Managing the Revenue Cycle: Optimized Coding and Billing

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Proper coding and billing have long been priorities of private and hospital-based radiology practices alike. Health-care reform and its accompanying reimbursement cuts, however, have created a need to optimize both functions. Efforts underway at practices across the country indicate that attention to detail in coding and billing can result in stepwise improvement in receipts.

Bill Ziemke, JD, LLM, MBA, CPA, believes that coding and billing cannot be optimized without the implementation of new strategic processes and the adjustment of existing ones. Ziemke serves as CEO of Strategic Administrative and Reimbursement Services (STARS), LLC, the billing and management company for Advanced Radiology Services, Grand Rapids, Michigan, which represents more than 100 radiologists and is one of the largest radiology practices in the United States.

The outgrowth of several radiology practice mergers, Advanced Radiology Services comprises four divisions—Grand Rapids, Kalamazoo, Grand Valley, and Lansing—that provide radiology services to six major health-care systems, including the various satellite health centers owned and operated by these health-care systems. STARS handles billing for approximately 20 hospitals and well over 100 smaller sites.

Not long ago, STARS completed a coding/billing-optimization initiative that spanned more than three years and yielded, among other enhancements, a 57% improvement in procedures billed per FTE. Ziemke says that changing the organizational behavior of the company was crucial. Implementing manufacturing processes and procedures, developed to exceed industry benchmarks, played a key role in sparking the changes. These benchmarks initially came from the RBMA and later were supplied by the Strategic Radiology practice consortium (St Paul, Minnesota) and others.

Ziemke cites the automation of multiple operating procedures and the subsequent elimination of unnecessary steps as prime examples. STARS now employs a straight-to-bill strategy wherein automatic coding replaces manual coding in 70% of cases (compared with 0%, in the past). “Because 70% of our procedures need no manual intervention, we need 70% fewer coders,” Ziemke explains. “One could argue that we probably have one of the higher auditing-of-coding costs in the country because we devote a lot of time to this area, but the additional auditing creates opportunities to save on back-end work. The more work you do on the front end, getting a clean code into the system, the less follow-up work needs to be done.”

Other new methods have also contributed heavily to heightened efficiencies and productivity, faster collections, and (in turn) a decrease in overall billing costs. For instance, based on an analysis of customer-service calls and their content, patient statements were refined to render them easier for patients to understand, reducing the volume of calls while bolstering the rate of private payments. A solution that enables patients to pay their bills online, coupled with the automatic deposit of more than two-thirds of remittances, among other changes, has helped to reduce days elapsed in accounts receivable by 40%, from a high of 55 days to 32 days (as of June 30, 2011).

Ziemke notes, “We could probably go on and on with the list, but it would be too long. Needless to say, constant efficiency improvement is now part of our daily expectation. We have created worklists. We are not yet where we need to be, but we have the ship out of the harbor, sailing toward its proper destination.”

Real-time Data

For Desert Radiologists (Las Vegas, Nevada), a 46-physician practice that offers diagnostic-imaging and interventional radiology services, that has five outpatient locations in Las Vegas and nearby Henderson, nine Southern Nevada hospitals, one Northern Nevada hospital, and one hospital in Arizona, outsourcing and the use of third-party technology have lined the path to billing/coding optimization. The practice performs more than 1.2 million exams annually.

William Moore II, is Desert Radiologists’ CEO. He says that the decision to outsource billing and coding was made in 2008, with the objective of improving collections and accounts-receivable management while reducing costs. Prior to this time, the practice depended on a local billing company, but its services, Moore explains, were not sufficiently comprehensive to handle a practice of Desert Radiologists’ size and scope. Management subsequently opted to bring billing operations