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Radiology, Vol 198, 651-656, Copyright © 1996 by Radiological Society of North America

ARTICLES

Capitated contracting in radiology: negotiating techniques, financial calculations, and utilization management

DC Levin, GH McArdle and CD Lockard
Department of Radiology, Jefferson Medical College, Philadelphia, Pennsylvania 19107, USA.

The authors describe how to develop and manage a capitated outpatient radiology contract. Aspects of a capitated fee structure and the need to apportion fees between a hospital and its radiology group are discussed. During negotiations with a managed care organization (MCO), certain information and commitments should be obtained. Utilization data should also be obtained from the MCO, but if they are not available (or are thought to be unreliable), certain norms can be used. Once a utilization projection is arrived at, reimbursement calculations can be made and compared with assumed reimbursements under a known fee schedule, such as that of Medicare. This procedure allows one to estimate whether a capitated proposal is financially feasible. Once a contractual agreement is instituted, the radiology group must then track and manage utilization. An understanding of these principles should enable radiologists to deal effectively with both practice and fiscal concerns presented by managed care.


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