I’ve been in radiology billing in since the 1990s. I’ve also worked with a lot of small and medium sized groups that don’t have practice managers that look out for this sort of thing for them. Here is a list of the top 4 things I think that radiologists do that cost them money regarding their billing staff regardless of whether they are using a billing company or whether they are billing in house.

#1 – Radiologists are not measuring performance.

I was talking to a solo practitioner radiologist the other day and ask him what his adjusted collection percentage was. His reply was “9%.” He was obviously referring to the fee he was paying his billing company. When I explained in more detailed what I was asking him, he said he didn’t know that answer. Not good.

This is not uncommon. I talk to radiologists every day who have no idea if their billing staff is performing well or not whether they are in-house or outsourced. There is a Russian proverb I love to quote that says “There is no shame in not knowing; the shame lies in not finding out.”

I told one radiologist recently (the “9%” doc) that you can’t qualitatively evaluate something you aren’t qualitatively measuring and monitoring. If you want to understand the basics on how to evaluate your practice, you can download my white paper “What Every Radiologist Should Know About Medical Billing.” See http://www.dexioscorp.com/radiology_billing_contact.html#RadiologyBilling

#2 – Radiologists are measuring something irrelevant (or don’t understand what they are measuring).

I meet radiologists all the time who focus on one or two metrics that either they don’t understand or are misleading them. They think that they are on top of things, but the ship is sinking. For example, I know some docs who think that Days in AR is a key, standalone metric. In my humble but highly accurate opinion, Days in AR is virtually worthless outside the context of Adjusted Collection Percentage, Bad Debt Recovery as a Percentage of Collection Agency Write-Offs and AR Aging Percentage Over 120 Days to name a few. You want to have a great Days in AR number, just write everything off and send it to collections after 25 days. You will collect a lot less money doing things that way, but boy your Days in AR will look super.

I think Net (or Adjusted) Collection Percentage is a “must know” and the most obvious one is money in the bank. The rest are helpful but can be misleading – especially if you don’t understand what they are telling you.

A great way to learn about these metrics as well as compare you to the rest of the world is the RBMA’s annual Accounts Receivable Report. In fact, you don’t even have to purchase it just to get the definitions. They can be found at http://www.rbma.org/Data_and_Surveys/Reference_Materials/Accounts_Receivable_Definitions_and_Formulas.aspx. The AR Report won’t tell you everything you need to know. A lot is predicated on your patient mix. However, it will explain the metrics and give you some data by which to compare yourself and see if you are above, below or at the median. You will at least have an inkling whether you need to dig deeper or not.

#3 – Radiologists get end of month reports that aren’t worth the paper they are written on.

The average billing company provides pathetic reporting. I get sent these reports by radiologists who want me to evaluate their practice. These reports are so bad that I have a difficult time figuring out what is going on…and this is what I do every day.

I know one billing company that regularly provides over 100 pages per month in reporting. Who has the time or the energy to wade through all that stuff? In fact, let me suggest that this may be one of the strategies of the billing companies—bury them in BS. The RBMA came out with a 13 month standard report a while back with all the key metrics. This one piece of paper tells you all you need to know including key ratios. As long as you know what these key ratios and line items actually mean, you have a beautiful snapshot right there.

If you don’t know how to make heads or tails out of your end of month reporting, tell your billing company what you would like to see. If you don’t know what you need, give me a call. I’ll send you a sample of the RBMA report and even walk you through what the different things mean on the report and why they are important.

#4 – Radiologists focus too much on the billing fee.

Now, as the owner of a billing company, of course I don’t want groups to focus on the fee. But seriously, the fee is equal to one percentage point of net collections. If you go with a billing company that drops your fee by one point but loses you five points in net collections you are out a lot of money.

Case in point, one of my clients pays me one point more in fee than they paid their last billing company. However, we were able to raise their net collections six points, so they netted five points to the positive. Pretty shrewd business arrangement, I’d say. For the record, if there is anyone out there who I can give $1 to and they give me back $6, I am OK with that arrangement all day and all night.

The key is finding out who can bring home the bacon. How do you do that? References are a good start. Ask references what their net collection percentage was before the current billing company took over and what it is after. Another thing is ask them to guarantee their improved collections. My company guarantees we will improve collections in the first year or we will pay $10,000. At least you know we are serious and not just blowing smoke.