Portland Imaging Centers File Suit Against Providence Health System
To ward off an estimated $1 million loss per month, two Portland, Ore, imaging companies have filed an injunction and a lawsuit against Providence Health System (PHS) after Providence terminated their services without cause.
Though the original termination date was to be May 1, Providence Health System announced that the contracts with EPIC Imaging and Body Imaging Radiology were extended until June 30. A court hearing has been set for June 20, according to Gary Walker, senior public relations coordinator for Providence.
If the contract termination goes through, the two imaging companies will no longer be on the Providence preferred provider list, meaning they would not be able to provide imaging services to patients who are Providence Health Plan members or whose insurance companies have access to the Providence Preferred Network, encompassing about 430,000 people in the Portland area.
“[It’s] strictly monetary,” says Gerald Warnock, MD, founder and medical director of EPIC Imaging. “They want all the imaging income for themselves.
“We estimate the actual business we’ll lose [to be] about $1 million a month,” he says.
The lawsuit, filed under antitrust statutes in federal court in Oregon, claims that Providence—a nonprofit organization that includes hospitals, health plans, clinics, physicians, advanced medical research, and education—is trying to secure monopoly power by excluding providers considered competitive threats. Under antitrust statutes, any damages awarded would be trebled.
“[T]he effort by the Providence Defendants to exclude plaintiffs from access to Portland area physician referrals for radiology and imaging services is based purely on economic considerations and the desire by Providence to consolidate and ultimately monopolize those services within its own system,” the lawsuit states.
EPIC Imaging and Body Imaging have been on Providence’s preferred provider list since 1982 and 1989, respectively.
They are the only two imaging services being removed from Providence’s preferred provider list, Walker says.
“We do not contract with every imaging provider in the Portland area,” he says. “One of our key commitments is providing high-quality, affordable health care access for people in the communities we serve and that’s a driver behind everything that we do.”
“They said they valued our superb services over the years, and care to their patients, and appreciated our business relationship,” Warnock says, “and [we] are terminated with out cause.”
In a joint venture with Radiology Specialists of the Northwest, Providence opened an off-campus imaging center on Portland’s east side in April. Another center is expected to be opened this year in a joint venture with Advanced Medical Imaging, Walker says.
“Now that Providence Health System’s own imaging facilities have expanded and can more than adequately handle patient capacity throughout the Portland area, we have determined that it is in the best interest of our customers to consolidate these services in Portland through the PHS facilities,” wrote Phil Jackson, regional director of network development for Providence Health Plans, in a letter to Warnock.
Warnock says patients were having a hard time getting authorization to come to EPIC Imaging or Body Imaging even though the contract termination had been postponed until the end of June.
“They’re jumping the gun,” he says. “We’ve had many patients that have said they have tried to come here and they couldn’t get the authorization. I haven’t heard of any dirty tricks today, but stand by.”
Contract termination letters were sent to EPIC Imaging and Body Imaging on February 1, 2005, followed by letters to Portland-area physicians from Providence informing them of its decision.
“That’s the way the contract is written, that they write that either party has the ability to terminate without reason, without cause, in 60 days,” Warnock says. “The thing about it is there’s no provision for a hearing or anything. You’re terminated.”
Mummies Get Reconstructed
 Moran, Rowan and Dorsey radiologists observed an optical nerve on a mummy, a feature never seen before. |
As part of Mummies: Death and the Afterlife in Ancient Egypt , radiologists from Moran, Rowan and Dorsey Inc (MRD), a diagnostic radiology group in Orange County, California, used a 4-slice CT scanner and a state-of-the-art workstation to produce images of six of the mummies on display at the Bowers Museum in Santa Ana, Calif.
The mummies—some dating back 3,000 years—belong to the collection from the British Museum. MRD got involved with the Bowers Museum through Linda Sutherland, MD, a fellow of the museum and a member of the board of directors, as well as a partner of MRD, says Daniel Weissberg, MD, chairman of the board of MRD.
“What differentiates this event from the others is that the most up-to-date and sophisticated workstations were used,” he says.
In the recent scans, radiologists observed an optical nerve, a feature never before seen on a mummy. They were also able to determine that the mummified remains of what they thought was an 18-month-old child in fact belonged to a child 4 to 5 years old, says Rick Weinberg, director of public relations and marketing at the Bowers Museum.
One of the mummies had a wooden stick lodged in its throat that was not picked up in previous x-rays because of its density, according to Weissberg.
“The British Museum curator was just stunned when he saw this stick lodged in the throat of this mummy,” Weinberg says. “He wasn’t sure whether it was put there to brace the back of this mummy when it was placed in the coffin or whether it happened during some kind of battle.”
The Un-Sustainable Growth Rate Formula
 (Click the image for a larger version.) |
Concerned about the projections of dramatic Medicare cuts through 2013, the American Medical Association (AMA) polled members on how they would adjust their practice in response to the cuts. Physician payment rates are scheduled to begin January 1, 2006, with a 5% cut, with an overall payment reduction of 31% by 2013. In response to the 5% cut, 38% of physicians said they would decrease the number of Medicare patients they accept; 49% said they would stop providing certain services; 9% said they would stop providing patient care; and 10% said they would retire. If Medicare payments are cut by 31% in 2006-2013, 71% said they would stop providing certain services, and/or spend less time seeing Medicare patients; 47% said they would stop providing patient care and/or retire. The above chart illustrates the difference between the government’s index of practice cost inflation and declining reimbursement rates. “Payments are not keeping up with practice cost inflation,” said J. Edward Hill, MD, AMA president-elect. “And as time goes on, it becomes obvious that Medicare payments don’t even come close to covering the cost of providing medical care to seniors.”
Source: AMA Member Connect survey, released April 5, 2005
Industry News
Agfa HealthCare, Mortsel, Belgium, has acquired Heartlab Inc, Westerly, RI. The joint solution allows for the smooth integration of radiology and cardiology, enabling information to flow more efficiently within the health care enterprise and facilitating management of the electronic patient record…Sectra, Linköping, Sweden, will begin production of mammography systems in a new facility based in Kista, Stockholm…SmartPACS, Irvington, NJ, and INFINITT Co Ltd, Seoul, Korea, signed a memorandum of understanding that the two companies are aligned for a closer relationship; the memorandum is a prelude to a joint venture agreement to be signed by the end of this year…Witt Biomedical Corp, Melbourne, Fla, and InSiteOne, Wallingford, Conn, announced a comarketing partnership to provide customers with more options for storage management solutions…ZONARE Medical Systems, Mountain View, Calif, and Hologic Inc, Bedford, Mass, have signed a 2-year service support agreement. Hologic will become an authorized ZONARE service subcontractor, providing on-site service assistance to customers who have purchased the z.one ultrasound system…SourceOne Healthcare Technologies Inc, Mentor, Ohio, and Shimadzu Medical Systems, Kyoto, Japan, have signed a contract giving SourceOne nationwide rights to market and distribute a mobile x-ray system manufactured by Shimadzu for SourceOne…Evolved Digital Systems Inc, Laval, Quebec, Canada, completed a round of financing, with a $3,000,000 loan from Argosy Bridge Fund LP II and a $3,000,000 private placement of First Series A Preferred Shares to qualified investors. Additional equity and debt closings of up to $2,200,000 are subject to certain terms and conditions and are anticipated to occur prior to August 30, 2005. The proceeds from the private placement will be used for working capital and other general corporate purposes…Neurognostics Inc, Milwaukee, received 510(k) market clearance by the FDA for its MindState® functional data acquisition device, which enables health care professionals to acquire fMRI data that may be used to track disease progression in patients with disorders of the central nervous system and to test drug efficacy…Eastman Kodak Co, Rochester, NY, entered into an agreement with Merry X-Ray Corp, San Diego, under which Merry X-Ray will serve as the exclusive US distributor for Kodak’s new Mammography CAD System…PACSGEAR, Pleasanton, Calif, has relocated to expanded office space…Radiology of the Rockies, Westminster, Colo, has been launched for the purpose of bringing PACS administrators, and support personnel together in an open forum to discuss scenarios, strategies, and solutions pertaining to imaging technology… The Joint Commission on Accreditation of Healthcare Organizations (JCAHO) has established the 12-member Medical/Diagnostic Advisory Council, which will meet formally three times per year and provide advice on topics including improving the accreditation process; enhancements to standards to improve patient care, and patient safety; legislative, and regulatory changes; and an assessment of business, and marketplace trends.
People
 Peter McClennen |
Peter McClennen has been named president and chief operating officer of AMICAS, Boston. McClennen most recently served as the global general manager for GE Healthcare’s IT PACS business. Stephen N. Kahane, MD , will remain as CEO and vice chairman of the board of directors…Rex Harmon was appointed vice president of sales for the Western US region, and John Hill as vice president of sales for the Southern US region at Imaging Dynamics Co, Calgary, Alberta, Canada…Mitchell Goldburgh was named senior vice president for marketing and sales of InSiteOne, Wallingford, Conn…Alan B. Bialek has joined AllPro Imaging, Hicksville, NY, as sales and marketing manager for the company’s line of ScanX Digital Imaging Systems… Becky Stahl has joined Cassling Diagnostic Imaging, Omaha, Neb, as its Cardiac IT business manager…Fred Trovato has been named regional manager for the Northeastern United States by NovaRad, American Folk, Utah…Bodo Herzog was named European sales manager by NAI Tech Products, Auburn, Calif, the first appointment of this position by the company…Alex Kowal has been named regional sales manager for the Northeast US region at Intelerad Medical Systems, Montreal.
