Managing the Revenue Cycle
Viewing revenue-cycle management as a function limited only to billing is shortsighted at best, and is more likely to be a mistake. Revenue-cycle management affects the entire practice, imaging center, and hospital radiology department, from a new patient’s first inquiry (whether made by telephone, through an online portal, or in person) to the receipt of payment for services rendered.
While procedures for executing revenue-cycle management might differ from one radiology entity to the next, savvy imaging providers recognize that a comprehensive, enterprise approach that extends beyond billing remains critical to the health of the bottom line. They also acknowledge that maximizing the effectiveness of revenue-cycle management necessitates that it be treated as a continual process, rather than as a periodically performed activity.
An Integrated Process
An integrated stance for revenue-cycle management bodes well for Carolina Regional Radiology, Fayetteville and Angier, North Carolina. Established in 1956 as Fayetteville X-Ray Associates, Carolina Regional Radiology has grown from a solo practice into one of the largest radiology practices in southeastern North Carolina, offering imaging and interventional services to hospitals, physician practices, imaging centers, mobile services, urgent-care centers, the armed forces, and individual patients throughout 10 counties. Its professional staff includes 21 board-certified radiologists, many of whom are fellowship-trained in subspecialties and some of whom hold certificates of added qualification in cardiovascular radiology, neuroradiology, and interventional radiology. 
Sheryl Jordan, MD “For us, revenue-cycle management involves juggling not just billing, but multiple moving parts,” Sheryl Jordan, MD, explains. Her nonmedical duties at the practice include serving as its treasurer. This involves three categories: charges, adjustments, and payments. The charges category includes, but is not limited to, electronic charge-capture interfaces, charge-capture auditing, charge master analysis, and adherence to state-mandated exam-appropriateness criteria to ensure correct coding. Examples of adjustments are electronic remittance/payment posting, payor audits for incorrect allowables, denial management, and self-pay strategies. Under the practice’s umbrella of revenue-cycle management, corporate performance is measured against the current year’s budget, prior-year performance, and RBMA benchmarks. Assessment of the first two factors occurs monthly through a review of corporate financial reports generated in-house, as well as of custom billing reports generated by a Chattanooga, Tennessee, physician billing and practice-management company. Billing performance is compared with RBMA benchmarks bimonthly. “We opted to keep the payor-contracting piece in-house because it falls within our own core competencies, but engaged a billing/practice-management company several years ago for billing services and analysis because its front- and back-end processes, as well as its technology, are a much better fit on that side,” Jordan explains. “Despite our best efforts for more than 40 years, we were unable to achieve optimal results with in-house billing; in fact, we couldn’t even get close on a few of the must-achieve parameters,” she continues. “Our front-end/back-end manual processes and lack of technology hamstrung superb employees. Account underperformance, and hence corporate financial underperformance, was the sentinel, year after year.” Communication between Carolina Regional Radiology and its billing company is constant, with claims transferred to and processed by the latter once each day and interim reports generated as needed. Claim denials and other information (work products) are also fed to the third-party company daily so that the root causes of problems (for example, coding errors) can be pinpointed quickly and errors subsequently can be rectified. Carolina Regional Radiology’s approach to revenue-cycle management dictates stakeholder engagement in all of its aspects, as set forth in a practice model developed by Lawrence R. Muroff, MD, FACR. Muroff is clinical professor of radiology at the University of Florida and University of South Florida, and is president and CEO of Imaging Consultants, Inc, Tampa, Florida. Adopted by Carolina Regional Radiology several years ago, the model espouses physician involvement in all facets of practice, as well as practice management via three committees (business development, finance, and operations), with physician constituents belonging to each one. Accordingly, a five-physician executive committee and three administrators (an executive director, a billing manager, and a bookkeeper) conduct report reviews and benchmarking activities, with members of the practice’s board of directors engaged at every committee level. “Without this degree of involvement in revenue-cycle management at the physician/owner level, we would be unable to protect our patients, ourselves, and the practice as a business properly,” Jordan asserts. “It’s essential, given both the high-deductible insurance-plan environment in which we work and the fact that 55% of our payments come from government payors.” In addition, physicians working within the practice are required (and given incentives) to assist in the charge-capture and denial-management elements of revenue-cycle management. As such, messages conveyed by management emphasize the need for accurate completion and expeditious (daily) signing of reports. “The physician-engagement piece, together with the integration of charges, adjustments, and payments into revenue-cycle management as a whole and the outsourcing of the billing function, has made all the difference for us,” Jordan reports. “At one time, our billing expenses consistently fell above 13% of revenues; this figure did not even include fees paid to third-party consultants for assistance with managing our billing office. In a sinusoidal manner, our days in accounts receivable and our accounts receivable aged over 120 days would balloon above benchmarks, then improve, then worsen, and so on, in the antithesis of optimal revenue-cycle management. Today, that is just not the case.” Better Results Outsourcing a portion of its revenue-cycle management, beginning in June 2009, has also proven to be an effective strategy for InSight Imaging, a subsidiary of InSight Health Services Corp headquartered in Lake Forest, California. Accounts receivable over 120 days old, which averaged 31% in 2007, now stand at 13%. InSight Imaging’s percentage of first-level claim denials has dropped from 15% two years ago to 8%; its short-pay claims, as a percentage of collections, from 3.6% to 0.9%. Contracting with a Plano, Texas, business-solutions company for its revenue-cycle services, however, has been just the tip of the iceberg for the organization, which provides diagnostic imaging services in more than 30 states through a network of 63 fixed-site centers and 114 mobile facilities.
Patricia Blank “Whether or not outsourcing is part of the strategy, getting revenue-cycle management right goes back to implementing good metrics and procedures,” Patricia Blank, InSight’s vice president of revenue-cycle management, explains. InSight Imaging first considered the outsourcing route in late 2007, “not because we were hopelessly broken, but because of the potential savings,” Blank recalls. “In our view, revenue-cycle management is a commodity, rather than a competitive advantage.” Blank’s initial steps in optimizing revenue-cycle management entailed moving from what she deems poor metrics to metrics that either matched or exceeded industry standards. Once an outsourcing partner had been identified, she shared two years of claims data so that an analysis of potential opportunities for revenue uplift (increasing revenue without increasing procedural volume) could be performed by addressing all facets of the revenue cycle. “Now, our mode of revenue-cycle management operation is to measure, measure, and measure some more, monthly (and in some cases, daily),” Blank says. She notes six core areas on which the entity concentrates: net collection ratios, days in accounts receivable, accounts receivable aged more than 120 days, claim-submission lags, denial rates, and revenue uplift. All data pertaining to revenue generation are stored in a data warehouse maintained by the revenue-management company, which has personnel who run reports in accordance with its contract. Three managers on Blank’s staff run reports and monitor metrics as well, with the two contingents convening once each month to review data and determine how to proceed if revenue targets are not being hit. “With the data warehouse, we can run informatics at any time and drill down to the transaction level, which is very important in maximizing the potential of revenue-cycle management,” Blank says. For instance, an individual who taps into the system can pull up the fee paid per scan for a given modality and determine whether it was lower than originally anticipated. Similarly, the database can be queried to discover why a particular insurance company has paid InSight Imaging a fee for service to a patient that differs from the amount specified in its contract. Blank’s team also keeps a close watch on the electronic claims submitted each day, using the business-solutions company’s technology, when claims are not picked up, to identify the culprits. The technology facilitates a determination of whether a payor, a referring physician, a radiologist, or the imaging center itself is at fault in these cases. Set revenue-cycle governance procedures, conceived prior to outsourcing revenue-cycle management, supplement continuous measurement. Patients are told, at the time of registration, exactly what their contribution to the fee for services will be and the amount that their insurance will cover. Such data can be readily accessed by front-office personnel because InSight Imaging’s point-of-sale system is integrated with its proprietary RIS; all carrier contract information resides in the database. “There is a lot to be said for knowing, for example, that one insurance company is going to pay $450 for a certain CPT® code, but another is only going to pay $375, and what the differential will be for the patient,” Blank states. “Streamlining revenue-cycle management with a procedure of this type is extremely helpful,” she adds, especially considering the fact that 80% of revenue-related glitches are related to point-of-sale issues occurring at the time of registration. It is just as significant that InSight Imaging has instituted a practice of holding monthly retrospective and claim-denial reviews aimed at identifying denial triggers and trends. In a somewhat different vein, a team of trainers, reporting directly to Blank, conducts employee-training sessions that cover 20 different specific workflows (including, for instance, how to fill out a cash log). “We believe we have made tremendous strides in revenue-cycle management, and we continue to work with an eye toward additional ones,” Blank says. Many, Many Metrics Meanwhile, constant comparison with a comprehensive set of benchmarks is the key to revenue-cycle management at NYU Langone Medical Center, New York, New York, for the faculty radiology practice and the radiology department alike. Felix Okhiria, MPA, MA, CCP, CMPE, CPC, CHC, director, business services, NYUL faculty practice, radiology, says, “It is truly an ongoing, seemingly minute-by-minute process,” which he describes as involving peeling back many layers of information residing in the hospital’s RIS. Okhiria and his team analyze cash flow daily. The number of claims reported on any given day is also scrutinized, with close attention paid to the volume of claim edits. Scheduled and conducted exam rates are reviewed to ensure that exam-abandonment volumes fall into a range that does not exceed 1.5% to 2%. The average length of a call to schedule an exam and the average waiting time before an exam fall into the daily monitoring category as well; the target for the former is under three minutes, according to Okhiria. Time spent answering telephone calls and performing exam-scheduling duties is part of a staff-productivity measure that also comes under scrutiny daily. Monthly evaluations are even more exhaustive. The number of claims submitted (with the overall revenue generated by these claims) is one area that is managed very closely. “For instance,” Okhiria notes, “we look not just at the number of claims and the revenue, but at how those compare with the same period last year.” He adds, “We take the number of claims submitted to a particular payor, like Medicare, and the revenue from those claims, and see how they measure up against the numbers for the previous month. We look at the overall end-of-the month billing report to see what percentages are related to various insurers. If we see that revenue is trending downward, we analyze the data to determine why.” Moreover, charges by modality are compared on a month-to-month basis. On the accounts-receivable front, year-to-date totals as compared with those for the same month in the previous year, days in accounts receivable, and accounts receivable aged in excess of 60 days are pushed under the microscope. Actual revenues versus budgeted revenues as they relate to expenses, salaries, benefits, other compensation, lease payments, salvage contracts, and supplies receive identical scrutiny.
Felix Okhiria, MPA, MA, CCP, CMPE, CPC, CHC The coding and claims-processing piece of revenue-cycle management can, by virtue of its complexity, be a pain point here, according to Okhiria. “We find ourselves answering a lot of questions and ironing out a lot of issues,” Okhiria says. “For instance, we might have a claim for an MRI with an authorization, but the physician only ordered an MRI of the abdomen, and all of a sudden, an examination of the pelvis has been performed,” he continues. “We need to see which exam was ordered, and by whom, in order to obtain payment for the other procedure.” In another example, “We’ll have a claim for a CT with contrast, but there is confusion about whether contrast was actually given. It can become complicated,” he says. Two staff members work with physicians to handle matters of this type. A tightly woven personnel infrastructure bolsters all revenue-cycle functions. The faculty practice has 20 staff members and two managers involved in billing and scheduling. Most of its coding tasks are outsourced to India as a means of simplifying the process, but some coding is performed by in-house staff. Four individuals handle electronic remittances, refunds, and quality assurance, while 10 staff members deal with accounts receivable, concentrating on specific insurance carriers so that individual payor nuances are always accounted for and addressed. Dedicated hospital personnel handle coding, claims processing, claims posting, and follow-up tasks for the radiology department, which also has three staff registrars in the nuclear-medicine area, two full-time staff members in MRI, and seven FTE personnel in CT and radiography.
Kirk Lawson, MBA For hospital technical fees, coordination of revenue-cycle management with the hospital’s finance department, including patient financial services, preauthorization, and certification, occurs through communication and interaction with a director of revenue management for the entire institution, according to Kirk Lawson, MBA, administrative director, NYU Langone Medical Center, department of radiology. NYU Langone Medical Center also has directors of inpatient and ambulatory patient finance and a senior director of patient financial systems, as well as a director of patient access whose responsibilities include ensuring that patient-registration processes are properly executed. In the area of technical fees, the radiology department is executing a preview, consolidation, and update of the hospital’s charge master, with input from the radiology department, the finance department, and an outside consulting company. The process also includes annual updates for each modality to incorporate new CPT changes; routine matching of RIS exam data to hospital charge data; and ongoing reviews of all suspended charges, claim denials, and claims that do not pass the editing stage. For its part, the faculty practice, which has initiatives encompassing all professional fees as well as all practice technical fees, has developed methods for accurately forecasting future revenues and potential difficulties. Revenue trends by modality and individual carrier are being carefully monitored, and aggressive accounts-receivable management has become the norm. “We’ve also defined acceptable standards and communicated expectations where needed, and are maintaining a core group of talented, skilled, and highly motivated staff,” Lawson concludes. “Revenue-cycle management is ever evolving.” Julie Ritzer Ross is a contributing writer for Radiology Business Journal.
Sheryl Jordan, MD “For us, revenue-cycle management involves juggling not just billing, but multiple moving parts,” Sheryl Jordan, MD, explains. Her nonmedical duties at the practice include serving as its treasurer. This involves three categories: charges, adjustments, and payments. The charges category includes, but is not limited to, electronic charge-capture interfaces, charge-capture auditing, charge master analysis, and adherence to state-mandated exam-appropriateness criteria to ensure correct coding. Examples of adjustments are electronic remittance/payment posting, payor audits for incorrect allowables, denial management, and self-pay strategies. Under the practice’s umbrella of revenue-cycle management, corporate performance is measured against the current year’s budget, prior-year performance, and RBMA benchmarks. Assessment of the first two factors occurs monthly through a review of corporate financial reports generated in-house, as well as of custom billing reports generated by a Chattanooga, Tennessee, physician billing and practice-management company. Billing performance is compared with RBMA benchmarks bimonthly. “We opted to keep the payor-contracting piece in-house because it falls within our own core competencies, but engaged a billing/practice-management company several years ago for billing services and analysis because its front- and back-end processes, as well as its technology, are a much better fit on that side,” Jordan explains. “Despite our best efforts for more than 40 years, we were unable to achieve optimal results with in-house billing; in fact, we couldn’t even get close on a few of the must-achieve parameters,” she continues. “Our front-end/back-end manual processes and lack of technology hamstrung superb employees. Account underperformance, and hence corporate financial underperformance, was the sentinel, year after year.” Communication between Carolina Regional Radiology and its billing company is constant, with claims transferred to and processed by the latter once each day and interim reports generated as needed. Claim denials and other information (work products) are also fed to the third-party company daily so that the root causes of problems (for example, coding errors) can be pinpointed quickly and errors subsequently can be rectified. Carolina Regional Radiology’s approach to revenue-cycle management dictates stakeholder engagement in all of its aspects, as set forth in a practice model developed by Lawrence R. Muroff, MD, FACR. Muroff is clinical professor of radiology at the University of Florida and University of South Florida, and is president and CEO of Imaging Consultants, Inc, Tampa, Florida. Adopted by Carolina Regional Radiology several years ago, the model espouses physician involvement in all facets of practice, as well as practice management via three committees (business development, finance, and operations), with physician constituents belonging to each one. Accordingly, a five-physician executive committee and three administrators (an executive director, a billing manager, and a bookkeeper) conduct report reviews and benchmarking activities, with members of the practice’s board of directors engaged at every committee level. “Without this degree of involvement in revenue-cycle management at the physician/owner level, we would be unable to protect our patients, ourselves, and the practice as a business properly,” Jordan asserts. “It’s essential, given both the high-deductible insurance-plan environment in which we work and the fact that 55% of our payments come from government payors.” In addition, physicians working within the practice are required (and given incentives) to assist in the charge-capture and denial-management elements of revenue-cycle management. As such, messages conveyed by management emphasize the need for accurate completion and expeditious (daily) signing of reports. “The physician-engagement piece, together with the integration of charges, adjustments, and payments into revenue-cycle management as a whole and the outsourcing of the billing function, has made all the difference for us,” Jordan reports. “At one time, our billing expenses consistently fell above 13% of revenues; this figure did not even include fees paid to third-party consultants for assistance with managing our billing office. In a sinusoidal manner, our days in accounts receivable and our accounts receivable aged over 120 days would balloon above benchmarks, then improve, then worsen, and so on, in the antithesis of optimal revenue-cycle management. Today, that is just not the case.” Better Results Outsourcing a portion of its revenue-cycle management, beginning in June 2009, has also proven to be an effective strategy for InSight Imaging, a subsidiary of InSight Health Services Corp headquartered in Lake Forest, California. Accounts receivable over 120 days old, which averaged 31% in 2007, now stand at 13%. InSight Imaging’s percentage of first-level claim denials has dropped from 15% two years ago to 8%; its short-pay claims, as a percentage of collections, from 3.6% to 0.9%. Contracting with a Plano, Texas, business-solutions company for its revenue-cycle services, however, has been just the tip of the iceberg for the organization, which provides diagnostic imaging services in more than 30 states through a network of 63 fixed-site centers and 114 mobile facilities.
Patricia Blank “Whether or not outsourcing is part of the strategy, getting revenue-cycle management right goes back to implementing good metrics and procedures,” Patricia Blank, InSight’s vice president of revenue-cycle management, explains. InSight Imaging first considered the outsourcing route in late 2007, “not because we were hopelessly broken, but because of the potential savings,” Blank recalls. “In our view, revenue-cycle management is a commodity, rather than a competitive advantage.” Blank’s initial steps in optimizing revenue-cycle management entailed moving from what she deems poor metrics to metrics that either matched or exceeded industry standards. Once an outsourcing partner had been identified, she shared two years of claims data so that an analysis of potential opportunities for revenue uplift (increasing revenue without increasing procedural volume) could be performed by addressing all facets of the revenue cycle. “Now, our mode of revenue-cycle management operation is to measure, measure, and measure some more, monthly (and in some cases, daily),” Blank says. She notes six core areas on which the entity concentrates: net collection ratios, days in accounts receivable, accounts receivable aged more than 120 days, claim-submission lags, denial rates, and revenue uplift. All data pertaining to revenue generation are stored in a data warehouse maintained by the revenue-management company, which has personnel who run reports in accordance with its contract. Three managers on Blank’s staff run reports and monitor metrics as well, with the two contingents convening once each month to review data and determine how to proceed if revenue targets are not being hit. “With the data warehouse, we can run informatics at any time and drill down to the transaction level, which is very important in maximizing the potential of revenue-cycle management,” Blank says. For instance, an individual who taps into the system can pull up the fee paid per scan for a given modality and determine whether it was lower than originally anticipated. Similarly, the database can be queried to discover why a particular insurance company has paid InSight Imaging a fee for service to a patient that differs from the amount specified in its contract. Blank’s team also keeps a close watch on the electronic claims submitted each day, using the business-solutions company’s technology, when claims are not picked up, to identify the culprits. The technology facilitates a determination of whether a payor, a referring physician, a radiologist, or the imaging center itself is at fault in these cases. Set revenue-cycle governance procedures, conceived prior to outsourcing revenue-cycle management, supplement continuous measurement. Patients are told, at the time of registration, exactly what their contribution to the fee for services will be and the amount that their insurance will cover. Such data can be readily accessed by front-office personnel because InSight Imaging’s point-of-sale system is integrated with its proprietary RIS; all carrier contract information resides in the database. “There is a lot to be said for knowing, for example, that one insurance company is going to pay $450 for a certain CPT® code, but another is only going to pay $375, and what the differential will be for the patient,” Blank states. “Streamlining revenue-cycle management with a procedure of this type is extremely helpful,” she adds, especially considering the fact that 80% of revenue-related glitches are related to point-of-sale issues occurring at the time of registration. It is just as significant that InSight Imaging has instituted a practice of holding monthly retrospective and claim-denial reviews aimed at identifying denial triggers and trends. In a somewhat different vein, a team of trainers, reporting directly to Blank, conducts employee-training sessions that cover 20 different specific workflows (including, for instance, how to fill out a cash log). “We believe we have made tremendous strides in revenue-cycle management, and we continue to work with an eye toward additional ones,” Blank says. Many, Many Metrics Meanwhile, constant comparison with a comprehensive set of benchmarks is the key to revenue-cycle management at NYU Langone Medical Center, New York, New York, for the faculty radiology practice and the radiology department alike. Felix Okhiria, MPA, MA, CCP, CMPE, CPC, CHC, director, business services, NYUL faculty practice, radiology, says, “It is truly an ongoing, seemingly minute-by-minute process,” which he describes as involving peeling back many layers of information residing in the hospital’s RIS. Okhiria and his team analyze cash flow daily. The number of claims reported on any given day is also scrutinized, with close attention paid to the volume of claim edits. Scheduled and conducted exam rates are reviewed to ensure that exam-abandonment volumes fall into a range that does not exceed 1.5% to 2%. The average length of a call to schedule an exam and the average waiting time before an exam fall into the daily monitoring category as well; the target for the former is under three minutes, according to Okhiria. Time spent answering telephone calls and performing exam-scheduling duties is part of a staff-productivity measure that also comes under scrutiny daily. Monthly evaluations are even more exhaustive. The number of claims submitted (with the overall revenue generated by these claims) is one area that is managed very closely. “For instance,” Okhiria notes, “we look not just at the number of claims and the revenue, but at how those compare with the same period last year.” He adds, “We take the number of claims submitted to a particular payor, like Medicare, and the revenue from those claims, and see how they measure up against the numbers for the previous month. We look at the overall end-of-the month billing report to see what percentages are related to various insurers. If we see that revenue is trending downward, we analyze the data to determine why.” Moreover, charges by modality are compared on a month-to-month basis. On the accounts-receivable front, year-to-date totals as compared with those for the same month in the previous year, days in accounts receivable, and accounts receivable aged in excess of 60 days are pushed under the microscope. Actual revenues versus budgeted revenues as they relate to expenses, salaries, benefits, other compensation, lease payments, salvage contracts, and supplies receive identical scrutiny.
Felix Okhiria, MPA, MA, CCP, CMPE, CPC, CHC The coding and claims-processing piece of revenue-cycle management can, by virtue of its complexity, be a pain point here, according to Okhiria. “We find ourselves answering a lot of questions and ironing out a lot of issues,” Okhiria says. “For instance, we might have a claim for an MRI with an authorization, but the physician only ordered an MRI of the abdomen, and all of a sudden, an examination of the pelvis has been performed,” he continues. “We need to see which exam was ordered, and by whom, in order to obtain payment for the other procedure.” In another example, “We’ll have a claim for a CT with contrast, but there is confusion about whether contrast was actually given. It can become complicated,” he says. Two staff members work with physicians to handle matters of this type. A tightly woven personnel infrastructure bolsters all revenue-cycle functions. The faculty practice has 20 staff members and two managers involved in billing and scheduling. Most of its coding tasks are outsourced to India as a means of simplifying the process, but some coding is performed by in-house staff. Four individuals handle electronic remittances, refunds, and quality assurance, while 10 staff members deal with accounts receivable, concentrating on specific insurance carriers so that individual payor nuances are always accounted for and addressed. Dedicated hospital personnel handle coding, claims processing, claims posting, and follow-up tasks for the radiology department, which also has three staff registrars in the nuclear-medicine area, two full-time staff members in MRI, and seven FTE personnel in CT and radiography.
Kirk Lawson, MBA For hospital technical fees, coordination of revenue-cycle management with the hospital’s finance department, including patient financial services, preauthorization, and certification, occurs through communication and interaction with a director of revenue management for the entire institution, according to Kirk Lawson, MBA, administrative director, NYU Langone Medical Center, department of radiology. NYU Langone Medical Center also has directors of inpatient and ambulatory patient finance and a senior director of patient financial systems, as well as a director of patient access whose responsibilities include ensuring that patient-registration processes are properly executed. In the area of technical fees, the radiology department is executing a preview, consolidation, and update of the hospital’s charge master, with input from the radiology department, the finance department, and an outside consulting company. The process also includes annual updates for each modality to incorporate new CPT changes; routine matching of RIS exam data to hospital charge data; and ongoing reviews of all suspended charges, claim denials, and claims that do not pass the editing stage. For its part, the faculty practice, which has initiatives encompassing all professional fees as well as all practice technical fees, has developed methods for accurately forecasting future revenues and potential difficulties. Revenue trends by modality and individual carrier are being carefully monitored, and aggressive accounts-receivable management has become the norm. “We’ve also defined acceptable standards and communicated expectations where needed, and are maintaining a core group of talented, skilled, and highly motivated staff,” Lawson concludes. “Revenue-cycle management is ever evolving.” Julie Ritzer Ross is a contributing writer for Radiology Business Journal.