RADMAX, LTD’s main focus will always be a full service billing solution for physicians and radiation oncology facilities, but occasionally we do get requests for consulting services. There always seems to be an interest to pursue an outside opinion, especially when talking about financial and coding issues. Since RADMAX handles radiation oncology billing on a daily basis, we see quite a lot of mistakes and can offer clients suggestions that will improve their own billing issues and ultimately influence their finances.

Fee Schedule Reviews
An outdated fee schedule can cost a facility a lot of money. You want your services to be fairly compensated, yet you do not want to set your charges so high as to set off red flags with insurance companies and encourage complaints from your patients.

Some considerations to think about are which payers will pay more if you do decide to raise your fee schedule. After all, raising prices for payers like contracted managed care may only lead to raising your contractual allowance adjustment amount in the end, not your reimbursement! Factors that can affect fee schedules are the size and population of the area and competition for services in that area. We use averaged data as a guideline for charges in a specific zip code or nationally, and we do an impact analysis (CPT codes and frequency in a given time frame) to determine the outcome of any changes.

Revenue Cycle Analysis
Revenue cycle is a growing buzzword these days and what we are really talking about is cash flow! Revenue cycle boils down to three areas that need to work in harmony-front end (admissions), middle section (treatment/charge capture), and back-end (billing/collections). The following is overly simplified because each practice has unique issues, but the main point is that all departments must work together and flow.

• Front end (admissions): clearly understands their mission (verification of insurance benefits, referrals, paperwork, patient demographics, etc.) and obtains accurate patient data.
• Middle section (treatment/charge capture): physicians and departments like physics understand their role in effectively capturing charges and coding for correct payment. There needs to be some type of process in place to make sure all codes are accurately recorded.
• Back end (billing/collections): understands radiation oncology coding and can demonstrate competency, along with strong appeal and collection skills. Some type of audit procedure in place to verify that all codes are being charged out correctly per patient. Formal policy in place on how accounts will get worked and who does what.

While nothing is ever completely cut-and-dried with healthcare, from our hands-on experience running cancer centers, we can help you understand the big picture and give pointers that will help your facility to have a strong revenue cycle.

Accounts Receivables Analysis
RADMAX has years of experience not only in radiation oncology billing, but cancer treatment center operations and finances. We understand radiation oncology. There are a few key indicators for accounts receivables that are important for any radiation oncology department to know on a monthly basis, even those centers that are hospital based and their billing is done by a centralized hospital billing department.

• Revenue AR Days: an indicator of how efficiently a facility is turning around claims (average number of days it takes to receive payment on a typical claim). The basic formula for Revenue Days is three months’ total revenue or charges divided by the number of days in that three-month period. The answer is divided into your latest gross accounts receivables (AR). Typically your days should be in the 30 to 45 day area, though we have seen some hospitals above 75 days. This number can be influenced by factors like billing cycles and electronic claims usage.
• Collection percentages: payments versus net charges (net collection rate) and payments versus gross charges (gross collection rate). Both are different and important. Your gross collection rate will tell you how much money, cents on the dollar, you are making and the net collections figure tells you how well your accounts are being worked overall. Your net charges are typically defined as what is payable (gross charges minus adjustments minus bad debt/charity = net charges). Unless there is some type of issue, i.e. large indigent population, the goal for net collections should always average between 90 to 100 percent monthly. If your net collection rate is below 90 percent, chances are that accounts are not getting worked and money is being left on the table. Please note that it takes about six months worth of data to establish a strong collection trending line!
• Adjustments versus charges: an average of what is being written off such as contractual allowances or bad debt adjustments. While this goes hand-in-hand with your net charges figure, it is important to realize that too high of an adjustment ratio can send up red flags that accounts are not being appealed correctly and charges are being written off that might otherwise be payable (i.e. patient deductible, co-insurance, bundled charges, U & C, etc.).
• Accounts receivables balance or gross AR: every facility should set a goal of what their accounts receivables should be at any given month. Your AR is defined as any accounts that have not yet been paid. There are many factors that can affect this number. If your billing system uses proration and takes the contractual allowance at the time of billing, or if you have an unusual amount of private pay or indigent patients, your AR can be influenced greatly either way. We suggest an AR goal is one to one-and-a-half times your typical gross charges in any one month.

There are many other figures that can be included such as electronic claims rejection rate, accounts receivables over 90 days old, bad debt ratio, average monthly expenses, etc. RADMAX can help you identify areas that need work and can point you in the right direction and strengthen your bottom line. As an outsourcing business for radiation oncology, RADMAX includes a lot of this very analysis as part of our service.

Facility Profitability Analysis
RADMAX can analyze your financial numbers and determine what your bottom line is. This is very much like balancing a checkbook. In simplistic terms it is the amount of cash received versus your total expenses. There are many other factors to consider like equipment and building depreciation, but the main goal is to see if the facility is in the black or in the red. This can also extend to new facility feasibility studies or a financial pro-forma on a new service like IMRT (Intensity Modulated Radiation Therapy). Recently we have received requests for analysis of free standing versus hospital based centers, asking which type of facility is more profitable. If your facility is in need of strategic planning and development assistance, we can offer advice and would be happy to help in any way we can.

Billing and Coding Audits
RADMAX utilizes coding software tools provided by Coding Strategies, Inc. (CSI). We also receive requests for in depth coding audits like individual chart audits. For this type of service we use CSI who we feel are experts in the field of radiation oncology billing and coding. Collectively, their consultants and support specialists have over 100 years of experience in the healthcare industry. Their employees gained their extensive experience with both payor and provider organizations. All of their coding and consultant staff maintains national certification.