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Planning ahead ensures payoff in new projects


The nationwide shortage of radiologists, coupled with the growing acceptance and prevalence of teleradiology, has many radiologists and group practice managers seeing opportunities in places they previously would not consider.

The nationwide shortage of radiologists, coupled with the growing acceptance and prevalence of teleradiology, has many radiologists and group practice managers seeing opportunities in places they previously would not consider.

Groups are expanding in order to cover geographically remote or distant hospitals, while individual radiologists are finding they can contract with hospitals for more volume than they can personally handle by sending the excess work to teleradiology firms. Despite the impact of the Deficit Reduction Act, some are still moving ahead with imaging center plans.

Expansions and new projects, however, often come up against short-term cash shortages due to lack of planning for the reimbursement aspect of the endeavor. Preliminary research and preparation will help avoid a cash crunch and make the project more profitable.


One of the biggest unnecessary draws on cash during the first several months of a project is a lack of provider numbers, which means claims are held and not billed until the provider numbers are received. Some groups encounter a severe cash crisis if they must hold claims for Medicare and Medicaid for months because they had not submitted the application until after they began providing services.

Planning ahead can alleviate this potentially significant problem. All provider number applications should be completed and mailed no later than three months prior to providing services. If information is required that is currently unavailable from a vendor, make the order contingent on receiving this information up front.

Billing experts offer another tip: Bring the billing company to the table early in the process. Many people incorrectly believe that once the deal is complete, the final step is for the billing company to come in and start billing. Not so.

If the deal is structured with billing needs in mind, collections will ramp up faster and can be as high as 3% to 5% higher thereafter. Specific data requests by the billing company have a better chance of coming to fruition while you have the hospital's ear. Once the deal is done, the hospital staff is off to the next crisis, and you can be stuck with poor billing data.

As a hedge against this, you should request early in the process several billing items:

  • secure, remote access to the patient information system or web portal to enable the billing company to view and print individual radiology patient demographics and insurance information, as well as individual radiology results;
  • secure transfer of a daily billing file from the patient registration system containing radiology patient demographic and insurance information for all applicable locations (including any offsite/clinic facilities);
  • secure transfer of a daily file from the RIS with all of the signed radiology results, which should contain the entire header, footer, and body of the radiology report, including an indicator to identify the facility (including offsite locations) where the services were rendered;
  • secure transfer of a monthly recap file, containing a summary of radiology exams that were signed in the prior month; and
  • an executed Health Insurance Portability and Accountability Act Business Associate agreement prior to exchanging data.

Bringing the billing company in early will also allow it to get a jump on completing electronic claims submission forms and programming the company's system to start billing on day one. Inform the hospital that these items will need to be addressed during the hospital contract negotiations.

Your billing company will also help assess penetration of and compliance with the newest insurance trend: radiology utilization management companies.

A new location may be in a different coverage area from your current business and thus have a separate set of rules. Carriers that use radiology utilization management companies put an increased burden on referring doctors to precertify exams in order to get paid. These companies are aggressive at restricting access and implementing red tape to reduce payments to providers.

The Feb. 25, 2008, issue of Forbes described just this situation.

"Utilization management companies like CareCore Radiology, American Imaging Management, and National Imaging Associates cropped up to do the dirty work of reviewing and rejecting imaging orders on behalf of insurance companies," Forbes said. "CareCore, with 40 doctors on staff, oversees 26 million patients through its contracts with Aetna and others. The company is paid $3 a year per member. CareCore chief executive Donald Ryan estimates that 18% of all scan orders are rejected and another 6% aren't even filed because of the deterrent effect."

So make sure you determine which, if any, of these carriers are operating in your area and familiarize yourself with these carriers' policies for payment and access before proceeding.

If any part of the service is going to be provided by teleradiology and the company is going to provide final reads from the remote location, potential patient communication issues need to be understood and proactively addressed with the facility. Claim forms for final reads must include the location where the radiologist was located when he or she interpreted the image, not the location where the image was obtained. This means, for example, that even though your practice is in Florida, your patients may get an explanation of benefits from their insurance carrier that indicates the exam was provided in Texas. Some carrier by carrier discretion exists, so your billing company should check with the carrier and advise you on how to structure the logistics.


For those brave enough to initiate outpatient imaging in the post-DRA world, make sure to include payer participation evaluation in the early stages. Lack of planning for insurance participation can cost imaging center operators huge amounts of money and time. Early in the planning process, determine if the major payers in the area will allow you on their panel with an effective date that coincides with your opening date.

Many large payers have instituted roadblocks to participation in an effort, they believe, to control utilization.

These payers will not contract with a new provider site until it has been open 12 months. Aetna and United Healthcare have added another hoop to jump through and now require American College of Radiology certification as a condition of participation.

Medicare has also changed the rules for back-billing. Prior to 2008, the date on which the Centers for Medicare and Medicaid Services would begin to pay reimbursements for services performed at an independent diagnostic testing facility (IDTF) was left to the discretion of the facility's Medicare contractor. In some areas of the country, services were reimbursed retroactive to the IDTF opening date even if the CMS Form 855B was not filed until some later date.

However, effective Jan. 1, 2008, CMS added new requirements to the IDTF conditions of participation. The effective date of billing privileges for a newly enrolled IDTF is now the later of the following:

  • the filing date of the Medicare enrollment application that was subsequently approved by a Medicare fee-for-service contractor; or
  • the date the IDTF first started furnishing services at its new practice location.

This new rule limits the period of time for retroactive billing. If the Medicare contractor rejects the initial 855B application for any reason, the effective date for the IDTF's billing privileges will be delayed until the Medicare contractor receives a correct and complete application. So to avoid any delay or potential unreimbursed care, it is important to file a complete CMS 855B very early in the startup process.

Like any new and rapidly changing industry, teleradiology requires planning, flexibility, and adaptability. These will be the traits that lead to success. Incorporating these elements into your planning process and the overall project will help you stay ahead of the curve, maximize your return on investment, and establish productive long-term relationships.

Mr. Reinitz is president and CEO of Advocate Radiology Billing & Reimbursement Specialists in Powell, OH.

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