DEPARTMENT OF RADIOLOGY

Raymond Liu, MD, FSIRDepartment of RadiologyMassachusetts General Hospital

The Value of Clinical Interventional Radiology

Agenda

• Clinical IR: A Journey• Revenue opportunity• MGH case study• Conclusions

The growing use of interventional radiology techniques signals a need to redefine the radiologist’s role in

patient management…[we] must decide whether [we] want to participate more fully in clinical matters

such as patient selection and follow-up care.

“

Ernie Ring, 1983

Introduction

• Interventional Radiology (IR) has been transitioning to an increasingly clinical delivery model in both outpatient and inpatient settings for years

Introduction

• Interventional Radiology (IR) has been transitioning to an increasingly clinical delivery model in both outpatient and inpatient settings for years

Clinical IR means focusing on the patient before and after the procedure

Admitting and discharging patients becomes a skill necessary to learn

Discharge Process

Admission Guidelines

• Define admitting policy based on procedure mix and clinical training

• Develop consistent protocols• Arrange 24/7 coverage

However, there is wide variation in clinical care models

But very few IRs understand the financial impact of their clinical IR work

• Most radiology departments focus on procedural and exam based CPT codes to drive revenue and profit

• Conception that non-procedural activities redirect provider time from traditionally RVU-generating tasks– Especially pronounced when staff intentionally freed from

procedural duties

• With IR outpatient clinics and in patient rounding continue to evolve, reliable sense of revenue and profit is limited

Traditional IR mindshare:Focused primarily on procedures

InpatientConsults

Procedures

Clinic / Rounds

OutpatientClinic

• Clinical care• Feed case pipeline• Enhance patient/referrer

perception of IR as clinical specialty

Inpatient Rounding

• Clinical care• New patients, follow-up care• Multi-touch interface with

clinical teams

Our Mindshare E&M Activities Benefits

• Clinical care• Feed case pipeline• Branding IR as true clinical

consult service

“Best practice” clinical IR:What does it look like?

Inpatient Team Outpatient Team

Team

Patient population

Setting

Examples

+ + + +/-Attending APC(s) Trainee Attending APC(s) Trainee

• New consults for IR expertise• Pre- and post-procedural care on

IR or med/surg inpatient service

• New referrals, self-referrals to IR clinic

• Pre-procedural, follow-up, and longitudinal care for IR patients

• Inpatient floors (med/surg/ICU)• Emergency room• Observation units

• Stand-alone IR clinic, often near angio suites

• Co-located clinics (e.g. multidisciplinary HCC/onc)

• Consult for acute GI bleed, +/-angio, +/- follow up visits on ICU service

• s/p UAE for pain management on IR service

• HCC patient seen with team of hepatology, med-onc, transplant surg, IR

• Chronic venous insufficiency patient seen in IR clinic

Inpatient rounding/consult team

Co-located multidisciplinary clinic

Maximizing advanced practitioner billing is critical

• Incident to billing– APs see established patients alone and bill under

supervising MD

• Independent billing– APs practice in collaborative environment, but MD

presence not required– AP is billing provider

• Shared visits– Both MD and AP perform significant portions of the visit

Sparse literature nonetheless underscores opportunity

• Emory:– Duszak and Borst showed that Medicare IR claims

for nonprocedural clinical encounters increased by 1,200% from 1993-2008, with 1,112% growth attributed to inpatients

• MCoW:– White et al demonstrated that a structured

approach to increasing inpatient RVU capture resulted in 722% growth in charges and 831% growth in collected revenues over a 3 year period

Agenda

• Clinical IR: A Journey• Revenue opportunity• MGH case study• Conclusions

What is Evaluation & Management (E&M)?

• E&M forms basis of payments from all US payers• Requires direct, face-to-face physician-patient encounter• Coded with Current Procedural Terminology (CPT) codes that

are distinct from procedures• E&M codes reflect various features of clinical services

• Physician status (treating physician versus consultant)• Patient status (inpatient versus outpatient)• Service complexity• Time spent

• Governed by the global period

However, finances have traditionally skewed in favor of procedures

ProceduralRevenue

E&M

Dollars ($)

Goal: Expand E&M contribution to total IR revenues

ProceduralRevenue

E&M

Dollars ($)

E&M growth does not occur in isolation

ProceduralRevenue

E&M

Dollars ($)

“Halo” effect of E&M work expands practice

ProceduralRevenue

E&M

Dollars ($)

Virtuous cycle feeds E&M, procedural revenue, and vice versa

Dollars ($)

ProceduralRevenue

E&M

Our purpose

• Develop a financial modeling tool to assess potential revenues and profits generated from an outpatient interventional radiology (IR) clinic

Our approach

• Model a baseline hypothetical IR clinic• Estimate current top-line revenuesStep 1:

Baseline Model

Step 2:Estimate Range of Possibilities

• Project range of potential revenues for IR practices of all different sizes

• Assess implications for daily practice as well as longer term division strategy

Step 2:Assess

Profitability

• Perform back of the envelope analysis to understand profitability of the enterprise

Materials and Methods

Volume Mix PriceX X

Revenues

• How much do I sell

• What am I selling?

• How much am I charging?

Revenue opportunities can be analyzed in both outpatient and inpatient settings

AverageCensus E&M Case Mix Staffing Mix Documentation Charges and

Collection Rate

Ass

umpt

ions

X X X X

• 8 existing patients per day

• 4 new patients per day

• New patients E&M mix (0% / 2% / 11% / 57% / 30%)

• Existing patients E&M mix (0% / 3% / 9% / 50% / 38%)

• APC solo visits and billing (0-5% of all visits)

• APC billing as % of attending physician (85%)

• Compliance with billing documentation by providers (95%)

• Estimated charges for new patients: $150-$650

• Estimated charges for existing patients: $75-$450

• Estimated gross collection rate: 30%

Formula and assumptions for calculating clinic $$ revenueVolume Mix PriceX X

Similar approach for inpatient practice

Financial model mechanicsIRINPATIENTCLINICALMODEL Type: Source:ModelControl

ScenarioToggling CAUTIOUS 4 HitF-9tocalculate

AssumptionsGlobal

Workingdayspermonth 20 # N/ANumberofAdvancedPractitioners(AP) 3 # fact

%ofAPpatienttimebyNP 30% % Historicaldata;ExperienceNPbillingrateas%ofStaff 85% % CMS

%ofAPpatienttimebyPA 67% % calcPAbillingrateas%ofStaff 0% % CMS

Blendedbillinglevelas%ofstaffforAP 28% % calc

NewPatients#ofNewConsultsperDay 1 # Historicaldata;Experience

E&MDistributionLevel1 30% % HistoricaldataLevel2 60% % HistoricaldataLevel3 10% % HistoricaldataLevel4 0% % HistoricaldataLevel5 0% % Historicaldata

ProviderMixAPAlone 0% % Historicaldata;ExperienceAP+Staff 100% % calc

ProviderComplianceLevelwithDocumentationandProviderBilling(PatientKeeper)Level1 40% % Historicaldata;ExperienceLevel2 40% % feedLevel3 40% % feedLevel4 40% % feedLevel5 40% % feed

PercentageBillability2/2GlobalPeriodReductionLevel1 100% % MGHanalysis(ouranalysissuggestshighestvolume/revenuegeneratorsarealmostallnotaffectedbyglobalpreiodreduction)Level2 100% % feedLevel3 100% % feedLevel4 100% % feedLevel5 100% % feed

ChargesforReimbursementLevel1 $300 $ HistoricaldataLevel2 $500 $ HistoricaldataLevel3 $750 $ HistoricaldataLevel4 N/A $ HistoricaldataLevel5 N/A $ Historicaldata

GrossCollectionRate(GCR)Level1 19% % BillingteamLevel2 18% % BillingteamLevel3 15% % BillingteamLevel4 N/A % BillingteamLevel5 N/A % Billingteam

ExistingCasesAverageCensus/Day 30 # HistoricaldataAverage%Censusnotseen 0% % Experience

E&MdistributionSubsequentvisitlevel1 30% % HistoricaldataSubsequentvisitlevel2 40% % HistoricaldataSubsequentvisitlevel3 36% % Historicaldata

ProviderMixSubsequentvisitlevel1

APAlone 0% % HistoricaldataAP+Staff 100% % calc

Subsequentvisitlevel2APAlone 50% % HistoricaldataAP+Staff 50% % calc

Subsequentvisitlevel3APAlone 50% % HistoricaldataAP+Staff 50% % calc

ProviderComplianceLevelwithDocumentationandProviderBilling(PatientKeeper)Subsequentvisitlevel1 80% % feed(assumesamefornewconsults&existingcases)Subsequentvisitlevel2 80% % feedSubsequentvisitlevel3 80% % feed

PercentageBillability2/2GlobalPeriodReductionSubsequentvisitlevel1 100% % MGHanalysis(ouranalysissuggestshighestvolume/revenuegeneratorsarealmostallnotaffectedbyglobalpreiodreduction)Subsequentvisitlevel2 100% % feedSubsequentvisitlevel3 100% % feed

ChargesforReimbursementSubsequentvisitlevel1 $150 $ HistoricaldataSubsequentvisitlevel2 $300 $ HistoricaldataSubsequentvisitlevel3 $450 $ Historicaldata

GrossCollectionRate(GCR)Subsequentvisitlevel1 24% % HistoricaldataSubsequentvisitlevel2 14% % HistoricaldataSubsequentvisitlevel3 10% % Historicaldata

Calculations

CaseVolume&MixNewConsults

Totalnewconsultspermonth 20 # calcLevel1

#ofpatienttouchespermo 6 # calcAPalone 0 # calc

HIGH OPTIMISTIC BASE CAUTIOUS

HIGH OPTIMISTIC BASE CAUTIOUSGlobal 1 2 3 4

20 20 20 203 3 3 3

75% 45% 33% 30%85% 85% 85% 85%67% 67% 67% 67%0% 0% 0% 0%28% 28% 28% 28%

NewPatients4 3 2 1

0% 19% 19% 30%50% 74% 74% 60%50% 7% 7% 10%0% 0% 0% 0%0% 0% 0% 0%

0% 0% 0% 0%100% 100% 100% 100%

80% 60% 40% 40%80% 60% 40% 40%80% 60% 40% 40%80% 60% 40% 40%80% 60% 40% 40%

Increasing%ofpatientsseenbyNPs

ImprovingPKdocumentation

Maximizing advanced practitioner billing is critical

• Incident to billing– APs see established patients alone and bill under

supervising MD

• Independent billing– APs practice in collaborative environment, but MD

presence not required– AP is billing provider

• Shared visits– Both MD and AP perform significant portions of the visit

Documentation is key for the success of a clinical practice…

…as well as understanding global periods

Agenda

• Clinical IR: A Journey• Revenue opportunity• MGH case study• Conclusions

An established clinical service with multiple components

• Inpatient service– 1 attending, 2-3 advanced practitioners, 1 fellow– 15-20 followup patients/day– 3-7 new consults/day

• Outpatient service– 5 days a week of outpatient clinic– Each attending has 1 day/week of dedicated outpatient

clinic– 5-10 patients/day

Growth of both inpatient & outpatient volumesYear-over-year growth 124% (inpatient), 21% (outpatient)

Inpatient E&M Volume(2013-2016)

0123456789

101112

2013 2014 2015 2016

Inde

xed

Volu

me

(y1

= 1

.0)

Outpatient E&M Volume(2011-2014)

0.0

0.5

1.0

1.5

2.0

2011 2012 2013 2014(Annualized)

CAGR124%

CAGR21%

CAGR withoutOnc9%

Oncology

Follow Up

New Patients

Commensurate growth in procedures…

1.0

1.5

2.0

2010 2011 2012 2013 2014 2015 2016

Total IR Case Volume Case Volume (2010-2016)

CAGR6%

(Annualized)

Inde

xed

Volu

me

(y1

= 1

.0)

1.0

1.5

2.0

2.5

2011 2012 2013 2014 2015

…especially in interventional oncology

Total IO Case Volume Case Volume (2011-2015)

CAGR19%

Inde

xed

Volu

me

(y1

= 1

.0)

Outpatient E&M Volume

Results

Estimated Total Annual Charges Estimated Total Annual Revenues

Existing Patients

New Patients Existing Patients

New Patients0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

$992K

$298K

Our model suggests a broad range of annual revenues from outpatient E&M…

Practice Type: Small Moderate Large Mega

Clinic Days/Week 0.5 2.0 4.0 5.0

Number MDs (FTE) 0.125 0.25 0.50 1.00

Number APCs (FTE) 0.25 0.50 1.00 1.50

New Consults/Day 1 2 4 7

Existing Consults/Day 2 5 8 15

Estimated annual charges $30,999 $284,298 $991,961 $2,260,683

Estimated annual collected revenues $9,300 $85,289 $297,588 $678,205

Scientific Talk, SIR 2016

…as well as inpatient E&M

Practice Type: Small Moderate Large Mega

Full Billing Days/Week 5 5 5 5

Number MDs (FTE) Variable

Number APCs (FTE) 0.5 1.0 2.0 4.0

New Consults/Day 0.2 0.5 2 3

Existing Consults/Day 5 10 35 50

Estimated annual charges $319,579 $643,761 $2,264,672 $3,241,822

Estimated annual collected revenues $54,766 $110,574 $389,612 $558,075

JVIR 2016

But what about PROFITS?

Materials and Methods

Revenues Costs Profit/Loss- =

• E&M Capture• Downstream

imaging• Procedures

• Salary & benefits• Rent & facilities• Overhead (SG&A)

• Did we make money or lose money?

Materials and Methods

Revenues Costs Profit/Loss=DownstreamImaging+ -

• Radiology practices likely benefit from the need for imaging in IR patients

ResultsD

olla

rs ($

)

Revenues Costs Profit/(Loss)

DownstreamImaging

TrueProfit

$298K ($396K)

($98K)

~$098K

Sensitivity analysis

Agenda

• Clinical IR: A Journey• Revenue opportunity• MGH case study• Conclusions

Conclusions

• The field of IR has largely successfully transitioned to a “clinical” specialty

• Yet the true financial impact on IR practices is still in its infancy

• There are challenges– Close relationship with finance/billing– Thoughtful deployment of IR FTE resources– Downstream imaging revenue analysis needs to be

incorporated– Significant cultural shift, requires commitment of all team

members

Acknowledgements

• Jim Brink, MD• Peter Mueller, MD• Alex Misono, MD• Kevin Pian, MBA• Adam Harbaugh• Rob Sheridan

Thank you

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