This article is a reprint of a piece originally published in the RBMA Nov/Dec Bulletin.
Every year we seem to cope with another external attack on reimbursement, lamenting reductions in the Medicare Physician Fee Schedule (MPFS) conversion factor and calculating revenue losses for the next year. Or we analyze the impact of insurance medical policy revisions that bundle codes, add another hoop to a process or announce new denials. We function in a complex business environment with little control over the rules, complicated by a workforce shortage and increasingly reported burnout.
At the same time, there are largely ignored revenue leaks in our organizations. If we can’t control the external factors, could we conceivably patch up these leaks to offset some of the inevitable reductions? The answer is “yes” but it means acknowledging radiology is a business that needs the infrastructure, attention and discipline of any business.
Where do the leaks occur, what does it take to fix them and is it worth the effort? We’ll start with a few culprits common to nearly all radiology groups. You don’t have to look far in the revenue cycle process to find them and while this is not a comprehensive list, these leaks also represent the largest financial gains if corrected.
Data Accuracy: Scheduling and Registration
This includes verifying eligibility, obtaining prior authorization for advanced imaging procedures, gathering sufficient information to complete medical necessity documentation, and accurately capturing information about the patient and financial responsibility. Theoretically, these areas should be less prevalent in practice-owned imaging centers since the group has control of personnel and processes. On the other hand, hospitals are notorious for missing and incorrect information, although it’s possible to engage their cooperation by presenting a case with statistics and recommendations. The radiology practice typically has access to higher-quality information than the radiology department, and hospitals often admit to revenue losses resulting from prior authorization problems. (Note: I have successfully worked with radiology departments to improve this process.)
Fortunately, vast improvements in billing software technology and the evolution of “value-added” clearinghouses have occurred over the past decade and can dramatically reduce errors and omissions. The shift to technology cleaning front-end processes has dramatically improved the quality of clean claims submissions, even though “missing/incorrect information” remains a significant denial category for many practices. Drilling down in that category can help identify how and why errors are occurring and reveal the resulting opportunity to correct a faulty process to improve revenue.
Missing Charges
I have yet to meet a hospital-based radiologist who doesn’t question whether everything he reads is getting billed. Experience has shown he is right—and the only question is how much is being missed. Billing software has addressed the issue to some degree in that systems match radiology reports and demographics, providing an exceptions report when one of the required elements is missing. As long as someone diligently works the exceptions report, matching issues can be corrected.
But what about the studies that never reach the billing system? This requires reconciliation with the facility’s scheduling log and is a more complex step that is expensive to develop and therefore, seldom done. The time involved manually checking logs makes a thorough review impractical for an inhouse billing department; however, monitoring file size and auditing what appears to be an incomplete file (smaller than normal) could be a worthwhile start.
It’s rare for a billing company to audit at this level but worth asking about. One company recently reported that approximately 80% of new clients experienced missing charges with prior billing entities and gained financially from their audit program. These are not “nickel and dime” improvements, and large amounts of money can be recovered, so it is an activity worth exploring.
Denials Follow-Up
The non-profit KFF (formerly the Kaiser Family Foundation) reported an estimated 73 million (of 392 million) in-network claims were denied in the U.S. in 2023, with HealthCare.gov stating a combined average of approximately 20% in- and out-of-network claims were denied. The first step in successful appeals is to verify the denial reason and determine the likelihood of payment on appeal. The appeal may be as simple as adding a modifier or could involve the submission of more comprehensive information to support medical necessity.
While the appeal represents an initial and important step, there should also be an emphasis on identifying the cause. For example, if documentation is missing from the radiology report, spending time on physician education about required elements can reduce, if not eliminate, the problem. Preventing a denial is a more productive use of time than correcting one after the fact, and in terms of stopping revenue leaks, this can be a biggie.
When it comes to denials, revenue leak detection should also review the impact of “total automation.” In many cases, a denial occurs due to an error or omission, and the appeal involves correcting the deficiency and resubmitting the claim. The over-automated process simply resubmits without review and correction, often triggering a duplicate denial and no payment, and the system will continue to submit multiple times. In this instance, the claim remains unpaid and is eventually written off. If corrected, it would be payable.
Downcoding
When the coder receives insufficient documentation to support a procedure, they code to the documentation, which could result in a lesser procedure being billed. Common examples of downcoding include a complete ultrasound being coded as a limited study if not all required elements are mentioned, or a knee described as “multiple views” as opposed to specifying the exact count and type, or an insufficient description of contrast administration. Why does this matter? How do you feel about a 30% reduction in payment for a downcoded study? The problem is that many, if not most, radiologists will resist the change because it may involve only a few dollars per exam. But what about the cumulative effect? How many downcoded studies occur in a year for this physician? Or for the entire group? Including critical prompts in a dictation template can reduce or even halt this particular leakage.
Final Thoughts
Worth the effort? Small drips and drops may not appear to constitute significant financial liabilities—or potential gains—yet cumulatively, the leaks erode the effectiveness of revenue cycle management. We agonize over a .05% reduction in a fee schedule but resist efforts to improve collections by 5%, 10% or more, questioning whether it is worth the effort.
Radiology is a business, although there are many times the owners do not seem to recognize that. They do recognize it is more difficult to hire and retain strong, competent physicians; they have to work harder to maintain income levels, and burnout is real. It is also a highly regulated business, constrained and consistently battered by external forces that seem to expect the owners to just adjust. And each year, we do adjust factors that reduce payments. What do successful “other” business models, such as manufacturing, do to survive and prosper? They seek ways to reduce costs a few cents here and there and consistently tighten processes to reduce variability. They use checklists and standard operating procedures. They plug the revenue leaks.
The simple baseline goal of professional revenue cycle management is to ensure payment for the work done. It involves the participation and coordination of numerous people and departments, from scheduling and registration to completion of a complex interventional procedure, and of course, billing and collecting. Examples from years of consulting revealed we are not dealing with bad people when a practice is underperforming, but more likely good people caught in bad processes. While our business environment may be largely out of our control, there are important differentiating factors in daily processes that we can control. Each administrator and medical professional has a role to play, since the effect of errors ripples through the entire system. The difference between the detail-oriented, well-run group and the underperforming one is measurable. The good news is that becoming a detail-oriented, well-run group begins with a decision that any practice can make—an emphasis on doing things right the first time.
Stopping revenue leakage may first appear to be like finding change in the couch cushions. In reality, it can be much more than that because fiscal discipline tends to be cumulative. There are other opportunities to adjust processes, and as changes occur, they can energize the entire staff to identify and execute improvements.
Prior to joining MSN Healthcare Solutions as Director of Education and Corporate Communications, Pat Kroken had nearly 30 years of experience in radiology management as both a practice manager and consultant to radiology groups, billing companies, software vendors and hospital radiology departments.
Pat has had more than 200 articles published, is a regular contributor to the Radiology Business Management Association (RBMA) Bulletin and a frequent speaker on practice management topics. She served two terms as President of the RBMA, is Editorial Advisor for the national RBMA publication, The Bulletin, and represented the “business side of radiology” as RBMA Liaison to the Radiological Society of North America (RSNA) Associated Sciences Consortium for 7 years.
