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Process changes solve radiology billing issues


Volume at the imaging center has improved over the past year, although revenue has remained flat. The billing manager explains that the center faces personnel problems: Employees have refused to take the necessary steps to ensure that complete and accurate information is captured for each patient. As a result, an increasing number of claims are being denied, and the billing staff is doing extra work to correct and refile these procedures. It seemed that terminating an employee for her bad attitude might help, but the current staff is falling into the same patterns. The billing manager suggests hiring an additional employee for insurance claims follow-up.

Volume at the imaging center has improved over the past year, although revenue has remained flat. The billing manager explains that the center faces personnel problems: Employees have refused to take the necessary steps to ensure that complete and accurate information is captured for each patient. As a result, an increasing number of claims are being denied, and the billing staff is doing extra work to correct and refile these procedures. It seemed that terminating an employee for her bad attitude might help, but the current staff is falling into the same patterns. The billing manager suggests hiring an additional employee for insurance claims follow-up.

Every radiology practice has been faced with the "hire more people" solution when problems occur. And indeed, problems with denied claims result in additional rework, as well as the risk that associated revenue will be lost altogether. Traditionally, a medical practice seeks to generate claims quickly, and the lack of control over the quality of patient information is addressed by reworking claims after they are denied. As a result, most of the costs in billing have been associated with employees at the back end of the billing process.

Those employees' work involves researching the reason for the denial, correcting information, and finding documentation to support why the claim should be paid. Time spent in claims follow-up varies widely, based on the reason for the denial, and may require extensive research, photocopying, and telephone calls. An easy correction may involve 15 minutes and a difficult one can take several hours, with unrealistically heavy workloads often assigned to personnel involved in these tasks. These workloads may result in a second round of denials due to failure to meet timely filing limits and, ultimately, in lost revenue. On the other hand, it is also easy to see why the obvious solution appears to lie with the addition of more personnel.

Where does performance improvement fit into this scenario? While it is possible to work on the efficiency of processes related to claims follow-up, would it be feasible and more effective to address process problems where they originate?


Six Sigma uses a structured approach to problem resolution and/or process improvement. As the following case study illustrates, the problem to be solved is often not the one originally presented, and the discipline of quantifying and documenting each phase removes the temptation to jump to premature (and often ineffective) conclusions.

Every manager has been in the situation of responding to a problem such as that presented in the composite imaging center described above. The traditional approach might involve one or more of the following steps:

- disciplinary meeting and actions with the involved employees;

- retraining front desk employees;

- possible termination of the offenders;

- posting more signs reminding workers to photocopy insurance cards; and

- hiring additional back-end process staff to correct problems.

The use of data-driven decision making results in a different process and a more positive, less personal, resolution. If nothing else, the importance of focusing on problem processes, rather than problem employees, demonstrates how issues can be neutralized and dealt with objectively. With objectivity can come consensus, even if the original "solution" ends up requiring further modification upon implementation.


During an operational review, the billing manager's frustration with the imaging center's scheduling and registration processes boiled over when he was asked about the one or two improvements that could have the greatest impact on his department. He stated that he had met with the center manager on several occasions regarding her administrative staff's obvious disregard for the importance of capturing accurate and complete insurance information during the registration process. A new supervisor with insurance experience had recently been hired and things seemed at first to have improved. Lately, however, even her work was slipping, and it was evident the situation had not been successfully addressed. The billing manager fumed about how little these employees cared about doing things the right way.

More about this situation: The imaging center consistently saw 75 to 100 patients a day for MR, CT, ultrasound, and mammography. When the billing staff researched denied claims, they often found photocopies of the patients' insurance cards in the film jackets, although that information had not been entered or updated in the computer system. The billing manager felt that claims denied because of administrative error represented the largest category of denials. The computer system was capable of running a report of denials by payer that included the reason for the denial.


The billing system report listed denials using codes from various insurance companies, with the result that several hundred descriptions were outlined. Classifications were then collapsed into the following categories for analysis, and more than 800 denied claims were identified in a 90-day period for administrative issues, including:

- eligibility (patient not identified as covered by the insurance carrier);

- duplicate claim submitted;

- timely filing;

- submitted to the wrong carrier;

- missing or incorrect information;

- noncovered services; and

- miscellaneous (not categorized clearly) reasons.

Of the total denials for the imaging center, an estimated 70% were due to administrative reasons, as opposed to coding problems. (Coding issues primarily involve procedures denied for medical necessity, CPT/ICD-9 code incompatibility, or bundling/unbundling). In terms of impact, approximately 18% of the total procedures performed at the imaging center were denied for administrative reasons, with sufficient economic impact to warrant attention to the process.

Denied claims were also broken down by insurance company, as seen in Table 1.

While commercial insurance represented the largest single category, there is little standardization among insurance companies in explanation of benefits forms to facilitate analysis. Therefore, the largest single insurance company was selected, since it was assumed that problems encountered with Blue Cross claims were likely to be represented in other payer denials.

A staff member then researched whether denied claims were appropriately entered into the billing computer. Because most of the administrative errors resulted from missing or incomplete information, as well as eligibility, source documents were also sought. In validation of the billing manager's assertions, the correct information was often stored in file folders in film jackets. So just what was happening?


One of the first steps in confirming the problem process was involving the registration desk in the project and removing the personal nature of the issue as it had been presented. During the fact-finding and verification process, we explained the process involved in submission of a clean claim and the expectation that it would be paid in 15 to 30 days.

When information is missing or incorrect (Table 2), the process becomes much more complex, and the time period for payment turnaround extends to 45 to 90 days-providing the billing staff members are not sufficiently backlogged to miss filing deadlines for appeals altogether.

The business implications were then explained. Staff must duplicate work, especially since the missing information is often found in the patients' film jackets. The group experiences increased overhead due to inefficiencies in administrative processes. Cash flow is delayed. More staff members are required to correct the results of inefficient processes. The problem claim may not receive follow-up and could miss deadlines for doing so. Each of these factors contributes to decreased profitability and, ultimately, the quality of salaries and benefits offered to employees.

The registration staff expressed appreciation for being treated as adults and being provided with additional information about the impact of process problems on a larger scale.

The next step involved verification of the registration process and observation of workflow issues. Like most imaging centers and radiology departments, patients did not present themselves on a consistent basis throughout the day. Instead, the registration staff worked in peaks and valleys, with morning hours providing the greatest challenge.

The staff confirmed that during especially busy periods, they sometimes had problems entering all the information into the computer system before it was needed for the film jacket, which had to be placed in the "ready" slot for the technologist. Furthermore, additional keystrokes were needed to save the demographic information, and in the heat of battle, the staff were aware that they could enter all information but not complete the "save" function. Efficient patient throughput depended on the speed of the registration process, and there was significant pressure to keep the process moving.


After reviewing the problematic process, we verified that the staff usually experienced a mid-afternoon lull in activity. That time was spent preparing for the next day's scheduled procedures: printing out registration forms for confirmation, requesting prior films from the film file room, and catching up on paperwork.

When asked if one person could be charged with updates to patient accounts, the staff found this realistic. They also agreed that billing information did not need to accompany the patient if the written order and clinical history were attached to the film jacket. Insurance and/or guarantor information was pulled from the clinical workflow and entered in the afternoon when the pace in the office slowed. Supporting documentation for billing and patient information were placed in the film jacket for storage at the time the radiology report was filed. Table 3 describes the improved process.

Technologists found that patient throughput was no longer delayed by the registration process, which means patient satisfaction from reduced wait times could potentially improve.


The new process was implemented with the agreement that staff members would review it with at the end of one week to ensure that nothing was overlooked and that the solution did not create unanticipated problems.

The process would be considered under control when scheduling, registration, and billing functioned on a consistent basis. Control would be determined by repeating the cycle again to verify that it was working. In the case of the composite imaging center, it seemed realistic to measure in 30 days, as implications of improved processes would begin to be evident at that point.

Once the process was considered under control, measurement could be scheduled periodically for confirmation, although in all likelihood that time would be spent identifying another process problem for resolution.

Due to the process-oriented nature of radiology, the Six Sigma DMAIC (Define, Measure, Analyze, Improve, Control) structure can be used in most areas. Its value lies in moving beyond the knee-jerk reaction and uncovering layers to identify and focus on supporting data. While data are often interpreted only as metrics, the DMAIC method encompasses a broader definition that includes mapping of processes and validation of the "layers"-much like peeling an onion.

Once problems are neutralized and moved away from the personal level, staff can be involved in identifying and adopting modifications. Again, process improvement is based on a series of logical steps that are often quite simple in isolation.

This article is the fourth in a series that discusses performance improvement and the radiology practice. The concepts of performance improvement do not appear to be especially difficult, but how do they look in real-life situations?

The preceding case study represents a composite of issues that are not uncommon in any imaging group. The amount of control over operational processes in an imaging center makes it easier to implement solutions, although similar actions are also appropriate for the hospital-based group.

The case study uses the DMAIC methodology introduced in the previous article in this series.

Ms. Kroken and Dr. Carmody are principals in Healthcare Resource Providers in Albuquerque, NM. Ms. Kroken is a former past president of the Radiology Business Management Association and a fellow in the American College of Medical Practice Executives. Dr. Carmody is board-certified in diagnostic radiology and nuclear medicine and has been involved in various aspects of practice management for more than 25 years. Ms. Amann is operations manager for Radiology Consultants of North Dallas. Ms. Kroken has received honoraria from the RBMA and is a member of its speaker's bureau.

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