Over the past few years, an increasing number of hospitals across the country have been entertaining and implementing outsourced billing and coding for their radiology departments and hospital-owned imaging centers. This strategic change is in keeping with the overall trend of hospital and RCM outsourcing. According to Kaufman Hall’s 2022 State of Healthcare Performance Improvement, “Nearly one-third of hospital and health system leaders (63%) have pursued at least one outsourcing solution, with revenue cycle functions at the top of the list (27%).”
The primary driver for this change is the complexity of radiology coding. Most hospital coders are generic medical coders. The radiology section of the Current Procedural Terminology (CPT) codebook is defined by the code range 70010 through 79999. This range covers 10,000 potential codes. Complex interventional radiology procedures, which are often high-dollar, are among the most complex procedures to code in all of Revenue Cycle Management (RCM).
Even radiology-specific RCM companies typically employ specialty coders for different procedures within radiology. Your most common radiology coder for diagnostic radiology is either a Certified Professional Coder (CPC), which is a certification offered by the American Academy of Professional Coders (AAPC) or an Radiology Certified Coder (RCC), which is a certification from the Radiology Coding Certification Board (RCCB). Interventional radiology coding is the most demanding and requires certification in the form of the Certified Interventional Radiology Cardiovascular Coder offered by the AAPC, or the Radiology Certified Coder in Interventional Radiology (RCCIR), offered by the RCCB. Beyond this, Evaluation and Management (E&M) coding, which is used to report the services a healthcare professional provides to a patient for the assessment and management of their condition, has its own set of challenges and requires someone educated in the nuances of this discipline.
With the complexity comes the challenge of correctly coding radiology procedures. Incorrect coding can result in audit risks for upcoding, lost revenue for under-coding, upset radiologists who may be compensated on RVUs, patient dissatisfaction, and increased denials. With a substantial upside and a significant downside, hospitals are seeking alternatives.
Given these substantial risks and challenges, hospitals are looking for outside vendors with significant radiology expertise to outsource the professional component of their billing for employed radiologists.
There are several key steps to consider when carving out your radiology billing to an outside vendor. You will want to create a Billing Tax Identification Number (Billing TIN) for radiology so that payments may be pre-sorted to both the hospital and the outsourced billing entity. It is difficult to sort payments between two entities in an efficient manner without a separate TIN. Without a TIN,this extra work will inevitably create higher fees associated with your outsourced billing. With that said, creating a Billing TIN also means that the hospital will need to integrate its outsourced billing payments into its financial systems each month.
Another factor to consider in this is teleradiology. Hospitals often employ a teleradiology firm to cover their nighttime reads. These firms can have hundreds of radiologists and will often assign a large pool to a given account. These radiologists often change from month to month, which can create a lot of extra work for the hospital’s credentialing staff. Most outsourcing companies will offload provider enrollment from the hospital, however fees may apply.
Don’t be naïve about outsourcing your billing. This approach is not a hands-off solution. The hospital will need resources from information technology, accounting, the radiology department, hospital RCM, patient intake, and administration to come together to effectively implement this solution. Switching to an outsourced model involves migrating data, integrating systems (often a challenge between a hospital and a vendor’s billing platform), and training or reassigning in-house staff, which can cause temporary dips in cash flow and claim submission rates. The hospital will need to make sure that they provide timely, accurate, and all relevant information to the RCM company for this to work well. Pre-authorizations will likely remain the hospital’s responsibility, so if denials are high in this area, outsourcing will not fix it.
With that said, outsourcing the radiology billing is not without its potential risks and downsides. The hospital loses direct, minute-by-minute visibility into the day-to-day billing and collections processes. You are relying on the vendor’s reports and promises, which can make it harder to spot and correct inefficiencies immediately. Your patients will no longer receive a single statement for all of their hospital services, which may confuse some.
Sharing Protected Health Information (PHI) with an external party inherently increases the risk of a data breach. The hospital is ultimately responsible for HIPAA compliance, and a vendor’s failure in security or protocol still reflects poorly on the hospital and can financially penalize it.
Of course, there is always an inherent risk to change and work to bring about that change. However, the trend is now for hospitals to seek radiology-specific billing partners.
In conclusion, outsourcing a hospital’s radiology billing to a radiology-specific billing partner can be a rewarding venture if it is approached in a careful and systematic way. The results can improve a radiology department’s bottom line as well as increase the accuracy of its coding.
About the Author
As founder and CEO of Dexios Radiology Billing, Kyle is an influential leader in the Revenue Cycle Management (RCM) industry. A former Immediate Past-President of the Healthcare Business Management Association (HBMA), he was honored with the prestigious J. Dennis Mock Award in 2020. Kyle is known for his deep expertise in radiology billing, earning him the nickname “the KPI guy.” He spearheaded the redesign of the Radiology Business Management Association’s (RBMA) annual Accounts Receivable survey, where he introduced a crucial new metric: “The True Cost of Billing.”
A prolific author and frequent speaker at major industry events like the RBMA’s PaRADigm and the HBMA’s conferences, Kyle has dedicated over 25 years to helping radiology groups improve their financial health. After a 13-year career at IBM, he transitioned into RCM, where he has since built Dexios into a company that offers a comprehensive suite of solutions—from traditional outsourcing and cloud billing to consulting—designed to solve any radiology billing challenge.