The Medford Radiological Group was facing rising costs and inefficiencies due to an outdated billing system. They considered upgrading their system, but were concerned about transition costs and the ability of their staff to adapt. Instead, they decided to outsource billing to McKesson. This reduced annual costs by over $1.3 million while improving coding, compliance and average charges. McKesson established electronic interfaces and on-site support, addressing challenges and providing additional benefits beyond what was expected.

1. Case Study
The Medford Radiological Group, PC
Billing Shift to McKesson Boosts Performance,
At a Glance
Organization
Reduces Costs, Improves Coding and Compliance
The Medford Radiological Group, The Medford Radiological Group, would be expensive; the costs of
PC, Medford, Ore. PC, Medford, Ore., is a large, some systems approached $500,000.
– Serving four hospitals 20-physician group providing And even with the new platform
and three imaging centers imaging services to four hospitals in place, there was no guarantee
– 20 full-time physicians and three imaging centers in billing personnel could quickly and
– 267,287 annual procedures southern Oregon. The group effectively adapt to the technology,
handles about 267,000 procedures says Roseanne McLaren, CEO of
annually. The Medford Radiological Group.
Solution Spotlight
– McKesson Revenue In 2008, Medford was preparing “Our concern was that we would
Management Solutions to upgrade its antiquated practice invest all this money, yet we still
– McKesson Practice Consulting management platform. Yet major didn’t know if the staff could make
SolutionsTM concerns existed about how the transition from DOS to
quickly the group’s billing staff Windows,” McLaren says. “So
could adapt to a new system. we assumed there would be a
Critical Issues Ultimately, Medford decided significant falloff in collections for
– Antiquated billing platform outsourcing its billing operations a period of time. In addition, the
– Coding concerns to McKesson made more sense – new platform would do nothing to
from an economic and business address concerns we had about the
– Excessive billing overhead operations standpoint – than quality of our coding.”
investing in costly new equipment
Results and software. Answers
– Billing costs reduced by more McKesson was asked to submit a
than 60% Challenges proposal for practice management,
– Annual savings of $1.3 million For almost 20 years, The Medford but instead suggested outsourced
Radiological Group had operated billing. The McKesson sales director
– Improved coding and a DOS-based practice management provided “a very impressive
compliance system. One problem with the overview of what its outsourced
– Average charge per procedure paper-intensive application was its billing service could do,” McLaren
increased by 24% inefficiency. The group was forced says. The Medford management
to constantly add billing personnel team also traveled to McKesson’s
to keep pace with practice volume radiology billing center in Fresno,
growth, and the billing staff had Calif., to learn more about the
increased to more than 20 people company’s capabilities.
by 2008.
“McKesson walked us through
To solve the problem, Medford how the process worked and we
solicited request-for-proposals appreciated the sophistication of
(RFP) for a replacement system. the operation,” McLaren says.
But investing in a new practice “It was also a real plus for us they
management software application were located on the West Coast.”

2. Case Study
“If I were to grade McKesson, The Medford Radiological Group Since McKesson took over billing,
looked at two other outsourced the group’s average charge per
I would have to give them an billing vendors before ultimately procedure has climbed more than
A-plus. It’s been a very good deciding on McKesson. 24%. The gain reflects improved
coding and documentation, as well
experience … We knew With McKesson taking charge of as fee increases recommended by
the group’s billing operation, one McKesson. In addition, eliminating
what we wanted from this of the most pressing challenges was the internal billing department
relationship. What we didn’t developing an orderly process for produced annual savings of about
downsizing the legacy billing $1.3 million.
have any idea about were all department. “It was difficult,
because we needed some of these Overall, billing costs have tumbled
the additional benefits that people during the transition,” by more than 60% since McKesson
would accrue from working McLaren says. “Fortunately, took over. Part of those savings
McKesson was able to assist us in includes dramatic reductions in
with McKesson. It’s been an structuring severance agreements healthcare premium expense due
and providing other support.” to a healthier, smaller workforce,
extremely positive experience McLaren says. Reporting and
for the group.” Results compliance also have been
McKesson established electronic improved significantly, she says,
interfaces with Medford’s hospital and with the elimination of the
partners and also assigned a billing department, human resource
Roseanne McLaren management has been greatly
permanent liaison to work on-site to
CEO address any questions or challenges. simplified.
According to McLaren, one of the
Medford Radiological Group most important benefits produced “If I were to grade McKesson,
by the shift to McKesson has been I would have to give them an
an improvement in coding. A-plus,” McLaren says. “It’s been a
very good experience. We had a
“Their coders are all certified, and difficult time with the transition
as a result, we’ve seen a major from a people standpoint, but
improvement in the coding as McKesson was super throughout.
well as the documentation by We knew what we wanted from
physicians,” she says. “Coding had this relationship. What we didn’t
always been a concern for us, but have any idea about were all the
now we’re confident that even with additional benefits that would
our most complex cases, such as accrue from working with
interventional radiology, we are McKesson. It’s been an extremely
documenting and coding correctly.” positive experience for the group.”
McKesson
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