Aerospace firm supports center company start-up

November 6, 1991

Financial support from a Florida aerospace company and the serviceexpertise of several former Quantum Imaging managers aided theformation of a new imaging center firm in September. MediTek Health of Tampa intends to acquire existing

Financial support from a Florida aerospace company and the serviceexpertise of several former Quantum Imaging managers aided theformation of a new imaging center firm in September.

MediTek Health of Tampa intends to acquire existing physician-ownedimaging centers and bring them into compliance with the safe harborregulations, said Paul M. Stanley, president and COO.

Stanley left Medical Imaging Centers of America in the springto form a new imaging services company called Genesis Health CareManagement (SCAN 4/24/91). He had served as president of mobileMRI provider Quantum Imaging prior to that firm's acquisitionby MICA two years ago (SCAN 12/13/89).

Genesis, however, did not have sufficient funding to supportthe growth plans of Stanley and the other Quantum managers whocontinued to work with him. Heico, a publicly held aircraft engineparts supplier in Hollywood, FL, did have the funds. Heico waslooking to diversify into growth industries outside aerospace,and medical services fit the bill, Stanley told SCAN.

Stanley sold 80% of Genesis and a related company to Heico.He has retained the remaining 20% ownership position in MediTek.He has also been freed of noncompete restrictions with MICA.

"The handcuffs are off," he said. "We are developinga national company. We can provide staffing, management and marketingfor (imaging) facilities. We bring economies of scale and (development)expertise to independent physicians who don't have those kindsof resources."

MediTek plans to purchase 60% to 100% of the equity in independentphysician-owned partnerships. The firm also intends to developnew centers or other types of facilities in combination with physiciansand hospitals or hospitals alone, Stanley said.

The dust is settling after the publication of the Departmentof Health and Human Services' safe harbor regulations this summer.The rules outlined criteria for legitimate referring-physicianjoint ventures under Medicare fraud and abuse legislation (SCAN7/31/91).

While most centers found it difficult to find shelter in thesafe harbors, they were not necessarily in violation of the underlyinglegislation. Initial panic among physician investors brought manypartnerships to the auction block. This flurry of potential acquisitionsis slowing, but the pace may resume if more restrictive rulescome out of Washington, Stanley said.

"Those (centers) that have been spooked by safe harborsare still on the market. Those that are past being spooked arerealizing they are not violating the law. They are looking forways to restructure," he said. "We should see a slowingof partnerships looking to be bought out. The market will tightenfor a while, but eventually it will open back up. I don't thinkwe have seen the last of safe harbors."