US Radiology Specialists announces name change
US Radiology Specialists is changing its name after seven years of using the USRS moniker.
The Raleigh, North Carolina-based radiology group will now go by Lumexa Imaging, effective Tuesday. Leaders said the rebrand comes as the practice continues pursuing expansion, with a focus on constructing brand new outpatient centers.
Altogether, it now operates over 180 locations across 13 states (with concentration in Texas, North Carolina, and New Jersey) including 85 through joint-venture partnerships. USRS has already opened 10 “de novo” imaging centers last year and six so far this year.
“The Lumexa Imaging name, rooted in the concept of illumination, symbolizes the power of bringing clarity to complex questions through innovation and clinical excellence,” Melissa Weston, senior VP of marketing, said in a July 8 announcement. “This brand represents more than a name change; it tells the story of who we are and what we stand for. It reflects our commitment to expand access to the millions of patients who rely on us for answers each year.”
Lumexa noted that industry trends continue to signal a “strong shift” toward freestanding imaging centers. The company believes it is “uniquely positioned” to deliver “convenient, low-cost alternatives” to hospital-based imaging. Its centers offer expanded access, extended hours, convenient locations, and the full range of modalities.
“Rebranding as Lumexa Imaging represents an exciting new chapter in our journey as a leader in outpatient radiology care across the country,” Caitlin Zulla, who joined the organization as CEO in January, said in a statement, adding that the new name “embodies the future we're creating in this next phase of our organization.”
The organization bills itself as “one of the country's largest providers of outpatient medical imaging,” with 5,000 team members conducting over 4 million outpatient imaging exams annually. US Radiology Specialists was formed in 2018 as a partnership between Charlotte Radiology and New York private equity firm Welsh, Carson, Anderson & Stowe. At the time, USRS handled around 1.5 million imaging studies and procedures annually, working across 18 hospitals, 14 breast centers, and two vein clinics, among other locations.
Financial picture
S&P Global recently offered a glance into the practice’s finances in a “Ratings Score Snapshot” published June 25. Lumexa Imaging boasts key business strengths including rising demand for radiology services, a payer-driven push for imaging outside of hospitals, strong relationships, and “satisfactory” insurer and geographic diversity. However, the company also is facing risks such as “margin pressures” from wage inflation, “modest scale and limited market share,” and private equity ownership. The latter, S&P said, comes with an “aggressive appetite for growth,” with Lumexa carrying high leverage—its debt-to-earnings ratio is roughly 7x—and limited free cash flow generation.
US Radiology experienced “modest” revenue growth last year and “relatively flat” margins of 19% to 20%. However, S&P expects rising imaging demand will support mid to high single-digit revenue growth (5%–7% this year and next). This despite “modest’ margin pressure (about 40 basis points), with wage inflation continuing to outpace reimbursement.
“Given increased regulatory scrutiny around private equity investors consolidating physician groups, we expect the company to focus on expanding its footprint by opening de novo locations, which we expect will also contribute to modest margin compression in 2025, given that profitability is initially weaker at newly opened locations,” the analysis noted.
Lumexa Imaging generates about 80% to 90% of revenues from outpatient imaging centers and the other 10% to 20% from hospital inpatient services. Last year, it recorded roughly $950 million in revenues, which excludes “substantial” earnings from joint ventures in which the company has a noncontrolling interest.
USRS/Lumexa has been focusing recently on hiring more remote radiologists, which provides physicians with “much desired flexibility” and is “more cost efficient to the company,” S&P said. Private equity firm Welsh Carson owns about 43% of the firm, another 48% is held by physician partners and 9% other investors.
“Moreover, the company's variable compensation model with employee ownership also helps it absorb some of these labor pressures,” S&P noted. “That said, we expect margins will be modestly pressured as the increase in labor costs is outpacing reimbursement trends, as both government and commercial payers seek to constrain rising healthcare costs.”
About 57% of its revenue comes from commercial payers, 24% Medicare, 4% Medicaid and 15% “other.” It also has a “moderate level of revenue concentration,” with Texas No. 1 at 31% followed by North Carolina (22%), and New Jersey (13%) as of last year. Lumexa’s capital structure consists of a $165 million revolving credit line that was undrawn at the end of March and matures in 2027. Meanwhile, a $1.2 billion, first-lien term loan also is due in two years. It also had about $7 million cash in hand as of March 31 and is expected to generate $40 million to $50 million from operations over the next 12 months. Capital expenditures are between $20 million to $40 million annually, including building new de novo centers, while mandatory yearly debt amortization is roughly $12 million.
“Our simulated default scenario considers a default in 2027, precipitated by intensified competition, declining reimbursement rates, or the termination of third-party payer contracts,” the analysis noted. “We assume the company would reorganize as a going concern to maximize lenders' recovery prospects, based on the company's good market position.”
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.