Internal fixes may be the answer, but when radiology coding problems are chronic or pervasive, outsourcing could prove a smart solution.

Before outpatient prospective payment was introduced less than a decade ago, radiology coding and billing was simple. Codes and charges were captured as a byproduct of the exam. There were few reimbursement setbacks or coding “gotchas.” Times have changed.

Today’s radiology coding and billing processes are more complex than ever before. The maze of radiology coding and billing rules is notoriously complicated, detailed, and inconsistent. Failure to meet coverage requirements of medical necessity, conflicting coverage determinations and incorrect modifiers are common, resulting in more denials and less revenue. The complexities are too much even for billing companies to effectively manage. Radiology coding has become a truly specialized job that requires specialized attention.

Top Problems in Radiology Coding

  • High volume of reports to be coded
  • Peaks and valleys in coding workload
  • Logistics issues (workflow)
  • Shortage of experienced, qualified radiology coders
  • Lack of physician documentation (eg, reason for exam)
  • Keeping up with payor rules and edits
  • Lack of continuing education

To navigate the maze and restore revenue, many radiology practices, imaging centers, and hospital organizations have turned to outsourcing coding experts for advice and support. Outsourcing agencies are proven to eliminate coding backlogs, improve accuracy, and reduce claim denials. But outsourcing is not always the best option. There are times when simple internal fixes and workflow changes can make dramatic improvements.

This article explores situations when it is appropriate to solve coding problems internally and when outsourcing is a better alternative. In addition, this article takes a look at how to cost justify outsourced coding and evaluate outsourcing firms.

Promises of Technology, Limitations of Human Planning

Radiology, interventional, and other imaging modalities are experiencing explosive growth. As new technologies are introduced and more procedures are offered, the volumes continue to climb. High-tech radiology services such as MRI and interventional radiology have seen the fastest rate of growth with overall radiology workload growing about 8% annually, according to the American College of Radiology.1 Even small community hospitals with fewer than 100 beds are planning to invest in new imaging modalities in 2009.2

As modalities and imaging equipment advance, so should the front end and back end administrative processes to support them. However, this has not happened at most provider sites.

For example, additional schedulers or registrars are rarely brought on board when a new, expensive piece of equipment is purchased. More coders or funding for staff education is seldom included in the capital budget. One thing that does change though is the complex maze of payor rules. The rules get only more complicated as new procedures and technologies are introduced.

The result: a front-end traffic jam coupled with substantial back-end obstruction stymieing everyone in the middle (radiologists and administrators). This is often why a new piece of equipment fails to meet revenue projections and a dense cloud of faulty perceptions hovers over everyone involved and financial fingers start pointing.

Clearing the Cloud of Faulty Perceptions

When new equipment doesn’t deliver a tangible return on investment, undercoding or underbilling is often seen as the culprit. Since this is sometimes the case, a quick analysis of administrative processes should be conducted and a series of practical questions asked. First, perform an initial quick walk-through of human resource requirements to help clear some uncertainties and begin to get revenue back on track.

  1. Did you increase scheduling, registration, coding, and billing staff to accommodate the new technology and additional volume? Should you have?
  2. Was supporting staff trained on the new equipment or procedure? Do they know what is covered and how to correctly code and bill? Can the equipment vendor provide this information?
  3. Was the charge master updated with the correct codes? Did the equipment vendor provide these?
  4. Are all radiologists on board with the new equipment? Do they know what “reasons for exam” meet medical necessity for local and national coverage determinations?

Sometimes the problem goes beyond a single piece of new equipment or technology, and the cloud of faulty perceptions covers the entire sky. It is at this point that a complete radiology coding audit and operational analysis is indicated—and outsourcing may be the best solution.

When Coding Problems Are Chronic

If radiology coding problems are pervasive (beyond one modality or service type) or persistent (lasting longer than 6 months), a more extensive analysis is recommended. Two steps should be taken at this juncture: an operational assessment and a complete coding audit.

Table 1. Some common operational assessment questions, findings, and outcomes.
Table 2. Some common radiology coding audit findings and suggested ways to resolve these issues.

Step One—Operational Assessment

In an operational assessment, the focus is on staffing, education, workflow, report turnaround times, scheduling, volumes and lapses in technology (eg, identifying paper-laden processes). Operational assessments can be conducted internally or by using an outside consultant. Assessments conducted internally will cost less, but may take longer and result in a more subjective view. Outside consultants typically get the job done sooner and with greater objectivity. Table 1 describes some common operational assessment questions, findings, and outcomes.

If the operational assessment uncovers internal issues that can easily be resolved with adjustments in staffing, workflow, education, etc, then an outsourced coding service may not be necessary. However, if the operational assessment points to bigger coding problems and internal changes can’t remedy the situation, it’s time for a complete radiology coding audit.

Common Reasons for Radiology Denials

  • Failed medical necessity edits
  • Failed CCI edits for interventional radiology
  • CPT code pairs being used incorrectly
  • Incorrect modifier codes

Step Two—Complete Coding Audit

For this step, an outside consultant is recommended. Because the coding and billing process is so complex and ever changing, knowledgeable and up-to-date radiology coding experts are the best choice to conduct a coding audit. Auditors will compare what was coded to what was submitted on the claims, and to what was paid.

At least 25 cases per coder with a minimum of 100 cases are recommended for the audit. In addition, the audit should cover the scope of services provided by the practice (eg, interventional, diagnostic x-ray, ultrasound, CT, etc). Table 2 describes some common radiology coding audit findings and suggested ways to resolve these issues.

You’re Considering Outsourcing—Now What?

Once your organization makes the decision to consider outsourcing radiology coding, it is important to conduct a cost-benefit analysis and select the right partner. Costs and benefits will fall into two categories: tangible and intangible. From a hard-dollar perspective, simply look at the current budget for coders. If additional coders are needed, it is important to include these positions in the staffing budget.

For example, one large academic medical center in Illinois had a staffing budget of six full-time coders at $32 to $40 per hour with benefits (annual salary of $65,000 per coder). Outsourcing (with 4.5 coders) would enable the center to save $97,500.

Intangible savings should include revenue improvements (eliminate backlog, faster cash flow, more accurate coding), reduced compliance risk, and space savings if the outsourced coders will work remotely. Often the intangible savings can also be quantified, as was the case at Guthrie Healthcare System in Sayre, Pa, where outsourced coding eliminated backlogs and improved accuracy, resulting in a 26% increase in interventional radiology revenues.

Annual In-house budget:

6 coders x $65K=


Annual outsourcing budget:

4.5 coders x $65K=


Annual savings


Finally, organizations that choose to outsource will need to identify a partner. In this step, it is important to ask questions, conduct interviews, and speak with radiology coding references. Some critical questions to ask include:

  • Experience: How many radiology cases does the agency code per month?
  • Technology: What radiology information systems has the agency worked with? If remote coders will be used, what technology will be needed? Does the vendor provide technical support?
  • Coders: Are agency coders trained in radiology coding?
  • Quality: What is the agency’s quality assurance process?
  • Pricing: Will the agency provide a fixed price per case for diagnosis coding?

The Bottom Line

Radiology coding is a specialty area of coding that has grown in importance with increased federal regulation. As radiology practices expand and associated revenues climb, the need for timely, accurate coding will continue to grow for all providers. By taking a careful look at the entire process and identifying weaknesses throughout every step, organizations may find quick, easy ways to improve coding outcomes. However, when problems are chronic or pervasive, an outsourced coding firm with radiology expertise may be the best choice to help navigate the maze and clear out the clouds.

Wendy Coplan-Gould, RHIA, is the founder and president of Health Record Services (HRS). For almost 30 years, she has consulted with and provided outsourced coding services to hospitals and physicians nationwide. Joe Sawyer, CRA, is radiology service line administrator for Guthrie Healthcare System. Certified through the American Healthcare Radiology Administrators (AHRA), he is also a member of the ASRT, SIIM, and ACHE. With 18 years’ experience with radiology, information systems, and coding, he is responsible for operational and strategic oversight for radiological services throughout the entire Guthrie Health Network, a three-hospital and 23-clinic organization.


  1. ACR Study: High-Tech Radiology Services Lead Recent Growth in Radiology Utilization. American College of Radiology. Available at:
  2. Smaller U.S. Hospitals Expect Surge in Capital Investment for Imaging in 2009. IMV Medical Information Division. Available at: