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Clinical Laboratory Management Solutions for Lab Revenue Cycle Management (Lab RCM)
December 27, 2024
Healthcare systems and medical labs rely on the right clinical lab workflow and pathology management software to efficiently manage resources and deliver diagnoses without encountering obstacles resulting from ineffective laboratory billing documentation, delays, or denied bills. Thus, advanced laboratory information systems (LIS systems, LIS software) support lab billing and laboratory revenue cycle management (lab RCM) to automate functions related to the different stages of generating and remitting medical bills.
Problems and Solutions: Laboratory Information Systems and Billing Software for Labs
Lab billing (the laboratory billing process) and lab revenue cycle management involve financial laboratory software systems that automate the RCM cycle of identifying and generating medical bills, processing claims and payments, and collecting revenue for testing services rendered.
When performed correctly, the laboratory billing process begins with a patient’s first encounter with a medical lab and its LIS laboratory information system, and it ends at the point where the lab is paid fully for its services. The lab workflow for effective laboratory revenue cycle management includes seven important steps.
- Pre-registration
- Registration
- Charge Capture
- Claim Submission
- Remittance Processing
- Insurance Follow-up
- Patient Collections
Each important step in the lab RCM process identifies and uses patient data to make an insurance claim, and then follows up with the claim until the final payment is made.
However, clinical labs and anatomic pathology practices face some common problems with laboratory billing without the right RCM tools supported by the right RCM management company. It should also be noted that these common problems can be eliminated if the lab chooses an all-in-one medical laboratory information system that also provides advanced billing software for labs.
Learn More: Reduce Denials and Stop Revenue Leakage With Integrated Laboratory Billing Management
Medical laboratories handle large volumes of patient data (managed by a laboratory information system) to process samples and deliver timely results. A medical lab requires a laboratory information system software solution to process sensitive patient data and work well with its lab revenue cycle management solution to handle the laboratory billing process.
Traditionally, two separate laboratory software systems have been used: LIS system software for handling patient information and lab data; and lab revenue cycle management software for lab billing purposes. Thus, in most cases, the laboratory billing process doesn’t start until after the test results have been prepared.
This lab billing scenario often leads to denied claims due to incorrect or missing patient information. On the other hand, an effective laboratory billing process reduces denied claims by getting clean claim information upstream and as the order comes into the lab. This translates into much fewer denied claims and more revenue capture downstream.
A clinical laboratory management solution that includes lab billing software for labs is thus the ideally constructed way for labs to meet lab RCM requirements and risk estimation.
Uncollected revenues due to the absence of highly automated LIS software with integrated laboratory billing solutions lead to reduced annual revenues generated for a lab. This could be due to delays in presenting claims, insufficient documentation, errors in calculating reimbursements and contracted services, or erroneous implementation of a clinical lab’s coding system (where a clinical sample is incorrectly matched with a test’s code). These errors can be mitigated through advanced laboratory information systems with in-house and transparent laboratory billing solutions.
Learn More: Maximizing Your Lab’s Profitability: The Case for In-House Lab Billing
The Role of Advanced Laboratory Billing Solutions
Advanced laboratory billing solutions ensure the smooth running of a lab by helping the LIS system quickly work through the digitization of the RCM process. Medical laboratory billing solutions leverage patient information captured during pre-registration and registration to initiate and eventually file a successful insurance claim.
Billing software for labs automates the RCM cycle and aids lab billing directors and managers in following up on insurance claims. Most importantly, an advanced lab billing solution eliminates discrepancies during claim processing, when a testing service may be mismatched to a medical code due to human error.
Advanced laboratory billing solutions validate insurance claims and ensure a patient’s insurance status. That said, lab directors and managers must understand the different steps of processing patient samples and tracking insurance claims to ensure a smooth RCM process.
Transparent lab billing policies and laboratory billing solutions help patients and laboratories manage their resources more effectively. To accomplish this lab billing policies must be displayed on the testing service’s website and communicated to the patient during pre-registration. The patient should also be informed of the various accepted payment modes so that he or she is prepared with insurance details during the registration RCM process.
Co-payments may be collected at patient registration, and referrals are required when a patient needs a specialist’s medical attention. The registration laboratory billing process must also include steps to assign benefits and record patient signatures on the requisite forms. These ensure the smooth dissemination of insurance claims.
Claims are ‘scrubbed’ before submission, where advanced clinical laboratory billing solutions are managed by a dedicated lab revenue cycle management team that assesses the test charges, ensures no code mismatches, and structures the claim for maximum revenue capture.
Integrating Modern Laboratory Billing Solutions with Laboratory Information System Software
An efficient laboratory information system software that includes laboratory billing software for labs can address various challenges during the insurance capture, claim, and collection processes.
When a patient enters a healthcare system for lab testing, the medical staff captures and transfers their data into a laboratory information system, which verifies the patient’s scheduling and eligibility.
Efficient and advanced LIS systems that feature modern laboratory billing solutions also help directors and managers resubmit denied claims through real-time monitoring of claim status. These laboratory billing solutions also generate reports that must be presented every three years to the Centers for Medicare & Medicaid Services (CMS), in compliance with financial regulation policies.
An LIS medical system containing a powerful lab RCM solution improves the staff’s ability to manage and track various processes from a single interface. It can also integrate with a patient’s electronic health record (EHR), improving the accessibility and tracking of patient information within the health system.
Laboratory information systems with advanced laboratory billing solutions should capture (at an early stage) various details about a patient’s eligibility for making an insurance claim so questions regarding payments do not crop up in later stages. LIS systems with claim management solutions should also be able to track the progress of an insurance claim, and the medical LIS/lab billing system should generate timely reminders to help manage multiple payment schedules.
A health institution with a strong infrastructure for Information Technology (IT) can easily set up and maintain LIS software with laboratory billing capabilities.
White Paper: The Connected Laboratory: Leveraging Medical LIS & Lab RCM to Grow Your Business
Alternative Laboratory Billing Solutions
Some labs may find it simpler to outsource their lab billing to a third-party service. These types of clinical/pathology lab solutions for lab billing can be interfaced with a lab’s LIS system so staff has timely access to the lab RCM data with this information stored in the cloud or on an on-prem server.
Labs can also increase outreach to improve their RCM process and revenue capture. This is most applicable for labs built to scale. During the COVID-19 crisis, many labs maximized their margins by providing direct-to-consumer lab testing (TestDirectly) services for the virus. Advanced laboratory information system software thus should be scalable to meet high demands during times of crisis.
Learn More: Highlighting the Versatility of the TestDirectly Direct-to-Consumer Lab Testing Portal
Some labs require specific LIS system software that addresses their unique demands, such as highly specialized procedures and diagnoses, or lab billing dynamics. Clinical/pathology lab management solutions should account for the large influx of patient data and samples, and could thus benefit from a third-party vendor.
Advanced medical LIS and lab RCM informatics solutions help clinical labs ensure patient eligibility for an insurance claim, even before their samples are processed. This saves time and prioritizes claims for swift approval and reimbursement, ultimately improving patient care.
A third-party laboratory billing system can provide application programming interfaces (API) that connect lab billing service solutions with the lab’s existing LIS system or LIMS software solutions. It can also be interfaced with electronic health record (EHR) systems.
Finally, much like in-house lab billing solutions, financial solutions rendered by third-party outsourced experts can ensure efficient processes such as claims scrubbing, follow-up on insurance claims, and generating financial reports that meet compliance requirements and generate revenue for labs to scale.
Learn More: Laboratory Billing 101: The Differences Between In-House Billing and Outsourced Billing Services
