Hospital system reportedly ends contract after private radiology practice declines employment arrangement

A Virginia radiology group claims a client health system ended recent contract talks after the practice declined a hospital employment offer.  

Radiologic Associates of Fredericksburg was supposed to let Mary Washington Healthcare know by December whether it planned to let the contract for hospital-based work automatically renew. Ian Gass, MBA, chief executive of the nearly 50-radiologist practice, says the two had been discussing a new professional services agreement since March 2024. 

However, the two-hospital system, located south of Washington, D.C., proposed a new contract that RAF “felt didn’t reflect the current radiology market,” Gass told Radiology Business by phone Tuesday. 

“We thought it would actually hinder our group's ability to retain and recruit new physicians,” Gass said. “We’ve gone back and forth a couple times, and then we just couldn't come to an agreement. Ultimately, they offered up an employment model that we weren’t interested in. We were still willing to talk to them, but they've kind of cut off communications for the most part since January. That's where we are today.”

Mary Washington Healthcare, meanwhile, framed things differently. A spokeswoman said Radiologic Associates of Fredericksburg terminated the contract to provide services at its Mary Washington Hospital and Stafford (Va.) Hospital in December. RAF will continue to provide coverage through the end of June, and the disagreement does not impact outpatient services provided at several freestanding imaging centers jointly operated by the two organizations. 

“The contract termination initiated by RAF is disappointing; however, our hospital team has been working hard to ensure we have high-quality radiology coverage for the hospital facilities beginning July 1,” Emily J. Thurston, director of communications and marketing, told Radiology Business by email. “We have had success in both recruiting permanent radiologists and contracting for longer-term interim radiologist coverage. We will be ready for the radiology transition on July 1.”

Gass remains hopeful the two sides may resume negotiations. RAF’s founding radiologist bought the first X-ray machine at the Fredericksburg hospital in 1948, and the practice has provided interventional and diagnostic services to its hospitals since RAF’s inception in 1974. The imaging centers and hospital-based care require separate contracts, Gass said, because the former is much simpler, only necessitating coverage from 8 a.m. to 5 p.m. (while EDs require night and weekend shifts). 

“We don't have to hire the overnight rads who are obviously very expensive in today's environment,” he told Radiology Business. “Given the difficulty that we've had hiring radiologists, I hope they do well and can continue to provide the same level of service that we have for this community,” Gass added later. 

The radiology group CEO declined to discuss sticking points in the negotiations, citing a nondisclosure agreement. He emphasized the quarrel was not strictly about payment, noting there were “several other provisions they had proposed that would have made hiring additional radiologists extremely challenging.” 

“We're disappointed too, but we're still hopeful that we'll be able to continue serving these hospitals in some form—and that an arrangement can be made at some point.”

The Free Lance-Star first reported news of the dispute Tuesday.