Physician services provider Mednax shared Thursday that it’s “very excited about radiology,” having earned half a billion dollars in revenue from the specialty in 2019.
That represents a 9% uptick from the prior year, with 50% of growth occurring organically, officials said during their fourth quarter earnings call. Following the company’s acquisition of Boca Radiology Group—its 10th affiliated imaging practice—in January, Mednax now employs 800 radiologists interpreting 12 million studies annually, CEO Roger Medel, MD, told investors.
Altogether, Mednax spent upward of $120 million on merger and acquisition activity in 2019, with about half of that going toward radiology. Officials anticipate 2020 to be a year of “stabilizing their financial results,” setting the stage for expansion in 2021, in pediatrics and other specialties.
“We also believe that there is a meaningful amount of growth opportunity still remaining in radiology and the trends have been very favorable for us in that business,” added Charles Lynch, vice president of strategy and investor relations.
Combining on-the-ground practices with its teleradiology arm vRad, Mednax now provides radiology services across the country, officials said. Last year, Mednax also invested in a common imaging platform at one of its core radiology practices, allowing docs to interpret studies via a single workstation and queue, rather than multiple PACS at disparate facilities. All are linked directly to the hospitals that submitted studies.
“This was a key initiative for this practice and we believe we are in a unique position to move forward based on the underlying IT and systems capabilities we bring to the table via vRad,” Medel told investors. “We’re excited about the growth opportunities for Mednax radiology as we scale investments like these across the organization.”
All told, Mednax reported a $1.15 billion loss in 2019 on revenues of $3.51 billion (a slight uptick from $3.45 billion the prior year). Earnings before interest, taxes, depreciation and amortization totaled $500.8 million in 2019, down about 5% from the $527.7 million logged in 2018.
Officials also shared that insurer UnitedHealth Group has “unilaterally” terminated contracts with its providers, eliminating them from insurer networks in four states. Mednax could not estimate the monetary damages from this “unprecedented action” but said it affects anesthesia, neonatology and high-risk obstetrics providers (leaving radiology off the list).
Medel shared that UnitedHealth has demanded a 50% rate reduction and dropped the news on his team “without warning.” He’s especially concerned about how its actions will impact negotiations on surprise medical billing legislation.
“The steps that United has taken fly in the face of both our efforts and those of Congress, and if these terminations are made effective, we will have significant increases in out-of-network patients,” Medel told investors. “This is a terrible and unfair outcome,” he added.