Dr. Ashutosh Rao reached out to me to post his perspective. The words below are not mine, but I think it’s a perspective worth hearing. My comments will follow.
Background:
The majority of healthcare provided in the U.S. is provided under the “Fee for Service ” model whereby medical care is provided by a Radiologist, and their organization then bills an insurer for each individual service provided. This model is seen in private practice, private equity, Academics, and multispecialty groups. Each individual service (e.g, head CT, abdominal sonogram) is valued at a contracted monetary amount, usually with a basis in CMS’s CPT wRVU schedule, but occasionally by a proprietary fee arrangement. The Radiologists are then paid from remittances from the insurer.
The problem:
Individual Radiologist compensation is rarely based solely on wRVU production (i.e., an eat-what-you-kill model). While the Radiology market is rapidly changing and there are teleradiology models paid by wRVU, most Radiologists are still paid based on time worked, with possible adjustments for productivity or working undesirable hours.
The wRVU system often does not value Radiology services accurately such that a radiologist working a shift in a specific subspecialty may bill far higher than another Radiologist in a different subspecialty working an otherwise similar shift. Or valued differently when the same Radiologist is assigned to a different shift on a different day with different responsibilities.
Radiology practices generally offer a wide range of services to patients and health systems, rather than only subspecialty-based or image-modality based service. The current Radiology practice model creates a significant variance between the highest billing and lowest billing radiologists. Most often, the variance in member Radiologists’ billing is higher than the variance in the compensation between Radiologists. Therefore some Radiologists bill more than they are paid, and some Radiologists are paid more than they bill.
In a sense, the higher productivity (by wRVU) Radiologists subsidizethe lower productivity Radiologists.
Having shown that Radiology groups generally cross-subsidize their subspecialties, our attention now comes to the specific case of Interventional Radiology, requiring a further investigation of the CPT/wRVU system.
Patient care activities can generally be thought of as “procedure” codes (e.g., cholecystectomy, colonoscopy, MRI lumbar spine) and “evaluation and management” (E&M) codes. E&M codes are valued less per unit time than the procedure codes. For example, the wRVU given to a 30-44 minute new patient E&M visit is 1.6 wRVU while reading a contrasted abdomen and pelvis CT is 1.82 wRVU.
The reason for the large gap between the average compensation of primary care physicians versus procedural subspecialists stems largely from the differences between how these two types of codes are “valued” by the AMA’s RBRVS/RUC system, the complexities of which are beyond the scope of this discussion.
Simply put, a Family Practice physician working a 40 hour week and billing mainly E&M codes will be paid much less than a surgical specialist or Radiologist working similar hours, due to the lower reimbursement of E&M codes.
IR Subsidies:
Returning to the subspecialty of Interventional Radiology, there has been a long push to move the specialty of IR from being “proceduralists”, to a more holistic “clinicians”. The term “clinician” is taken in this context to mean seeing patients in a clinic setting both before and after their procedure. The expansion of the expected duties of a clinical Interventional Radiologist must now incorporate much lower paying E&M codes, and therefore will lower IR productivity as measured by wRVUs.
Are we to believe that friction in Radiology groups between DR and IR is due to IR physicians billing too much and subsidizing their DR partners too highly? Or the opposite? That IR physicians are pressed to limit their patient interactions and read more DR studies because the subsidies to IR are felt to be too large? Should DR continue to subsidize IR?
Independent IR:
The push for independent IR practice ignores the fact that IR income expectations are on average in line with Diagnostic Radiologists. But who will bridge the gap in reimbursement between E&M billing and purely procedural (DR) billing? I.e., who subsidizes IR?
The current models for IR subsidies:
- IR is subsidized within Radiology: IR is usually a core requirement of a healthcare system Radiology contract, and Radiology groups will pay market-rate compensation to attract IR physicians independent of how much IR physicians bill.
- IR is subsidized within a corporation: Businesses who employ IR directly whether in a healthcare system, academic setting, or multispecialty practice, will subsidize the market-rate compensation of IR physicians from general corporate revenue.
- IR is subsidized by technical fees: The vast majority of (all?) independent IR’s have an equity position in an outpatient facility (OBL). The technical fees made by their equipment ownership supplement their professional component billing and subsidize their E&M work.
What does the future hold? Will IR break away from DR and seek their subsistence subsidy elsewhere? How will healthcare systems react to independent IR OBLs encroaching on their highly profitable outpatient procedure business?
Time will tell.
Ashutosh Rao M.D.
Line Monkey MD Commentary
Thanks to Dr. Rao for providing this perspective. It is important to understand that he works in a large, diversified radiology group and has done so for many years, so his perspective is probably the exact opposite of the perspective I have. Nevertheless, the central theme in his commentary ultimately boils down to this one question: how will interventional radiologists be paid? It’s an important question and deserves careful consideration.
The word “subsidy” has a lot of negative connotations, but I understand where he comes from in using this word. The prevailing theme in radiology groups is there are differing payments based on the modality “read” and certainly interventional work as a “modality” does not pay as well per unit time, particularly with a focus on clinical care, which requires E&M work.
Most, if not all, procedural subspecialists have found themselves in situations where hospital professional fees alone do not sustain salaries in their specialty relative to a market average. If doing pure hospital work, many have had to rely on arrangements with healthcare systems to make a living. Cardiology is a prime example of this, with most cardiologists now employed by systems:
Those who can remain private do well by owning their facilities, be they ASCs or physician-owned offices where procedures can be performed. IR is fundamentally no different.
In my own life, I have personally been financially far better off not practicing IR with a radiology group. Having now been an owner in an outpatient center and directly contracted with healthcare facilities, it is possible to do quite well without the shackles of a radiology business model largely dependent on professional fees only. There are many others out there, both within hospitals as independent contractors or system employees in addition to OBL/ASC owners or employees who have been far better off economically outside of the typical radiology context.
Independent IR should largely not be a threat to “lucrative outpatient procedures” within hospitals because most radiology groups are hardly scratching the surface when it comes to doing these procedures in the HOPD setting. A “good group” may get excited if it does 5 UFE a week. Some OBLs are doing that number in a day. Even then, we globally aren’t doing enough, as the number of unnecessary hysterectomies is quite high. Now apply this same logic to about 8 different service lines or more. There is so much unrealized potential.
The radiology business mentality is essentially a scarcity mindset where the potential pool of patients has already been captured within a said system, and any threat of outside competition limits the group’s ability to prosper. It is a mentality that is not conducive to collaboration and is dangerous when it comes to expanding services and having the most positive population health impact possible.
Yes, economics are important, but the drive for IR independence isn’t some pipe dream. It’s asking for similar consideration as other medical and surgical subspecialties. So if one’s primary motive is money, then it’s certainly smarter to advocate for the status quo. But honestly, any individual with this mindset probably took a wrong turn going into medicine in the first place.