Download Example MIDS Stakeholder Information

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Medical Imaging District Services (MIDS)
Transfer Pricing
In this LHD, facilities have previously / never
trialled a business model utilising a transfer
price to cross-charge referrers for medical
imaging services.
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To achieve the necessary financial and clinical
balance and sustainability MIDS need to build
their
capacity
to
provide
diagnostic,
interventional and therapeutic services for
multiple referrers at any hour or day, for routine
and emergency patients.
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Though no actual budget is allocated to
Radiology and Nuclear Medicine by the facility,
MIDS has an indicative ‘operating budget’ or
costs to be recovered.
Total costs vary across facilities depending on
costs ‘allocated’ to MI departments. Private
revenues (Medicare) are deducted from total
costs leaving Net Cost of Service (NCOS).
The ability to generate private revenue varies
across facilities so the percentage of remaining
costs varies. These are then recovered using a
‘transfer price’ to cross-charge referring
departments for examinations requested.
Therefore the transfer price is a function of all
MIDS operating costs (including those charged
to MIDS by the facility) and the amount of
private revenue earned.
The transfer price includes components for:
 Staffing (may be 24/7)
 Consumables
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Equipment replacement (capital or lease)
and maintenance for better patient care and
revenue maximisation → transfer price
minimisation
Radiologists’ attendance at MDT and other
meetings
Consultations
Teaching
Research
Q&A activities
Transfer pricing allows referring departments to
manage their activity and dollar budgets and
ensure appropriate referrals.
To keep it simple, the transfer price is based on
a percentage of MBS. Although the percentage
of MBS charged may be higher than the actual
rebate, or bulk billing at a private practice, public
hospital departments undertake a wide variety of
examinations for a high percentage of unwell,
non-ambulatory
patients,
including
time
consuming high cost interventional and
therapeutic services. In addition, these services
are often undertaken after hours.
Referrers are therefore encouraged to continue
referring low cost high volume examinations
such as x-ray through the MIDS.
More information
In the meantime, if you have any concerns or
questions please send an email initially to the
contact people below.
XXX: [email protected]
YYY: [email protected]