By the hundreds of thousands, digital images along with electronically transmitted reports are being sent daily from radiologists to referring physicians and other interested parties. Despite these technological achievements, which would seem to position radiologists as leaders on the computerized medical landscape, the computer revolution is evolving slowly on the administrative side of radiology just as it is in the rest of health care. As much as everyone would like to see the demise of paper records and the advent of real time scheduling, coding and, in particular, billing and payment, old-fashioned paper documentation is proving to be very tenacious.

Don Jacobsen, CPA, is chief operating officer for the Center for Diagnostic Imaging (CDI), Minneapolis, a group of 15 radiology clinics located in five states.

“I have been here for 10 years, and I don’t think we were submitting more than 1% or 2% of claims electronically when I arrived. Now it is up to 40%. That is slow progress in 10 years,” Jacobsen says. To throw some light on why the transition has been so slow, Jacobsen uses the example of collecting deductibles and co-pays.

“The payor sends a check and then an accounting on paper of who they’re paying on,” he explains. “We have to tell our system what we received, and then we have to go back and try to collect the co-pays. Instead of getting computerized data on this, we have to rekey the data that comes in the form of paper. You have to tell our system, ‘I got a check,’ and it covers these claims. Then you have to go in and break down the payments and see if they fully satisfy the account or if there is a co-pay that we now have to collect from the patient. If so, we’ll send out a bill to the patient saying we need the co-pay. A lot of times you don’t have a co-pay, but you do have a deductible, and we don’t know up front if the patient still owes that.”

Foot-Dragging is Culprit

Other radiological practitioners echo this statement. Even if the payor puts the accounts that have been paid on magnetic tape, a clerk has to go through the tape, matching payments to accounts receivable (AR) to see if co-pays and deductibles have been satisfied. It is a common scenario.

Other impediments to electronic processing occur because of foot-dragging. Monica Welsh is office manager for Intra-Med Services, which owns and operates four imaging centers in Kentucky, including Kentucky Medical Imaging based in Louisville. Intra-Med does only CT and MRI using contracted radiologists who read the images.

Welsh’s company recently purchased software to help it track electronically all kinds of data, including coding. But Welsh says the software is mostly being used as a marketing tool. “We can track from month to month how many referrals we receive from all our doctors,” she says. “If one month a doctor sends us 20 referrals and the next month they send only five, something’s wrong. We’ll send somebody out to that doctor to find out why.”

The software could easily be adapted to do the scheduling for referring physicians, and, in fact, the referring doctor’s staff could schedule referrals by using the software capabilities, but Intra-Med has not purchased that component of the software for one simple reason, Welsh says: The referring doctors do not want it.

“If that is what our referring doctors want, then we will do it,” Welsh says. “But that is not what they are telling us. They still use books to schedule. They still want to talk to a human being. They have not caught up to the computer age yet.”

Welsh also believes there is intentional foot-dragging in the insurance industry in adopting uniform claim forms, which would be a huge boon to electronic processing. “I do not see the uniform forms as ever happening,” Welsh says, “because the insurance companies will never work together. I believe they make it as difficult and confusing as possible, and I think they do that purposefully. Insurance companies will do everything they can not to pay you. They will send something back so they can hold onto their money.”

The idea is that if insurance companies or any payor can delay payment for a day, a week, or a month, there is money to be made in the form of interest on those accounts that remain unpaid. In accounting parlance, this interest collection period is called the float and it is cited as the reason for any payment delay that may occur. Some, however, think the economic incentives to go electronic are too compelling for payors to cling to paperwork or dissimilar claim forms in order to delay making payment.

Randall Lindner is executive vice president and chief information officer of HealthHelp, a data management and radiological services firm based in Houston. HealthHelp has carved its niche by providing both payors and radiologists with management services. For payors, the company becomes the provider of radiology services; for radiologists who sign on, HealthHelp becomes the payor for the services it contracts with insurance carriers, HMOs, and other dispensers of health benefits. The company is in a growth mode and now has “close to 3 million fee-for-service and 1 million capitated patients” under its radiology umbrella, Lindner says. He estimates that HealthHelp, which is heavily electronically oriented, is now about “70% electronic and 30% paper” in its claims processing.

Float too costly

It costs $8 to process a claim manually but only $1 to process it electronically if both radiologists and payors are up to speed with technology, Lindner says. The savings to be accrued through real-time electronic processing and payment are too great for insurance companies to be up to old profit tricks like the float, he suggests.

“The manpower on the float is not out there,” he says. “There are rooms and rooms of people now who do claims adjudication manually. The big thing now is to go electronic. Fraud and abuse is what payors are attentive to now. The float is not cost- effective.”

Tom Croal disagrees with that assessment. Croal, a CPA, is chief financial officer for InSight Health Services Corp, headquartered in Newport Beach, Calif. InSight earns nearly 75% of its revenues of roughly $200 million annually by marketing MRI services. InSight provides the machines and the technologists to shoot the images. It contracts with radiologists to do the readings that are then sent to referring physicians and health care companies. InSight operates mobile MRI units serving mostly rural hospitals along the East Coast. It also operates fixed site clinics all across the country. Altogether it operates in 32 states using nine billing centers. Croal says about 45% of the company’s revenues come from its fixed site clinics and the remainder from its mobile units.

According to Croal, the insurance company float remains alive and well. “The float is still happening,” he says, “don’t let anybody kid you. An insurer will deny that a diagnostic report was attached to a claim. It will acknowledge that it got an electronic batch file but then say it lost the claim. You tell me how that happens. There’s still the gamesmanship of getting paid. The investment income is still a bigger stream of cash for insurance companies than paying providers quickly. Is it better or worse than it was, I don’t know: They’ve found different reasons to deny or delay payment.”

The Promise of HIPAA

The point is not so much the float. The point is that radiology, like the rest of health care, is cut into so many shapes and sizes as its services are parceled out that there is not the uniformity of claim and payment expediting that must be present to make electronic processing easy. Even the Health Care Financing Administration (HCFA) Form 1500, the basic reporting form, differs from one insurance company to the next, Croal says. “I believe we are actually headed in the direction of quick electronic processing, but we’re not there yet. It’s a slow process.”

Many in the industry are watching to see what will happen when the Health Insurance Portability and Accountability Act (HIPAA), passed by Congress in 1996, raises the ante for electronic processing with its mandate that health care providers have uniform record-keeping systems in place in the next 2 or 3 years. (Deadline for compliance is February 2002, or February 2003 for small health care organizations with billings of less than $5 million.) Already Medicare’s insistence that claims be submitted electronically has been a giant spur to getting health care moving quickly into computerization. But stumbling blocks to a totally paper-free environment are everywhere. It will probably take the insistence of a regulatory agency to get all health care providers on the same electronic playing field. HealthHelp’s Lindner is optimistic. “HIPAA is going to force everybody to play in the same sandbox,” he says. “That’s just wonderful. Everybody wins on that one.”

But until there is uniformity, companies like HealthHelp must continue doing what HealthHelp is doing now: using devices like optical scanners to convert paperwork to digital files; hiring programmers to write interfaces between HealthHelp’s electronic patient-based data pools and large payors; and installing many different computer systems for handling claims. “Any large player is headed fast in the direction of computerization to avoid wasting dollars,” Lindner says. “Data management is going to be critical to the financial success of health care. Electronics for me equals dollars, and the dollar is critical to the provider.”

Ripe for computerization

For coding, the big stumbling block to smooth electronic claims processing is mismatches between the codes for the radiological procedure and the diagnostic codes that define the reason for the patient being referred for a specified radiological test.

There are essentially two sets of codes going from the radiologist to payors. One is the Current Procedural Terminology (CPT) code for the procedure the radiologist completes. The other code typically used is the International Classification of Diseases (ICD-9). It tells the payor that the chest radiograph being billed is for suspected pneumonia or lung cancer or whatever the referring physician believes the diagnosis to be.

When the CPT codes and the ICD-9 codes do not match, when chest radiography is ordered for a patient presenting with abdominal pain, for example, payors tend to question the claim’s validity. Mismatches can also occur between the CPT code billed by a hospital for use of its radiography machine and the radiologist’s CPT code used to bill for the professional services in reading that same chest radiograph. A recent study by HealthHelp of nearly a million patients in Florida revealed that mismatching took place nearly 38% of the time between CPT codes and that mismatching occurred nearly 29% of the time between CPT and ICD-9 codes.1 Several large health care providers have recently faced Medicare fines in the millions of dollars for what were termed fraudulent patterns of billing based on code mismatches discovered in reviews of patient files. These fraud judgments have put the whole industry, including radiologists, on edge. Quick, sloppy coding has become a major obstacle to electronic claims processing.

Robert L. Bree, MD, MHSA, is professor and chairman, Department of Radiology, at the University of Missouri Health Sciences Center in Columbia. “The problems are in obtaining the correct information about the reason for the examination,” he notes. “That’s a universal problem that many radiologists have. We used to make something up; now the payors don’t like that. They want to know the actual reason for the examination, and they want to decide if that reason is a payable reason or not. Getting that information from the patient or from the referring physician is often extremely difficult.”

Bree poses a hypothetical situation. “A patient came in for stroke and somebody ordered a chest radiograph,” he suggests. “Stroke and chest don’t match, but they wanted the chest radiograph because the patient had a breathing problem or a cough. Getting that information can be extremely problematic. The physician orders the test but they don’t put down the reason. Then a clerk, who doesn’t know anything about medicine, is ordering the test. They just put down [as the diagnosis] the first thing that comes to mind or the first piece of information that they have accessible to them, which is typically the admitting information. And then it goes down hill from there.”

Lack of Software

While there are electronic coding software programs that are designed to finger code mismatches, there is no software that can apply human logic to the reason a test may have been ordered. So if a radiologist wants to get paid and cannot get clarification from the referring physician, Bree says, “then you’re back to making something up.”

Bree says his university has a hybrid coding and billing system that is part electronic but not fully. It includes a radiology information system that has electronic order entry and a software system that analyzes CPT and ICD-9 codes. The radiology department sends its billing information to the health center’s central billing, which sends out the actual bill. If it gets rejected, then the radiology department “does the clean-up,” Bree notes.

Agreeing that if a pattern of miscoding is spotted it might be the radiologist who goes to jail, Bree downplays the risk of fraud charges resulting from unpatterned mistakes. “Most of these audits happen through whistle-blowers,” he says. “If you have a disgruntled employee who sees a pattern of abuse, then watch out.”

It is important to have a compliance plan in place to show regulators, Bree emphasizes. “If you have a compliance plan that illustrates on paper your work-flow process and that you are insisting on proper coding and proper medical necessity, and you then make a mistake, you are at least covered for fraud. You can still get dinged on the abuse side, but if you have a compliance plan in place, then your chance of getting caught in a focused audit is very slim.”

Other radiology providers add that regulators and payors are mostly looking for mismatches on the more costly imaging like CT and MRI scans and are not likely to spend time haggling over mismatches on radiographs. But everybody is concerned about compliance. Says InSight’s Croal: “Compliance is an important issue for us, and so is making certain that we are coding and billing properly. There are lots of rules and regulations. We have been extremely diligent and schedule periodic audits, and we have done fine. We are proud of the record that we have.”

Bree points out that it is rare that radiologists themselves actually do much coding. According to the respondents surveyed for this story, that appears to be true. The coding and billing systems range the gamut, from hiring billing services to do the job externally to keeping a staff of coders and billers working at one or more billing centers to attempt to computerize the process as fully as possible. But no one is doing these tasks in quite the same way. That is true of virtually every aspect of radiology, and it is a major reason that the computerization of functions previously performed via paper is a slow-moving elephant even though profound in scope and purpose.

Managing Data

When it comes to data management, companies like HealthHelp are on the leading edge. Data management is essentially HealthHelp’s product. “Data management is going to be critical to the financial success of health care,” says HealthHelp’s Lindner. “We have report cards for primary care physicians, radiologists, and specialists. That is what our company is all about, controlling and marketing data and redundantly backing it up.”

HealthHelp keeps files on all patients in its system, transmits electronic images, and utilizes software and mapping tools to convert the formats of its many payors into a single, cross-referenced system. Other programs look for mismatches in data. “We do our best to get everybody electronic,” Lindner says, “but the ones we really want to get electronic are the providers.”

One of the things HealthHelp closely watches is utilization of services. “When we go into a new area, we usually find that utilization is incredibly high,” Lindner says. “Young doctors especially tend to overprescribe.” HealthHelp holds quarterly regional seminars at which it attempts to guide providers on utilization. “By the third month, we’re getting them all educated,” Lindner says.

Through a wholly owned subsidiary, HealthHelp makes sure that all the providers in its system are properly credentialed and certified. “They make sure the doctors are really doctors and that the technicians are really technicians,” Lindner explains.

CDI is trying to break new ground with its data collecting by asking surgeons to send back postoperative surgical reports so that the report can be correlated with the preoperative imaging on the patient. “If what we saw was confirmed by surgery, how much more accurate can you get?” Jacobsen asks. But even if they have the capacity to transmit the surgical reports back electronically, Jacobsen adds, it is often difficult to get surgeons to bother with returning the reports.

“We are the only ones I know of who are doing that,” Jacobsen says. “We can’t figure out how good the data is because we’re the only ones doing it. That just shows you how ripe medicine is for the computer age. You would think with all the smart people in medicine that it would be highly computerized, but in my opinion it is lagging.”

Those pushing the computerization envelope, however, vow that it will not lag for long. Jacobsen says CDI’s average claim now has a DSO (days a sale is outstanding) of about 70 days. That is down from a DSO of more than 100 days a few years ago, he adds.

But HealthHelp’s Lindner says that if all the electronic systems are in place on both sides of the payment equation, radiologists who bill electronically can be getting paid in 7 to 21 days. That is a big incentive for all radiological providers to invest now in their electronic futures. Time is money.

The Internet Factor

When asked about the Internet, most of the providers queried for this story expressed concern about the privacy rights of patients. “We have used it somewhat for insurance verification,” CDI’s Jacobsen reports. “We want to use it as a distribution system for diagnostic reports, but we are just scratching the surface. Clearly, the whole issue of patient privacy is a big barrier to the use of the Internet. We are still trying to figure ways to take advantage of it.”

This is a perspective shared by many respondents. As they wait for clarification on Internet usage, some larger companies like InSight are building their own intranets so that images, data, and other forms of reporting can be shared between sites inside the company quickly and cheaply. “There will come a day when you will be able to transmit all images and scans over the Internet,” says InSight’s Croal. “It’s just a matter of making it cost-effective and secure. The financial incentive is there from both the time savings and efficiency of service perspectives.”

It is probably fair to say that half the job of making radiology electronic-ready has been done. Will it be another 10 years before the second half is added? Who knows. Paperwork is a stubborn fellow. He’s far from being on life support at this juncture. “Ultimately, we’ll all be computerized and communicating in real time,” Croal says. “We’re working on it, but we’re not there yet.”


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