The authors describe how to develop and manage a capitated outpatient radiology contract. Aspects of a capitated fee structure and the need to apportion fees between a hospital and its radiology group are discussed. During negotiations with a managed care organization (MCO), certain information and commitments should be obtained. Utilization data should also be obtained from the MCO, but if they are not available (or are thought to be unreliable), certain norms call be used. Once a utilization projection is arrived at, reimbursement calculations can be made and compared with assumed reimbursements under a known fee schedule, such as that of Medicare. This procedure allows one to estimate whether a capitated proposal is financially feasible. Once a contractual agreement is instituted, the radiology group must then track and manage utilization. An understanding of these principles should enable radiologists to deal effectively with both practice and fiscal concerns presented by managed care.
