Is it time to reassess your revenue cycle management strategy?
When the dust settles from all the recent activity and changes in the healthcare environment, it will soon become clear that there has been a major shift in the way healthcare is practiced, measured, and compensated. We’re all watching shifting patient populations, decreasing reimbursements, and billing changes on the horizon with ICD-10. Changing times are calling for changes to how imaging centers are managing their practices and more specifically, their revenue, so they can remain focused on providing quality care, but at the same time, allow measures to maximize compensation.
Today patients are taking more responsibility for their healthcare costs, too, and while in theory that’s promising, the financial implications can seem daunting. Many patients enrolling in the health insurance exchanges are opting for more affordable premiums or high deductibles, which may increase their out-of-pocket cost when they see an imaging provider.
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Within this complex and unpredictable reimbursement model, imaging providers are considering revenue cycle management (RCM) solutions that provide technology upgrades, offshore coding, ASP hosting, and outsourced or hybrid billing models to better monitor and control revenue, coding and denials management in their practices. One group that recently made a major shift in its billing operations is Columbus Radiology Corporation (CRC), a 45 physician sub-specialized radiology practice based in central Ohio.
“We managed our billing and collection operations in-house since the practice opened, but the primary issue we were facing was that we no longer had the technology to do it properly,” says Charles McRae, CEO of Columbus Radiology. “We had 20 full-time staff working in the operation and the investment for a new, in-house system would have been too high. So we began looking at fully outsourced models for our practice.”
The options available for revenue cycle management run the gamut completely outsourced solution to hybrid models that work for practice looking to keep some of the management internal to the business. McRae and his team assessed the market offerings and providers before making the decision to go with Canopy Partners in 2013. To Columbus Radiology, Canopy offered a turnkey outsourced billing model that would free up staff to focus on core business initiatives and new growth opportunities. And, the team liked the fact that Canopy was big enough to offer the expertise and resources, yet small enough to offer personalized attention.
“We wanted the most efficient business solution we could find,” McRae says. “There were some hybrid models we looked at, but they left the hardest work to the practice—denials management and collections.”
There were several factors that played into Columbus Radiology’s decision to outsource billing, namely cost and key performance indicators that Canopy provides.
“I’m a data cruncher,” McRae says. “I looked at cost, but the decision was not based on cost alone. I was interested in data by practice examples. There are some key statistics to consider when evaluating billing services, adjusted collection percentage being the most important, and people overlook the impact of uninsured patients on this number. The percentage of self-pay patients in a practice has a disproportionate impact on the adjusted collections percentage. I could have a poor billing operation, but still have great revenues if my self-pay percentage is lower, and dangerously, the opposite is also true. With the data I was able to evaluate, I was able to build a model to evaluate our outsourced billing options that factored in the amount of self-pay that was being billed and the proportionate impact on the adjusted collection percentage. Using this model, Canopy’s performance track record and pricing stood out.
Now that the enrollment deadline has arrived for the health insurance exchanges (HIEs), we will have a better idea of the demographics on that patient population, although it will be some time before the effects on revenues will be seen. The coding changes brought on by ICD-10 will serve to complicate the equation, but eventually, provide even more clarity and transparency to revenue cycle management.
“ICD-10 coding changes gave us yet another reason to change our billing operation,” McRae notes. “Our new Canopy system is already coding with ICD-10 on some of our exams so we can develop a gap analysis and begin training our radiologists. It’s better to train sooner than later. Radiology practices must have a training and compliance plan in place—this is not a one and done event. And Canopy is helping us to prepare.”
“Our billing system will be transitioned well in advance of the ICD-10 start date [Oct. 1, 2015]. Our radiologists will begin training in April and start dictating using ICD-10 standards. The new processes we’ve put in place allow us to monitor and isolate diagnosis codes that are not sufficient for reimbursement. So we can focus our software efforts and training on those areas. If we’re not already dictating in the new standard, it will negatively affect our revenues.”
Transitioning to a fully outsourced solution
The transition that CRC made to Canopy was part of a well thought out plan and the process began very early. It was a challenging process for CRC to wind down operations of their in-house billing system. CRC has a strong IT department that worked well with Canopy’s transition team and one of their main goals was conducting dry runs of billing a month in advance of going live on the new system.
Rarely is any transition without its challenges, but McRae says the transition went extraordinarily smooth. The Canopy team was there to offer flexible and customizable options to CRC and created a program that fit CRC’s needs. Any minor glitches during the transition revolved around automating accounts that fell outside of the typical, but according to McRae, those accounts amount to roughly one half of one percent of the total accounts.
In fact, McRae says the system was able to compress CRC’s timeline in terms of how quickly claims were sent out and that CRC’s collection revenue actually showed an increase over what was expected in the last two months of the year.
Columbus Radiology has a reputation for thought leadership and innovation. They have recently won a host of new hospital contracts and are expanding rapidly. Canopy’s fully outsourced revenue cycle management system has helped CRC realize these new growth opportunities by freeing up resources and allowing the practice to remain dedicated to patients’ health outcomes.
Looking back, McRae says it would have been difficult to bring on more volume using their in-house billing operation. “We would have over-taxed our system and expended capital and management resources on a function that isn’t a core competency,” he says. “Our relationship with Canopy Partners has made it faster and easier to onboard new contracts, insulating our team from day to day management headaches and risks. We are able to focus on providing a unique experience for hospitals and referring physicians and positively impacting patients’ lives on a daily basis.