Utah Valley Radiology Associates Establish Successful Vein Center
Getting Into a Payor’s Network: 5 Tips
Liberty Pacific Medical Imaging Pulls Radiologists, Cardiologists into 64-Slice Venture

Utah Valley Radiology Associates Establish Successful Vein Center

By Tor Valenza

Interventional radiologists who wish to enter the world of clinical medicine are increasingly establishing outpatient centers for management of superficial venous insufficiency. Stand-alone facilities, such as the Intermountain Vein Center, Provo, Utah, have successfully broken the traditional mold of the hospital-based interventional radiologist through a transition to a clinic-based practice. Moreover, interventional radiologists are finding that these enterprises are likely to be supported by their diagnostic colleagues.

When Carl Black, MD, chairman of Utah Valley Radiology Associates and co-founder of the Intermountain Vein Center, first proposed establishing an outpatient vein center, he gave his group’s board three reasons. “First, superficial venous insufficiency is a common but disabling disease, which interventionalists can deal with effectively,” he says. “Second, establishing a vein practice offers a natural transition for an interventionalist to become clinic-based. And finally, it can be justified based on the potential profitability. If done right, it should hold its own as a profit center.”

Black is one of seven interventionalists in a busy group private practice of 21 radiologists. Four years ago, Black and his partner, John Collins, MD, approached their group with a detailed pro forma for creating a vein center as a division of their interventional services. Initially, they planned to operate the vein center for half a day, three times a week. They would share office space with a vascular surgeon, occupying a procedural room and their own clerical area. Their staff would be lean, consisting of a single medical assistant, who also would handle insurance, plus a part-time sonographer.

In addition, the proposal included the estimated regional vein ablation demand, including population demographics and the estimated daily number of procedures that physicians could perform. Black and Collins also provided the board with profit margin projections, which factored in the costs of equipment, rent, and staff, as well as anticipated insurance and Medicare reimbursements. In the end, based on their pro forma and previous success as interventionalists, the group gave its approval.

Start-up Costs and Equipment

“A thorough understanding of an individual patient’s venous anatomy and sources of reflux is essential.”
—Carl Black, MD
Intermountain Vein Center

Aside from the cost of the office space and staffing, the center’s equipment start-up costs consisted of a laser generator ($30,000), a procedure table ($7,000), and two ultrasound units. According to Paul Lemon, sonographer and vein center manager, a state-of-the-art diagnostic ultrasound machine can be priced at more than $90,000. A portable ultrasound unit, for use in procedures, could cost up to $45,000.

In addition, Black states that a new facility should expect to purchase instruments for performing ambulatory phlebectomy and sclerotherapy, as well as miscellaneous supplies, such as a compression hose and dressings. He also recommends that the whole team, including the interventionalist, sonographer, medical assistant, and administrative staff, spend time in a well-established vein treatment practice.

Although the center initially invested in both endovenous radiofrequency and laser ablation devices, Black and his colleagues have transitioned primarily to endovenous laser. “We found that our results with radiofrequency were significantly inferior to laser in terms of ablation failure and recanalization,” he says. In their own two-arm internal study, the center followed patients over 2 years and observed about a 20% rate of ablation failure and/or recanalization with radiofrequency, and a less than 3% failure rate with laser. In their experience, laser is faster, less expensive, and provides a more durable result.

Evaluation, Treatment, and Follow-up

According to Black, the additional technical training needed to establish a successful vein service is readily achievable for an experienced interventionalist. The endovascular skills are second nature. “The learning curve is steepest in gaining familiarity with clinical manifestations of venous insufficiency, treatment indications, and contraindications, as well as in learning to set appropriate patient expectations,” Black says.

He stresses that close patient follow-up is extremely important to assure patient satisfaction, quality care, and, ultimately, practice success. “The more you do this, you realize how much individual variation there is in venous anatomy,” Black says. “A thorough understanding of an individual patient’s venous anatomy and sources of reflux is essential. Anything less may result in failure. You may perform a successful ablation of the greater saphenous vein, but if you miss other significant sources of reflux, the patient may have a suboptimal outcome. It’s very important that you set an appropriate expectation for vein patients. Tell them that this could be a several-step process and that success requires thorough evaluation and treatment of all significant sources of reflux.”

Business Basics

Reimbursement will vary, depending on regional insurance coverage policy. Over the course of the treatment, physicians may expect to bill for an initial office consultation, a diagnostic ultrasound, and an average of six follow-up visits over the course of 2 years. Endovenous ablation and ambulatory phlebectomy is covered by Medicare and most major insurance providers. Sclerotherapy often is excluded and may require a self-pay policy.

Consumer promotion is achieved mainly through newspaper and radio with an advertising budget of about 10% of revenues. Typically, advertisements are targeted toward women. In fact, Black estimates that 85% of the center’s patients are female. Marketing to the local physician referral base occurs primarily through direct peer-to-peer follow-up, in-office education, regional symposia, and a quarterly newsletter.

Today, the Intermountain Vein Center has evolved into a 2,300-square-foot facility with two full-time sonographers, a nurse practitioner, an insurance specialist, and two medical assistants. The nurse practitioner and a sonographer screen new patients under the supervision of a physician. Although there is some local competition, Black is confident that as long as the center provides state-of-the-art care and pays close attention to both patient and referring physician satisfaction, its growth and success will continue.

Tor Valenza is staff writer for Axis Imaging News.

Getting Into a Payor’s Network: 5 Tips

By Dave Cater

The ability to get into a payor’s network can make or break an imaging center. With competition for the imaging business at an all-time high, networks enjoy the luxury of offering their business to facilities that provide the greatest services at the best prices.

“A good relationship with the third-party payor, coupled with the element of providing a full range of services, are the union cards that get you into the game.”
—Troy Roovers
Minneapolis Radiology

Clearly, the payor has the control in today’s market; if the payor isn’t happy, it just heads to your competition down the street. In fact, one imaging professional describes the payors’ mentality as such: “This is the contract, and we’re not going to change it. If that’s not acceptable, we’ll go somewhere else.”

With today’s “you-need-us-more-than-we-need-you” attitude facing imaging centers, the real trick to remaining in the business loop is not only getting through the network door but making a positive impact once inside. Keep the following five tips in mind to help pave the way.

1) Create a Relationship

According to Troy Roovers, executive director of Minneapolis Radiology, Plymouth, Minn, a solid relationship is built on how well an imaging center demonstrates value to the third-party payor.

“We try to offer services at various heights,” he explains. “We have hospital-based services, freestanding imaging-based services, and we provide outside reads for primary care and specialty groups that have imaging modalities in their offices. All of a sudden, you begin to build a relationship where the third-party payor says, ‘We must have them as part of our network.’ ”

Roovers adds that any relationship is based on need and demand. “If you’re a onesy-twosy freestanding outpatient imaging center, perhaps not even located in your local community, it’s very easy for a third-party payor to say, ‘We don’t need you.’ ”

2) Provide a Full Range of Services

Many networks want to know that most reads can be done under one roof. In other words, why deal with three imaging centers when just one can do it all?

“I know some payors are saying, ‘If you don’t do mammography, we’re not going to sign you up,’ ” explains Davis W. Graham, chief financial officer of Manatee Diagnostic Center, Bradenton, Fla. “I think that is a very progressive way of utilizing their strength in medicine. One payor I know has claimed, ‘If you only offer CT and MR, but you don’t do mammography, we’re not going to contract with you. We need more.’ ”

Imaging centers need an “advantage” when sitting down with third-party payors, Roovers says, adding, “That can happen if you provide a full range or complement of services.”

3) Let Quality Be Your Guide

“The foundation of anything, whether you hire a teacher or a plumber, is making sure they’re certified,” notes Graham, whose imaging center performs 80,000 to 90,000 procedures per year. “The same holds true for a diagnostic imaging business. If you have been accredited by the industry’s top organizations, then payors know you stand for quality.”

4) Back Up Your Claims

Actions speak louder than words. According to Graham, Manatee Diagnostic’s turnaround time is an hour or less. And, he says, the facility always has a radiologist available for referring or ordering physicians to call for questions.

Although it is true that you get what you pay for, Roovers says that the radiologist remains the differentiator. “We’re in the business of providing accurate interpretations in a timely fashion,” he says, adding that Minneapolis Radiology will not be the “low-buck provider.”

5) Money Talks

In the end, as much as experts hate to admit it—as much as they hope quality outweighs costs—it really is all about the money.

As Graham admits, “I think the payor almost always uses the available competition as a bargaining tool.” In other words, the bottom line will always be the end of the line.

“I believe in their heart of hearts, third-party payors believe it’s all about the quality,” Roovers says. “At the same time, there is undoubtedly an element, no matter how great your quality, that if it doesn’t come down to price, you probably aren’t going to be sitting at the table very long.”

So, does it really all come down to money? Absolutely, Roovers says. “There is a minimum threshold of quality, and although that’s somewhat amorphous, some minimum threshold must be met. A good relationship with the third-party payor, coupled with the element of providing a full range of services, are the union cards that get you into the game. Then, it’s all about money.”

Dave Cater is a contributing writer for Axis Imaging News.

Liberty Pacific Medical Imaging Pulls Radiologists, Cardiologists into 64-Slice Venture

By Cat Vasko

Wanting to lure the best radiologists to his business, Steve Renard, president and chief operating officer of Liberty Pacific Medical Imaging LLC (LPMI), Encino, Calif, made an offer that was hard for any medical professional to resist: “Leave the risk up to the businessmen.” Renard’s company takes a majority share interest in its imaging centers, partnering with radiologists who can simply practice—without taking responsibility for management or signing personal guarantees.

Imaging centers are so much more expensive than, say, family practices, “and the risk associated with a practice is the thing that scares most radiologists,” Renard explains. “We wanted high-quality radiologists to partner with us, and the fact of the matter was, the only way to do that was to make the deal so good they couldn’t say no.”

By taking majority interest in each of its imaging centers, LPMI gives radiologists ownership on the technical side without assumption of risk; Liberty Pacific Capital LLC, Seattle, obtains “all the financing and all the leverage, and takes on all the personal guarantees,” Renard says. Liberty Pacific Medical Management LLC, San Francisco, the management arm of LPMI, handles price negotiation for equipment and personnel issues. And radiologists are left to do what they do best.

Is investing in imaging worth the risk? Renard certainly thinks so. “There’s no doubt that it’s an expanding field,” he says. “I compare this industry to the cell phone industry; what’s propelled it has been the silicon industry. In Northern California, all the tech geeks were flushed out in the bust of 2000 and 2001, and they went to different fields. One of the fields they went to is health care. We’ve really seen the expansiveness of the technology—[multislice] CT, 3T MRI, computer-aided detection, PACS—in the past 2 or 3 years, and I think that’s going to continue to be the case.”

Jay Amster, MD, and Kay Yan, MD, a husband-and-wife radiology duo contracting with LPMI as Vista Radiology Medical Group LLC, Long Beach, Calif, see two main benefits to this business model. “One would be that they’ve taken on the management,” says Amster, who is medical director of LPMI Long Beach. “The other is that we’re not at risk for any of the personal liability. They’re managing partner, and we’re basically passive investors through our own LLC. It’s nice to know that if everything went belly-up, we wouldn’t have to sell our house.”

Amster and Yan bought in at 49% and signed a 5-year professional services agreement (PSA) with LPMI. Working from a local physician referral base, Amster interprets the MRIs, and Yan performs women’s imaging, ultrasound, and body CT. Recently, LPMI Long Beach acquired the first 64-slice CT scanner in the Long Beach–Los Alamitos area of California.

Another interesting facet to LPMI Long Beach is its relationship with three area cardiologists. “They’ve signed PSAs as well to provide interpretations of the coronary angiograms,” Amster explains. “We send data to their offices, and they read off-site. My wife reads the data on the images that are outside their field of view.” LPMI Long Beach charges a $1,000 co-pay to the patient to offset the cost of the overread. “We’re encouraging the cardiologists to do the interpretations because they’re best qualified to do it,” Amster says. “Doing so brings a level of sophistication to our capabilities. We were first in this area to provide that service, including the hospitals.”

Renard expands on the LPMI cardiologist–radiologist relationship. “Usually what happens is that the radiologist does an overread, sends that off to a cardiologist, the cardiologist reviews it, looks at the radiologist’s report, says, ‘We concur,’ and sends in one form. It’s kind of a pain until Medicare figures out that two brains are better than one.” He agrees with Amster that the relationship is a positive one, for both physician and patient. “It’s just good medicine. What my radiologists have come to realize is that they went into medicine for what’s important for the patient. Sometimes with all this turf-war stuff, the patient and good medicine are left out of it.”

Both Renard and Amster note that the intangible benefits to a radiologist–cardiologist partnership outweigh the potential drawbacks. “A lot of radiologists want to have more to themselves, but they wind up with less,” Amster observes.

A former member of MEMRAD Medical Group Inc’s board of directors, Amster sees this business relationship as a lasting one—as does Renard. “I think dosage will become small enough on CT that it will be the equivalent of getting a chest film,” Renard says. “For those groups 40 and older, and those in certain risk categories, they can be scanned from head to toe—do a colonoscopy, do a heart study, do the whole thing.”

Although recent regulatory changes are daunting, Renard doesn’t doubt that imaging will pull through. “I went through this nightmare with rehab in 1997, with the Balanced Budget Act,” he says. “I saw them decimate the entire industry. They said they’d done their due diligence, but they ended up repealing the acts 3 years into it because access was decimated. It’s an issue. But utilization for us is only going to continue to grow.”

Cat Vasko is associate editor of  Axis Imaging News.