White Papers

Abstract: How Billing and Coding Automation Increases Laboratory Revenue

Clinical laboratories and pathology practices face mounting financial pressures from declining reimbursement rates, rising operational costs, complex payer requirements, staffing shortages, and increasing claim denials. With average denial rates historically reaching 15% for in-network claims and 30% for out-of-network claims, laboratories must find more effective ways to protect revenue, reduce administrative expenses, and improve reimbursement performance.

This white paper explores how automated laboratory billing and coding, supported by advanced revenue cycle management (RCM) software, can reduce claim denials, accelerate reimbursement, and significantly increase laboratory profitability.

Featuring insights from LigoLab CEO Suren Avunjian and RCM Billing Manager Farzad Abdi, the paper examines the financial consequences of manual billing processes, including coding errors, missed submission deadlines, inconsistent payer compliance, and time-consuming appeals.

Central to the discussion is LigoLab's unified Laboratory Information System (LIS) and RCM Informatics Platform, which uses a highly configurable rules engine to automate repetitive billing activities, assign CPT and ICD-10 codes, validate claims, and identify potential denials before submission. By incorporating National Coverage Determinations (NCDs), Local Coverage Determinations (LCDs), National Correct Coding Initiative (NCCI) edits, and payer-specific policies, the platform helps laboratories strengthen billing accuracy and reduce compliance risks.

The white paper also highlights measurable results achieved by LigoLab customers. During the COVID-19 testing surge, partner laboratories scaled to nearly 500,000 claims per week while maintaining clean claim rates exceeding 98%. Another laboratory reduced billing processes from several weeks to just hours and increased monthly collections by 20% to 30% without additional testing volume.

Beyond revenue improvements, the paper demonstrates how automation enables laboratories to redirect skilled billing personnel toward complex denials, revenue recovery, and other higher-value activities.

Ultimately, billing and coding automation is more than an operational efficiency tool. It is a strategic investment in revenue integrity, financial stability, and sustainable laboratory growth. By connecting clinical and financial workflows within one integrated platform, LigoLab helps laboratories minimize revenue leakage, improve productivity, and scale without proportionally increasing administrative costs.

Key Takeaways

1. Manual laboratory billing contributes to costly claim denials. 

2. Billing and coding automation can significantly increase laboratory revenue. 

3. A configurable rules engine is central to effective laboratory RCM. 

4. Automated CPT and ICD-10 coding improves billing accuracy. 

5. Proactive claim validation helps prevent denials before submission. 

6. Automation eliminates repetitive billing tasks. 

7. Modern RCM technology supports dramatic increases in testing volume. 

8. Real-world results demonstrate measurable financial improvements. 

9. Automated billing improves workforce productivity and scalability. 

10. Front-end verification strengthens revenue cycle performance. 

11. Real-time workflow queues improve visibility and accountability. 

12. Advanced reporting supports data-driven financial decisions. 

13. A unified LIS and RCM platform eliminates unnecessary system fragmentation. 

14. Automation helps protect institutional knowledge. 

15. Billing automation strengthens compliance and reduces financial risk. 

16. Investing in laboratory RCM technology supports sustainable profitability.