FRA and Florida Hospital: A Cautionary Tale Unfolds

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After 40 years, a 47-physician group ceased to exist, a casualty of current medical economics, internal strife,and failed negotiations

The first inkling that the public had that anything was amiss between Florida Hospital and its radiology group occurred in March 2008, when a story appeared in the Orlando Sentinel revealing that Florida Radiology Associates (FRA), which had been interpreting for the hospital since 1968, was ending the 40-year relationship.

At the core of the failed negotiations, the story says, was FRA’s demand that Florida Hospital offset a significant compensation gap resulting from unrecompensed or poorly recompensed Medicaid and indigent billings for emergency-department and other services that FRA provided. The story adds that the hospital, instead of compensating the independent radiology group, had offered to take over FRA’s billing, an offer the radiology group declined.

FRA sources were quoted as saying that a full 40% of the group’s work was now occurring on nights and weekends—peak times for uninsured patients to appear in the emergency department. FRA was doing its own night and weekend reading, per its contract. No outside teleradiology coverage was being provided by either FRA or the hospital, according to sources in the radiology group.

On March 3, when FRA gave notice that it would terminate its contract, a deadline was set: June 3, the term of the contract. After that, FRA would no longer be interpreting for the hospital. Negotiators had that long to find at least a temporary solution, or the hospital had that long to find an alternative solution on its own.

According to FRA radiologists involved, the decision to terminate the contract was an effort to inject a more urgent tone into further negotiations, with the endpoint being a more suitable contract with the hospital. One FRA source reports that the radiologists indicated that they would have been willing to work without a contract during negotiations.

Instead, negotiations came to a stop. The hospital formed its own in-house radiology group, Radiology Specialists of Florida (RSF). It then hired away 32 of the 47 FRA radiologists to join the hospital’s in-house group. FRA, as an independent practice, collapsed. The former FRA radiologists who chose RSF were now hospital employees.

FRA administrators made a brief face-saving effort to keep the group going with its skeleton crew of radiologists, but that turned out to be for naught. By late May, FRA had laid off the bulk of its 64 billing-support personnel. By late September, it had disposed of its headquarters building. A highly specialized, independent radiology practice that had provided interpretations to Florida Hospital for 40 years was no more. FRA’s doctors who had joined RSF had, in the words of one former FRA doctor, been transformed into radiology hospitalists.

While negotiations were collapsing and the hospital was forming its own group, online radiology forums were buzzing, with much of the comment coming from those who were obviously close to the Florida Hospital scene. Cowards, scabs, and worse terms were used to describe the doctors who chose to leave FRA to join RSF. Ironically, though, those who did join RSF may have achieved much of what FRA had been aiming for all along. The hospital hired a teleradiology service to provide final readings for the emergency department at night. It also reportedly offered attractive salaries to the former FRA doctors, effectively giving them a big pay increase.

The vituperative forum posts and word of mouth made the demise of FRA a sort of cause célèbre in the radiology world. If a hospital could shift unilaterally to an employee model with a big group like FRA, were other independent practices that read for hospitals at risk? One forum comment states that the demise of FRA has taken on the stamp of an urban legend.

Some FRA doctors who are no longer with the hospital agreed to explain that legend, as long as their names were not used. The hospital issued a one-paragraph statement on its position. Later, a hospital administrator agreed to an interview.

FRA’s Narrative

Negotiations between FRA and the hospital, according to more than one source, had been ongoing for five or six years, at least. Essentially, one issue was at the heart of things: the radiology group was losing income because it couldn’t collect from patients coming to the emergency department. This lost income left FRA holding the bag on recruitment. It