Technical fees vs professional fees?

[RollTideRadOnc]

I apologize if this topic has already been covered. I searched the forum and didn't find anything that directly addressed this issue. As a new resident likely interested in private practice, I was wondering if someone could help me understand the issue of technical versus professional fees.

It seems like the majority of fees in rad onc are on the technical side, but these remain inaccessible to most practices.

This raises the question: in which states can rad oncs collect technical fees? I've tried to find this information online but have been unable to locate it. It seems like this would be a potentially important part deciding where to practice.

Any input?

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[radiaterMike]

I believe this can be done in all states except Alabama- and really only depends on whether a practice owns the equipment, and or how/if the practice negotiated getting a portion of the technical fees from the hospital which owns the equipment.

 

[md_hopeful21]

I believe this can be done in all states except Alabama- and really only depends on whether a practice owns the equipment, and or how/if the practice negotiated getting a portion of the technical fees from the hospital which owns the equipment.

good luck on getting the hospital to give you any of the technical fees

 

[Gfunk6]

Honestly, I was not aware that Rad Oncs cannot collect technical fees in some states. In California, you can collect technical fees.

Broadly summarized, technical fees are generated through the actual use of equipment (e.g linear accelerator with hardware attachments such IGRT) and professional fees are generated through the RO physician (consults, follow-ups, looking at ports/cone beams, on-treatment visits). Broadly speaking, for each Radiation Oncology treatment about 15-30% of the fees are professional and the remainder is technical.

There are a few ways that you can access technical fees:

1. Own the equipment; you keep all the profits but you are also responsible for the overhead (linac maintenance and repair, staff salaries/benefits, physical plant maintenance, etc.)

2. Negotiate a percentage of the technical fees or global (Technical + Professional fees) fees; it is nearly impossible to get this from hospitals nowadays; however, if you join a corporate owned practice (Vantage, 21st Century Oncology) you should earn some percentage of technical fees once you make partner

3. Productivity bonuses can provide you with more money than you normally make from professional fees; this is relatively common and rewards the physician if they meet certain patient volume thresholds

 

[radiaterMike]

The fees are based on what is coded by CMS and private insurers follow those guidelines. Technical fees are billed by whoever is entitled to receive them (hospital, physicians, or both). There are some codes that apply only to free standing clinics (i.e. weekly physics check).

I dont think there is any variability from state to state. The "Alabama exception" was a not so funny comment on the posters name.

 

[TarHeelRadOnc]

The fees are based on what is coded by CMS and private insurers follow those guidelines. Technical fees are billed by whoever is entitled to receive them (hospital, physicians, or both). There are some codes that apply only to free standing clinics (i.e. weekly physics check).

I dont think there is any variability from state to state. The "Alabama exception" was a not so funny comment on the posters name.

The difference between hospital-based and freestanding technical reimbursement is widening in 2013 (in favor of hospitals) and will likely further widen in the future, secondary to changing CMS policies and ObamaCare/ACA. Physicians who own machines will always recoup greater revenue than those who receive only professional reimbursement, but that has to be balanced against the cost of capital equipment (which is ever increasing). Some practices that own machines are forging strategic alliances with hospitals/ACOs to limit exposure in light of the forthcoming changes. Practices in certain settings (small town/rural, CON state, further distance to major referral center) will likely be in a better position to protect their technical investment than those in highly competitive areas, but all will be affected. The current appeal of outright technical ownership is somewhat decreased compared to the early IMRT era (circa 2000-2004).

 

[medgator]

The difference between hospital-based and freestanding technical reimbursement is widening in 2013 (in favor of hospitals) and will likely further widen in the future, secondary to changing CMS policies and ObamaCare/ACA. Physicians who own machines will always recoup greater revenue than those who receive only professional reimbursement, but that has to be balanced against the cost of capital equipment (which is ever increasing). Some practices that own machines are forging strategic alliances with hospitals/ACOs to limit exposure in light of the forthcoming changes. Practices in certain settings (small town/rural, CON state, further distance to major referral center) will likely be in a better position to protect their technical investment than those in highly competitive areas, but all will be affected. The current appeal of outright technical ownership is somewhat decreased compared to the early IMRT era (circa 2000-2004).

Important points. Certain things have traditionally been harder to get paid for in the freestanding setting vs the hospital, namely cyberknife

 

[RadRadRad]

The difference between hospital-based and freestanding technical reimbursement is widening in 2013 (in favor of hospitals) and will likely further widen in the future, secondary to changing CMS policies and ObamaCare/ACA. Physicians who own machines will always recoup greater revenue than those who receive only professional reimbursement, but that has to be balanced against the cost of capital equipment (which is ever increasing). Some practices that own machines are forging strategic alliances with hospitals/ACOs to limit exposure in light of the forthcoming changes. Practices in certain settings (small town/rural, CON state, further distance to major referral center) will likely be in a better position to protect their technical investment than those in highly competitive areas, but all will be affected. The current appeal of outright technical ownership is somewhat decreased compared to the early IMRT era (circa 2000-2004).

Tarheel has hit on an important point. Namely the discrepancy in reimbursement for the same procedure for free standing centers vs hospitals. This is killing diagnostic radiology private practice and medical oncology (infusion services...well one could argue it already killed them). This is basically CMS/government forcing our hand into being hospital employees. Although I am a hospital employee by choice, I do not think we should be forced into this. See the below NYtimes article to see how well this is working out for patients and doctors in certain hospitals.

http://www.nytimes.com/2012/12/01/b...r-doctors-nationwide.html?pagewanted=all&_r=0

 

[FreeRT]

Thanks for your answer, Gfunk6. Quick question: If someone is in a hospital based practice and the hospital is really supportive and accomodating, what would be considered a reasonable percentage of technical fees a radiation oncologist could ask for?

 

[medgator]

Thanks for your answer, Gfunk6. Quick question: If someone is in a hospital based practice and the hospital is really supportive and accomodating, what would be considered a reasonable percentage of technical fees a radiation oncologist could ask for?

I've never heard of a hospital handing over a portion of the technical fees. I guess if they were really desperate....

The only way I've heard of such an arrangement is a Joint-venture between a rad onc group and the hospital where the rad oncs bill professional and both groups (sometimes in combo with other entities like US Oncology, Vantage etc) split the risk/reward in terms of paying for expenses and collecting the residual technical distributions after that has been done.

 

[Gfunk6]

Thanks for your answer, Gfunk6. Quick question: If someone is in a hospital based practice and the hospital is really supportive and accomodating, what would be considered a reasonable percentage of technical fees a radiation oncologist could ask for?

I already responded to you by PM, but I thought I would repost here for public dissemination. Rather than tech fees, Rad Oncs can ask hospital to bill everything and give them a percentage of global billing. Range is 20% to 35%+

The hospital admin will only do this if they feel that the ROs bring the business and not the hospital. If it is the latter, then they can put any warm body there. If the former, then they have to weigh the risk of pissing of their current RO against the possibility of her leaving or (even worse) building/going to a rival freestanding center.

 

[seper]

10% used to be standard technical cut

 

[Gfunk6]

10% used to be standard technical cut

Well if the ROs bill professional fees themselves and the hospital gives them a 10% cut of technical it should probably work out to 25% of global or so.

 

[BobbyHeenan]

In my limited experience, getting a cut of technical revenue seems possible in undesirable rural areas, but administrators in competitive markets (where they think they can get good rad oncs) is out of the question. I have seen contracts with built in incentives for private practice docs covering hospitals, but a straight percentage of technical revenue I have not seen unless there is some sort of physician ownership or partnership with the hospital on machine/facility costs. Just because I haven't seen it doesn't mean it doesn't exist...I just didn't see it three years ago when I did a big job search.

In a busy practice (25-30 under treat at once) professional plus 10% of technical would be insanely good money. I know they do in non-competitive rural markets where hospitals have struggled for stable coverage, but I'm not aware of them existing in competitive places.

 

[medgator]

Standard professional rates these days are around 18% of global, but can vary from 10% (terrible) to 25% (really good, as you are getting some "technical"thrown in) in my experience