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Why Automated Client Billing is a Must-Have for Medical Labs
August 27, 2024
Breaking with tradition is never easy, especially when something is unfamiliar.
For clinical laboratories and pathology practices that want to scale their businesses, reduce accounting errors, and improve bottom-line collections, “We’ve always done it this way” just doesn’t cut it anymore.
Increasing client demands, changing policies, and the steady movement toward digitization have made operational and financial transformation a necessary outcome rather than an option for most medical labs.
Central to this is a lab’s laboratory billing (lab revenue cycle management) operations, specifically client billing.
If a manual laboratory billing process (lab revenue cycle management) still drives your lab’s client billing operations then you are doing your clients and business a huge disservice.
Not only are you subjecting yourself to inevitable and avoidable accounting errors, but you are also hindering your lab’s growth by leaving hard-earned revenue on the table due to leakage and manual processes that waste time and resources.
With labs already short-staffed and overworked, forward-thinking lab directors and managers understand the value of mustering every bit of efficiency they can get out of their operations.
The entire health delivery ecosystem is counting on it.
The Growing Need to Automate the Laboratory Billing Process
“Labs that do client billing can no longer afford to utilize mainly manual processes,” said Farzad Abdi, LigoLab’s Billing Manager. “Even long before the pandemic, labs were overloaded with burdensome administrative tasks. Tiered payments, volume discounting, complicated reimbursement structures, and extreme workloads were making things unmanageable for many labs.”
For labs struggling to manage this important aspect of the RCM cycle, there is good news. There are new laboratory billing solutions on the market that can help carry the workload.
Laboratory billing solutions like LigoLab’s fully integrated medical LIS & lab RCM platform with intelligent lab billing automation can replace manual processes, clerical errors, client notifications, and lost revenue with automated client billing functionality. Once in place, this laboratory billing system feature directly leads to increased net collections and more profit for the lab.
Learn More: Reduce Denials and Stop Revenue Leakage With Integrated Laboratory Billing Management
“Laboratories have long relied on mostly manual processes for lab 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 lab revenue cycle management automation if they are to survive the storm.”
As a pathology lab software partner, LigoLab can help them survive and even thrive by providing the RCM tools needed to differentiate themselves from others and become significantly more profitable.
“Our laboratory billing solutions help labs scale their operations to meet the growing demands of their customers,” said Avunjian.
Learn More: Understanding the Real Costs of Non-Integrated RCM Systems
Client Laboratory Billing Operations are Becoming Extremely Complex
To help put things in perspective, medical labs should factor in the growing complexities associated with client laboratory billing. There no longer is a single price for a specific set of services for a specific period. 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 would be to accurately calculate and operationalize all this utilizing a manual laboratory billing process.
Also noteworthy is the fact that some clients want labs to adjust for their patients’ desire for alternate payment methods. As such, not only do labs have rolling totals and discounts to contend with, but they also have a variety of payment methods to account for. 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 lab billing, it’s important to have a clear view of what’s being accounted for daily,” added Abdi. “That’s why LigoLab’s lab billing module also includes daily notifications. These notifications enable labs and their clients to view everything that is being processed in real-time. Any necessary adjustments can be made with the simple push of a button, and a laboratory billing process that once took several weeks now only takes a few minutes.”
Lab RCM Automation is the Key to Quality and Scalability
If your lab’s RCM cycle workload is growing beyond the point of manual processes, automating client lab billing operations is an attainable solution.
There is a growing reliance on diagnostic testing throughout the medical community and the demands are pushing labs to their limits. Case in point, a LigoLab partner lab recently experienced a massive surge in cases. The lab went from processing a few thousand tests monthly to over 180,000 per week. Scaling operations this quickly and managing laboratory billing at such a high volume using manual processes would have been next to impossible.
“Without LigoLab’s laboratory revenue cycle management module, there is no way our customers' lab billing team could have kept up with these demands,” added Avunjian.
As noted previously LigoLab’s billing software for labs helps save time and increase collectibles by adding automation and preventing leakage.
On-Demand Webinar: Unifying Technical and Financial Operations to Minimize Denials and Prevent Revenue Leakage
Another LigoLab partner lab had been using manual RCM processes for their client lab billing operations for several years before making the switch to LigoLab’s fully integrated medical LIS & lab RCM platform and taking advantage of the platform’s many RCM cycle features, including its rule engine and automated client billing capabilities.
Before full LIS system & lab 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 laboratory information system (LIS system) customer, implemented LigoLab’s lab RCM module.
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 into one powerful software infrastructure that’s infinitely configurable. Laboratory 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.
Learn More: Maximizing Your Lab’s Profitability: The Case for In-House Lab Billing
Within weeks of full integration, the lab began 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; 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 laboratory billing solutions, we take all the pain out of the process.”
The effective use of laboratory billing solutions like LigoLab’s comprehensive LIS medical & lab RCM platform is critical 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 investment that labs should consider as they weigh the pros and cons of upgrading their lab RCM strategies.
LigoLab’s Intelligent Laboratory Billing Solutions Reduce Denials and Audit Risk
LigoLab’s lab RCM module empowers labs to start the laboratory billing cycle at order creation, a real advantage that reduces denials and audit risk and increases net collections and profitability.
LigoLab’s intelligent laboratory billing solutions include:
- 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
- And much, much more
To learn more, please review the following related laboratory billing links or contact a LigoLab lab RCM product specialist to schedule a lab billing software demonstration.
Leveraging LIS & RCM Integration to Improve the Laboratory Billing Process
Laboratory Billing 101: The Differences Between In-House Billing and Outsourced Billing Services
Six Reasons Why You Should Choose an Integrated Laboratory Billing Solution for Your Medical Lab
