Is it time to reassess your revenue cycle management strategy?

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 - Charles McRae
Charles McRae, CEO, Columbus Radiology

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.

 - Revenue Cycle Management - CanopyThe available financial data doesn’t provide much reassurance. Bad debts and uncompensated care continue to rise, according to the latest data from the American Hospital Association. Healthcare practitioners provided $45.9 billion in uncompensated care in 2012, an increase of $4.8 billion from 2011, and more than double the reported figure just a decade ago of $23.6 billion in 2002. Despite the proposition that the new health law will mitigate some of these non-recouped expenses, the upward trend continues year over year.

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,