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Case Study The Medford Radiological Group, PC At a Glance Organization The Medford Radiological Group, PC, Medford, Ore. – Serving four hospitals and three imaging centers

Billing Shift to McKesson Boosts Performance, Reduces Costs, Improves Coding and Compliance The Medford Radiological Group, PC, Medford, Ore., is a large, 20-physician group providing imaging services to four hospitals and three imaging centers in southern Oregon. The group handles about 267,000 procedures annually.

would be expensive; the costs of some systems approached $500,000. And even with the new platform in place, there was no guarantee billing personnel could quickly and effectively adapt to the technology, says Roseanne McLaren, CEO of The Medford Radiological Group. “Our concern was that we would invest all this money, yet we still didn’t know if the staff could make the transition from DOS to Windows,” McLaren says. “So we assumed there would be a significant falloff in collections for a period of time. In addition, the new platform would do nothing to address concerns we had about the quality of our coding.”

Results

In 2008, Medford was preparing to upgrade its antiquated practice management platform. Yet major concerns existed about how quickly the group’s billing staff could adapt to a new system. Ultimately, Medford decided outsourcing its billing operations to McKesson made more sense – from an economic and business operations standpoint – than investing in costly new equipment and software.

– Billing costs reduced by more than 60%

Challenges

– 20 full-time physicians – 267,287 annual procedures Solution Spotlight – McKesson Revenue Management Solutions – McKesson Practice Consulting SolutionsTM Critical Issues – Antiquated billing platform – Coding concerns – Excessive billing overhead

– Annual savings of $1.3 million – Improved coding and compliance – Average charge per procedure increased by 24%

For almost 20 years, The Medford Radiological Group had operated a DOS-based practice management system. One problem with the paper-intensive application was its inefficiency. The group was forced to constantly add billing personnel to keep pace with practice volume growth, and the billing staff had increased to more than 20 people by 2008. To solve the problem, Medford solicited request-for-proposals (RFP) for a replacement system. But investing in a new practice management software application

Answers McKesson was asked to submit a proposal for practice management, but instead suggested outsourced billing. The McKesson sales director provided “a very impressive overview of what its outsourced billing service could do,” McLaren says. The Medford management team also traveled to McKesson’s radiology billing center in Fresno, Calif., to learn more about the company’s capabilities. “McKesson walked us through how the process worked and we appreciated the sophistication of the operation,” McLaren says. “It was also a real plus for us they were located on the West Coast.”


Case Study

“If I were to grade McKesson, I would have to give them an A-plus. It’s been a very good experience … We knew what we wanted from this relationship. What we didn’t have any idea about were all the additional benefits that would accrue from working with McKesson. It’s been an extremely positive experience for the group.”

Roseanne McLaren CEO Medford Radiological Group

The Medford Radiological Group looked at two other outsourced billing vendors before ultimately deciding on McKesson. With McKesson taking charge of the group’s billing operation, one of the most pressing challenges was developing an orderly process for downsizing the legacy billing department. “It was difficult, because we needed some of these people during the transition,” McLaren says. “Fortunately, McKesson was able to assist us in structuring severance agreements and providing other support.”

Results McKesson established electronic interfaces with Medford’s hospital partners and also assigned a permanent liaison to work on-site to address any questions or challenges. According to McLaren, one of the most important benefits produced by the shift to McKesson has been an improvement in coding. “Their coders are all certified, and as a result, we’ve seen a major improvement in the coding as well as the documentation by physicians,” she says. “Coding had always been a concern for us, but now we’re confident that even with our most complex cases, such as interventional radiology, we are documenting and coding correctly.”

McKesson 5995 Windward Parkway Alpharetta, GA 30005 www.mckesson.com/radiologyservices 866-217-4184

Since McKesson took over billing, the group’s average charge per procedure has climbed more than 24%. The gain reflects improved coding and documentation, as well as fee increases recommended by McKesson. In addition, eliminating the internal billing department produced annual savings of about $1.3 million. Overall, billing costs have tumbled by more than 60% since McKesson took over. Part of those savings includes dramatic reductions in healthcare premium expense due to a healthier, smaller workforce, McLaren says. Reporting and compliance also have been improved significantly, she says, and with the elimination of the billing department, human resource management has been greatly simplified. “If I were to grade McKesson, I would have to give them an A-plus,” McLaren says. “It’s been a very good experience. We had a difficult time with the transition from a people standpoint, but McKesson was super throughout. We knew what we wanted from this relationship. What we didn’t have any idea about were all the additional benefits that would accrue from working with McKesson. It’s been an extremely positive experience for the group.”

Copyright © 2010 McKesson Corporation and/or one of its subsidiaries. All rights reserved. McKesson Practice Consulting Solutions is a trademark of McKesson Corporation and/or one of its subsidiaries. All other product or company names mentioned may be trademarks, service marks or registered trademarks of their respective companies. PRT441-10/10

Radiology Billing Shift to McKeesson Boosts Performance  

The Medford Radiological Group, PC Billing Shift to McKesson Boosts Performance, Reduces Costs, Improves Coding and Compliance

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