Issues and Answers With Outsourced Teleradiology Night Coverage

For radiology practices who utilize outsourced teleradiology services, there is a growing chasm between the revenue from these services and rapidly increasing costs. From early terminations of teleradiology contracts and take back call requests to issues with turnaround times and seemingly prohibitive monthly service guarantees for teleradiology services, radiology practices are seeing an array of daunting challenges with outsourced night coverage, according to Nicole Palmer, CPA, FRBMA, who lectured about this subject at the Radiology Business Management Association (RBMA) conference earlier this week.

Palmer said it has become more common in recent years for teleradiology provider companies to ask radiology practices they have contracted with to take back some night call coverage due to staffing issues with the teleradiology providers. In most cases, the radiology group will accede to these requests, but it can lead to significant strife for the team at the group radiology practice, according to Palmer, the vice president of practice management and consulting services for MSN Healthcare Solutions.

“At that point, you are asking physicians to do something they may not have done in years,” pointed out Palmer, who has over 31 years of experience working with radiology practices on billing and financial management. “It definitely affects quality of life, could lead to burnout and causes internal turmoil for the group.”

Palmer said one of the practices she has worked with in the past had this challenge with take back calls. The practice’s solution was to divvy up the new night call coverage between four non-partner radiologists. Within four to six months, three of those radiologists left the practice, according to Palmer.

Early termination of contracts by teleradiology service providers is also on the rise. Palmer noted that a period of 60 to 90 days after termination without cause is relatively standard in older contracts between teleradiology providers and group radiology practices. The radiology practices initially viewed this short notice period favorably, according to Palmer, as this seemed to give them the option to look at alternative teleradiology services if they weren’t happy with the current provider they were using. However, this provision has come back to haunt these practices.

If you want to outsource final reads and switch teleradiology providers, Palmer said final read deals can take up to a year when you consider processes for hospital privileging, payer credentialing if the practice is doing final billing, IT integration with multiple locations and the relationship with the hospital.

One possible mitigation strategy is to negotiate that termination period if there is an opportunity to do so.

“If a telerad company comes to you asking for more money on computed tomography (CT) reads, you can ask them to extend the no-cause termination period to 270 days,” suggested Palmer.

Minimum monthly guarantees on payments to teleradiology providers are another area to be mindful of with contracts. Even if a radiology practice starts to use one teleradiology provider less often as it begins to switch to another teleradiology provider, Palmer said those monthly minimum guarantees must be met per the contract and they have significantly increased in recent years. Noting an example of a practice that might pay $30,000 a month to a teleradiology services provider, Palmer said the minimum guarantee in the past would have been $5,000 a month. Now the minimum guarantee for the same practice would be $27,000 a month, according to Palmer.

While radiology practices may not have as much leverage given the current demand for teleradiology services, Palmer recommended thorough review of all termination language in contracts with existing teleradiology providers and new ones.

“Try to keep the guarantee amounts down. This gives you a little more breathing room and protection if you decide to switch providers,” noted Palmer.

Another consideration in contracts with teleradiology providers is reporting with the Merit-based Incentive Payment System (MIPS). Palmer noted that one of the challenges with using outsourced teleradiologists to do final reads is that they, in effect, are identified as your practice’s radiologists from a MIPS reporting perspective. Spelling out your expectations in terms of MIPS reporting processes and potential costs of non-compliance in a contract is a worthwhile mitigation strategy, according to Palmer. She noted inconsistencies with quality and reporting by one teleradiologist can “cost you a MIPS bonus even if your 10 radiologists are doing a great job.”

Palmer said other factors to consider when assessing potential alliances with teleradiology service providers are stability and competition. Noting a fair amount of mergers and acquisitions in the teleradiology space in recent years, Palmer emphasizes due diligence in this regard. Also, if the teleradiology provider is taking on an increasingly larger share of a practice’s imaging reads, that provider could possibly go after the practice’s contract with a hospital, according to Palmer. She emphasized having anti-competitive language in the contract to address this possibility.

Given the challenges of switching teleradiology providers and if a practice is getting good quality from its current teleradiology provider, Palmer said group practices may consider partnering with that provider a bit more. She noted that the number of years with a teleradiology provider, size of the practice and using some of the teleradiology company’s offerings, such as their PACS system or worklist, may be helpful factors in maintaining that relationship and preventing early termination scenarios.