MRI Profitability

Increased Profitability for your MRI Imaging Center!

Services Provided

IN-DEPTH BUSINESS ANALYSIS & ACTION PLAN IMPLEMENTATION

If you have asked yourself, “Why isn’t my MRI Imaging Center as profitable as I had expected, and what can I do about it,”  you are certainly not alone.

Much can happen that you did not anticipate, resulting in an MRI Imaging Center not performing at the expected level. Let us work to correct your center's decreased performance.

IN-DEPTH BUSINESS ANALYSIS

Time is of the essence in affecting an MRI Imaging Center turnaround. Let us demonstrate through our quick but thorough In-Depth Business Analysis, which leads to the recommendation of highly individualized strategies in the Action Plan Implementation, how we can work with you to lift your underperforming MRI Imaging Center to strong, sustainable profitability.

Hope is not a strategy for Change. We have witnessed high-quality MRI Imaging Centers that have burned through their remaining funds, closed their doors, and sold off assets, all while spending valuable time trying to figure out what they should do to revitalize their underperforming Centers.

Don’t let that be your MRI Imaging Center!

We perform a highly individualized, in-depth business analysis based on your MRI Imaging Center Metrics and implement proven strategies that can provide the foundation for improved and sustained performance for your MRI Imaging Center.

Before I became CEO and Principal Consultant of MRI Consulting Group, I was the CEO of a successful Orthopedic and Spine Center for many years.

Starting in 2006, I worked to plan and implement many very high-quality MRI Imaging Center Projects. Since then, I have facilitated and placed into service MRI Imaging Centers for Orthopedic and Spine Surgeons, Neurosurgeons, Physiatrists, Neurologists, General Surgeons, and several other practice groups.

I know the MRI Imaging Center business, all that needs to go right, and the numerous areas where things can go wrong.

Here is an important personal note on MRI Imaging Profitability......... In one of my early positions as the CEO of an Orthopedic and Spine Medical Group, I worked with the surgeons and physicians of our musculoskeletal group, and we built out an Orthopedic and Spine Center and installed a brand new 1.5 Tesla MRI Magnet in our Imaging Center space. I remember fondly, and with a significant amount of satisfaction, following the end of the first year of operation, reviewing the financials for the physician group with our CPA and discussing the distribution of $1,000,000 dollars in profit from the MRI Imaging Center among the five physician owners! Profitability increased every year after that, and when we added more physicians, the new physician partnership buy-in and entry into the group not only brought with it more monthly MRI scan revenue and additional new physician sharing of MRI expense costs but the return of additional monies to the existing physicians, related to the buy-in sale of shares in the group as the result of the addition of the new physician. And, of course, we could show any potential new physician that becoming a partner in a medical group with a profitable MRI was a very good idea and provided all physician partners with strong additional annual ancillary revenue. Feel good about profitability from your MRI Imaging Center. If done right, it is more than worth the expenditure of money and the work necessary to make it happen. Done well, it is the gift that keeps on giving.......

What if your previously profitable MRI Imaging center has run into problems?

Let us discuss what we often see.

Competitive landscapes can change, and hospitals can set new rules that may impact physician referrals. They often work to restrict the use of MRIs owned by physician groups. There is also continual downward pressure on reimbursement from managed care insurers in several forms.

Perhaps aging equipment has become prone to excessive downtime and has become an issue, or referring physicians are dissatisfied with scan quality, and competing MRI centers are now a problem. Sometimes, a lack of patient satisfaction with the facility or the MRI Scanning experience can diminish referrals to your MRI Imaging Center. Referring Internal group physician group members and/or referring physician assistants may have left your group since your MRI services were implemented, resulting in decreased MRI scan referrals. At times, we find internal management billing and collections issues. There are many ways that profitability can begin to slip.

Due to reporting practices, a gradual decrease in scans often goes unnoticed for quite some time.

The Financial Impact of Decreased MRI scans

If you assumed that you would be performing 180 MRI scans per month in your MRI Imaging Center and identify that you are underperforming by 20% or 36 fewer MRI scans per month, how bad can that be? Let us say you are, for example,  36 MRI scans per month short, and you had expected to earn an average of $650 per scan; you are now off your revenue projections to the tune of $23,400 per month, or $280,800 per year. Not a small sum, and maybe that sum is a large part of the difference between projected annual profitability and the non-profitability that you are experiencing at present. Diminished MRI scan volume is often a significant factor seen in the MRI Imaging Center, which experiences decreased performance.

Our IN-DEPTH BUSINESS ANALYSIS can determine the origins, possible reasons for, and impact of your decreased MRI scan volume in your MRI Imaging Center. Our ACTION PLAN will offer proven strategies and solutions that can be implemented to reverse this problem.

The Financial Impact of Decreased Revenue per MRI Scan

Perhaps your scan volume numbers align with projections, but your average per scan revenue amount is falling short.

It is not uncommon to see how often slippage in total profitability can be traced back to the failure to collect patient co-payments before service or failure to get necessary test pre-authorizations from insurers, resulting in denial of payments, collectively and ultimately resulting in significant erosion in revenue and full reimbursement for your MRI Imaging Center scans. You will be quite surprised when we show you all the avenues in which your revenue slippage can, or did, occur.

It may also be that you are not being paid per your managed care reimbursement agreements. We find this to be an issue quite often. There are several ways to address this head-on, and we frequently succeed in increasing reimbursement. We also work to implement strategies to recover the monies you should have received. Time is of the essence in recovering monies you should have received.

Payment for your MRI Imaging Center Scans can be subject to different tiers of reimbursement (MRI only, MRI with Contrast, MRI with and without Contrast) and is also subject to the various scan CPT codes, all individualized to the varied payers in a geographic area where you are performing your MRI scans, and individualized to your specific practice contract with each insurer. Medicare, Medicaid, and other government payers are often near the lowest end of the reimbursement scale. Each of the managed care and commercial insurance plans will offer differing amounts of reimbursement and will vary in reimbursement amounts and contract terms, sometimes quite dramatically. This provides a continual environment for diminished and eroded MRI scan reimbursement amounts. This blended set of payment amounts and clinical procedure mix influences the computation of your projected annual average reimbursement amounts for your MRI scans. Stewardship and internal practice audit of the reimbursement amounts you receive from all payers for the MRI Scans you perform in your MRI Imaging Center must be thorough, ongoing, and constant.

Whatever the cause—and there are many more reasons we have not discussed—the impact of insurer/payer underpayment on your MRI Imaging Center's bottom line is undeniable.

Suppose you projected to perform 180 MRI scans per month (2,160 MRI scans per year), with an average projected reimbursement rate of $700 per scan. Still, your average reimbursement after center opening is, in reality, $600 per scan. In that case, you are earning $216,000 per year less than you had projected and may have yet to analyze the individual and collective reasons why that might be. You also might not know what your remedies and action plan to turn that around might look like.

We have found this problem of Decreased Revenue per MRI Scan to be quite common. We know the necessary process of analysis to home in on precisely what you are experiencing and why. We know the various action plan details and the remedies that need to be implemented to turn this in the right direction! In utilizing our IN-DEPTH BUSINESS ANALYSIS, we will find the information necessary to create and IMPLEMENT AN ACTION PLAN that can provide solid solutions and significant increases in profitability when the ACTION PLAN is fully Implemented in your Imaging Center. But do not delay; this can be a catastrophic problem that needs to be addressed quickly.

The Impact of MRI Imaging Center Expenses on Profitability

In a recent review of an MRI Imaging Center Financial and Business Viability Analysis, I noted that, on average, 47% of annual center revenue was necessary to meet Imaging Center expenses each year. As such, the impact of increasing expenses on profitability must be understood and responded to quickly when required.

Expenses can gradually increase without anyone taking much notice until the situation becomes obvious and profitability is threatened. Unrestrained expense growth in your MRI imaging center can severely impact profitability in a handful of larger expense areas.

When conducting a Financial and Business Viability Analysis for an MRI Imaging Center, the highest expense is the annual MRI lease amount. The second highest expense is the annual cost of MRI professional scan interpretations, followed by the cost of MRI Technologists' Salary, Wages, and Benefits as the third highest expense. If we also consider the cost of a single receptionist and the cost of an Administrator/Manager, employee costs emerge as the single largest expense category on the ledger for the MRI Imaging Center.

The Impact of Increased Employee Payroll Expenses

Payroll expense growth can be a common contributing factor in the decreased financial performance of an MRI Imaging Center. Overstaffing is expensive and can be easy to fall into, and we often see it. I mention this because I sometimes note that MRI Imaging Centers are quick to add employees when that may not be necessary. Through experience, I have seen MRI Imaging entities with more full-time MRI technologists hired than is essential. Your MRI technologist staffing levels should relate directly to actual scan volume, scan types that you are performing, and your specific MRI Magnet scan throughput speed. In addition, a less expensive front office person can take a patient to a dressing locker room area and return them there after a scan, which is far less costly than an MRI Technologist performing that same task.

When your MRI Technologist requests another technician, which may or may not be needed, it is your call to make after a solid analysis has been completed. Of course, you also do not want to incur expensive overtime pay amounts. Our review of MRI scan throughput and available appointment hours can usually uncover many areas of efficiency to be gained and determine efficient staffing coverage. We perform a very solid and unique analysis of MRI scanning time to Staffing Hour Equivalent, which is an analysis based on your specific MRI unit scan throughput times and your specific center patient clinical mix (complexity of scans), to reveal the need for additional staff members in the MRI Imaging Center, or not. We can tell you the number of MRI staffing hours that are needed, and number of employees that are needed per year, to meet your patient MRI Imaging Center scanning needs.

Working with your center and staff members, and in the review of the information provided through our IN-DEPTH BUSINESS ANALYSIS, we can IMPLEMENT AN ACTION PLAN that is individualized to your MRI Imaging Center and can work to ensure that your profitability can be restored and actually significantly improved upon, and not entrapped in excessive payroll costs.

Bringing your MRI Imaging Center to Improved Profitability

If your MRI Imaging Center procedure revenue and net income after expenses are lower than you were planning for or when the negative deviation from your financial performance goals is apparent, you will want to intervene sooner rather than later.

MRI Imaging Centers may underperform, muddle along for some time, and finally fail when there is no need, possibly without the physician principals knowing exactly why it went in that direction.

Candidly, the financial turnaround at the MRI Imaging Center can take some time, so it is critical to take decisive corrective action while it can still make a difference.

We can work with you and your partners to conduct an IN-DEPTH BUSINESS ANALYSIS, which is a very comprehensive analysis and financial review. Once that analysis has occurred, we are able to put a highly individualized and highly effective ACTION PLAN in place. Then, we closely track the intended improvement upwards both financially and through a number of operational metrics for your specific Imaging Center.

It is gratifying for everyone to put an u-performing MRI Imaging center back on the path to improved, sustainable financial performance.

Choosing to live with your MRI imaging center's diminished financial performance is not an attractive option, nor is it sustainable in light of the significant investments that will have been made in developing your MRI Imaging Center Project. MRI Imaging Center financial underperformance does not need to happen at all; it can be remedied!

Call us for a confidential but candid discussion so we can work together to make your MRI Imaging Center the valuable ancillary revenue practice asset you need!

MRI Imaging Center Profitability

The big three: 1. Number of scans, 2. Reimbursement per scan, 3. Cost  (expenses) to perform those scans

How “New” MRI Imaging Centers may underperform

When starting a new MRI Imaging Center, it can take some time to see your procedure revenue and net revenue after expenses fall in line with your performance projections.

Normally, you must anticipate subsidizing operations and all expenses in a new MRI Imaging Center's first five months of business!

It simply takes time before insurance payments are released by your insurers in sufficient amounts to “catch you up financially" and to begin to show you what your normal revenue stream will look like.

However, if, for any reason, you are still burning through your MRI Imaging Center start-up funds after this initial five-month center start-up period without adequate new revenue offset or burning through operational bank funds without corresponding offset in scan revenue, then you have problems to uncover and address.

Performance 7 Months Post MRI Imaging Center Opening

If it has been seven months or longer since your MRI Imaging Center started, and the physician owners are still subsidizing the MRI operations without adequate corresponding new revenue offset each month, you need consulting assistance ASAP, and you will want to respond accordingly!

However, this came about, and there can be a considerable number of reasons, you have an issue that needs to be quickly and professionally addressed before it becomes an irreversible problem.

There should be no need to financially subsidize your MRI Imaging Center operations and expenses without adequate offset in patient MRI scan payments. If you are doing so seven months after opening, then you already know this is not sustainable or acceptable.

After start up and “Go Live," your MRI Imaging Center should earn patient imaging revenue that exceeds all of your expenses in year one, and provides reasonable profit that is replicable and sustainable, and grows every year thereafter. If this is not happening, something is amiss and must be identified immediately.

If seven to nine months after the MRI Imaging Center starts up, you are not seeing the procedure revenue numbers you need to see, and after paying expenses, you are not seeing the net revenue numbers that you had projected for your MRI Project at this point in time, you do not want to delay. Professional review and action plan implementation are called for.

You will have an MRI that is new to your regional managed care insurers and, ideally, approved by them. Hopefully, most of your insurers in your area have already agreed to pay for your MRI services. Delays in insurer approval of your Magnet use are common and have to be anticipated and addressed well before “Go Live” and scanning of MRI patients. We have a great deal of experience in this area.

It may happen that not all of your insurance agreements will be signed and in place when you first open for business. That can hurt your anticipated cash flow. You will need to closely review and monitor your insurance payment trends, as it is possible that you might not be paid all of the monies owed to you by your managed care insurers in the first six months of business.

Expect a delay of several months before receiving your first payments from Medicare, Medicaid, and other governmental payers. Your communications and request for contract approval for payment from these governmental payers, subject to final MRI magnet accreditation, must start some months before going live at your center. If that does not occur, payment delays will occur, and there is work to be done to move your payments along. We have worked with our clients, and had these conversations with a number of payers, and stayed close to insurers to obtain payment for our clients.

When you start an MRI Imaging Center and submit claims to your insurers, if you have difficulty sorting out a delay in payment, your claim will still “Age Out” with the insurer and can be denied for payment due to failure to meet “timely filing” periods while you are going back and forth with the insurer.

If you have yet to finalize your MRI Center's accreditation, you should be aware that many insurers have a clause in their agreements stipulating that they will not pay you for any scans that you have performed until you have provided proof of your MRI unit's accreditation. So, move strongly, efficiently, and early to meet MRI accreditation submission requirements and keep good records of communications.

Nevertheless, you should see an increased amount of money in receipts in the second half of your first year, which reflects the amount of funds you should have received in the first six months of the year, plus the money to be received for scans in the second half of the year as well. Review your patient payment accounts, and make sure you have received all the monies due your MRI Imaging Center for each and every scan you have performed each year.

Importantly, you will want to verify that you are being paid according to each of your managed care insurance agreements. We have reviewed both newer imaging centers and centers that have several years in business, and we continue to find that across several managed care contracts, the provider of MRI Imaging Center is often not being paid according to the contract agreement.  As necessary, make sure you know the amount that you are supposed to be paid for any and all CPT procedure codes under all of your insurer agreements. Make sure you have archived your MRI insurer agreements (each of them) or plan addendum for your agreements, both electric and paper copies if you are an existing medical group. After the fact, it may be challenging to get a copy of your managed care payer agreement or addendum to an existing contract that you had signed or agreed to from your insurer group.

Make sure you are collecting patient self-pay and co-payment amounts. These patient co-payment amounts are often not always collected, resulting in significant cumulative shortfalls in your MRI Imaging Center compensation.

Almost without exception, whatever the problems are, they can be remedied if addressed in time. Once the financial loss is too great, and the practice or physicians have been under too much stress, it is far more challenging to set things right. Sadly, financial losses and payment shortfalls sustained through excessive waiting can seldom be fully recouped.

ACTION PLAN IMPLEMENTATION

In addition to what you will have noted above, our services for underperforming MRI Centers can include, but are not limited to; in-depth business analysis, analysis of all center metrics, managed care contract review, hands-on renegotiation of managed care contracts, recruitment of staff, extensive training and mentorship of staff members, creation of facility performance dashboards, analysis of facility accounting documents, and analysis and shopping for alternate loan agreements. We can implement the renegotiation of building and equipment lease agreements, medical group merger options, physician group partner search, and assistance with group block leasing agreements. We provide planning and implementation of full facility turnaround action plans, as well as other fully customized assistance based on your individual circumstances.

The need to think outside the box has given rise to many solutions, small and large, from negotiating with local hospitals to merging competitive practices to forming new legal entities that can open the door to new referral sources.

Please reach out to discuss your concerns and needs. We will work with you to get you on track and develop a plan to keep you there……. Exchange “Hope” for Real Analysis and Action Plan Implementation!!

Call or e-mail us to discuss initiating an IN-DEPTH BUSINESS ANALYSIS and the initiation and ACTION PLAN IMPLEMENTATION.

Bringing your MRI Imaging Center to Improved Profitability!

*In-Depth Business Analysis     *Action Plan Implementation