-
Fixed amount contracts
This is mostly venting but are any other groups working under capitated or fixed amount contracts?
Our group has a few different contracts with separate entities within a relatively small community and rural catchment area. One of the largest of these contracts has always been capitated/fixed amount. Its has become an increasing point of contention. Over the years, as wRVUs have crept up, $/wRVU has decreased. The $/wRVU has also decreased relative to our other locations (where we private bill for pro fees only) so it is more than just declining reimbursement.
Every contract negotiations starts with us asking to bill for our professional fee or something analogous, volume based, etc. This gets dismissed as being not feasible, confusing to patients, you are getting paid a lot already, etc. We relinquish and they throw us a negligible increase in the face of rising volume, thus, $/wRVU continues to decrease. Since our most recently signed contract (2 years left on it), new changes have happened which will further increase volume (potentially drastically) and likely siphon off volume from our other locations where we collect.
We have let them know that the contract needs renegotiated and capitation ended – in order for us to continue to provide the service their physicians and patients expect. The admin response has been that you make too much money, we just bring these patients to you and you guys dont have to do anything, and do you want us to hire our own radiologists? I think their points are irrelevant and they dont understand they wont be able to just grab 4-5 onsite radiologists for cheaper than what we are asking. We are careening towards a potential separation and pain for both parties because they are ignorant, stubborn, and will cut off their nose to spite their face. At this point we are inclined to let them. -
13 Replies
-
You have to do what most radiologists wont- give them an ultimatum and be willing to walk if they dont play ball. If youre not willing to that in this market, you never will. Its not like you cant just fall into a telerad gig with ease. And who is the hospital going to hire on short notice? I wouldnt telegraph your move and give them time to find replacements. Check your minumum notice as stipulated by the contract, and say you either give us what we want or we all leave.
Also need to see how much cowardice exists in the group. You may have rads willing to become hospital employed which would blow up your plan. If youre united or majority united, then my guess is you will succeed. Not even remotely possible that they can replace you and get the same service they are used to.
-
Of course you run the risk that they will cut off their nose to spite their face. But you have to assume they are bluffing. Again, like I said, its not like you cant secure a telerad gig somewhere else. That would also keep you nimble if hospital comes crawling back in the even they go nuclear and make the wrong decision. Gotta have the guts to do it though. Thats the only obstacle I think youre facing and you know it
-
As I am learning, sometimes admins desire separation and employment for reasons other than the underlying economics. Noses regrow in their world, albeit slowly and sometimes deformed or never quite right. This is particularly the case in academic and public health systems.
Aggressive posturing begets aggressive responses, but if the business fundamentals are not there, then I agree with SartoriousBIG, be ready to walk. No one is lacking in opportunities in this market. Just realize that power politics in health systems mean more than money to many an administration. Sad because ending up with employees that are improperly motivated often results in service declines and recruiting headaches that private practices laser focused on radiology can better respond to.
-
-
-
Quote from goldenbell12
This is mostly venting but are any other groups working under capitated or fixed amount contracts?
Our group has a few different contracts with separate entities within a relatively small community and rural catchment area. One of the largest of these contracts has always been capitated/fixed amount. Its has become an increasing point of contention. Over the years, as wRVUs have crept up, $/wRVU has decreased. The $/wRVU has also decreased relative to our other locations (where we private bill for pro fees only) so it is more than just declining reimbursement.
Every contract negotiations starts with us asking to bill for our professional fee or something analogous, volume based, etc. This gets dismissed as being not feasible, confusing to patients, you are getting paid a lot already, etc. We relinquish and they throw us a negligible increase in the face of rising volume, thus, $/wRVU continues to decrease. Since our most recently signed contract (2 years left on it), new changes have happened which will further increase volume (potentially drastically) and likely siphon off volume from our other locations where we collect.
We have let them know that the contract needs renegotiated and capitation ended – in order for us to continue to provide the service their physicians and patients expect. The admin response has been that you make too much money, we just bring these patients to you and you guys dont have to do anything, and do you want us to hire our own radiologists? I think their points are irrelevant and they dont understand they wont be able to just grab 4-5 onsite radiologists for cheaper than what we are asking. We are careening towards a potential separation and pain for both parties because they are ignorant, stubborn, and will cut off their nose to spite their face. At this point we are inclined to let them.
What are you collecting per wRVU and what are they paying per wrvu. Capitated contact for rural hospital coverage is unusual. Never heard of it before this.
-
I am well aware of the ignorance of hospital systems when it comes to negotiations with radiology. They will pay someone else or teleradiology 5 times as much just so they don’t lose the negotiations with your group. It’s in their heads that you guys make too much money. They won’t care that they are paying someone else even more money. Just not your group. Admin salaries will remain unchanged, so it doesn’t really matter to them.
-
For clarification, this is an outpatient clinic – not a hospital. We provide off site urgent care coverage during evenings and weekends.
Our pay per wRVU is still pretty good relative to the rest of the country. Lets say we are collecting approximately 9% less per wRVU than what we are collecting via self billing from another similar outpatient facility which also has a poorer payer mix. This also includes our billing expenses. They are also reimbursing less than what we get for our hospital work when stipend is included.
They also like to use MGMA data against us which doesnt seem valid given regional differences in reimbursement rates. They also point out our minimal overhead, not taking into account that we are a self managed group, doing our own administrative work, negotiations, etc. In our minds, it seems pretty clear that our worth is what our professional fees are. The thing is, we are ok with a reasonable skim, cost of doing business, etc. But enough is enough.
Quote from drad123
What are you collecting per wRVU and what are they paying per wrvu. Capitated contact for rural hospital coverage is unusual. Never heard of it before this.
-
Quote from goldenbell12
For clarification, this is an outpatient clinic – not a hospital. We provide off site urgent care coverage during evenings and weekends.
Our pay per wRVU is still pretty good relative to the rest of the country. Lets say we are collecting approximately 9% less per wRVU than what we are collecting via self billing from another similar outpatient facility which also has a poorer payer mix. This also includes our billing expenses. They are also reimbursing less than what we get for our hospital work when stipend is included.
They also like to use MGMA data against us which doesnt seem valid given regional differences in reimbursement rates. They also point out our minimal overhead, not taking into account that we are a self managed group, doing our own administrative work, negotiations, etc. In our minds, it seems pretty clear that our worth is what our professional fees are. The thing is, we are ok with a reasonable skim, cost of doing business, etc. But enough is enough.
Quote from drad123
What are you collecting per wRVU and what are they paying per wrvu. Capitated contact for rural hospital coverage is unusual. Never heard of it before this.
Still no numbers.
Outpatient centers are going to skim. This has been the case for the last 25 years I have been in the business.
How can MGMA be used against you? MGMA numbers are high. 55-57 wrvu-
The exact numbers are bit irrelevant IMO. We make less at one site because we have a fixed contract vs self bill. On top of that, our volumes will continue to rise, further dragging down $/wRVU. Per wRVU pay is still good in the 60s. We understand and are ok with the skimto an extentbut it cant be a potential bottomless black hole. I guess wed rather be aligned than adversarial. You sound like you have the perspective of the administration – you rich radiologists are making too much money because other are making less.
We dont make the commercial/Medicare reimbursement rates. Someone else has deemed this is what a radiologist should be paid to do the work in this area. We do know how difficult it is to recruit to fly over country in the face of radiologist shortages. We dont have Michelin stars, beaches or mountains, so if you cant offer a nice combo of money and vacation, you are not getting your position filled. Im sure they have thought of teleradiology but that wont work very well because they need onsite coverage at multiple locations for breast imaging, procedures, fluoro, etc.
Quote from drad123
Still no numbers.Outpatient centers are going to skim. This has been the case for the last 25 years I have been in the business.
How can MGMA be used against you? MGMA numbers are high. 55-57 wrvu
-
You just need to decide what number you need/RVU to make it worthwile to your group. Tell the hospital, “We’d love to continue to provide coverage, but given the current radiologist labor market, we cannot continue under the current contract terms due to several of our radiologists have more lucrative options with lower workloads.” Not aggressive, just matter of fact. Best to win them over with a desire to meet their need. Let them come with your idea to pay you more money or maybe they can help you out in other ways. Have found it’s best to make hospital admins feel like they solved the problem, rather than us telling them how to solve it. Present them the situation and possible outcomes.
-
Quote from goldenbell12
The exact numbers are bit irrelevant IMO. We make less at one site because we have a fixed contract vs self bill. On top of that, our volumes will continue to rise, further dragging down $/wRVU. Per wRVU pay is still good in the 60s. We understand and are ok with the skimto an extentbut it cant be a potential bottomless black hole. I guess wed rather be aligned than adversarial. You sound like you have the perspective of the administration – you rich radiologists are making too much money because other are making less.
We dont make the commercial/Medicare reimbursement rates. Someone else has deemed this is what a radiologist should be paid to do the work in this area. We do know how difficult it is to recruit to fly over country in the face of radiologist shortages. We dont have Michelin stars, beaches or mountains, so if you cant offer a nice combo of money and vacation, you are not getting your position filled. Im sure they have thought of teleradiology but that wont work very well because they need onsite coverage at multiple locations for breast imaging, procedures, fluoro, etc.
Quote from drad123
Still no numbers.
Outpatient centers are going to skim. This has been the case for the last 25 years I have been in the business.
How can MGMA be used against you? MGMA numbers are high. 55-57 wrvu
You may not have a business mind. Numbers are very relevant. Few centers have fluoro- no money in it. They should send that to local hospital.
60s is 90th percentile. Things are great now but get away from capitated deal.-
If they can pay you in the 60s they are killing it on technical unless centers are poorly run.
-
A read that goes from a local market to the tele market is not the same read-
commodification.
-
-
-
-
-
-
-
Quote from goldenbell12
We have let them know that the contract needs renegotiated and capitation ended – in order for us to continue to provide the service their physicians and patients expect. The admin response has been that you make too much money, we just bring these patients to you and you guys dont have to do anything, and do you want us to hire our own radiologists? I think their points are irrelevant and they dont understand they wont be able to just grab 4-5 onsite radiologists for cheaper than what we are asking. We are careening towards a potential separation and pain for both parties because they are ignorant, stubborn, and will cut off their nose to spite their face. At this point we are inclined to let them.
Imaging centers are increasingly sending everything to tele market. Cheaper. All they have to do is match or beat RPs 30 wrvu.
