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Plugging Reimbursement Leaks

 

By Matt Skouflas

Every imaging practice relies on a comprehensive reimbursement process to maintain its bottom line. From the largest and busiest to the smallest and least utilized setting, the fundamental, underlying mechanics of the medical imaging space turn on timely payments after services are rendered. 

With budgets tightening and a need to maximize patient throughput, it can be a secondary challenge to ensure that the work that’s been scheduled and done is also paid for. Sara Nofziger-Drew, client relations director at HealthPro Medical Billling of Lima, Ohio, believes that shoring up deficiencies in the revenue cycle requires a vigilant eye, attention to detail and a lot of internal communication among key players throughout the organization.

“You can avoid leaks, identify them and resolve them so they don’t continue to happen,” Nofziger-Drew said. “But first you have to identify those errors in the system that are creating those leaks.”

Nofziger-Drew describes six specific concerns as “the prime revenue cycle areas where reimbursement is lost.” They are coding, denials, timely processing, validation of charges, accuracy of payments, and auditing. Addressing each involves dedicating time and attention to a checklist of critical factors and repeating as needed. 

The first among these – coding and denials – are potentially the easiest items on which to find clarity. If a payment is denied for want of an appropriate code, practices should review the study to discover whether any internal errors were made in billing codes.

“Could they have gotten something wrong?” Nofziger-Drew asked. “Was there something else that should have been dictated by the radiologist? Are they monitoring to see if the coding is accurate, and what denials are taking place from that coding? Just because it might not have been paid by the insurance company, doesn’t mean it shouldn’t have been paid.”

Denials offer what Nofziger-Drew described as “the greatest opportunity” for revenue recapture, despite being among the most commonly cited volume expenses to address. The best way to avoid claim denials is to prevent them, which is difficult to achieve when insurers deny as much as 30 percent of all bills for services out of hand on first submission. That’s according to the Centers for Medicare and Medicaid Services (CMS), which also notes that as much as 60 percent of those denied claims may go without being resubmitted. Couple that with Nofziger-Drew’s calculation that it can cost a radiology practice $25 just to work a denial, and it’s easy to see why this void in the revenue cycle is the most difficult to fill.

“One of the things we preach is, once you identify a denial, go back and determine why it happened,” she said. “Then make sure that every scan that gets completed gets billed, because it doesn’t always get through to the billing system. A prior authorization doesn’t mean that a payment is going to be made.”

Neither does simply being alerted to a denial mean that it will be addressed. Nofziger-Drew noted that a dedicated team of experts is often needed to help process any claim denied out of hand, and that means retaining people who are familiar with every step of the procedure involved, and compensating them for their determination to see it through.

“When you’re looking at people who don’t believe they’re paid what they’re worth to work a denial, it doesn’t happen,” she said.  

Intertwined with coding and billing are details surrounding the timely processing, the work done to ensure that reimbursement for services is received in a timely fashion. If claims aren’t processed by payers on the first submission – and statistics say that one in three won’t be – that can affect providers’ ability to collect on the work they’ve performed. Any edits to the coding or billing processes could require the claim to pass through multiple hands, adding delays to the process, and jeopardizing a chance at timely payment. 

“If they have any edits, that could go through multiple people,” Nofziger-Drew said. “If the people take time in between, you’re delayed getting it out the door.”

Any issues that could result in the denial of payment must be resolved within a contracted time limit, so whether that’s as many as 120 days or as few as 60, the work involved in addressing any problems must be completed within that window. As Nofziger-Drew said, even 60 days can become a short amount of time. 

“That’s the reason timely processing becomes important,” she said. “You need extra time to do that; hospital systems need [more] extra time to do that.”

Validation of charges or charge capture involves ensuring that radiologists are billing for every procedure that they performed. Just because a radiologist signs off on a report doesn’t mean it actually gets done, Nofziger-Drew said.

 “Once it’s ordered, it’s got to get to the practice management system,” she said. “There are always scans that get lost that don’t get billed. Maybe it’s not huge, but if the reimbursement was $2,000 or $5,000, that can be a salary, or half a salary, or equipment or supplies that are needed.”

Another way to recapture potentially lost revenue is to certify accuracy of payments; that is, to be sure that the payments received match the contracted amounts outlined in the agreements between service providers and payers. Nofziger-Drew notes that this simple detail, if overlooked, can be the cause of significant revenue shortfalls when volume procedures are involved. 

“Somebody needs to validate that if the contract says they should be getting $X for a CT scan, that they’re getting it,” she said.

Finally, the first and last tools in the revenue recapture process are the same: auditing. Organizations of every size must routinely review their entire billing procedures from soup to nuts to certify that the whole of the system is working as intended. Its functionality can change in any single aspect as well as in terms of overall performance, particularly whenever staff turn over. 

“If it was a human that was touching something, and that human has changed or forgotten to pass the knowledge on, then you have a break in the process,” Nofziger-Drew said.

If an audit reveals the need for any changes to be made, then those edits should be identified and enacted, and then added to the practice management system to ensure that the same mistakes aren’t repeated. Supervisors should then review system reports individually “to make sure the money’s coming in,” Nofziger-Drew said. 

“You can’t automate too much because things break,” she said. “If they audit the billing process, they’ll find out where the leaks are, and then back up to the front side to prevent those leaks from happening.”

“[It’s about] putting in checks and balances, and then continually auditing the process to make sure they’re not losing [money],” she added.

Just how much can be recaptured through a successful, thorough auditing of discrepancies within the system depends upon where the breaks occur. Nofziger-Drew believes that the bulk of preauthorization denials can be avoided before any service is performed by simply establishing preventative steps prior to scheduling the study. 

“If you change the process going forward, where a patient does not have an imaging service that needs a prior authorization until X, Y, and Z are completed, you’re likely going to avoid 90 percent of those denials,” she said. 

Upon whose shoulders does that work fall, however? Nofziger-Drew said that depends upon the practice environment – and on the presence of healthy, multi-level, inter-departmental communication within a health system. 

“You have to build relationships,” she said. “It takes time. It’s an investment, but once you’ve made that investment, then the people are willing to do the work. That’s how you connect with people. That’s how you can improve the process for everybody. Build relationships with the finance team, with the billing department, with radiology, so they’re working together without just putting more work on the billing department. Even the coding department; you’ve got to build the relationship. If the coding department felt they had a relationship, they would come back and say you’re not going to get paid on this. If somebody doesn’t tell you there’s a problem, you don’t know.”

Jordan Johnson, chief information officer at Oncospark of Dallas, Texas, said that the best way to shore up reimbursement leaks within an imaging practice is by finding a partner who understands how to use relational financial data and the various systems this data is housed in. In a world of labyrinthine, ever-changing rules that dictate how, when, and whether your practice gets paid, Johnson believes the most important thing to manage is prior authorization and front-end tasks.

“All these procedures by the utilization management companies, or the commercial payers – they’re going to tell you what you can do and what you can’t,” he said. “They’ve got rules, algorithms, and guidelines, and you’ve got to follow them. It’s a game you’re constantly navigating, and the problem is it’s eating up staff time.”

To Johnson’s thinking, the more complex the system by which reimbursements are determined, the more points of failure; compounding those vulnerabilities are the limitations of the people tasked with navigating them. One of the most overlooked factors in that calculus, he noted, is that the people upon whose labor much of the work and payment depends on are often underpaid and in short supply.

“You’ve got people doing this for so many specialties [in a single health system], and how much time can they do it in?” Johnson said. “The people who control the most money are paid the least, so their level of commitment varies. You can’t expect somebody making $16 an hour to care at the level I do as a service-line administrator. It is more than a productivity mill, these are oftentimes sensitive cases that can be very complex.”

“The biggest request I get as a consultant is staff,” he said. “I never thought that would happen, but we’re staffing people for these tasks now. They’ve had turnover; they’re not paying people appropriately; people have quit. It doesn’t mean patients have stopped. It’s expertise, and it’s knowing how to navigate the system.”  

If Johnson believes the biggest challenge in plugging reimbursement leaks comes down to staffing, Dennis Chaltraw, director of revenue cycle management at Oregon Imaging Centers in Eugene, Oregon, thinks it’s about getting overwhelmed by the sheer volume of procedures and the work it takes to interpret them. However, by his reckoning, that’s also wherein the guidance to manage the problem lies.

“Whatever size practice you have, there’s a lot of challenges because there’s so many moving pieces, including payer rules, governmental rules and patient demographics,” Chaltraw said. 

“The beauty of radiology has a lot to do with the volume of procedures and the consistency of those volumes,” he said. “Unless you add a hospital or another modality, your volumes remain wonderfully consistent in this business; therefore, you should be able to pick out outliers when things veer from the norm – if you’ve got people who are trained to do that.” 

“Practices have to invest in people who are trained in revenue cycle, and who understand the ebb and flow and consistency of radiology volumes, as a starting point,” Chaltraw said. “I think the industry, over the last five years, has begun to recognize that you have to have somebody focused on revenue cycle start to finish. The people who invest in revenue cycle folks can rest assured that someone’s looking at their accounts receivable.”

Chaltraw also pointed out that, in high-volume practice environments, even the smallest inconsistencies in reimbursement policies can compound the problem quite rapidly. His practice, which includes 24 physicians and six physicians’ assistants, generates upwards of 500,000 procedures annually. With the revenue generated at that scale, that amounts to significant cash flow, which can easily mask some underlying flaws.

“If you’re doing 500,000 procedures a year, even though the money is consistent and you’re paying pretty good salaries, the opportunity to leave money on the table is significant,” Chaltraw said. “Five percent of $50 million is a lot of money. Two percent of $50 million is a lot of money. One percent of $50 million is a lot of money.” 

Even in practices where that kind of volume (and revenue) aren’t in the discussion, it’s just as meaningful to recapture potentially lost revenue, Chaltraw said, because physicians are already liable for all the work they do anyway. By his reckoning, “they carry that risk, so they might as well get paid for it.” 

“It’s still revenue lost,” he said. 

Chaltraw’s focus is on achieving the highest rate of “clean” claims – those paid on the first submission to a payer – for his physicians. Anything lower than a clean claim rate of 90 to 95 percent means providers are leaving money on the table. To him, the clean claim rate is an indicator of the financial health of a practice.

“The average claim payment is in the 21- to 22-day range,” Chaltraw said. “Payers pay very quickly; if you give a billing company a valid diagnosis, they’re going to pay the claim. If I can’t get the claim paid within 60 days with no interaction on first billing, there’s something wrong.”

When claims are denied, Chaltraw said it’s equally important to have an aggressive appeals process in place; one that includes boilerplate letters for outright denials, medical necessity or authorization issues. Even if a claim is denied on medical necessity, he also said it’s important to make sure that it’s not written off without a second review for acceptable signs and symptoms. 

“It should be put back in my lap so that I can develop that,” Chaltraw said. “Maybe 80 to 90 percent of the time I can find a compliant, valid diagnosis by reviewing medical records.” 

“If you have people who don’t know how to manage medical necessity, that’s a problem,” he said. “To me, the secret of denial management is focusing on things that aren’t paid. I care about denials that have been paid, for trending purposes, but I place much more urgency on denied imaging services when no payment has been made.” •

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