FAQs on Radiology Billing services in RCM

Not all radiologists are experts in radiology billing services. At the same time, it’s even more essential to notice the huge impact that billing staff has on revenue profits, which can’t be ignored. This article states the basic formulas and benchmarks radiologists need to gauge the performance of their billing operation. It’s not a very comprehensive study of the various facets of medical billing, and moreover not intended to replace expert guidance.

The concept here will enable radiology professionals in any practice environment to quickly understand key billing measurements and apply them in their proper context.

Practices also vary widely depending on their approach towards radiology billing services. Some groups have outsourced their radiology billing services to third parties while the others have a billing manager to take care of radiology billing.

We will look at few issues that relates specifically to billing staff who are practice employees and those who work for radiology billing services in a billing company.

What are the key financial indicators of radiology billing services?

  • The Radiology Business Management Association publishes a survey every year related to the key financial indicators of radiology billing.
  • These indicators are discussed according to their definitions. The key indicators are:
  1. Gross Collection Percentage
  2. Net Collection Percentage (or Adjusted Collection Percentage)
  3. Average Days in Accounts Receivable
  4. Bad Debt Recovered as a Percentage of Collection Write-Offs

What is Gross Collection Percentage?

  • The Gross Collection Percentage (GCP) is the gross payments divided by gross charges before refunds and other payments. In other words, it is the amount of money the radiology practice receives in payments compared to what it charges. Gross Charges = Gross Collection Percentage
  • Gross collection percentage isn’t a valuable measurement as few of the others, unless bench marked internally.
  • For example, if a radiology practice is doing about $10 million in gross charges with gross payments of $3.5 million, their Gross Collection Percentage is 35%.
  • When the GCP is effective, it also measures staff effectiveness, if no changes occur in the fee schedule. When the fee schedule is steady, the GCP neutralizes the effects of contracts and write-offs on radiology billing effectiveness.
  • The GCP also helps to determine the amount of money that can be collected from radiology professional’s accounts receivable.

What is Net Collection Percentage?

  • Net Collection Percentage refers to the adjusted collection percentage that is calculated by first taking gross charges and subtracting contractual adjustments.
  • Contractual adjustment is the amount the practice has agreed to accept from the insurance companies.
  • For instance, the practice charges $100 for a certain procedure, but Medicare allows only $40. The contractual adjustment then is $60. The remainder is net charges.


  1. Gross charges – contractual adjustments = net charges
  2. Gross payments – (refunds + returned checks) = net payments
  3. Net payments / Net charges = net collection percentage
  • Net chargers are the best indicators of the billing staff performance, because the dollar amount reflects the possibility of the collections. Therefore, they are considered as the standards of their job performance.
  • There are some problems that arise with the NCP calculation as an indicator when it’s reviewed month to month.
  • Because of the payments that lag a few months behind the charges, the NCP can be inflated or deflated depending on the rising and falling charges.

What are the Days charges in account receivable?

  • The Days Charges in Accounts Receivable actually indicates how well the accounts receivables are being managed.
  • Moreover, it’s also calculated by taking the current accounts receivable balance and dividing it by the average daily gross charges.
  • Then the result is multiplied by number of days for the given period of time. Total receivables / average daily gross charges = days charges in AR.
  • In the U.S., the average number of days in accounts receivable is around 40.6 for professional component billing. Simultaneously, the lower the number of days in AR, the better off the practice will be because they are getting their revenue payments

What is Cost to bill?

  • One of the main questions radiology professionals is- what is a reasonable billing expense? According to the RBMA, professional component billing clusters between 7.5% and 11.2%. Global billing clusters around 3.2% to 5.9%.
  • The key factor here is value- one percentage point in fee equals and one percentage point in net collections percentage.
  • Radiology professionals must be alert to not sacrifice any quality collections for a low fee. If you save half a percent on fee, but lose several points in net collections, you are actually losing revenue.
  • However, a higher fee does not always mean better collections. It is not unusual for practices to both lower their cost of collections and improve their NCP.

What are the factors affecting collections in radiology billing services?

  • How can the radiology professional determine the average of the practice? The averages can also be deceiving. There are several factors that affect collections outside of what the billing staff does, but none more than patient mix.
  • If a practice has a lot of self-pay patients, then this will have a lot of influence on According to the US Census Bureau, the percentage of Americans without health insurance was 15.4%, a decade ago.
  • One of the significant things that has been changing in the marketplace is the rise of high deductible health plans, which is essentially turning “insured” patients into self-pay patients.
  • When a practice depends on a lot of commercial insurance, it could obviously affect the number of days in AR. The other things that can affect collections are:

    The quality of data being received from the hospital:

    Poor data takes time and human effort to correct. When a hospital provides the billing staff with accurate data in timely limits, collections improve significantly. If the hospital provides the information electronically, it eliminates errors that occur from repetitions, and helps reduce processing errors.

    Effectiveness of billing system:

    If the healthcare billing software system is used to do most things automatically, it frees people to spend time collecting the difficult money, such as self-pay. In many situations, the billing staff spends an inordinate amount of time doing mundane and low-impact jobs simply because the billing software is poorly designed.

    Electronic filing:

    Filing claims electronically can reduce the amount of time it takes to process a claim and receive payment from the insurance companies. In doing so, it lowers the AR days.

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