things unmanageable for a lot of the labs.”

For labs struggling to manage this important aspect of the RCM billing process, there is good news in the form of new technologies on the market that can help carry the load. Software solutions like LigoLab’s fully integrated LIS & RCM Platform with intelligent automation can replace manual processes, clerical errors, client notifications, and lost revenue with automated client billing functionality. Once in place, this feature directly translates into increased net collections and more profit for the lab.

“Laboratories have long relied on mostly manual processes for RCM,” said LigoLab CEO Suren Avunjian. “This was the accepted way of doing business in the past when the margins were thick. Fast forward to today, and lab operators are getting squeezed by market pressures and skyrocketing operational costs. Labs have to be open to change and automation if they are to survive the storm.”

As a software partner, LigoLab can help them not only survive but thrive by giving them the tools needed to differentiate themselves in the marketplace and become significantly more profitable.

“Our software solutions help labs scale their operations so they can meet the growing demands of client customers such as school districts, health departments, large health systems, corporations, and more,” said Avunjian. 

Client Billing Operations are Becoming Extremely Complex

To help put things in perspective, labs should take into account the growing complexities associated with client billing. No longer is there a single price for a specific set of services for a specific period of time. Now clients want things like volume discounts and other credits on a daily, weekly, or monthly rolling basis. For example, let’s say that a lab processes 10,000 specimens one day for a client, and then the next day they process 20,000 and after that 40,000, with a tiered discount at every 50,000 tests. Imagine how difficult it is to accurately calculate and operationalize all of this utilizing manual processes.

Also noteworthy, some clients want labs to adjust for their patients that have alternate payment methods. As such, not only do labs have rolling totals and discounts to contend with, they also have a variety of payment methods to account for as well. This gets even trickier when you consider the potential consequences if double-billing were to occur.   

“With all that’s at stake when it comes to client billing, it’s important to have a clear view of what’s being accounted for daily,” added Abdi. “That’s why LigoLab’s RCM solution also includes daily notifications. These notifications enable labs and their clients to view, in real-time, everything that is being processed. Any necessary adjustments can be made with the simple push of a button, and a process that once took several weeks now only takes a few minutes.”

Automation is the Key to Quality and Scalability

If your lab’s RCM workload is growing beyond the point of manual processes, automating client billing operations is an attainable solution. 

Throughout the medical community, there is a growing reliance on diagnostic testing, and the demands created by another surge in COVID-19 cases are pushing labs to their limits. Case in point, a LigoLab partner lab recently experienced a massive surge in cases because of COVID-19. The lab went from processing a few thousand tests per month to over 180,000 per week. To scale this quickly and manage billing at such a high volume using manual processes would have been next to impossible.

“Without LigoLab’s RCM solution, there is no way our customers' billing team could have kept up with these demands,” added Avunjian. 

As noted previously, LigoLab’s RCM solution helps labs save time and increase collectibles by adding automation and preventing leakage.

Another LigoLab partner lab had been using manual processes for their client billing operations for several years before making the switch to LigoLab’s fully integrated LIS & RCM platform and taking advantage of the platform’s many RCM features, including its rule engine and automated client billing capabilities. 

Before full LIS & RCM integration, processing times for this lab’s client billing often took several weeks and there were constant delays because of clerical errors. That changed soon after the lab, which already was a LigoLab LIS customer, implemented LigoLab RCM. By doing so, the lab was able to leverage LigoLab’s all-in-one laboratory information solution where LIS and RCM modules are deeply integrated on one powerful software infrastructure that’s infinitely configurable. Billing processes that once took weeks now took hours and the lab’s billing staff, freed from time-consuming manual processes, was now able to work more efficiently and go after every dollar due to the laboratory. 

Within weeks of full integration, the lab was collecting approximately $200,000 more every month thanks to a reduction in errors and costly overhead, two direct results from automating 100 percent of its client billing. Even better, the additional collections were not short-term, and the lab has sustained that level of added revenue ever since. 

“Not only does automation help labs grow their capacity, but it also reduces errors and decreases the time an invoice spends in the accounting department,” added Abdi. “With our platform, we take all the pain out of the process.”

The effective use of RCM solutions like LigoLab’s comprehensive LIS & RCM platform is critical when it comes to the success of medical laboratories. According to the nonprofit Council for Affordable Quality Healthcare, the healthcare industry saved $122 billion in 2020 administrative expenses through digitalization and automation. This is a significant return on the investment that labs should consider as they weigh the pros and cons of upgrading their RCM strategies. 

LigoLab’s Intelligent Billing Solution Reduces Denials and Audit Risk

LigoLab RCM empowers labs to start the billing cycle at order creation, a real advantage that reduces denials and audit risk and increases net collections and profitability. LigoLab’s intelligent billing solution includes:

  • Upfront demographic and insurance verification
  • Claim validation and error correction
  • Automated ICD and CPT coding and client billing
  • Real-time data processing workflow queues for heightened visibility
  • Detailed statistical reports to monitor trends and KPIs

To learn more, visit RCM.LigoLab.com and review the following related links.

Leveraging LIS & RCM Integration to Improve the Laboratory Billing Process

A New Approach to the Laboratory Billing Process

LigoLab Offers Labs an Automated and Real-Time Software Solution for Prior Authorization Requirements

LigoLab’s RCM Module Features an Automated A/R Payer Projection Tool

LigoLab Gives Labs a Convenient and User-Friendly Way to Incentivize Patients and Accelerate Payments

LigoLab’s Fully Integrated Platform Features No-Touch Auto-Billing


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