RFS news highlights resources, issues, and news relevant to in-training members of the ACR. If you have a topic idea or would like to contribute to the blog, please email RFS Secretary Nathan Coleman, MD.
Medical Billing Fundamentals
What all radiologist should know
This is one of my all time favorite internet memes. It makes me reflect on how many times I’ve learned about [insert zebra disease here] instead of a real world skill, like how medical billing works…
The main objective of residency training is to produce radiologists who can function independently and effectively within their chosen subspecialty and practice environment. The vast majority of radiologists practice in private or other settings outside of academic medicine, for whom skills in the business of medicine are critical. Yet very few radiologists are able to gain proficiency with business fundamentals (such as medical billing) in medical school or residency, despite the importance of these topics. In fact, 75-82% of residents or recent graduates across multiple specialties rate their exposure to business topics as poor or inadequate. Radiology practices are often small businesses, for which percentage point differences in profit margin are vital to keep the PACS running and the lights on (dimly, of course).
According to several private practitioners and academics that I’ve spoken with, the best way to become adept at billing is to simply be interested in learning more. I cannot think of anyone in my medical school class who embarked on the gauntlet of medical training because he/she wanted to master the finer points of HCPCS coding. However, basic education in billing and coding can substantially benefit physicians at an individual and institutional level; one study of Neurology trainees demonstrated that the implementation of a formal curriculum on these topics led to an average increase in legitimately earned outpatient revenue by $34,313/trainee/year.
Billing is a critical element to a radiology practice, and having some knowledge can make you an asset to your group. Most practices, whether small, large, or academic employ a menagerie of billers and business managers. As a practicing physician, you’ll add significant value to your group by understanding the mechanics of the billing process. Just some of the benefits include ensuring the accurate valuation of your individual and group productivity, and being able to troubleshoot when issues arise.
Most residents that I’ve met are at least somewhat familiar with the alphabet soup of billing acronyms: CPT (current procedural terminology), RVU (relative value unit), HCPCS (healthcare common procedure coding system), etc. It’s probably easiest to explain the process in chronological order with a case example of a patient with abdominal pain referred for a CT abdomen/pelvis:
- An order is placed by a referring physician based on symptoms or specific clinical concern. The symptoms are then patched with an ICD-10-CM code. The ICD-10 classification is essentially a coding system for signs, symptoms, and diagnoses. For example if a patient is referred to you with right lower quadrant abdominal pain, the ICD-10 code is R10.31. At this point, an insurance pre-authorization may occur, depending on the practice setting.
- The radiological exam is performed and a report is generated. The specific exam is matched with a CPT code, which is then sent for billing. A CT Abdomen/Pelvis with intravenous contrast is CPT code 74177 (Note, most radiology CPT codes are five-digit numbers starting with a 7). Certain procedures and services not encompassed by the CPT system are in the HCPCS database, for example administration of low-osmolar intravenous contrast is Q9951, Q9965-7.
- Without getting too far into the weeds, it is important to have a basic familiarity with a concept called Procedure-to-procedure (PTP) edits and Medically Unlikely Edits (MUE). These are both essentially exceptions to rules which would otherwise prevent full reimbursement. For example, MUEs prevent many reimbursements for studies performed on the same day, so it is important to know which modifiers to use to document medical necessity, based on your practice (mammography, IR, etc).
So you’ve done all the paperwork, now how much do you get paid? That depends on the Relative Value units (RVUs). RVUs are determined by a committee at the AMA, and the scale is used by Medicare to determine payments based on CPT/HCSPCS codes, with some variation depending on region of the country. It’s important to note that not every payer reimburses the same amount. Private insurers generally pay a negotiated multiple of the Medicare rate. Medicaid on the other hand generally reimburses physicians less than Medicare, approximately 28% less on a nationwide basis.
Since there are significant differences in the criteria used by different payers for reimbursement, it is important to have a firm understanding of your payer mix and what requirements they may have. Most insurers use algorithms for approving prior authorizations or claims after a procedure has been conducted. If the ordering physician provides an insufficient or inappropriate history, for example, the fee for the Radiologist may not be reimbursed. Notably, the history of “rule out…” may be insufficient. Thus, it is important to document relevant history within the radiology dictation so the coder can accurately match the patient’s symptoms with the test performed. Similarly, it’s important to know each payer’s requirements in order to collect legitimately earned reimbursement. For example, complete abdominal ultrasounds must contain documentation of eight structures, otherwise the payer can reimburse at a lower rate. Incredibly, insufficient documentation occurred in up to 20% of abdominal ultrasound reports, according to one study, leading to loss in payments.
Okay, back to our example of the CT abdomen/pelvis. The insurer has approved reimbursement for the scan, but one last potential thorn in your side is that it can take several months for the money to actually arrive. An accountant would call this “accounts receivable” and it’s important to note that it’s not the same as cash. If your account receivable is due in 3 months but your account payable (electricity bill, tech salary) is due today then you can see how this can cause a cash shortfall and is problematic for a business.
Eventually the radiologist in our example is reimbursed for her interpretation of the patient’s CT abdomen/pelvis. Though medical billing can be tedious, it is quite literally how a physician is compensated.
Entering a practice with a foundation of knowledge and a thirst to learn more will undoubtedly make you an asset to your group!
By Emir Sandhu, MD, PGY4 Resident, Stanford Radiology
- Waugh JL. Education in medical billing benefits both neurology trainees and academic departments. Neurology. 2014 Nov; 83(20):1856-61.
- Chung CY, Alson MD, Duszak R, Degnan AJ. From imaging to reimbursement: what the pediatric radiologist needs to know about health care payers, documentation, coding and billing. Pediatr Radiol. 2018;
- Rosenkrantz AB, Degnan AJ, Duszak R. Documentation, coding, and billing: what abdominal radiologists need to know. Abdom Radiol (NY). 2018;43(3):734-741.