Attacking the Root Causes of Radiology Denials

July 9, 2019

Dan Low
Director of Operations

Radiologists face unique challenges when it comes to getting paid. Coding for imaging is complex and multi-faceted, and documentation must be thorough and precise. In addition, unlike most other specialists, radiologists are usually dependent on the referring physician’s office or emergency department to document medical necessity or ensure that any required prior authorizations are obtained.

Given these challenges, it is not unusual for a large portion of hospital denials to originate in the radiology department. That’s why attacking the problem is essential for stabilizing cash flow and improving collections.

Ultimately, reducing radiology denials hinges on accurate demographic and insurance eligibility information, appropriate coding, complete documentation, and the creation of systems that can ensure prior authorizations and medical necessity confirmations are obtained before the imaging exam is conducted.

Root cause analysis

Reducing denials begins by developing a comprehensive understanding of the root causes of previously denied claims. This can be accomplished through a careful analysis of denial reports and should highlight where, when and why denials are occurring. Radiology denials generally fall into four categories:

  • Patient eligibility problems
  • Failure to obtain prior authorization for the procedure
  • Failure to document medical necessity for the exam
  • Inaccurate or incomplete coding and documentation

1. Eligibility

Patient eligibility is an issue that plagues not just radiology, but most physician practices to a greater or lesser extent. Given the financial risks associate with denials, it is important to ensure that accurate information about the patient’s insurance coverage, or lack thereof, is obtained as quickly as possible. Ideally this should occur before the exam is performed and certainly before any claim is submitted.

Practices can implement edits in their billing systems to block claims from dropping if there is no active insurance. Staff likewise needs to be trained in the appropriate steps to take if patients present without active coverage. Too often, personnel submit claims to the insurance company on record, even if automated rejections in the radiology information or billing systems already have indicated the insurance is no longer in force.

Eligibility problems also can be triggered by listing the incorrect site of service or by inaccurate patient demographic information. For those reasons, systems should be established to double-check each detail relating to the patient’s information, their coverage and the location and nature of the exam.

2. Prior authorization

An increasing number of commercial insurance companies in recent years have required prior authorization for imaging exams, particularly for more expensive procedures like MRI, CT and PET imaging.

Healthcare Financial Resources (HFRI) works with a range of provider clients to identify and mitigate denial root causes for emergent, inpatient, outpatient and ancillary services. From this experience, we’ve determined that failure to obtain prior authorizations represents the most common reason for radiology denials.

Because prior authorizations typically are the responsibility of either the referring physician practice or the hospital’s precertification department, making sure they are obtained is usually beyond the control of the radiologist. But unless the exam is conducted during emergent care, it is probable the procedure is a pre-scheduled service. Therefore, the pre-authorization can and should take place when the exam is scheduled.

It admittedly can be difficult for physician or hospital staff to keep track of the many and varied insurance company pre-authorization guidelines. But most carriers provide links on their websites regarding what requires pre-authorization, and hospitals should be able to consolidate these links for easy access or create their own documents for internal use.

To underscore the impact that failure to obtain pre-authorizations can have, radiology groups should list pre-authorization denials by type of procedure, carrier, referring physician and dollar value, and then convey this information to the physician practice, hospital pre-authorization office, and if necessary, hospital administrators. Educating those further upstream about the impact of their actions (or inactions) ultimately is the most effective way to reduce pre-authorization denials.

3. Medical necessity

Failure to prove and document medical necessity can have a major impact on radiology reimbursement when it comes to commercial payers as well as Medicare and Medicaid.

In addition to confirming medical necessity based on the initial diagnosis, groups should build rules engines that identify imaging services that Medicare will not reimburse. Frequently, these services can be identified through NCDs and LCDs. Similarly, many commercial payers publish experiential clinical policy bulletins that identify services they will not reimburse. Rules can also be created to flag these procedures to reduce unnecessary follow-up, balance bill the patient or write off the balance if no other option exists.

4. Coding and documentation

Because coding and documentation requirements for many imaging procedures are becoming more complex, it is important that processes be established to help ensure both clinicians and coding staff remain current on the latest guidelines. For example, failure to add modifiers that reflect the appropriate chronology of the imaging studies often will lead to denials.

Omitting essential details in the imaging report can also prevent coders from submitting complete and accurate claims. According to the American College of Radiology, all imaging reports must have the following:

  • Exam name
  • Clinical indication
  • Description of exam, sequences and/or technique
  • Comparison studies if applicable
  • Finds
  • Conclusion and recommendations, if indicated
  • Physician signature

Your denial specialists

ParaRev specializes in AR recovery and resolution. We work as a virtual extension of your hospital central billing office to help you resolve and collect more of your insurance accounts receivable faster and improve operating margins through a seamless and collaborative partnership with your internal team.

In addition to our resolution capabilities, ParaRev also can provide denial management assistance by conducting root cause analysis and recommending process improvements to help decrease aged and denied claims going forward.

Contact HFRI today to learn more about how we can help you identify the source of your radiology denials and develop a process to help prevent them from happening again.

Want to avoid 90% of your hospital denials? Learn 7 strategies to improve your AR.

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