The New Rules for Radiology Reimbursement

Few American workers have seen their salaries and wages continue to go down over the last few decades, even adjusting for inflation. Radiologists, however, are getting paid less now than they were 10 years ago for doing the exact same work.

According to a study published in the Journal of the American College of Radiology, steady cuts to the Medicare Physician Fee Schedule effectively reduced reimbursement for radiologists nearly 25% between 2005 and 2021. Medicare conversion rates have continued to go down every year since then.

Additionally, while radiologists are getting paid less for each image reviewed, their workloads are also skyrocketing. The number of imaging studies performed each year has been increasing approximately 5% a year, and it is expected to top 1 billion in 2025. It is not hard to see why: Even small changes, like lowering the mammogram screening age from 50 to 40 as the U.S. Preventative Services Task Force did in 2024, will have a significant impact on the number of studies radiologists read. By 2055, imaging utilization is projected to be up to 27% higher than it was in 2023.

Rising workloads and shrinking reimbursement have understandably led to a physician shortage, with Radiology anticipating a shortfall of 42,000 radiologists by 2033. Nearly half of radiologists are at retirement age or leaving early due to burnout. Compounding the problem, some aspiring radiologists were discouraged from the specialty in recent years due to uncertainty about the rise of AI. (Fortunately, we are starting to see a reversal of that trend, with record high applicants registered in the 2024 Main Residency Match.)

All this is to say, it is no longer business as usual for Radiology. Radiologists are working harder than ever yet still struggling to remain profitable and fully staffed.

Under the new rules for Radiology reimbursement, basic billing services are not enough to guarantee financial success. Radiology groups now need a strategic, highly engaged plan, optimizing the entire revenue cycle to capture all available reimbursement.

Beyond basic billing and coding, what are the critical issues to consider? These are the hallmarks of a next-level approach to Radiology revenue cycle management (RCM).

Radiology-Specific Expertise

Among even the most complicated physician specialties, Radiology tops the list for RCM complexity. Their high volumes are coupled with an extraordinarily complex CPT code set that covers every system in the body. This is a perfect storm for coding errors, which lead to reduced revenue in the form of denials, down-codes, and underpayments. Further, with a high degree of repetition in Radiology cases, one coding error could be repeated hundreds of times and result in thousands of dollars in missed revenue. 

Radiology RCM teams also must work extremely hard to stay current on the strict and changing regulatory environment. Because of high procedural volumes and large numbers of Medicare patients, Radiology is particularly affected by government compliance programs such as the Merit-based Incentive Payment System (MIPS), yet MIPS was not designed with the unique nature of Radiology in mind. Remote-reading regulations that set pay based on the radiologist’s physical location are among other Radiology-specific compliance issues that further complicate the billing process and can dramatically change expected revenue.

For these reasons, Radiology billing can’t be done effectively by shared RCM teams, even with professionals who are very experienced in other specialties. You need full-time, dedicated experts with a working knowledge of the systems of the body, mastery of the enormous CPT code set, and a constant eye on coding and regulatory changes. You need professionals who know what to look for within clinical documentation to find every service and bill it to the appropriate level of specificity.

Financial Stability to Support Recruiting

Amid a physician shortage, financial stability takes on a heightened sense of urgency. Radiology groups must look beyond meeting their current financial needs. They must also present an attractive long-term picture of financial viability to attract new recruits, which in an unfortunate chicken-and-egg cycle requires those very same new recruits.

Step one is a healthy revenue cycle, where RCM teams are optimized to capture every available dollar. Radiology billing can no longer be a passive process of receiving reports and filing claims. It must now include proactive processes to:

• Ensure all billable services are captured. High volumes make it easy to miss a view or even an entire study.
• Prevent denials. Automation can be leveraged to correct coding and billing errors, improve the clean claims rate, and improve cash flow by shortening days in A/R.
• Appeal denials. Denials that aren’t prevented are often overturned on appeal—as many as 54% by some estimates. You need an RCM team with the bandwidth and expertise to pursue the appeals.
• Address inappropriate down-codes. Teams can target the most frequently under-coded exams for physician education efforts that will improve documentation.
• Negotiate favorable stipends and payer contracts. Reimbursement begins with the contract. By leveraging practice data and external benchmarking data, experienced negotiators can help set more favorable reimbursement rates with payers and appropriate stipends from contracting hospitals.

Proactive Insights and Context

In addition to Medicare payment challenges, commercial payers are increasingly employing tactics to reduce reimbursement and delay or deny payment to physicians. In just a few short years, we have gone from a 10% overall initial denial rate in 2020 to 15% in 2024.  Payers accomplished that dubious milestone with bad behaviors including excessive records requests, poorly publicized changes to policies and procedures, and noncompliance with their own provider contracts.

Despite these obstacles, physician groups can use the power of their data to fight back against payer behaviors that threaten their financial stability. By analyzing both benchmarking data and their own reimbursement data, practices can build effective strategies to improve profitability. A data-driven approach can proactively uncover and correct issues that lead to claim denials, down-codes, and other payment delays. For example, data analysis can identify an uptick in denials caused by a coding error, which can be easily corrected before it results in significant revenue loss.

Insights are only half the equation, however. You need a highly engaged strategic partner who can put those insights into context and tell you what they mean for your practice. With workloads increasing astronomically, time may be a radiologist’s scarcest resource. Physicians can’t afford to spend clinical hours wading through self-service portals and resource libraries.

An experienced Radiology RCM partner will be able to:

• Translate raw data to tell the full story of current and future financial health.
• Monitor client metrics—such as net collections rate (NCR), cash per unit (CPU), and AR > 120 Days—to quickly identify and correct issues that impact the revenue cycle.
• Track regulatory changes and alert you to the ones that affect your practice.
• Provide ongoing education to help improve physician documentation and support appropriate reimbursement. For example, failing to document a visualization correctly could mean the difference between getting reimbursed for a limited versus complete study.

When practices can rely on both proactive insights and meaningful context, physicians can confidently turn attention back to their core work, delivering patients the imaging results they are anxiously awaiting.

How Ventra Can Help

ADVOCATE RCM combined forces with Ventra Health in 2024 and is now known as the Ventra Health Radiology business unit. For more than 25 years, the Ventra Health Radiology team has focused exclusively on the complexities of Radiology RCM, honing the most sophisticated claims processing infrastructure available today. For every part of the revenue cycle, we have a custom-built process to identify and address revenue gaps. As a result, we deliver the lowest denial rates in the country. 

Working as an extension of your practice, our Radiology RCM experts partner with you to increase billing efficiency, improve physician documentation, reduce audit challenges, and uncover issues that are negatively impacting your revenue. They leverage our proprietary Radiology billing software, along with AIMS, our powerful data & analytics platform, to provide exceptional coding accuracy and actionable data insights. We also created a Performance Surveillance Team to focus solely on daily monitoring of more than 200 audit controls, watching for issues that may impact performance and working cross-departmentally to address them proactively. 

With a revenue cycle optimized to succeed under the new rules of Radiology reimbursement, practices can expect to see significant revenue improvements and a more stable cash flow. We are incredibly proud to assist our Radiology clients in meeting the evolving demands of the profession.

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