Neal F. Epstein, MD, demonstrates Lenox Hill Hospital’s new PET/CT scanner with Lauren Parente, RPAC.

By 2001 when Gerard Durney came on board, Lenox Hill Hospital’s radiology department was badly in need of a resolute hand on the tiller. Relatively speaking, the department was keeping bankers’ hours. Report turnaround time was measured in days. Worst of all, the hospital was losing out to competitors on lucrative outpatient imaging. The situation was bad enough that an overnight fix was impossible. But now, 4 years later, Lenox Hill is about to unveil a renovated radiology departmentand particularly an outpatient capabilitywhich may be the envy of its peers.

In the beginning, the radiology rebuild focused not so much on physical changes but on operational changes that Durney masterminded with an eye to maximizing outpatient revenues. This was not the first time that Durney, MBA, FAHRA, had been hired to nurse an ailing radiology department back to health.

“For the last 20 years, I’ve been fixing x-ray departments,” he says. “Lenox Hill had a wonderful reputation as a hospital, but its radiology department needed a lot of work. I was brought in to turn the department around.”

In a presentation to the American Healthcare Radiology Administrators (AHRA) annual meeting earlier this year, Durney gave an account of what he had done. For this story, he recounted that presentation.

Lenox Hill Hospital is located on New York City’s Upper East Side. It is licensed for 652 beds. The radiology department has 18 radiologists and 13 residents and a staff of about 115. The hospital sits in an affluent district where people are accustomed to having their needs catered to. As far as Lenox Hill’s imaging was concerned, those needs were going unmet in 2001.

“I inherited a department that had let its outpatient radiology business go,” Durney says. “It was a department that was basically an 8 am to 4 pm, Monday to Friday service. The turnaround time was very bad, and it had old technological equipment, all analog and film screen, and single-slice CTs.”

Lenox Hill itself was not languishing. Its interventional cardiology and open-heart surgery units are world class, and it has additional centers of excellence in orthopedics, ENT, and plastic surgery. Radiology was languishing, particularly for outpatients. And as Durney notes, “As an outpatient, you can vote with your feet.”


Durney knew that fixing Lenox Hill’s radiology department was going to be a long climb. Outpatient and inpatient imaging were commingled, to the benefit of neither, he says. There was an outpatient waiting room and dressing rooms, but after that, modalities were shared between outpatients and inpatients, and outpatients could be bumped in triage.

Durney’s first step was to review work processes. “We looked for the low hanging fruit in the high revenue areas, especially MR and CT,” he says. “I did a business plan and we extended our operating hours.” He justified the additional staff by promising additional revenue. Evening and weekend hours and the addition of CT imaging 24/7 resulted in “incremental outpatient revenue that did offset the additional staff,” he says.

More than that, extending the hours improved operations and efficiencies on the inpatient side as well, an effect that Durney characterizes as “a rising tide raising all boats.”

As he explains it, “The time from order to procedure completion dropped significantly. This benefited our inpatients, and also increased outpatient volumes in MR, CT, and ultrasound. Inpatient service was available in a more timely fashion, and we were providing 24/7 CT service to inpatients.” He estimates the order to procedure completion time dropped from more than 40 hours to under 4 hours.

The second step Durney took was jarring to some radiologists. He implemented mandatory voice recognition (VR) reporting that enabled radiologists to dictate and correct their reports as they did their interpretations. These reports were then available for referring physicians, and for inpatients they showed up quickly on the hospital information system (HIS) and were autofaxed to referring physicians for outpatients.

This was the second time Durney had done a VR implementation, and this time he was prepared for resistance from radiologists. He held his ground.

“It’s a major change. However, if you look at it in the gestalt view, meaning the whole process, it actually makes the radiologists more efficient,” he says. He makes the case that completed reports sent to referrers mean that radiologists do not have to field calls from these doctors as they would have had to in the transcription days. The same efficiencies, he says, hold true for the radiology support staff.

He also says there is a quality leap. “When you correct conventionally from the transcription, sometimes hours or the the next day after transcription, you can’t remember that individual patient. You’re just correcting syntax. The VR is one-stop shop; when it’s done, it’s done. You only touch it once.”

From the VR’s initiation when, Durney admits, “some radiologists were very unhappy” to now, there has been an attitude turnaround, he says. “The consensus of those interviewed 2 years later is that the one thing they would never change is the VR,” he notes. “They love it. So there you go, it’s a behavior change.”

Durney learned one lesson himself. Initially, he had asked radiologists to enter the examinations’ ICD-9 codes on their reports. “It turned out to be an inefficient use of time, and there was 30% to 40% inaccuracy,” he says.

He conceived a better plan to upgrade Lenox Hill’s outdated radiology financial coding. He implemented a complete revision of the department’s Charge Master Index (see sidebar below). He also began to develop benchmarks to compare what Lenox Hill was charging for specified procedures to what the competition was charging for the same procedures.

“You want to look at payors. Some payors still pay percent of charges,” he says. “You want to make sure you’re not losing money because your charges are too low.”

Durney also implemented charge modifiers to handle situations like multiple procedures on the same patient on the same day or examinations started but not completed that were not properly addressed under the old coding system. Lenox Hill after a time also engaged a new company to handle radiology billing. The company agreed to return its ICD-9 coding generated by natural language coding software and a team of professional coders. In this way, the same ICD-9 codes would appear on radiology professional and hospital bills, Durney explains.


Durney says he knew how important it was to bring the hospital staff on board in the process if the radiology outpatient turnaround was to succeed.

“An important thing we did,” he explains, “is we included the registration staff in all our meetings and social events. We worked with clinical supervisors and those in patient access. They have to have an understanding of what we do and why we do it. Some of the results on our revenue I shared with them and gave them credit. You want to knock down the silos between departments. That was one way we did it.”

The outpatient radiology staff also coordinated with the registration staff to develop what Durney calls “core competencies”how to financially screen patients and get them properly registered. Preregistration was the goal. The preregistration function was moved to a separate office in a separate location so they could focus on one task alone, calling the patients ahead of time and getting them preregistered. The result, he says, “was profound.” Patients did not have to wait to go through a registration process when they arrived. Having the proper financial information improved Lenox Hill’s bottom line.

The hospital was so committed to attracting outpatients that it hired one person to do nothing but work the outpatient floor and expedite patient flow. “The ombudsman makes sure that when people come in, they get taken on time,” Durney says. “If there’s a problem, it gets escalated to the proper clinical manager.” The ombudsman also works with referring physicians to mitigate problems.

In another effort at teamwork, the radiology technical staff was encouraged to help by collecting as much information about patients as they could in the course of the patient’s examination. “We want pertinent patient history,” he says. “We want to tell the radiologists what’s wrong with the patient. The physician order doesn’t always provide that. This information has significant clinical and billing implications.”

The radiologists themselves were monitored (and still are being monitored) on how well they completed Key Report Elements. These included noting the procedure and why it was needed, the permanent positive and negative findings, the impressions and diagnosis, the numbers and types of views taken, the amount of contrast, and the need for additional studies.

All of this, Durney says, ensures compliance with the physician order, reconciles the order with the examination dictated, increases reimbursement, and reduces payor edits and denials.


Another huge step was a revamping of the outpatient radiology scheduling system. During this time, Lenox Hill had no picture archiving and communications system (PACS). It still does not have one, but that is about to change. The RIS was old. When Durney took over, scheduling was being done physically in books, a different scheduling book for each modality.

“It was static, and only one person could use a book at a time,” Durney says. “So we modified Microsoft® Outlook® to become a patient scheduling tool. That became dynamic, and anyone answering the phone could schedule on any modality” (See Figure 1).

Figure 1. Until a new RIS could be installed, Lenox Hill modified Microsoft Outlook® to become a patient scheduling tool. (Click the image for a larger version.)

Having the scheduling in an electronic format helped the registrars preregister. It also allowed the file room staff to fetch priors with more lead time. Another step Durney took was to electronically scan physician order scripts and insurance information and insert it into Outlook®, making it available to the registration staff, decreasing lost and misfiled paper.

“We had a problem with things getting lost,” Durney says. “You need the scripts to make sure you’re doing the right test and to comply with Medicare regulations and audits.”

Lenox Hill is now putting in a new RIS, along with a PACS and all new modalities. The new RIS will have its own scheduling system, but Durney credits the Outlook adaptations as “filling a need in the short term in a wonderful way.”

Lenox Hill was still reading film, but Durney worked with the hospital’s information technology (IT) department to install software and hardware that enabled radiologists to read soft images from natively digital modalities like CT and MR. This step alone, he estimates, saved the hospital $350,000 a year in lost film and unbilled professional fees.

All of these changes took time, but by the end of 2002, Durney could see a payoff. A key measure of outpatient imaging for Lenox Hill is reflected in its private ambulatory radiology (PAR) values, cash receipts from, as Durney explains, outpatient imaging revenue.

Figure 2. A key measure of outpatient imaging at Lenox Hill Hospital is reflected in its private ambulatory radiology cash values. (Click the image for a larger version.)

In 2000, Durney’s first year, Lenox Hill’s PAR was about $3.3 million. By the end of last year, this had risen to almost $8.5 million (Figure 2). Durney estimates this year’s PAR will fall in the $10 to $11 million range. Interestingly, the big jump in PAR came a few months after Lenox Hill revised its radiology Charge Master (Figure 3).

While the increase in PAR thus far is more than significant, it falls short of what Durney thinks can be achievedfar short. “For a hospital our size, we should have a yearly PAR of about $30 million,” he says. That figure is more in line with the American Hospital Association benchmark of 8% of health care system revenues.

Figure 3. The big jump in private ambulatory radiology cash receipts came a few months after Lenox Hill implemented its revised Charge Master Index in April 2001. (Click the image for a larger version.)


The increase in outpatient revenue from 2000 to early 2003 paid bigger dividends than just the money collected. The revenue boost was at least part of the reason that the Lenox Hill Hospital administration committed hugely to a complete renovation and redoing of the radiology department. This includes a planned freestanding outpatient-imaging center, to be built across the street from the hospital. The outpatient center is due to open in 2006 if not sooner.

The renovation is the chief task of Department of Radiology Chairman Neal Epstein, MD, a cross-sectional and interventional radiologist who joined Lenox Hill’s department in April of this year after an extensive search process. But Epstein knew of his appointment months in advance and was brought early into the planning process to redo the department.

Figure 4. The increase over time of the PAR charges reflects procedure volume and charge increases, and a focus on high revenue per unit modalities such as MRI. Results are plotted monthly from January 2000 to January 2004. (Click the image for a larger version.)

Epstein says one intention of the restructuring is to make the department “outpatient friendly.”

To do this, the hospital’s outpatient unit will be physically separated, walled off, from the inpatient imaging side. There will be minimal sharing of modalities. For the most part, outpatients will have their own modalities, Epstein says.

It is a big project. Epstein puts the price tag at $30 million. It will mean all new CTs, MRIs, a PET/CT, new CR and DR, a PACS, a new RIS, and what Epstein believes will be one of the first SPECT/CT systems in the country.

Epstein says a single vendor was chosen to supply all of the imaging equipment. “You can make an argument for best of breed,” he says, “but there are advantages with going with a single vendor. The vendor can make a lot of things happen in a rapid time frame, from planning to architectural to site issues.”

At the same time that radiology is replacing equipment, the hospital has implemented a new clinical information system that will form the backbone of a patient electronic medical record combining laboratory results, radiology reports, and imaging. All of this will be viewable to the clinician by patient.

Changing of the Charge

The Charge Master, according to Lenox Hill Hospital’s radiology administrator Gerard Durney, is the master file in the HIS (hospital information system) that contains all the charges for procedures-in Durney’s case the charges for radiological procedures. If the file is outdated or ill conceived, the charges will not be correct, or perhaps they will not be applied correctly, and the hospital can lose money.

One of the major steps Durney took in revamping Lenox Hill’s radiology department and its outpatient imaging was to revise the Charge Master. It was more than a revision actually.

“The unique thing we did,” he says, “was that we threw out our whole radiology Charge Master.”

He explains, “Our Charge Description Master (CDM) number is the number in the computer system that identifies the procedure and the charge. We changed it by imbedding the CPT4 [procedure] code in that CDM, so the last five digits of the CDM were the CPT4 codes. This made a one-to-one correspondence of the CPT4 code with the CDM number.

“We also became pure in how we described our examinations. Hospitals have different ways of calling different views or procedures. We started naming them the way the AMA (American Medical Association) describes them in its CPT4 manual.”

Lenox Hill coded its procedure descriptors to begin with a notation for the modality-xr, ct, mr, nm (for nuclear medicine)-and so on. “Because we set up the descriptor field in this way, we can run financial data [on the modalities],” says Durney. “The system also allowed us to do easy year-to-year updates, because our Charge Master was now the AMA CPT4 code book for radiology. Now, we can just add a charge, a CDM, with a CPT4 code, and it’s very easy to do. It’s not confusing, it’s logical, and it’s quick.”

To get the job done, the radiology department formed a team with the hospital’s information technology (IT) and finance departments.

“There was a lot of internal IT programming that had to be done for new charges and where they went,” Durney says. “There was a whole series of modifications that IT needed to do, but it was well worth it.

“When you think about it,” he adds, “all the payors are billing on CPT4 codes. It would behoove you to have your Charge Master reflect the CPT4 code book.”

“We’re creating a brand-new department of radiology,” says Epstein. “It’s a redesign and renovation from the ground up. We have made our final vendor selections, and they are installing while we renovate.”

He compares installation on such a scale to a giant game of musical chairs. An old amphitheater for lectures will turn into space for nuclear medicine imaging, for instance, he says. That area will house the PET/CT, even though it will be used primarily for outpatients. The old nuclear medicine space will be used for support and teaching space, while new technology will allow for space that will be used to leverage the renovations, and so it will proceed, switching modality sites all the way through the install.

Epstein knows there will be bottlenecks, but he also knows the payoff will be worth it.

“Our patient flows are edging up, and the volumes are edging up,” he says. The renovation, though hectic, is, he says, a “nice problem to have.

“If we are able to deliver our results in a much quicker fashion to clinicians, that will be of great value to the hospital and to outpatient imaging as well,” he adds. “Length of stay can improve with an efficient radiology department.”


As the pieces in the radiology renewal come together, Lenox Hill plans to step up its marketing. Epstein says he will send letters to physicians and host a departmental open house “basically to let people know what we are able to do.”

Durney says particular attention will be paid to clinicians credentialed to practice at Lenox Hill. “Our customers are our physicians,” he says. “We have to be facilitators to enable them to maximize their time management by making it easy to care for patients at Lenox Hill.”

Durney and Epstein also expect to market particular outpatient imaging capabilities like PET/CT and interventional radiology. They predict that the market for what they call “retail radiologycoronary artery scoring, virtual colonoscopy, and cosmetic procedures like varicose vein ablations will continue to develop. It’s something you need to look at.”

Durney says Medicare data indicate that imaging is on a par with surgery as an income generator for hospitals. Like others, he foresees outpatient-imaging growth in the 8% to 11% ranges annually for the foreseeable future.

“Thar’s gold in them thar hills,” he says. And he wants Lenox Hill to mine those outpatient imaging hills.

George Wiley is a contributing writer for Decisions in Axis Imaging News.