Michel Taupin, MD (right), championed the claims denial management program for Abington Radiology Group, with the support of John W. Breckenridge, MD (left), chariman of radiology at Abington Memorial Hospital and the practice’s billing vendor.

Because insurance is the biggest source of revenue for radiology practices today, it is also frequently their biggest source of woe. By some estimates, roughly one third of claims for reimbursement from the typical radiology practice end up denied. That much rejection impacts a practice in multiple ways. It can choke cash flow by greatly delaying the time it takes for payment to be rendered (assuming, that is, the practice cleans up and resubmits its rejected claims and those claims eventually are accepted and approved). It also can cause significant revenue loss in the event that the practice fails to resubmit or the claims are fatally flawed. Consider also the cost in time and FTEs: having to clean up and resubmit claims consumes manpower, materials, and other resources, the costs of which must be deducted from whatever income those claims ultimately produce. Thus do denials eat away at practice profitability.

Finally, a practice that experiences excessive denials can attract the unwanted attention of auditors. It is not unusual to see practices tagged for retrospective review or for the federal Office of Inspector General to swoop down in search of evidence of fraud and abuse against habitual offenders.


Outsourcing Billing:
Pros and Cons

Many radiology practices prefer to handle claims generation and submission in-house, and have done so with considerable success. However, Radiology Group of Abington PC (RGA) is one that has chosen to outsource that responsibility. Always has, always will.

“The savings in overhead alone makes it worthwhile to use an outside service,” says John W. Breckenridge, MD, RGA partner and chairman of the radiology department at Abington Memorial Hospital in Abington, Pa, where the group is based. “In-house personnel have to be very skilled in order to do a good job with coding. And when they become that skilled, you have to pay them exceptionally well for their expertise. Consequently, it can be very expensive to develop a good in-house billing team.”

Replacing skilled staff is problematic—even talented and experienced hires still must go through a process of training to acclimate themselves to the practice’s coding and documentation patterns—a process that can take weeks or even months to complete.

Then there is the matter of keeping an in-house billing staff up to date on changes in payor requirements, government regulations, and other pertinent issues. Some practices—like RGA—blanch at the prospect of having to marshal resources for the continuing education of clerical staff, which is why they prefer to outsource.

Breckenridge says another advantage of outside billing companies is that they also have experience catering to the needs of multiple practices in and around RGA’s market area, which gives these companies special insights into the reasons claims are denied by payors that RGA deals with.

But there are disadvantages as well to using an outside service. For one, practices surrender much or all of their control over the billing and collection process. Also, practices lose a percentage of every claims dollar in the form of a service charge or transaction fee (typically about 10% of the amount billed or collected). There may even be regulatory hindrances, such as Health Insurance Portability and Accountability Act rules that bar outside billing services from patching in directly to the practice’s RIS. (The ability to tie in would simplify the workflow processes involved in getting demographic and diagnostic information into the hands of the billing service, Breckenridge points out).

“It all comes down to a practice’s goals and preferences, but, in our case, we believe that outsourcing is the right choice,” Breckenridge adds.

R. Smith

Companies that help radiology practices get a handle on claims rejections report that a leading cause of denials is incorrect procedure coding—especially true for hospital-based practices that rely on the hospital’s staff rather than their own to perform that particular chore (reason: hospital employees often lack formal training and certification in coding, and they frequently do not understand the nuances of coding for certain multifaceted radiology procedures, such as those common to interventional radiology).

Typical of hospital-based radiology practices that have experienced trouble with claims denials is Radiology Group of Abington PC, which operates the radiology department at 600-bed Abington Memorial Hospital in Abington, Pa, as well as a small, freestanding, general radiology-only office some miles away in the city of Fort Washington (Radiology Group of Abington, or RGA, also provides interpretations for an unaffiliated MRI center elsewhere in Pennsylvania’s Montgomery County). The group is composed of 22 full-time and part-time radiologists (with four more slated to join by August). Imaging volume reaches 350,000 cases per year, using technology assets that run the gamut from radiography to nuclear medicine; but since the hospital owns those assets, the group bills only for the professional services component of each study.

At first glance, denials for RGA have long appeared to be at an acceptably low level. In 2004, for example, its outpatient MRI denial rate for Medicare claims was 8.9%, inpatient MRI 7.3%, emergency department CT 4.8%, and inpatient CT 7.3%, according to RGA partner John W. Breckenridge, MD, and chairman of Abington Memorial Hospital’s radiology department. “Our claims that were most vulnerable to denial were those for procedures involving more complexity and higher RVUs—mainly CT, MRI, ultrasound, and interventional radiology,” he says. “The reason that complex and high RVU procedures were more vulnerable is simply that they represent the largest billable sums. Because so much money is involved with these claims, they come under the tightest payor scrutiny.”

Still, from RGA’s perspective, the rate of denial was unacceptably high—high enough to warrant taking action, says Michel Taupin, MD, the radiologist who oversees the group’s efforts to manage denials.

“At the start of 2006, we were preparing to develop interventional neuroradiology services, and we recognized that it was going to be of paramount importance that these procedures be coded correctly,” Breckenridge explains, noting that the universe of CPT codes from which the group can pull is confined largely to the 70000 series, with the chief exception being interventional radiology, for which procedure codes are found scattered throughout the full CPT set. A single miscode could result in a loss of hundreds of dollars.


With the advent of those higher-level imaging services, RGA determined to work harder at generating clean claims and thereby give payors less opportunity to deny reimbursement. This effort took the form of a proactive denial-management program that RGA’s longtime outside billing company offered as a customer service.

Breckenridge indicates that a good denial-management program should be able to bring a practice’s claims rejection rate down into the vicinity of 3% to 5%. Indeed, that has been the case for RGA—and then some. By the end of 2005, its MRI and CT denial rates for Medicare claims fell by a combined average of 74% (outpatient MRI had dropped 85% from the previous year to a denial rate of 1.3%, inpatient MRI declined 66% to a denial rate of 2.5%, emergency department CT plummeted 77% to a denial rate of 1.1%, and inpatient CT receded 68% to a denial rate of 2.3%).

Key to achieving those reductions was correct coding of claims. “It was a team effort that involved everyone, including the technologists, radiologists, even our referring physicians,” Taupin says. “But correct coding is a real challenge, no matter what. For example, in a case where we perform an arteriogram, an angioplasty, and a stent placement, right there you have many possible different procedure codes that can be used. One of the things we’ve done to help minimize confusion in these situations is establish guidelines that our technologists can refer to as they code. The codes they’ve selected are subsequently reviewed by the radiologist right before he dictates the case—this is done to confirm that proper coding has occurred, that there are no missing charges, and that the charges applied are in fact correct.”

Related to correct coding is correct documentation. With that as its goal, RGA established a policy of procuring none but properly articulated patient histories—preferably at the beginning of the process rather than at mid-course or, worse, at the tail end. “The starting point for us is when the patient schedules an appointment,” Taupin says. “Previously, it would be typical for the patient to come over from their doctor’s office for, let’s say, a CT scan of the abdomen, and the history that we’d be given would use language along the lines of ‘rule out kidney stones.’ But we’ve determined that such terminology is not acceptable to payors. So what we’ve done is train our schedulers to try to get more information from the patient and/or the referring physician as to what the actual signs and symptoms are. For instance, in the example I just gave of ‘rule out kidney stones,’ we’d rather have the history say ‘abdominal pain’ or ‘blood in urine.’

“Then, when the patient arrives in our department, the technologist will try to get more specific information from the patient as to the reason for the study—again, we’re trying to obtain signs and symptoms details. The information gleaned by the technologist is next entered into a special field of our PACS. That information will then be available to the radiologist, who will reference it in his report of findings.”


Just as important is the way that report is dictated. “Basically,” Taupin says, “we try to be as specific as possible about the type of procedure that was done, describing it in as much detail as we understand the payor to need. Also, we avoid down-coding by making sure the dictated report references the number of views in each study and states a diagnosis. For example, the wrong way to dictate a chest x-ray would be to say ‘an examination of the chest was performed to rule out pneumonia.’ We never use the term ‘rule out’ in a Medicare claims submission—Medicare doesn’t recognize ‘rule out’ as an appropriate indication for the performance of a study. The correct way to dictate it would be to say, ‘History: cough and fever. Two-view examination of the chest demonstrates….'”

Table. Denial rate percentages before and after denial management effort.




Outpatient MRI



Inpatient MRI






Inpatient CT



RGA’s denial-management program also seeks to address problems that can arise because of inaccurate or incomplete data contained within the hospital’s information system, which interfaces with the group’s radiology information system. Says Breckenridge, “We enter our charges into our RIS; those are relayed to the HIS. The HIS then generates two tapes—one containing hospital-collected patient demographic and insurance information, the other containing the individual CPT codes and charges our group has entered. Our billing service receives those two tapes at its Atlanta operation where the data are merged. From that comes the completed claim. In the past, unfortunately, the tape with the hospital’s data did not always contain the correct diagnosis information. For example, if a patient was admitted for a urinary tract infection and ended up having an MRI of the back for leg weakness, the only diagnosis that might go over on the computer tape would be urinary tract infection—which meant the MRI would likely be denied by the payor on grounds that it was not medically indicated. The correct clinical information is dictated as part of the report. If the claim is denied initially, it is resubmitted by our billing company with the correct diagnosis code. Getting the proper diagnosis over initially is a goal that we strive for.”

To bring the hospital onboard, the practice went to hospital scheduling with a list of the most commonly denied claims and their associated approved indications provided by the billing vendor. Schedulers were then equipped to tell patients their procedure was not approved. Either the referring physician provided an appropriate indication or the examination was not scheduled.

In addition to good coding, proper reporting, and harmonious data, RGA finds it useful to know payor requirements for claims submissions—the preferred format of submission, when and how to use modifiers, and so forth. “If you meet the payor’s specifications, the claim can be processed accurately,” Breckenridge says.


Although the elements of RGA’s denial-management program may seem commonsensical, none was easily implemented, Taupin confides.

Administrative Resources

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“The biggest challenge has been educating the technologists and the radiologists to acquire and relay patient historical information that is as complete and comprehensive as possible,” he says. “That’s been difficult because we’re trying to change ingrained behavioral patterns and work habits.”

Taupin says this is addressed by “explaining to our team the reasons it’s so important that detailed histories be provided. We try to reinforce that message whenever possible—occasioned, for example, if I repeatedly see cases where the technologist has not given us the appropriate history or indication. Let’s say a patient comes in for an inpatient CT scan to rule out a pulmonary embolism and I’ve asked the technologist to collect additional history—details such as whether the patient has been complaining of shortness of breath and chest pain. If those details are not present when the CT scan shows up at my PACS workstation, I’ll pick up the phone, give the CT technologist a call and ask him to fill me in on the reason the patient or the referring physician gave for the patient coming in. I’ll also politely remind the technologist to, in the future, please always try to remember to collect that kind of information and pass it along to us—and, here, by the way, is the reason why we need it.”

Breckenridge reveals—as Taupin’s remarks hint—that success with a denial-management program requires at least one radiologist to act as its champion.”You can’t just set in motion a program of this sort and expect to see practice-wide buy-in without someone advocating for it,” he says.

Looking ahead, Taupin expects RGA will be hampered by progressively fewer claims rejections throughout 2006, but concedes that the year’s gains may be less profound than those seen in 2005.

“No matter what you do, there will always be a certain number of cases denied,” he says. “For example, with some studies, the insurer will declare up front that they’re not going to reimburse—but, knowing that the patient must have those studies, you’ll go ahead and perform them regardless. Then, there will be a certain number of cases that the payor doesn’t tell you up front won’t be reimbursed, and you find that out only after the service has been performed. For us, I can’t predict with any accuracy what the number of these expected and unexpected denials will total for this current year, but I can say that there is probably no way to totally eliminate them.”

That said, RGA nonetheless can take comfort in the knowledge that the vast majority of its claims will be paid—in a timely manner, too—and that it is greatly reducing the potential for receivables to languish or entirely slip through the cracks. Denial management is a daunting task, but the stakes are too high to not engage in it. RGA understands that and has helped fortify itself against the uncertainties of the future by taking this important step.

Rich Smith is a contributing writer for Decisions in Axis Imaging News.