Lab information systems (LISs) are time- and money-savers for large and small laboratories in many ways. They handle receiving, processing, and storing of information that is generated by medical laboratory processes, and they can interface with instruments and hospital information systems. An LIS can also perform a wide variety of other functions.

The challenges of coding, billing, and reimbursement—a big issue for labs—have been lessened by LIS usage. Despite the fact that most big hospital laboratories don’t do billing themselves, they still must enter correct billing codes for each procedure at the front end in order to be reimbursed for the services they provide. Small, freestanding labs, which do their own coding, billing, and collections, also need to perform such tasks correctly so reimbursement proceeds speedily and accurately.

The performance of lab functions has become routine for software systems, but reimbursement from health insurance carriers and Medicare for the services laboratories perform is a big chore that a LIS can also handle. That’s significant because coding, billing, and reimbursement can be time-consuming and labor-intensive processes with the potential to create both customer and lab dissatisfaction if payments are delayed. Therefore, a number of companies have developed LISs that perform these functions, saving time and increasing efficiency.

Here’s a look at several software products that enable labs to streamline the coding, billing, and collections process.

Antek HealthWare

Antek’s LabDAQ system

According to Jim Kasoff, vice president of operations, Antek HealthWare, the coding/billing/reimbursement process will be straightforward if the facility has software to facilitate the workflow. He notes that using software for billing and reimbursement is essential, since Medicare accepts only electronic billing—as do many insurance companies.

The requisition is created in the LIS; typically, when all tests are completed and accepted, the charge information is exported to the PMS (practice management – or billing – system) via an HL7 (health level 7 – the national standard for medical data interchange) interface. The procedures are handled by billing personnel, not physicians, and the system checks the diagnostic codes entered by the personnel for accuracy. The data includes the information necessary to create a completed encounter in the PMS, with information such as the patient demos, insurance, CPT (current procedural terminology—a standard, universal code applied to medical procedures and services for the purpose of patient records), and ICD-9 (diagnostic coding). From the PMS the claim is scrubbed (reviewed for basic inaccuracies that are built into the PMS) and forwarded to a clearinghouse, which then runs its internal rule engine to ensure that the basic elements of the claim are intact. If everything looks good, the claim is forwarded to the insurance carrier.

The carrier then typically runs more complex rules to ensure that the claim has the appropriate information and also checks the specific plan type to see whether the procedure is eligible for payment, Kasoff says. Other checks include DX/CPT (diagnostic code) validation and frequency. If a claim or a part of a claim is rejected, that information is returned to the clearinghouse and forwarded to the PMS system in what are referred to as payor acknowledgement/denial reports. If payment is rendered, that information is also returned to the PMS in the form of electronic remittance reports (or a type of electronic EOB, or explanation of benefits). The patient will also receive an EOB in the mail to explain the insurance company’s disposition of the claim.

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Many insurance companies are now capable of sending the EOB data to the PMS in the form of electronic remittance advice (ERA). With electronic remittance, Antek’s DAQbilling medical billing software will download the EOB, automatically apply the allocate amount from the EOB, and once reviewed and approved, the payments are all posted. “This option will save your practice hours of data entry and reduce clerical errors,” Kasoff says.

While ERA is not a new feature, he says, more carriers now support this functionality, and it is becoming more commonplace to see this offered in a PMS package.

The Antek system features Real-time Insurance Eligibility software that provides medical practices with a reliable insurance-verification system. Users can instantly access their patients’ eligibility information. This eliminates the hassles of calling and playing phone tag with insurance companies, and it ensures that the practice is informed from the very beginning. It enables office staff to obtain up-to-date eligibility information before the patient leaves the office, which reduces the likelihood of bad debt write-offs.

Antek’s Health Check-Real-Time, Financial Monitoring feature alerts practices to potential issues before they become crises. And its unique Health Check helps practices monitor important financial information by providing a quick snapshot of 17 financial parameters, such as patient and insurance aging, open deposits, incomplete encounters, encounters that have failed claims submissions, and other details that impact your bottom line. By describing the severity of a parameter, and suggesting corrective action, Health Check helps practices stay on top of the details and fully aware of their financial pictures, Kasoff says.

Scanning is provided via ASP technology. DAQbilling’s application service provider (ASP) architecture ensures ultimate reliability, security, and speed. ASP is an advanced technology that lets labs focus on their practices or businesses, instead of paying attention to hardware, network, and other IT issues, Kasoff says.

“ASP technology just makes life easier. You can access data from any PC with an Internet connection, and your data is always synchronized and current. You enjoy unlimited scalability, and when your business grows, DAQbilling grows with you,” he says.

Lab data is stored at Antek. Highly redundant servers, two-server facilities, and multiple Internet service provider relationships—along with backup generators—keep data secure and accessible, while ensuring rapid information transfer. And data and the entire system are backed up every hour of every day. Data is compressed and encrypted during storage and transit, and is not uncompressed nor unencrypted until viewed on the user’s desktop. The system also incorporates extensive firewall protection.

Orchard Software

The Orchard Harvest LIS is designed for physicians’ office labs, clinics, hospitals, and regional reference labs.

The Orchard Harvest LIS uses process automation; instrument, billing, EMR, and reference laboratory interfaces; and rules-based technology to address regulatory and integration issues and simplify laboratory workflow. The system automatically screens ICD-9 codes, testing frequency, and experimental procedures during order entry. Orchard specializes in integration, which makes host system, EMR, billing, and reference laboratory interfaces routine, and linking multiple sites.

According to Kerry Foster, director of marketing, Harvest software is designed for physicians’ office labs, clinics, hospitals, and regional reference labs. It was developed in clinics and small hospitals to incorporate medical-necessity screening, to ensure that the tests that physicians order will be approved for reimbursement. Over the years, the software has become increasingly elaborate.

This is essential with Medicare, for instance. The software provides three-pronged screening for whether the physician has added the diagnostic code correctly; if the frequency of the lab test for a given patient is allowable within Medicare guidelines, and whether or not the test is being done for research purposes (because Medicare does not reimburse for those). For example, if a physician orders a PSA test, and gives the diagnosis a code corresponding to the flu—which doesn’t have medical-necessity approval and therefore wouldn’t be reimbursable—the software system flags it. The physician can then notify the patient that his insurance may not reimburse him for this procedure and that he may be out-of-pocket for it.

Another feature: Since managed care insurance companies dictate where blood work can be processed—only in certain labs, depending on the insurance company—if the lab doesn’t match the insurance, either the physician gets billed for it or the lab simply won’t run the test. Harvest has an “insurance destination filter” that screens the test and routes it to the correct lab.

In many cases, Foster says, the patient contact is the nurse or phlebotomist drawing the blood, not the physician. A paper order for the test is issued, which the lab enters into the system or the patient contact hand-types into the system. The lab system then checks the order for problems. Any mistakes raise a flag, and the physician is contacted. If a nurse is ordering a test but blood hasn’t yet been drawn, the nurse gets the alert first. If the problem isn’t corrected there, the phlebotomist will deal with it at the lab.

Orchard’s system also contains an element that helps with coding, because different insurance companies bill for different types of tests in different ways, including medical bundling. If, for example, a physician orders a group health panel, since Medicare no longer recognizes panels, coding must be done for the individual tests that compose the panel. However, most insurance companies do recognize bundling, and the system knows—based on the payor—how it should be billed.

Foster notes that the system can be enhanced for large labs by adding microbiology and other functions.

Psyche Systems/Seacoast Labs Data Systems

PsycheSystems’ anatomic pathology system, WindoPath, being used in the lab.

The two software providers are strategic partners in an LIS system that’s used by small, private labs as well as large community hospital labs, and offers a full range of billing features.

The gamut includes the ability to order tests, insert the proper billing codes, and follow the process through the testing system to completion. Lisa-Jean Clifford, senior director of marketing and business development, explains that in the software, Psyche Systems’s portion handles the coding for tests; then Seacoast pulls the process through to billing. Psyche’s anatomic pathology system, WindoPath, is integrated with Seacoast Laboratory Data Systems’ billing and financial product: SurroundLab AR.

Over the years, labs have used a variety of systems for billing, from practice management to small general ledger systems. But, according to Jim Whitehurst, Seacoast Labs Data Systems’ VP, sales and marketing, none of them was integrated with anatomical pathology products.

“Some do have integrated systems, but they don’t concentrate on AP and billing,” he says.

In the Psyche/Seacoast system, when an order is entered, charges are automatically entered. Additional stains can also be ordered. At the end of the process, the order can be checked for accuracy and modified.

Psyche’s LIS interfaces with Seacoast’s billing system at the back end. But the two also interface at the front end, because the Psyche system contains billing elements as well. Seacoast’s part of the system is the lab communication element, and it also offers that portion separately from the billing system provided by Psyche. But, according to James Gearhart, Seacoast Labs Data Systems sales team leader, combining the two systems eliminates technical headaches.

The two companies have worked together for several years, but the relationship was never really formalized in this fashion before. “It’s good for the market, because it creates better billing and better customer experiences all around,” Whitehurst says.

Gary Tufel is a contributing writer for CLP.