Group Rift Leads To Hospital Inquiry

A radiologist's employment lawsuit has ballooned into a full-scale probe of Jackson  (pop. 102,400), Tennessee's  largest hospital, 697-bed Jackson-Madison County General, raising questions about consumer protection violations in the process.

C. Vinson Alexander, Jr, MD, was terminated by Jackson Radiology Associates, the practice he helped found, in June 1999. According to his lawsuit, which he filed in May 2001, the group doubled its fees for common radiology procedures within 6 months of his departure. Alexander alleges he was fired because of his refusal to go along with the fee increases under his tenure.

C. Barry Ward, an attorney from the Memphis firm of Glankler Brown PLLC who is representing Alexander, says, "We looked at radiologists' fees in the Southeast, and the people at Jackson made more than the 90th percentile, by a long shot. We think there was a conspiracy to remove Alexander, and then raise rates following his departure."

Attorneys for Jackson Radiology would not comment for this story. However, according to an article in Modern Healthcare, they contend that there is no relation between Alexander's firing and the raising of fees, and they attribute the firing to allegations that Alexander was abusive to fellow physicians and hospital staffers.

Recently, Tennessee attorney general Paul Summers got into the act, seeking to unseal documents related to the lawsuits, as part of his office's investigation into the relationship between Jackson General Hospital and Jackson Radiology Associates for possible violations of the Tennessee Consumer Protection Act and the Sherman Act, the federal antitrust law.

"The attorney general wants to know whether the hospital arranged to steer patients to Jackson Radiology," says Ward.  "I know that might be seen as common practice, but in the case of this hospital, they're looking to see if such referrals included the hospital also paying more than fair market value, which would violate the Sherman Act." He adds that if Jackson Radiology did indeed charge exorbitant fees to patients, the aforementioned consumer act would also be violated.

"We're also investigating if there was a conspiracy to interfere with prospective business relations," adds Ward, alluding to allegations that Jackson Radiology denied Alexander's former patients radiological services.

Ward says that a trial is expected to take place by the end of the year, with a status conference with both parties slated for the end of May, during which a new judge will be named for the case and any other updates will be announced.

NY Imagers Form Society

A group of New York state imaging professionals has joined forces to create a non-profit group that will combine marketing and legislative efforts, as well as seek better purchasing terms.

The newly formed New York State Association of Medical Imaging Providers (NYSAMIP) is governed by a board of directors made up of physicians and managers of medical imaging facilities statewide. The association is comprised of freestanding imaging centers and hospitals.

According to a press release, the association will focus on the relationship of medical imaging providers to managed care companies. (518) 462-4080.

Huge Mammography Litigation Costs Predicted

The annual cost of screening mammography litigation in the United States could top $250 million within the next 10 years, according to a new analysis presented at the American Roentgen Ray Society's annual meeting in late April.

The analysis, conducted by Richard Tello, MD, MSME, MPH, professor of radiology, epidemiology, and biostatistics at Boston University, was based on a statistical model that reviewed the number of women likely to be undergoing mammograms, the potential for missed cancers, average lawsuit settlement ($200,000 based on 1995 figures), and other factors.

"The number of women needing mammograms is on the rise, since the Baby Boomers are aging," Tello says. "With more mammograms come more chances for missed cancers, and therefore lawsuits." He says the analysis suggests that between $70 and $200 per woman per mammogram would need to be saved to pay for future costs, as opposed to current litigation costs which are closer to $10 per woman per mammogram, according to Tello. "We came up with that figure based on several studies we conducted," he says.

He suggests that the predicted figures are problematic given that some insurance reimbursement for mammograms is only at or near the $70 level. "With rates like that, it does not appear feasible  for radiologists to contribute to litigation defense. It also is not likely that insurance companies will contribute more money to prepare for these future costs. As a result, malpractice insurance companies will probably increase their premiums, meaning radiologists might be more reluctant to do screening mammography."

Tello notes that, in the estimates, "we looked at women who received mammograms and then developed breast cancer," as opposed to women who simply received mammograms. He says that the estimate that one in 10 women who are litigation candidates will actually sue is a "conservative  number. We believe it's higher than that." He adds that "only a quarter to one half of these women who go through litigation actually win their cases. Also, in general, younger women get paid out more money than older women in these cases."

Industry News

McKesson Corp, San Francisco, has signed a definitive agreement to acquire A.L.I. Technologies Inc, Vancouver, British Columbia, through a cash tender offer of approximately CN$530 million, or US$340 million...GE Medical Systems, Waukesha, Wis, and R2 Technology, Sunnyvale, Calif, announced FDA approval for the use of R2's proprietary mammography computer aided detection (CAD) technology, the ImageChecker, with the GE Senographe® full field digital mammography system. The ImageChecker was originally approved by the FDA in 1998 for use with film-based screening mammography to assist radiologists in minimizing false negative readings, and in 2001 the FDA expanded approval to include use with diagnostic mammograms...Royal Philips Electronics, Amsterdam, the Netherlands, has announced the appointment of Jouko Karvinen as the new president and CEO of Philips Medical Systems...Eastman Kodak Company, Rochester, NY, announced that Dan Kerpelman will join the company as president of its health imaging unit. Kerpelman will develop strategies for pursuing growth opportunities created by the convergence of imaging and information technologies...VitalWorks Inc, Ridgefield, Conn, has reported financial results for its first quarter ended March 31, 2002. For the quarter, the company reported record net income of $7.6 million, or $.16 per diluted share, which compares favorably to a net loss of $(19.1) million, or $(.54) per share, for the 3-month period ended March 31, 2001...Voxar Ltd, Edinburgh, Scotland, has been named one of Europe's fastest-growing medical imaging companies, according to the 2001 Deloitte Touche Tohmatsu European Technology Fast 500 list. Voxar is number 81 on the list.