both diagnostic and interventional radiological services needed by referring physicians at the hospitals.
The economics of imaging have come to
rankle Wiggins. “One of the biggest points
of contention I have with CMS is the talk
about over-utilization—it is completely in-
accurate,” he says. “The radiologist is not the
referring source. We are the recipient.”
CMS price cuts have hit the practice
deeply. Two years ago, CMS altered its reim-
bursement policy on CTs of the pelvis and
abdomen, combining the formerly separate
services into a single, reduced fee. “It comes
back as one study, but the doctors would
interpret them as separate studies,” Wiggins
explains. The new policy dinged the practice
at about $388,000 in reduced annual rev-
enue, Wiggins says. “It was not an elegant
approach to cost reduction. It was a hatchet
approach. But it saved a significant amount
of money. Our fear is that we will continue
to see Medicare combine procedures.”
The rise of consumer-driven health
plans is another challenge facing the imag-
ing sector. “Our patients are more savvy,”
Wiggins says. “They have high-deductible
health plans and they do the research to de-
termine cost. We used to get t wo to three pa-
tient calls a week about costs, but now we’re
getting two or three calls a day.”
Highly varied consumer-driven health
plans are a thorn in the side of Jeff Ronner,
chief financial officer at Shield Health Care
Group, a Quincy, Mass.-based provider
which runs 25 imaging centers across the
state, providing some 200,000 annual pro-
cedures, mostly MRIs, on an outpatient
basis. “We really need simplification,” Ron-
ner says. “Every self-insured company has
its unique plan. We used to pick up a Blue
Cross plan and it was fairly generic. Now ev-
ery plan is different.”
Beyond that, Ronner says that collecting
patient co-pays and deductibles is a major
challenge for the practice. “We’re trying to
collect small amounts from a lot of people,
and when we can’t do that the write-offs can
be pretty staggering.”
For radiology practices, trying to squeeze
out more revenue via increased productiv-
ity might not have huge payoffs. CEO Wig-
gins says that while Radiology Associates of
Northern Kentucky might be able to boost
physician productivity somewhat, the prac-
tice, like many of its peers, has already made
its large productivity gains, in large part due
to the efficiency of the PACS set-up in place
for the vast majority of its imaging studies.
The practice doesn’t own the PACS, but
uses an enterprise system maintained by
St. Elizabeth Health Care. “We do two hours
turnaround on reports,” Wiggins says. “Our
Boosting Financial Return
Faced with an aging practice management and billing system, Radiology Associates of
Northern Kentucky, Crestview Hills, outsourced its billing back in 2004 to a small Florida
firm. The group practice maintained the relationship for seven years, but watched in
dismay as the quality of service diminished and key financial indicators, such as denial
rate, AR days, and resubmissions steadily worsened, recalls Chad Wiggins, CEO of the
32-physician group practice. It performs some 600,000 annual studies across all imaging
modalities and radiological sub-specialties. To revamp its billing, the practice turned to
McKesson—the provider of the PACS in place at the practice’s key hospital partner, St.
Elizabeth Health Care. Within a year, the practice has seen dramatic improvements in
its revenue cycle, Wiggins says. “Days in AR dropped, revenue is up, denials are down,
every key performance indicator with billing service quality is up,” he says.
In the new set-up, radiologists complete their reports as they always did in the
McKesson PACS. The dictated report goes to the hospital’s EHR, from Epic. The
McKesson billing service, in turn, gets a direct interface with Epic, from which it
exports physician documentation, assigns appropriate billing codes, and dispatches
claims to the various payers. Before the files are fed to the billing service, the practice
does a hold to make sure the appropriate demographics are captured. That’s a work-
flow difference with the old billing service, Wiggins say. The former service billed off a
data file sent from the hospital and would drop the claim prior to any data scrubbing.
“We would go ahead and drop the claim, but we got a higher percentage of denials.
The information was inaccurate.”
To make matters worse, if a payment was denied, the former billing service would
send a statement to the patient, asking for any difference. Later, the file might be re-
worked once the hospital updated its data and the patient would be refunded. “It was
a horrible patchwork of a process,” Wiggins says.
The denial rate, once as high as 20 percent, is now less than 3 percent, he says.
AR days have stabilized at 43 to 45, and net patient revenue is up almost 4 percent.
The revenue improvements stem from two factors, Wiggins says. First, the McKesson
service relies on certified coders who understand the nuances of interventional services and bill more appropriately. Second, overall patient volume coming through St.
Elizabeth’s is up—largely due to a reduction in the fee schedule for outpatient imaging
procedures. “They recaptured volume that had been migrating to Ohio,’ says Wiggins.
But Wiggins knows that the dependency on volume will ultimately shift. St.
Elizabeth’s is not participating in any ACO efforts, but it is participating in CMS’
Comprehensive Primary Care (CPC) initiative. The program will incentivize primary
care physicians to reduce readmissions, length of stay, lab and imaging expenses,
Wiggins says. “There will be tighter protocols for imaging and lab,” Wiggins says. “It
will change how we operate. We will have to figure out how to negotiate our percent-
age out of any savings. The easy strategy is to roll over and become employed [by the
hospital]. If you become a W- 2 of the health system and have a base salary, you don’t
care. You’re getting income regardless of what happens. That is the easy path, but that
is the path we absolutely don’t want to take.”
Instead, Wiggins says the practice will up the ante on its on quality efforts. Under
consideration is the purchase of its own PACS and expansion of its services into a
broader region. Data analytics will be key, he says. “We will have to step outside our
traditional measures of gross charges and volume by modality and we will look at the
patient population. What has been the historical MRIs per 1,000 population? We will
set up a baseline and then see if we reduce it. That reduction has direct correlation
with cost savings and we will figure out how to negotiate that.”
