2015 National Survey Results: Radiology Billing Practices

2015 National Survey Results: Radiology Billing Practices

July 15, 2015 - 10:14 pm
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A new national survey administered by Emerald A/R Systems www.emeraldar.com shows that the majority (77.3%) of radiology practices are receiving only a 12% rate of recovery from collection agencies working on their behalf. The remainder of the practices are receiving even less, with more than one-third (33.6%) reporting that their collection agency delivers a rate of recovery of between zero and 10%. Let’s think about that for a moment.  The vast majority (52%) of practices surveyed turn over between $50,000 and $200,000 in monthly debt to collection agencies.  So that means that a practice is happy with their collection agency recovering a maximum of $5,000 on a $50,000 debt?  Given the 1% to 2% profit margin of most practices that just doesn’t make sense.

 

The survey indicates that billing and collection practices need a wholesale overhaul. Practices are struggling, patients aren’t brought into the financial responsibility loop early enough, billing isn’t handled efficiently (or sometimes fairly) and communication breaks down. Emerald conducted a survey of exclusively for RBMA http://www.rbma.org/ members to ask about those issues.  It is the largest national survey of billing and collection agencies to date, with more than double the respondents participating than in previous, association sponsored surveys.

The results are both troubling and reassuring. Here is what Emerald discovered.

The survey found that 3/4s of practices carry large amounts of monthly bad debt.

    • 48.1 % turn up to $50,000 in bad debt to collection agencies
      • 25% of that amount represents monthly bad debt of less than $20,000
    • 52% turn between $50K and $200K to collection agencies
      • Out of that percentage, the majority (30.8%) have between $151K and $200K in bad debt
  • Lots of energy expended but debt remains

 

The industry has long suspected that practices are struggling with billing and collections but remain hesitant to hire a collections expert. Our survey found that the majority of medical practices (62.6%) wait more than 3 months to turn over monthly medical debt ranging from $50,000 to $200,000.  In the meantime, they are using precious time and energy to collect bills on their own. Three-quarters (72.4%) of the practices use in-house billing systems and are employing multiple tactics to collect bad debt:

  • 20% are making one or more outbound calls to patient
  • 41.8% send 1-4 statements to patient
  • 20% use automated dialer in office
  • Only 4% use Extended Business Office systems

What you don’t know can hurt you

The survey uncovered a surprising number of practices that don’t know what specific collection actions are taken on their behalf, despite entrusting agencies with the collection of up to $200,000 in monthly debt.

 

The majority of practices don’t know if their collection agency complies with the Federal Telephone Consumer Protection Act (TCPA) http://www.emeraldar.com/2015/05/08/patient-portal/  , which can cost the practice thousands of dollars in fines.

  • This very strict law prohibits pre-recorded or auto-dialed calls to a person’s mobile phone or land line with prior consent.
  • It carries a maximum fine of $1,500 in damages per call and federal courts have levied millions of dollars of fines against those who do not comply.
  • Practices and their collection agency are held liable for non-compliance with the law.

When asked, “Has your collection agency changed their autodial process to comply with the increase in TCPA class action lawsuits?” 62% of practices said they are not sure if their agency complies with TCPA, 32.8% said yes they are sure and 5.2% said no.

Talk about leaving money on the table:

  • Nearly half (48%) are unsure if their agency scans for state Medicaid eligibility, an opportunity to insure patients and bill appropriately for services provided
  • 8.6% are unsure if their collection agency sends medical debt to a credit reporting agency.

 

Let’s talk about these two.  First, Medicaid eligibility.

It is a well-kept revenue secret, but one in which we happen to specialize. http://www.emeraldar.com/2015/01/17/working-from-new-workspace/ As of January 2015, 28 states authorize entities to conduct presumptive Medicaid eligibility (hyperlink:http://kff.org/health-reform/issue-brief/medicaid-moving-forward/) determinations for patients. If you are enrolling patients in Medicaid at the time of treatment, you can bill for any services delivered to them during the previous 90 days.  How many claims do you think that represents?  For one client we found 300 claims a month, the majority of them Medicaid, to rebill, at an average value of $100 per claim for a grand total of $300,000. You can read more about Medicaid eligibility in our blog on the topic. (Hyperlink: http://www.emeraldar.com/2015/01/17/working-from-new-workspace/)

Secondly, credit reporting agencies.

Nearly 9 percent (8.6%) of surveyed practices are unsure if their collection agency sends medical debt to a credit reporting agency. Why does this matter? Because medical debt and medical debt collections are rising.  (You can read more in our blog. http://www.emeraldar.com/blog/ Medical debt is the leading cause of bankruptcy in the US. Given the numbers, it’s easy to see why.

  • For an average family of four, the costs of healthcare – payroll deduction plus out of pocket costs- now total more than the annual cost of groceries. ($9,144)
  • Out of pocket costs alone total more than the annual cost of gas for the family car. ($3,600)

The Kaiser Family Foundation reports that most Americans have less than $3000 to cover out of pocket medical costs- yet the ACA requires an individual to pay up to a cap of $6,350, $12,700 for families. (KFF hyperlink: http://kff.org/private-insurance/report/medical-debt-among-people-with-health-insurance/) This is why it matters if your collectibles are sent to a credit reporting agency. It has become more than a financial question- it is now a philosophical and ethical question as well. http://www.emeraldar.com/emerald-services/bad-debt-recovery/

Some Reassuring Signs

The good news is that survey results indicate that some practices are well informed and on top of collection efforts.

  1. More than 50% have reevaluated their collections agency within the past year.
  2. 22.6% say their collection agency delivers a 15% to 20% rate of recovery.
  3. 24.5% say their collection agency does scan for Medicaid eligibility.
  4. 32.8% say their collection agency has changed their autodial process to comply with the increase in TCPA class action lawsuits.
  5. 87.2% of the surveyed practices have seen little or no increase in bad debt accounts since the implementation of the ACA.

Questions remain on debt levels and recovery

Throughout the survey some questions were not answered by many participants. That is to be expected. However, a larger percentage of participants did not answer two specific questions:

  1. “What is the average monthly bad debt placement amount you turn to a collection agency?”
    1. 17% did not answer
  2. “What is the rate of recovery for your collection agency?”
    1. 16% did not answer

The amount of outstanding debt and the rate of recovery achieved are important revenue management issues for any practice. We suspect that some left these questions unanswered because they believe their debt is too high, and they have no idea what their rate of recovery is.

If this is true then we reaffirm what we have stated here; it is time for practices to seek expert collection agencies to reduce their medical debt, and they should not settle for a recovery rate between 10% and 15%.

 

We believe in compassionate collections. We do not believe that is an oxymoron. We believe that medical debt can be recovered efficiently and professionally. We do it every day. Yes, the industry as a whole needs repair but while it’s undergoing construction – at the very least- we can demand excellence.

http://www.emeraldar.com/

 

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