7/17/2025

HEALTHCARE
CONTRACTS

Revolutionizing Healthcare Contract Management

• Importance of contract
management in modern healthcare
• Overview of healthcare contract
types and definitions
• Common challenges in managing
healthcare contracts
• Strategies to optimize the contract
lifecycle
• Using modern tools to replace
manual, error-prone processes
• Achieving streamlined, compliant,
and profitable operations

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What Is Healthcare Contract Management?

(Definition, Scope, Importance)

• Definition:
A strategic process of creating, executing, and
monitoring contracts in healthcare—covering services,
insurance, vendors, staffing, and compliance—to ensure
smooth operations and legal protection.

Scope Includes:
• Provider Contracts: With doctors, hospitals, insurers
• Payer Contracts: Government/private insurance
agreements
• Vendor Agreements: Equipment, IT, medical supplies
• Employment Contracts: Staff hiring & compensation
• Software Licenses: Digital health tools & EHR systems
• Facilities & Lease Deals: Space, maintenance
• Research Contracts: Clinical trials, partnerships

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Why It Matters:

 Ensures legal & regulatory compliance

Reduces financial & operational risk
Enhances care coordination & efficiency
Tracks renewals, deadlines & obligations
Improves transparency and accountability

Core Elements of Healthcare Contract Lifecycle

Management (CLM)
1. Request (Initiation):
The process starts when a stakeholder (e.g. clinical, IT,
procurement) formally requests a new contract, outlining scope,
deliverables, and urgency.

2. Creation (Drafting & Authoring):

Using standardized templates and clause libraries, contracts are
drafted to comply with healthcare regulations (e.g. HIPAA, Stark
Law) and align with organizational goals.

3. Negotiation & Collaboration:

Internal teams—legal, finance, clinical, procurement—work
together with external parties to finalize terms. Real-time
collaboration helps reduce back-and-forths and lead time.

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4. Execution (Approval & Signature):

Once negotiated, contracts are routed through approval workflows and
signed, increasingly via e-signature tools. This provides an audit trail and
speeds up execution

5. Compliance Monitoring & Obligation Management:

Post-signature, obligations (like service-level agreements, privacy
protections, reporting duties) are tracked. CLM systems flag
non-compliance, deadlines, audits, and regulatory requirements in real
time.

6. Renewal (or Termination):

As contracts near expiration, the system triggers alerts for review.
Organizations then decide to renew, renegotiate, or terminate based on
performance analysis and evolving needs

Stages of Making a Contract

Stage Description
Request Formal start: collect info and define what’s needed
Creation Drafting contracts with templates and legal standards
Collaborative edits and terms finalization with
Negotiation
stakeholders
Execution Approval routing and signing (often electronic)
Track obligations, regulatory requirements, and
Compliance
performance
Automated alerts lead to renewal, renegotiate, or
Renewal
termination

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Diverse Types of Healthcare Contracts

Provider Agreements Employment Contracts

These are foundational agreements between healthcare providers Formal agreements between healthcare professionals and their
and payors (individuals or insurance companies). They meticulously employers, detailing job responsibilities, work hours, compensation,
outline the terms and conditions for reimbursement of services, and benefits. These legally binding documents protect both parties'
cost regulation, and ensuring patients receive appropriate, rights, provide clarity, and foster a stable, productive work
necessary care. They also streamline administrative processes, environment.
facilitating smooth information flow.

Vendor Contracts Purchased Services Contracts

Agreements between healthcare providers and suppliers of goods These involve external vendors providing non-healthcare services
or services. They specify pricing, delivery schedules, quality like laundry, food service, IT support, or facility maintenance. They
standards, and support, crucial for establishing clear expectations, ensure high-quality support services at reasonable costs, allowing
streamlining supply chains, improving efficiency, and maintaining organizations to focus on core patient care functions.
high-quality care.

Diverse Types of Healthcare Contracts

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Specialized Healthcare Contract Types

Equipment–Lease Contracts
Leasing expensive medical equipment improves cash flow, provides
access to advanced technology, and includes maintenance—without
large upfront costs.

Technology Licensing Contracts

Grants rights to use patented devices or software. Covers confidentiality,
ownership, compliance, and data protection—often requiring legal
expertise.

Patient Care Contracts

Define services, payment terms, and responsibilities between providers
and patients. Essential for managing sensitive data, informed consent,
and dispute resolution in modern digital healthcare.

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Navigating the Challenges in Healthcare Contract

Management

As the healthcare industry its rapid evolution, so too does

the inherent complexity of managing its vast array of
contracts. Healthcare providers, insurance companies,
and suppliers critically depend on these agreements for
smooth operationcontinuess, stringent compliance, and
financial stability. However, navigating healthcare
contract management presents a unique set of
significant hurdles.

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Navigating the Challenges in Healthcare Contract

Management

Manual Processes Lack of Visibility & Control Changing Regulations

Many organizations still rely on paper-based Organizations often struggle with fragmented The healthcare landscape is constantly shifting
systems or outdated software, leading to data and a lack of centralized information, with new laws and policies. Ensuring that all
inefficiencies, errors, and delays. This reliance making it difficult to gain real-time visibility contracts comply with the latest requirements is
significantly increases the risk of non- into contract status, obligations, and a continuous challenge, as failure to adapt can
compliance and substantial financial losses performance. This hinders the ability to track result in severe financial penalties, damaging
due to oversight or missed deadlines. milestones, evaluate performance, and legal disputes, and reputational harm.
identify potential risks.

Lack of Standardization Multiple Stakeholders

Inconsistencies across contract templates, clauses, and approval Healthcare contracts typically involve diverse stakeholders—providers,
processes within and between organizations create inefficiencies and insurers, government agencies—complicating communication,
errors. This lack of uniformity complicates management and increases negotiation, and decision-making. Coordinating input and approvals
the potential for disputes or misinterpretations. from numerous parties can be challenging and prone to errors.

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Strategic Approaches for Enhanced Contract

Management
In the dynamic healthcare environment, effective contract management is paramount for ensuring seamless operations and
upholding rigorous compliance standards. By implementing strategic approaches and leveraging advanced technologies,
healthcare providers can streamline processes, minimize inherent risks, and maximize financial benefits.

Centralized Repository Standardized Templates Streamlined Processes

Establishing a single, secure source of Utilizing pre-approved templates and Automating contract lifecycle processes,
truth for all contracts (e.g., Dock’s digital clauses ensures consistency, accelerates especially negotiations and approvals,
repository within Office 365/SharePoint) contract creation, and reinforces through tools like Dock’s Word plug-in
eliminates manual searches, reduces compliance. This approach (facilitated by and custom workflows. This enables real-
mismanagement risks, and enables easy Dock software) saves time and time collaboration, tracking changes, and
tracking of key dates, clauses, and significantly reduces errors or omissions reducing delays and errors.
performance obligations. across all agreements.

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Linking Contracts to Policies & Procedures for Compliance

In the highly regulated healthcare sector, a critical best practice in contract management software is the robust linking of important contracts to
relevant internal policies and procedures. This ensures stringent regulatory compliance, especially concerning security and patient privacy.

"Hospital contracts are all about regulatory compliance and obeying stringent guidelines concerning security and privacy. Therefore, having a
successful and appropriate contract in the healthcare sector is practicable by implementing the right healthcare contract management
software."

• Overcoming Compliance Issues: Appropriate linking helps proactively identify and overcome potential compliance issues before they
escalate, safeguarding the organization from penalties and legal repercussions.
• Regulatory Adherence: Healthcare organizations must meticulously adhere to numerous regulatory bodies and statutes, including HIPAA,
False Claims Act, Joint Commission standards, Stark Law (I, II, III), GLBA, HITECH, and the Federal Anti-Kickback Statute. Explicitly linking
contracts to the policies governing these regulations is paramount.
• Microsoft 365 & Compliance: Platforms like Microsoft Office 365 offer a comprehensive suite of compliance tools and offerings specifically
designed to assist healthcare businesses in adhering to these rigorous industry standards, providing a secure foundation for contract
management.

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Payment Models
1- Fee-for-Service (FFS) – Pros & Cons

What is FFS?
Providers get paid for each individual service or procedure performed.

Pros:
 Simple and easy to understand
 Encourages thorough care since every service is reimbursed
 Flexibility for providers to offer various treatments
Cons:
 Can incentivize overutilization of services
 Doesn’t promote cost control or quality improvements
 Risk of fragmented care and inefficiency

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2- Capitation – Fixed Per-Member Payment

• What is Capitation?
Providers receive a fixed amount per patient for a set period,
regardless of services used.

Advantages:
 Predictable revenue for providers
 Encourages cost containment and preventive care
 Promotes coordinated care delivery
Disadvantages:
 Risk of under-providing care to save costs
 Providers bear financial risk for patient health outcomes
 Requires strong data and management to succeed

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3- Bundled Payments – Episode-Based Reimbursement

A single payment covers all services related to a treatment
episode (e.g., surgery + recovery).

Benefits:
 Encourages efficiency across multiple providers
 Aligns incentives to improve care coordination
 Helps control overall costs of specific treatments
Challenges:
 Complexity in defining episodes and allocating payments
 Providers must manage risk for complications or readmissions
 Requires robust data sharing and collaboration

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Accountable Care Organizations (ACOs) / Value-Based Care

• What are ACOs?
Groups of providers jointly responsible for quality and cost of care
for a population, rewarded for meeting quality and cost targets.

Key Features:
 Focus on outcomes and patient satisfaction
 Shared savings for cost-effective care
 Encourages preventive care and chronic disease management
Potential Issues:
 Complex contract structures
 Requires investment in infrastructure and data analytics
 Challenges in balancing financial risk and patient care

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Negotiating a Difficult Hospital Contract: The

Attorney’s Perspective.

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Legal & Regulatory Framework

HIPAA / HITECH – PHI Handling & Breach Notification

Regulation Key Focus Requirements Impact

HIPAA ((Health
- Secure PHI- Access Prevents
Insurance Portability Protecting patient
controls- Patient unauthorized
and Accountability health info (PHI)
consent disclosure
Act))
HITECH (Health
- Breach notification-
Information
Strengthening HIPAA Increased penalties- Encourages secure
Technology for
in digital age Focus on EHR health IT use
Economic and
security
Clinical Health Act)

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Stark Law, Anti-Kickback Statute, False Claims Act

Law Purpose Prohibited Actions Enforcement

Civil penalties,
Prevent financial Self-referrals to
Stark Law exclusions from
conflicts in referrals owned entities
Medicare
Anti-Kickback Stop payments for Exchange of value Criminal fines,
Statute patient referrals for referrals imprisonment
Upcoding, false
Treble damages,
False Claims Act Prevent billing fraud documentation,
whistleblower suits
duplicate billing

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ACA & State-Level Mandates

Mandate Scope Key Provisions Implications

- Coverage for pre-
existing conditions
Influences contracts
ACA Federal - Essential health
& care models
benefits
- Encourages ACOs
- Medicaid rules
Requires local
- Telehealth policies
State-Level Varies by state compliance in
- Mental health
contracts
parity laws

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Accreditation Ties (NCQA) & FDA Oversight

Impact on
Entity Role Focus Areas
Contracts
- Quality metrics Enhances credibility
NCQA Accreditor - Patient satisfaction & plan
- Access to care competitiveness
- Medical devices Ensures compliance
FDA Regulator - Drugs & legal use of
- Diagnostics treatments

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Important Provisions of Exclusive

Provider Agreements

Exclusivity
• The agreement should contain an affirmative grant of exclusivity.
- Need to make sure the grant is consistent with the medical staff
bylaws, rules and regulation.
• The grant of exclusivity should be broad.
- Does the hospital want you as their “partner” or not? And remember
the concessions that are being made to the hospital.
• The extent of the exclusivity should be clearly defined.
- Ideally would like to specify by CPT codes or categories of procedures.

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Exclusivity

• Need a process for addressing exclusivity for new modalities

or new uses of existing modalities.
- The default should be that the radiology group has the
exclusive.
• Any “carve-outs” or exceptions to the exclusivity should be
narrow and clearly defined, and should not become “the
exception that swallowed the rule.”

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Exclusivity

• Insidious provisions:
• A process for modifying the exclusivity if the ultimate
discretion is left in the hands of the hospital.
• Exclusivity that isn’t very exclusive.
- Remember that the agreement may contain a clean sweep
provision.
• Carve-outs based on who reads the procedure versus what
procedure is performed.

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Coverage and Services

The agreement should clearly articulate the

coverage and professional service obligations of the
radiology group.

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Coverage and Services

• Common provisions:
• Physical presence at the hospital.
• Sub-specialization?
o Supervision of technical component (“TC”): who is responsible and when?
o Off hours and call.
o Report turnaround times.
o Use of locum tenens.
o Charitable care.
o Records and clinical service reports.
o Participation in UM, QI, risk management and compliance programs.

As an alternative, could default to requirements specified by

the medical staff, but this entails its own set of risks.

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Coverage and Services (cont'd)

• Insidious provisions:
• Provisions that give the hospital almost a unilateral right
to set the coverage and call requirements.

• Coverage and call requirements when the radiology group

does not have the exclusives, especially if the other
physician specialties who read films don’t have the same
obligations imposed on them, either by contract or under
the medical staff bylaws, rules and regulations.

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Performance Standards

• Many hospitals are demanding detailed, and

burdensome, “performance standards.”

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Performance Standards

• How do you address performance standards?

• Read them very carefully.
• If you haven’t had problems at the hospital, consider pushing the standards back
completely.
• Be wary of hospitals just copying standards that they have heard about other
hospitals using.
• The standards should be unique to your relationship, should be based on sound
clinical principles, and should be tailored to address past problems as well as future
problems that can be reasonably anticipated to arise.
• Also be wary of standards that depend heavily on effective and efficient operations
by the hospital or that are outside the control of the radiology group.
 As an example, maximum report times when the hospital has a poor history of
transcribing dictations.
 As another example, patient satisfaction scores.

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Performance Standards

• Evaluate whether failure to satisfy the performance standards will

constitute a breach under the agreement.
• Consider making the standards “objectives” to be strived for, but not
requirements that can lead to a breach.
• The hospital should NEVER have the right to unilaterally modify
the performance standards.
• Also be careful of efforts by hospitals to incorporate all sorts of
separate hospital policies, procedures and protocols, and, in effect,
make them part of the agreement.
• At a minimum, obtain and review all of these.

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Radiology Director

• If the radiology group will be providing a radiology

director for the department, then the agreement
should clearly articulate the role and responsibilities
of the position.
• The radiology group should have the right to
designate which radiologist will fill the position,
subject to the prior approval of the hospital of the
hospital, which approval may not be unreasonably
withheld.

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Radiology Director

• Insidious provisions:
• Position descriptions that shift too much responsibility to the radiology director.
The radiology director obligations of the radiology group should not be allowed to
become a new source of recovery to the hospital when the department is poorly run.

• Language that could have the effect of making the radiology director personally
liable to the hospital for her or his actions (when acting as the radiology director).
The agreement should include language that disclaims all such personal liability, and that
affirmatively states that the radiology group is solely responsible.

• Delegations of responsibilities to the radiology director that are inconsistent with,

and can be “trumped” by, the medical staff bylaws, rules and regulations.

• Additional obligations in the agreement that are unique, and only apply, to the
radiology director.

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Qualifications of Radiologists

Common provisions:
• Licensure.
• Medical staff membership and privileges.
• Board certification or eligibility.
• Medicare and other payor status.
• Compliance with ethical and religious directives.
- Don’t let “ethical” or “conflict of interest” policies trump any
restrictive covenants that have been negotiated for the
agreement.
• Relationship with the radiology group.

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Qualifications of Radiologists (cont'd)

• Additional requirements might be requested for

certain key radiologists such as the radiology
director or department chair.
- But these should be narrow and appropriate.

• Be aware of how locum tenens are treated under

the agreement.
-The qualifications provisions can sometimes make it
difficult to utilize locum tenens.

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Qualifications of Radiologists (cont'd)

• Insidious provisions:
• Mandatory written “acknowledgment” of the agreement
by each radiologist.
o It isn’t unreasonable for the hospital to demand that each
radiologist acknowledge and agree to any clean sweep provisions
and covenant(s) not to compete.
o HOWEVER, these acknowledgements are sometimes drafted
(perhaps unintentionally) in a way that makes each radiologist
personally liable for ALL of the terms and conditions of the
exclusive provider agreement, and for any breach thereof.
• Random drug testing obligation imposed on each
physician.

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Service Obligations of Hospital

• The agreement should clearly articulate the obligations of

the hospital.
• Any sources of past conflicts should be specifically
addressed.
• If the hospital demands performance standards from the
radiology, then it should be willing to agree to
performance standards for itself.
• Will the hospital be responsible for supervision as and to
the extent required under Medicare and any other
applicable payor requirements?

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Compensation

• Any compensation to be paid to the radiology group

for providing a radiology director should be
described in the agreement.
o The compensation needs to be fair market value and
cannot be calculated in a manner that takes into account
the volume or value of referrals or other business
generated among the parties.
o The compensation can be a fixed amount, although it is
more common today for compensation to be calculated
on an hourly basis.

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Compensation

• Likewise, any compensation to be paid to the

hospital for items and services it provides the
radiology group should be described in the
agreement, and is subject to the same rules.

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Compensation

• If the hospital will be billing for any of the PC, then the agreement
must include or describe:
o The proper steps and documentation for reassignment.
o A methodology to calculate the professional component (“PC”)
compensation.
• Absent extenuating circumstances, it is generally recommended
that the radiology group separately bill for the PC.
• On the other hand, if the agreement is intended to be more of a
“Coverage Agreement,” then the compensation methodology and
amount will be critical.

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Term and Termination

• It’s generally preferable to seek the longest possible
term, and ask for an evergreen clause.
• After Rev. Proc. 2017-13: For tax-exempt hospitals, the
term of the exclusive contract is probably a strictly
business issue.
• For all other hospitals, the term has always been a
strictly business issue.
• Neither party should be able to terminate without
cause, i.e., upon notice, until after a minimum period
of time.

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Term and Termination

• For cause termination provisions should allow a

reasonable period of time for a party to cure the
breach.
o Absolute minimum is 30 days, and 60 to 90 is better.
o Could be shorter for breach of payment obligations.
• The hospital should not be able to terminate the
entire agreement because of the actions of a single
radiologist, provided the radiology group bars the
radiologist from providing services at the hospital.

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Term and Termination

• Insidious provisions:
• Vague, “bad citizen” termination rights.
• Termination upon change in law, e.g., the hospital can
terminate the agreement if it merely perceives a
potential risk to its tax-exempt status.
- Could be very problematic in the future as hospitals become
more and more nervous about their tax-exempt status.

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Term and Termination

• Insidious provisions (cont'd):

• “Transition rights” that allow the hospital to unilaterally require the
radiology group to continue providing services for a specific period of
time after termination (even after a termination for cause).
o On the one hand, such a provision will make it easier for the hospital
to terminate the agreement.
o On the other hand, it could also give the parties some breathing
room in negotiating a replacement agreement.
o It’s a judgment call.
• Post-termination obligation on the radiology group requiring it to
release all of its radiologists from their covenant(s) not to compete
with the radiology group.

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“Clean Sweep”

• If the exclusive provider agreement is terminated for

any reason, then the medical staff membership of
each radiologist is automatically terminated without
due process rights.
• Clean sweep is becoming, if it hasn’t already become,
the standard hospital quid pro quo when the hospital
grants exclusive privileges to a radiology group.

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“Clean Sweep” (cont'd)

• Be aware of efforts at the state level to limit the

ability of hospitals to grant exclusives.
- If you can’t be granted exclusives, why agree to a clean
sweep?
• Similarly, if your exclusivity isn’t very exclusive,
then why agree to a clean sweep?

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Sidebar on HCQIA Reporting

• In order to access the immunity protections under the HCQIA, a

hospital is generally required to report to the National Practitioner
Data Bank:
 A professional review action which terminates, suspends or restricts a
physician’s clinical privileges based on actual or potential harm to patients,
and . . .
 Any resignation in lieu of corrective action or during an “investigation.”
• Medical staff termination pursuant to a typical clean sweep
provision does not require reporting because no professional
review action, i.e., a hearing, even takes place.

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Sidebar on HCQIA Reporting

• Sometimes the radiology group and/or the hospital may want to

build a mechanism into the exclusive contract for reviewing and
addressing problems that might arise with respect to a specific (as
distinguished from the group as a whole).

• This mechanism is designed to assure that the radiology group has had a
chance to make its case before it is required to remove the physician from
providing services under the exclusive contract.
• Even though this is a mechanism based in contract (not on the medical staff
bylaws, rules and regulations), it potentially could be deemed to be a
professional review action.
• Consideration should be given to specifying in the exclusive contract that the
mechanism is not and will not be deemed to be a professional review action,
and therefore is not reportable to the Data Bank.

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Payor Contracting

• This is probably the most controversial issue these

days in hospital contracting.

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Payor Contracting

• From the hospital’s perspective, it ideally wants the

rights to:
Negotiate and enter into payor contracts for the radiology
group.
Approve the radiology group’s fees.

• From the radiology group’s perspective, it ideally

wants the rights to:
Negotiate and enter into its own payor contracts.
Approve its own fees.

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Payor Contracting
• How this issue should, and will, get resolved depends on local market conditions and recent
payor contracting experiences.
• Examples of alternative, compromise resolutions:

 Radiology group has discretion in payor contracting, but cannot unreasonably refuse to participate with a
payor, or . . .
 Build a process for hospital to request participation by the radiology group, or . . .
 Mandate that the radiology group participates, but only if all the terms and conditions are reasonable,
or . . .
 Mandate that the radiology group participates with a listed set of the largest payors, as well as with all
other payors if the terms and conditions for these other payors are reasonable, or . . .
 Mandate that the radiology group participates if the group’s rates
from a payor are greater than or equal to the rates the group receives
from its “x” largest payors, or . . .
 Mandate that the radiology group participates if the group’s discounts are equal to are greater than
those of the hospital (usually measured against Medicare).

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Covenant Not to Compete

• This is probably the second most controversial

issue these days in hospital contracting.

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Covenant Not to Compete

• The hospital will often demand that the radiology

group agree to not compete with the hospital.
- At a minimum, the hospital will likely want to bar TC
competition.
- But the hospital may also attempt to bar PC work outside
the hospital.

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Covenant Not to Compete

• Whether the radiology group will have to agree to a covenant not to

compete for TC will depend on the radiology group’s leverage.
 Existing TC facilities of the radiology group will need to be carved out.
 But even if the radiology does not currently have TC facilities, it needs to ask
itself how likely it is that the radiology group would develop new TC
facilities given the hospital’s right to terminate the exclusive provider
agreement.
• It’s almost never acceptable to limit the radiology group’s ability to
provide the PC.
 This is particularly the case if you’ve agreed to relatively detailed
performance standards: if you don’t do a good job, they can terminate you.

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Indemnification

• Any indemnification should be mutual, i.e., it should

apply equally to the hospital and the radiology
group.
• If the draft agreement does not include
indemnification, then it’s a judgment call whether to
ask for it.
• In any event, make sure the radiology group has
insurance that covers the indemnification liability.

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Dispute Resolution

• Consider the pros and cons of any dispute

resolution mechanisms such as binding arbitration.
• The radiology group may prefer to reserve its rights
to litigate in the event it gets into a dispute with the
hospital.
- The radiology group’s threat of litigation (versus the
obligation to pursue binding arbitration) may itself create
leverage to the benefit of the radiology group.

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Negotiating Process and Strategies

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Negotiating Process and Strategies

Key Principles
Understand the Dynamics
• Be aware of what’s truly at play in negotiations.
• Evaluate the leverage your group realistically holds.
 Maintain a Collaborative Tone
• Aim for non-confrontational discussions.
• A constructive tone helps preserve long-term working
relationships.
 Take the Lead with Caution
• Offer to draft the first version only if it’s balanced and you're
confident it will be seriously considered.
• Avoid wasting effort if the other party tends to disregard drafts.

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• Confidentiality Clauses – Red Flags &

Considerations
Be Cautious with New Confidentiality Demands
• These clauses can prevent you from:
• Consulting other physicians about prior agreements
• Communicating with medical leadership (e.g., MEC,
Board of Trustees)
• Going public if negotiations break down
 Know Your Existing Obligations
• Always check if your current agreement already
includes confidentiality restrictions.
• Avoid violating prior terms while navigating new
ones.

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Negotiating Process and Strategies

(cont'd)

Don’t just accept what the hospital says (whether on legal or business
issues).
• Challenge positions and rationales that are based on extreme legal positions or
that seem unreasonable or not supported by the clinical and operational
realities.
Be prepared to use past statements and positions of the hospital:
• Hospital has said: “Everything must be at fair market value. For example, you
must pay us fair market value for any of our infrastructure that you use to read
films from other locations.”
• Radiology group should say: “Don’t expect us to provide extensive medical
director services for less than fair market value. In other words, we’re not
going to provide these services to you for free.”

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Responses to Some Things Hospitals Say These

Days

• Hospital: “We have to be very protective of our tax-

exempt status.”
• Response:
• “The law really hasn’t changed, although we recognize the
scrutiny is higher.
• The hospital and the radiology group have to find a way to
balance your [the hospital’s] concerns against our [the
radiology group’s] need for a reasonable agreement.”

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Responses to Some Things Hospitals Say These

Days (cont'd)

• Hospital:
• “We can’t grant you exclusives because we need to have an open staff.”
• Response:
• “A vast majority of hospitals don’t have ‘open staffs.’
• But if that’s what you want, then don’t expect a clean sweep right, and don’t expect us
to provide coverage and be on call by ourselves.
• By the way, who’s more qualified to read the films?”
• Hospital:
• “We need the right to modify the exclusivity.”
• Response:
• “Exclusivity is the quid pro quo for agreeing to a clean sweep.
• If you can unilaterally modify the exclusivity, then we really wouldn’t
have an exclusive, and there would be no reason to agree to a
clean sweep.”

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Responses to Some Things Hospitals Say These

Days

• Hospital:
• “You must give us the right to sign any and all payor agreements for the radiology
group.
• Or at least you must agree, without conditions, to participate with all payors that
we participate with.”
• Response:
• “If we agree to what you’re asking for, we would have no leverage with the payors.
• We would be at the mercy of every payor who somehow figures out that once it
gets its deal done with the hospital, then we [the radiology group] must
participate, REGARDLESS OF THE TERMS AND CONDTIONS PROPOSED BY THE
PAYOR.
• The result is that our reimbursement will drop precipitously.
• Oh, and by the way, how do you think the payors will learn
about this? And they always do.”

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Responses to Some Things Hospitals Say These

Days

• Hospital:
• “We want to partner with you, and we want to work with partners who are committed
to us.
• So, we don’t want you providing professional services for anyone who competes with
us.”
• Response:
• “We will have a robust exclusive contract with you, including detailed performance
standards.
• The contract is full of specific requirements that we’ve agreed to because we are
committed to you and want to partner with you.
• If we don’t do what we’re supposed to, you [the hospital] can terminate the contract,
and sue us for breach.
• Also, providing professional services at other places allows us be, and support
ourselves as, a broad, subspecialized group that you alone could not support.”

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What should you do when all else fails?

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Be aggressive

• Prepare for asymmetrical, guerilla warfare.

• Conduct a multi-channel PR campaign.
• Remember to comply with any existing confidentiality obligations.
• Engage in Kissinger-like shuttle diplomacy.
• NEVER underestimate the support of a medical staff that values and
appreciates the quality and service of the radiology group.
• Always remember: it ain’t over ‘til it’s over!
• But also: it ain’t finished ‘til it’s finished!

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