Three Hidden Barriers to Radiology Practice Growth

Like most providers, radiology practices face constant changes in regulations, payor requirements, patient demographics, and business environments. Over time, these shifts can significantly impact your practice’s operational and financial health, and even minor problems can escalate as your practice grows.

Over the coming months, we will provide guidance and best practices for radiology practices aiming to scale and grow their business while preserving their independence. Tapping into expertise gleaned from more than 20 years of experience serving radiology, pathology, and specialty physician practices, we explore both common pitfalls and lesser-known growth inhibiting scenarios—as well as proven strategies to help promote success.

In this post, we will start with three obstacles that may already be hindering your practice’s ability to scale.

1. You Implemented Your Billing System a While Ago

Regulations, payor requirements, patient demographics, epidemiological developments, business climates—not a lot stays constant over an extended period of time. Simply put, times change. If you haven’t upgraded, reviewed, or updated your practice’s billing system in years, several issues could be lurking under the surface. At best, they’re small. At worst, cost you revenue and put your practice at regulatory risk. And even small issues can balloon as your practice grows.

Here are some possible situations that your current billing system and its configuration may not be taking into account.

Evolution of Business Needs: Over a five-year span, a radiology practice can undergo significant changes such as acquiring new facilities, shifting payor mixes, or changing service offerings. An outdated billing system may not be equipped to handle these changes efficiently, leading to potential mismatches between current business needs and the system’s initial setup. Unfortunately, unless these issues heavily impact revenue, you’re likely to be unaware they even exist without a proper audit.

Configuration Inconsistencies: Denials might not be addressed correctly due to potential inconsistencies in your system’s setup. For instance, test codes might be added without the necessary modifiers, such as TC or 26, resulting in overbilling or other billing errors. Such inconsistencies are often due to missed steps in the configuration process, often attributable to the system’s design or oversight from staff unfamiliar with the original setup. Without well-defined process protocols and role-access limitations, it is possible a multitude of RCM users have the ability to set up edits, new tests, and such without realizing they conflict with other rules in the system. This is why at XiFin, we consolidate all system configuration updates and setups to a single team of subject matter experts that follow a very rigid testing and audit process to ensure accuracy.

Internal Knowledge Gaps: As staff turnover occurs over the years, the internal knowledge of the billing system’s configuration can diminish. This loss of legacy expertise can lead to missed updates or necessary adjustments, such as adding new payor groups to consolidation rules. These gaps can cause billing inefficiencies and errors, which might not be immediately apparent. Having visibility to setups is critical in knowledge transfers and continuity. Ideally, the bulk of your system configuration and rules should be managed in the RCM solution—not pre-processors, scripting, bots, or ancillary applications. In addition to the lack of consolidated transparency and reporting for system setups, disparate tools increase the risk of black holes and unknowns.

Ultimately, an outdated and improperly configured billing system can lead to financial inaccuracies, increased denials, and inefficiencies that hinder business growth. Your team must regularly review system configurations. Ensuring consistency in configurations, updating roles, and expiring irrelevant rules can prevent potential problems. This proactive approach helps maintain the billing system’s alignment with your practice’s evolving needs and reduces the risk of errors.

2. You Lack Financial Transparency

Comprehensive financial reporting and analysis enable you to make informed decisions, identify and address issues promptly, and optimize your practice’s revenue cycle to scale with your practice as it grows. Tap into your billing or revenue cycle system to generate the reports that help drive financial transparency. If you outsource your billing to a partner, ask them to generate and share those reports with you and your leadership team. With that reporting in hand, here’s how you can cultivate and maintain a 360-degree view of your practice’s financial performance.

Analyze Your Entire Revenue Cycle: Understanding the complete revenue cycle is essential for accurate financial analysis and business growth. This includes assessing all elements such as gross charges, contract adjustments, net charges, gross collections, refunds, net collections, bad debts, and changes in accounts receivable. Many billing reports often focus on just one element, like charges or collections, which provides an incomplete picture. Further, many industry segments have grown heavily dependent on appeals to overturn payor denials and help drive revenue. The ability to understand denial trends by payor and modality, as well as the success rate of necessary follow-up, is key to understanding where there may be additional gaps. Monthly or weekly assessment of these nuances has become a critical part of the RCM process. A holistic view ensures better evaluation of billing performance and highlights areas needing improvement.

Compare Current to Past Performance: Comparative reports add significant value to financial analysis. Comparing current year-to-date numbers with the same period from the previous year helps identify variances and their causes, such as changes in volume or price. Many times, radiology practices feel they have had an increase in volume, but the work being performed has shifted from a higher- to lower-dollar modality or the payor mix has shifted from a higher-paying PPO to a lower-paying HMO. Understanding these variances aids in making informed business decisions that can drive growth. Sometimes, assessing your own reimbursement, payor mix, and test trends is not sufficient. Partnering with your RCM solution provider to see if they can aggregate cross-customer data to help paint a macro-level picture of what’s happening around the country can better inform your organization’s performance and help establish rational expectations.

Monitor Key Performance Indicators (KPIs): Establish financial performance benchmarks and monitor them monthly for variations. Although some fluctuation doesn’t always indicate an issue, wide and/or persistent variations can—and it’s time to investigate the root cause. As a best practice, we recommend reviewing these KPIs:

• Net collection %
• Bad debt %
• Change in accounts receivable %
• Days in accounts receivable

Go Deeper: Detailed breakdown reports by payors, CPT codes, places of service, locations, and radiologists offer valuable insights. These reports help identify specific areas causing issues, such as high days in accounts receivable. By drilling down into these details, you can pinpoint and resolve problems. Your billing team should be fully supportive and proactive in managing these assessments in partnership with you. Weekly and monthly calls to review trends expose shifts before they become revenue-impacting trends and allow for both teams to strategically align on solutions before they become problems.

3. Your Billing System May Be Holding You Back

For your practice to grow and scale, you need a revenue cycle solution that can grow and scale with you—empowering your team to do its best work and enabling sustained optimal financial performance. Some factors to help you evaluate current and potential replacement solutions include:

Automation and Workflow Optimization: By automating such things as error identification, appeals, and exception processing workflows, the system reduces manual tasks and ensures that errors are addressed by the most capable users, leading to optimal outcomes. Leveraging a robust RCM technology solution to manage the clerical tasks allows RCM teams to leverage valuable resources to manage the hard-to-collect encounters and have bandwidth to focus on strategic approaches vs. reactive management.

Prior Authorization: Integrating insurance discovery and prior authorization processes streamlines the acquisition of necessary insurance information and approvals, minimizing delays and potential denials.
Financial Reconciliation and Transaction Management: Automate bank reconciliations and maximize electronic transactions to enhance accuracy and efficiency. This reduces the time spent by finance teams, which often require the same reconciliation.

Analysis and Monitoring: We’ve covered the importance of reporting, but it bears repeating. Through price discrepancy analysis and monitoring the outcomes of error resolutions, the system ensures continuous improvement and accuracy in billing.

Conclusion

As you look to grow your practice, it’s essential to make sure your staff, your systems, and your entire revenue cycle process are optimized in a way that scales with you—instead of undermining your growth. After all, what may seem like a minor, insignificant issue today can mushroom into a much larger issue down the road.

Stay tuned as we delve further into revenue- and profit-enhancing best practices for radiology organizations that seek to preserve their independence as they grow their business.

Analyzing your practice’s financial performance and optimizing billing workflow can seem overwhelming, especially if you and your team are strapped for time. Let us help you with a quick revenue cycle assessment.