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Relationships Gone Wild

by Curtis Kauffman-Pickelle

All across the country, in markets large and small, a drama once considered unimaginable is unfolding in ways that are shaking the confidence of many radiology practitioners and creating tension within the ranks of hospital administrators. The issue relates to the unilateral breaking apart of longstanding exclusive contracts with radiology groups, contracts set in motion by group founders, many years prior, that were seemingly bulletproof and tantamount to annuities.

In Orlando, Florida; Toledo, Ohio; San Antonio, Texas; Roanoke, Virginia; and, most recently, Sacramento, California, radiology–hospital relationships that have been part of the fabric of these communities’ respective institutions for decades have melted down, seemingly overnight. Some of these changes have had no shortage of acrimony and bitterness, and this has damaged the entire local health-care community. Friendships have been poisoned; careers, ruined.

What is going on here?

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Radiology Practices Fight Declining Technical Revenues

by Julie Ritzer Ross

Declining technical revenues have become a way of life for imaging practices, but that doesn’t mean that they are taking the situation lying down: “Having a proactive stance and an ongoing application of strategies to compensate for decreases, head on, is a must for facilities with a will to survive,” according to Michael Bohl, executive director, Radiology Group PC, SC, Davenport, Iowa.

Much of the precipitous drop of recent years can be traced to the DRA of 2005. A study¹ published in the September 2009 issue of the Journal of the American College of Radiology: JACR cites a Government Accountability Office report indicating that in 2007—the first year that the DRA took effect—Medicare Part B payments for imaging dropped to $12.1 billion, 12.7% less than the $13.8 billion in payments reported in 2006.

The DRA cuts, however, are only the tip of the iceberg. Additional radiology payment cuts instituted by CMS and slated for gradual implementation between 2010 and 2013 will “do further damage,” Bohl says. He estimates (based on what he describes as a sophisticated model) an overall 28% reduction in Medicare revenues for large, multimodality imaging centers over the next three years. Revenues from dual-energy x-ray absorptiometry will drop by 43%; for CT, by 36%; for nuclear cardiology, by 36%; for MRI, by 33%; for general radiography, by 13%; for nuclear medicine, by 10%; and for ultrasound, by 6%, Bohl believes.

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Restructuring: The Way JVs Get Done

by George Wiley

After Congress passed the DRA, reducing Medicare reimbursements for imaging services, the radiology landscape has never been the same. This is especially true for joint ventures between radiology groups and hospitals to provide outpatient imaging, according to Richard Townley, MBA,  president and CEO of AGI Healthcare Group, a consultancy headquartered in San Ramon, California.

Prior to the DRA, hospitals and radiology groups often entered into joint ventures for the ownership of OICs simply to increase market share. This is not the case anymore, Townley says. These days, the market is saturated with providers, and the joint-venture incentives have changed.

“There has been a big post-DRA drop in building new OICs or annexes on the hospital campus,” Townley says. “Now, it’s more about restructuring existing centers. In 2005, we might have seen 10 new centers and one restructuring; now, it’s 10 restructurings to one new center.”
—Richard Townley, MBA, president and CEO
AGI Healthcare Group , San Ramon, California

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Leveraging IT for Better Service

by Cat Vasko

Don Trexler, CEO of Baton Rouge Radiology Group (BRRG) in Louisiana, wants his practice to be different from a typical imaging group. “We’re a full-service radiology firm,” he says. “The radiology market, in general, is becoming more and more price conscious. To be in a leadership position when it comes to contract negotiations, we have to make it about more than cost; it also has to be about service, while keeping our patient care and quality the top priorities.”

BRRG has certainly fulfilled that objective. The 25-radiologist group, which owns and operates two imaging centers, also provides subspecialty imaging services for 10 hospital clients via teleradiology, and it brings the functions of an “extensive billing and IT operation,” in Trexler’s words, to all of its clients. “We’re a management firm,” he says. “Not only do we bill and collect for our physicians, but we’ll provide IT services to our teleradiology hospitals, and marketing and pro formas for our rural hospitals. We’ll do equipment assessments and quality assurance (QA) for our facilities, peer-review work, ACR® accreditation services, and more.”

BRRG employs close to 100 FTEs to fulfill its service objectives. “We’ve developed expertise in all these areas in-house, so we can turn around and say, ‘We’ve already done this; we can support you,’” Trexler says. “The bigger hospitals are pushing us for the best of the best in service, so we’ve spent a lot of time developing QA programs and interventional programs, and doing equipment analysis for the higher-end hospitals. It’s one thing to be a good radiologist; it’s another to be a good radiology firm. BRRG is both.”

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New Templates for Recession-resistant Marketing

by Cat Vasko

Marketing radiology services can represent a significant challenge, particularly in an increasingly consumer-driven medical marketplace, where outreach to patients requires reconfiguring a familiar line of messaging. Nancy McNee Newell, vice president of marketing for Diagnostic Health Corp (DHC), Birmingham, Alabama, calls it the softer side of imaging. “You have to remember that we’re caring for people,” she says. “They could be dealing with something difficult. We have to keep the idea of care in every aspect of what we do.”

DHC, which consists of 31 freestanding imaging centers spread across 12 states and the District of Columbia, has a significant-enough task on its hands when it comes to referring-physician marketing. Factoring in patients, Newell says, requires a whole new level of innovation. “The economy has affected everyone in health care, which means we have to think outside the box,” she says. “We can’t do things the way we did them 15 years ago. We have to be creative in how we deliver our message.”

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Radiology Assistants: A User’s Guide

by Elaine Sanchez

From May 2007 to January 2008, an Atlanta, Georgia-based radiologist signed and submitted thousands of reports in his name, with one major caveat—he didn’t review a single one. Instead, he delegated the work to his radiology practitioner assistants (RPAs), who interpreted the exams and prepared the reports. In November 2009, the US Department of Justice caught on and indicted him under federal charges of wire fraud, mail fraud, health-care fraud, and obstruction of justice.

“There is virtually no potential for reimbursement for an RPA’s or radiologist assistant’s (RA’s) independent provision of professional interpretations of radiographs, even if he or she is working under the supervision of a physician in a hospital setting. Likewise, private payors, in most instances, are not reimbursing for RPAs’ or RAs’ independent provision of professional services, but should be consulted for billing guidance.”

—Lisa Brian, vice president of operations, West Division, Medical Management Professionals Inc, Atlanta, Georgia

Although this particular case is severe, Brian says that many practices simply fall prey to misinformation. “I believe there is a misconception out there that if a physician is employing an RA or RPA, he or she can bill for the RA’s or RPA’s interpretation of radiographs,” Brian says, “but you can’t.”

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