Regional Diagnostic Radiology: Looking Ahead to Quality Initiatives and Better Reimbursement

We have been working on improving our reimbursement from hospital systems. We cover 24/7, and we know how much teleradiology companies charge if they could even provide service—and we know they can't. We are working from a diagnostic standpoint to understand what the market value is for what we do after hours.

Darrin Spoden, DO
President, Regional Diagnostic Radiology
April 30, 2024

With the Covid shut-down and post-Covid imaging boom in the rear-view mirror, Darrin Spoden, DO, president, Regional Diagnostic Radiology, Sartell, Minn., is finally emerging from crisis mode with a much-altered practice model and thinking about the future.

"On some days, our work-lists seem to be a bit more under control," he shares. "Several of our key partners are focusing on clinical improvement projects again—we really haven't done a lot of maintenance in the past four years: We've just been trying to survive."

One of Strategic Radiology's newest member groups, 20-radiologist Regional Diagnostic Radiology, northwest of Minneapolis, Minn., has grown organically from three radiologists covering one hospital in the 1970s to 20 radiologists covering 10 hospitals throughout the region today. In many ways, the practice is a case study in the adaptability and resourcefulness of private practice, one that grew along with its primary hospital client and then found ways to meet the regional medical imaging needs of an expanding catchment area.

"RDR started as St. Cloud Radiology back in the early-70s by three radiologists," explains Mary Hondl, CEO, who joined the group in 2001. Initially, St. Cloud Radiology worked mainly with St. Cloud Hospital and a busy internal medicine clinic. St. Cloud hospital aligned with CentraCare health system and St. Cloud Radiology became Regional Diagnostic Radiology in the 1990s. As the hospital system and the clinic grew, so did the practice.

"As we started recruiting more radiologists, we thought it was important to go outside of the CentraCare health system and provide service and support for rural hospitals," she adds. Today, five of the practice's 11 hospitals are unaffiliated with its primary client.

Molding Practice Model to Meet Needs

Dr. Spoden joined RDR in 2013 out of a residency that was still using transcription. "I thought, 'I'll never see this again,'" he notes, but he soon discovered that RDR was still using transcription. "That was largely due to the tight relationship with the hospital, but the inefficiencies were compounding with all the different sites. We had to dial a different number and dictate into the phone for each different hospital, so if you were on call you literally had four phones going."

In 2018, RDR made the decision to invest in its own PACS, including transcription and a universal PACS overlay. "That investment decision for our group was probably the biggest milestone for me and for many of the younger partners," he acknowledges.

A more recent milestone occurred when the group adapted its practice model to accommodate teleradiologists. "Our first teleradiologist came on just before Covid hit, and that section has now grown to seven teleradiologists," Dr. Spoden shares. "Previously the only pathway to working with RDR was associateship followed by partnership, and today we have radiologists working for us in five different states. We've been fortunate in being able to attract teleradiologists." 

A third milestone occurred much earlier when RDR brought Ms. Hondl on to lead business operations. She brought billing in-house and every time RDR added a new contract, she hired more billers, from three employees in 2001 to 35 billers today. "Technology improved, so now we do more work with fewer bodies," she notes. 

Endemic Challenges

While RDR enjoys a strong market position as the predominant group in its region, it nonetheless faces many of the same intractable challenges that other private practice radiology groups face today: recruiting partners in a tight labor market, competing with deep-pocketed, private-equity–financed outpatient-only organizations, and reimbursement that hasn't kept up with inflation.

While RDR successfully built a teleradiology section over the past four years, hiring partner-track radiologists willing to go into the hospital and do procedures has been harder. "We go to all of our hospitals, and we do pain injections and other procedures," Dr. Spoden notes. "How do we find radiologists who are being trained appropriately and willing to do the broad scope of practice that we do because that is what creates value? We don't get the imaging unless we are offering the full scope of procedures as well, so as much as we all like teleradiology, it presents a new set of challenges to radiology as a profession."

In 2020, RDR opened its first outpatient imaging center, a joint venture with partner CentraCare. Its biggest competitor in the outpatient arena is a private equity-financed, entrepreneurial, outpatient-only outfit that is well established in the marketplace. "For every hospital-based radiology practice with a competitor that is strictly outpatient based, the frustrations are about the after-hours work," notes Hondl. "The biggest challenge for practices in hospitals is covering those evenings and nights."

The issue of night coverage is not merely one of logistics, it presents a financial conundrum. Staffing a 24/7/365 service line is expensive. "When we are billing ourselves for that work, we are really not getting fair market value, there is no doubt about it," Dr. Spoden says. "That is a notorious under-collection area of work, but it is very important to hospitals. They continue to grow the volume and continue to order more and more advanced imaging after hours. We want to make sure that we are getting paid fairly, so that I can pay radiologists to read it. We are in an inflationary economy, radiology included."

After-Hours Solutions and Opportunities

To address the shortfall, RDR is beginning to have honest discussions with its hospital clients about supplementing after-hours work. "We have been working on improving our reimbursement from hospital systems," Dr. Spoden reports. "We cover 24/7, and we know how much teleradiology companies charge if they could even provide service—and we know they can't. We are working from a diagnostic standpoint to understand what the market value is for what we do after hours."

In the past few years, Ms. Hondl has worked to provide additional education to RDR's hospital clients about funds that are available to help them pay providers a fair market value for imaging services. "I've been able to provide some solutions and additional information to the rural hospital administrators about critical access and the value for them to bill globally and pay us on a flat fee schedule," she explains. "Rural hospitals can get an extra 15% from CMS if they are considered critical access, and several of our hospitals are. Specifically, the language of CMS is that these dollars are there to help them pay providers to get them to come to their rural hospital. That additional amount from CMS can be used to help pay us."

"It is not just critical access hospitals anymore," she adds. "The large health systems also get additional grants and money, and patients like one bill, so it is a good idea to meet with your hospital administrators and educate them, say, "This is the cost for us to provide an after-hour radiologist and the service for all after-hours imaging. It's a lot of conversation, education, and continuous talk about what we all need to do together. This really is a huge opportunity, but also a goal for us for 2024: To get the majority of our hospitals to participate in better reimbursement for us to provide this after-hours care."

Into the Future

Looking ahead, Dr. Spoden is upbeat. "We are not concerned about anyone swooping in and replacing us at this point," he shares. "It is the first time in a long time that we have not been looking over our shoulder."

He also is extremely pleased about the changes RDR has made in its practice model and the positive impact on morale. "I'm excited about the flexibility of our staffing model, all of the changes we've made in staffing, and how we do our work," he adds. "We have more remote shifts now, we've cut back on some coverage, and I'm thrilled that our morale has improved."

Ms. Hondl agrees. "There has never been a time in my career that anyone has been able to work remotely," she marvels. "It has been a huge satisfier. Learning to open our minds about how we can do the schedule differently and make it work will pay it forward for us with physician burnout, we've seen that already."

She suggests that the practice may not have made the changes it did without the Covid disruption and the imaging tsunami that followed. By opening their minds about what works for the new generation coming out of training, leadership discovered a way to help partners de-stress with a mid-week remote day. "It has been a huge satisfier and a key way we prevent burnout in our practice," she notes.

Enthusiastic New Team Member

Ms. Hondl is enthusiastic about RDR'a membership in Strategic Radiology and enjoys the camaraderie among like-minded people and the ability to openly address challenges and opportunities, find out how others face a given situation, and to not feel threatened. "These are challenging times and it's good to learn how others handle an issue," she says.

"It also feels good to share how we are handling a situation and hear back that we are ahead of the game," she adds. "That makes us feel good. We have already gained some discounts on products we are buying, and that is key and important, but more than that, the value of networking and the ability for the radiologists to connect with others and feel safe in sharing sensitive information  is key." 

An added benefit of membership is the peace of mind knowing that Ms. Hondl's successor will have access to a community of high-level, expert radiology practice executives when she reduces her hours in 2025. "That was another key investment opportunity," she says.

Dr. Spoden reports that his radiologist partners have already understood the value of membership in just six months. "We are all so busy that it is hard to get a lot of partners engaged and on committees," he acknowledges. "That will take time, but the group has already seen the financial benefits as we look to renegotiate our PACS. That's a huge one. Time and money matter and the group purchasing that SR brings to the table is huge. Right there with it is the collaboration in a non-threatening, non-competitive environment."

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