Things just don’t seem right. Radiologists have experienced a drop in income, monthly meetings are increasingly tense and the billing company acts as if it is just making excuses. It’s not just making up excuses, though; there are legitimate issues going on, and they’ve been happening for quite some time.
Dissatisfaction with revenue, the end product of the billing/collections process, seems to be at an all-time high. Radiology billing involves a series of defined processes and many of them have been successfully automated by the leading software vendors. As a result, fewer people are involved in billing and overall costs are lowered.
This is a good thing, of course. In a finely tuned organization, there is an intricate interplay between automation and skilled employees.
But in too many cases, organizations rely too heavily on automation and the tendency to “set it and forget it” that results in a lot of revenue being lost on a daily basis.
So, what’s happening? In many cases, logic will tell you a process can easily be automated—and, theoretically, it can. However, automation relies upon underlying process stability where inherent instability is more prevalent in our industry. Hospitals tinker with IT processes, insurance companies change the rules and employee turnover is rampant.
Here is one example, taken from real life: The billing system is programmed to identify certain denial types, knows they cannot be appealed and automatically adjusts them off. That sounds very efficient—and logical. The software hums along, the adjustments occur and that insurance rep works on other denial types. Then, one day while she is working her other denials, the rep has a “that can’t be right” moment while examining a patient’s account, appeals an automated denial adjustment and reports a likely programming error to her supervisor. She is reprimanded, both for questioning programming accuracy and for not doing what she was told to do (work the other denial types). The charge is adjusted off. Then a check for $1,200 comes in because of the appeal. Is the rep praised? No. Does someone check the accuracy of the automation? No. The automated process continues for several years until, eventually, the group terminates its billing contract—after losing several hundred thousand dollars each year from this process failure as well as others that remained unchecked and unquestioned.
Here is an older example that is still relevant: The billing company knew CAD would not be paid by most payors when billed with a mammography code. They decided it would be more effective to just not bill the CAD code and save dealing with the resulting denial—so the system was programmed to bill only the mammography code when the mammo/CAD combination was reported. Unfortunately for the radiology group, the system dropped the mammography code and billed the CAD. It did this for thousands of procedures over the course of a couple of years until the error was detected in an internal process audit. In this particular instance, the software was old and cumbersome, so modality reports were not readily available to be regularly reviewed. (Incidentally, that software is still in use!)
The off-shoring of processes also has added another source of problems, although coding seems to be relatively dependable in terms of quality. With that said, here’s yet another example I have seen: A group sent its coding off shore and worked diligently with the coding company for several months, monitoring accuracy and providing feedback and education. After about six months of consistent, clean internal audits, the assumption was that the process was stable and would then be monitored only periodically. The coding company then took on a new, large client, sending their experienced coders to that new client and sending a new crop of coders to the original group. Denials spiked as a result, prompting a new internal process audit and the discovery of rampant training failures. In this instance, the problems were identified and resolved before the practice suffered significant revenue loss and fortunately they did not experience coding compliance violations. But practices are not always so lucky!
Are these issues occurring because billing companies are lazy? No, but in some instances, the companies are naïve about the limitations of automation and the need to involve highly skilled employees at key process junctures. Or they assume that, if an automated process is working smoothly, the hospital won’t make IT changes that can drop charges. Or they assume the insurance company is always correct when classifying a denial. Or … well, the list goes on and on.
The biggest problem we have as practice administrators or physicians is that we see management reports illustrating the end result and process failures contributing to revenue declines are not evident. As long as we, as an industry, insist on the lowest price, we will continue to get what we pay for in terms of over-automation and failures of process controls.
So what can you do now if your gut is telling you all is not well? The first step is to validate any unsettled feelings you have, although this may not always be easy. If you have billing system access, conduct internal audits of denial categories or charge capture, for example.
Also, rather than trying to audit everything, start with areas you think may be experiencing problems. And if you do find something wrong, begin discussing a satisfactory resolution with your billing operation. In some cases, they may not be able to adapt a high-volume, automated process flow, but it’s important to ask anyway.
Pat Kroken, CRA, is the president of Healthcare Resource Providers in Albuquerque, N.M.