In a recent article, we wrote about the case for maintaining an independent radiology practice in the face of industry consolidation.
A radiology practice that has served the community with high-quality services over many years naturally has developed relationships that can be drawn upon to strengthen its position and avoid what might otherwise seem to be the imperative to become absorbed by some larger entity. Some of those existing relationships include the hospital served by the group, its referring physician community, and neighboring radiology practices.
The hospital
The local radiology practice can be responsive to its hospital system's needs, whereas a large investor-owned radiology service might not be. This point should be communicated to the hospital management as often as possible, not only in words but also in the actions of the radiology practice. When the physicians are working together with the hospital to solve problems, they will become more valuable as members of the community and not seen as "hired hands" who interpret images. In return, the physicians can solicit support for some of their own needs.
Rebecca Farrington from Healthcare Administrative Partners.Insurance payors are always interested in a one-stop approach, and they are willing to negotiate with hospitals and physicians who will bundle payments for certain services into a single claim and unified fee structure. As a larger entity, the hospital gets more attention from payors, and when the radiology group can leverage its relationship with the hospital into a better overall fee structure, it will benefit along with the hospital.
Other avenues to explore are the hospital's physician-hospital organization (PHO), independent practice association (IPA), and accountable care organization (ACO). These often provide advantageous contracts and reimbursement rates that are higher than an individual practice can obtain on its own.
Hospitals are interested in forming integrated systems that make the care of their patients more seamless. Under the right circumstances, the hospital might be interested in joining with the radiology group in the purchase and installation of a unified RIS and/or PACS that would tie together the radiology services provided in the hospital with those in an imaging center. Sharing the cost of such a system can be a great benefit to a radiology group that is trying to cut its costs.
The joint RIS/PACS can also be the focus of an integrated network of physicians within the hospital system. If a centralized electronic medical record (EMR) component can be added to the RIS/PACS, it becomes the hub for bonding the hospital's community of physicians and helps to ensure that referrals are kept within the hospital's system.
Opening a new imaging center in a strategic location can be a benefit to both the hospital and the radiology group. Rather than undertaking such a project individually, which could set up a competitive situation, developing the imaging center as a joint venture partnership is a win-win. By working together with the hospital, the practice builds on its relationship at the same time as it enjoys the additional revenue generated by the facility.
Referring physicians
The physicians within a community become familiar with the quality of each other's services, and they usually prefer to send patients to those physicians when a referral is needed. The radiology group should cultivate those collegial relationships through high-quality work, prompt reporting of results with direct feedback to the physician when it is warranted, and easy accessibility for the referring physicians to both discuss cases with the radiologist and to get their patients scheduled as easily as possible.
Working with the hospital to establish an integrated RIS/PACS/EMR would be perfect, but it is not always feasible. The group can make judicious use of its phone system to be sure calls are answered promptly and appointments scheduled efficiently.
Whether at the imaging center or in the hospital, a system for referring physicians to directly contact the appropriate radiologist is essential. A central, dedicated phone number can be established for this purpose, even if it is a virtual number from a service such as Line2. The autoattendant menu can list the various areas of importance to the referring physician, such as "MRI," "Ultrasound," "Interventional," etc., or it could be more specific, such as "Neuro" or "Body." This could also be accomplished through a website where the listing is set up to dial the extension when accessed on a smartphone.
While many practices view the pending appropriate use criteria/clinical decision-support (AUC/CDS)1 mandate as a headache, others are taking advantage of it as a marketing opportunity. Working together with ordering physicians to explain the rules and making it easy for them to order on your group's platform will further strengthen your relationship and ensure that the referrals to your group will continue.
Neighboring radiology practices
Over the years, many practices have considered merging with a complementary practice in their area to form a larger group that can enjoy the benefits of shared overhead and perhaps obtain more favorable reimbursement. While these plans are initially met with great enthusiasm, there is always a reluctance among the physicians to lose their own culture and control over the way they practice, and so in many cases the merger is never completed.
One solution short of a full merger is to enter into a joint venture with another practice in ways that can benefit both, from overhead and administrative functions to the development of an imaging center that serves the area of both practices.
Saving money in overhead is as good as generating additional revenue. A jointly owned management services organization (MSO) is one way to share overhead while the practices maintain their operational autonomy and culture. The MSO can handle such things as billing and collections, IT support, and compliance with the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) or the Merit-Based Incentive Payment System (MIPS).
Beyond these administrative functions, the MSO could implement a cross-coverage platform for radiologists to provide subspecialty needs and after-hours availability. A more ambitious undertaking would be to pool all of the practices' employees under a single employer that can negotiate more favorable health insurance and other benefits plans for the larger combined group, as well as to centralize the increasingly complex human resources responsibilities of the practices.
Joint venturing in this manner does not have to be limited to two practices, or even to practices in the same geographic area. There are many examples of such organizations in radiology that span wide areas of the country and include many practices.
Conclusion
To survive, radiology practices need to increase their revenue and/or streamline their operations to reduce overhead costs. However, the decision to merge a practice or to sell it to a large entity is not palatable to many physicians who enjoy their autonomy and independence. Building upon existing relationships and leveraging any opportunities they present is a first step toward maintaining a group's independence.
Notes
- The Medicare rule beginning in 2020 will require ordering physicians to access AUC using a qualified CDS mechanism when ordering certain imaging such as MRI, CT, and certain nuclear medicine exams. For more information, see our recent article on this topic.
Rebecca Farrington serves as the chief revenue officer for Healthcare Administrative Partners. She has more than 20 years of experience in healthcare sales and management roles, focusing on hospital-based and physician revenue cycle management.
The comments and observations expressed are those of the author and do not necessarily reflect the opinions of AuntMinnie.com.
