Clinical Laboratory Management Solutions for Lab Revenue Cycle Management

Healthcare systems and medical labs across the country rely on the right clinical lab workflow software (pathology lab 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 abbreviation medical) support lab billing and laboratory revenue cycle management (revenue cycle management meaning; the laboratory billing process or lab RCM) to automate functions related to the different stages of generating and remittance of medical bills.

Problems and Solutions: Laboratory Billing Software for Labs

Laboratory billing and lab revenue cycle management involve financial systems that automate the laboratory billing process of identifying and generating medical bills, processing claims and payments, and collecting revenue for testing services rendered. 

When performed correctly, the laboratory billing process (the RCM cycle) begins with a patient’s first encounter with a medical lab and its laboratory information system (also known as a LIS system or LIS system software), and ends at the point where the lab is paid fully for its services. The lab workflow for lab RCM includes seven important steps. 

• pre-registration 
• registration
• charge capture 
• claim submission
• remittance processing
• insurance follow-up 
• patient collections 

Each of these steps in the laboratory billing process identifies and uses patient data for making an insurance claim, and then follows up with the claim until the final payments are made. 

However, clinical labs and anatomic pathology practices face some common problems with clinical laboratory management of lab RCM without the right RCM tools supported by the right RCM management company (in this case laboratory information system companies that provide billing software for labs). 

Medical laboratories handle large volumes of patient data that are managed by a laboratory information system (sometimes also referred to as a pathology information system) to process samples and deliver timely results. A medical lab requires a laboratory information system software solution in place to process sensitive patient data as well as a 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 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 claims 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 lab information systems with in-house and transparent laboratory billing solutions.

The Role of Laboratory Billing Solutions 

Advanced laboratory billing solutions ensure the smooth running of a lab by helping the LIS staff to quickly work through the digitization of the RCM process. Medical laboratory billing solutions leverage patient information captured during the patient pre-registration and registration processes to initiate and eventually file a successful insurance claim. 

Billing software for labs automates the RCM process and aids lab billing managers in following up on insurance claims. Most importantly, an advanced lab billing solution eliminates discrepancies during claims processing, when a testing service may be mismatched to a medical code due to human error. Laboratory billing solutions validate insurance claims and ensure a patient’s insurance status. Lab managers need to bear in mind the different steps of processing patient samples, as well as the tracking of insurance claims, to ensure a smooth RCM process (lab revenue cycle management).

Transparent lab billing policies and laboratory billing solutions help both patients and laboratories manage their resources more effectively. To accomplish this, lab billing policies need to be displayed on the testing service’s website and should be 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 during the registration RCM process to provide insurance details. 

Co-payments may be collected at patient registration, and referrals are required when a patient needs a specialist’s medical attention. The registration RCM 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 there are no code mismatches, and structures the claim for maximum revenue capture.

Integrating 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, claims, and collections process. 

When a patient enters a healthcare system for lab testing, the medical staff captures their data and transfers it into a laboratory information system, which verifies the patient’s scheduling and eligibility. The integrated LIS system with lab billing functionality can also estimate charges so that a transparent RCM process is maintained. 

Efficient laboratory information systems and lab billing solutions also help lab managers resubmit denied claims through real-time monitoring of the claims’ status. These laboratory billing solutions also generate reports that need to be presented every three years to the Centers for Medicare & Medicaid Services (CMS), in compliance with financial regulation policies. 

The laboratory information system with a 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 laboratory billing solutions should capture, at an early stage, various details about a patient’s eligibility for making an insurance claim so that 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 laboratory software system should generate timely reminders to help manage multiple payment schedules. 

A health institution that has a strong infrastructure for Information Technology (IT) can easily set up and maintain LIS software with laboratory billing capabilities. 

Alternative Laboratory Billing Solutions 

Some labs might find it simpler to outsource their billing to a third-party service that will be up-to-date with the latest industry practices and can thus accelerate insurance claims. Pathology lab solutions for lab billing can be integrated with a lab’s LIS system so that staff can access the data from a single informatics platform. The data will be stored in the cloud or on the server, ensuring reliable access to it within institutions. 

Labs can also increase their outreach to improve their RCM process and revenue capture. This is most applicable for labs built to scale. During the recent COVID-19 crisis, many labs maximized their margins by providing direct-to-consumer lab testing services for the virus. Advanced laboratory information system software thus should be scalable to meet high demands during a time of crisis. 

Some labs require specific LIS software that addresses their unique demands, such as highly specialized procedures and diagnoses, or lab billing dynamics. Pathology lab management solutions should account for the large influx of patient data and samples, and could thus benefit from a third-party vendor. 

Implementation of advanced LIS & RCM informatics solutions helps clinical labs ensure a patient is eligible 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 their lab billing service solution with the lab’s existing LIS system or LIMS software solutions. It can also be interfaced with Electronic Health Record (EHR) and Electronic Medical Record (EMR) 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 as well as generate revenue for labs to scale.