Call Extraction: Kendall Report Discussion — CON Application Support

DDX ID: 0076 Date: 2025-12-10 Duration: ~33 minutes Participants: Kendall Thiessen (CDL, attorney/contracts), Dr. Joe Mazza (Cardiovascular Institute of New England, lead cardiologist), Shaina Smolowe (MedScout Head of CS), Meaghan DePeter (MedScout CSM). Call type: Platform capabilities review for CON hearing support. Rhode Island PET CT authorization case. Triage: Very rich. Opens entirely new commercial dimension — regulatory strategy. Kendall and Dr. Mazza are new voices with distinct perspectives (law/math and clinical practice respectively).

Distinct Insights

1. CDL has a regulatory consulting business alongside equipment sales

What: Kendall has filed approximately 20 CON applications across multiple states. His role extends beyond legal/contracts into operational consulting — pitching mobile trailers to local jurisdictions, appearing before planning boards. CDL is expanding from “easy” states (TX, VA, FL) into harder CON states (IL, MI, OH) that require proving healthcare gaps before adding services.

So what: The anchor notes presented CDL as an equipment company selling to hospitals and private practices. Kendall reveals a third commercial motion: CDL also serves as a regulatory consultant that helps practices navigate the state approval process required before they can even install PET equipment. In CON states, a hospital or practice can’t just buy CDL’s turnkey solution — they first need state authorization, which requires proving patient demand exceeds existing capacity. CDL doesn’t just sell the equipment; they help win the right to install it. This means CDL’s sales cycle in CON states has a regulatory phase that precedes the sales phase — and the data used for targeting (SPECT volume, facility characteristics) also serves as evidence for regulatory filings. The same analysis that tells a BDM “this is a good prospect” tells Kendall “this is a winnable application.”

Speaker credibility: Kendall, 25+ years practicing law, ~20 CON applications filed. Very high — this is his direct experience. Scope: CON states specifically (roughly half of CDL’s target states based on Melissa’s list). Motion: Regulatory (third motion, distinct from hospital sales and private practice sales). New: This entire dimension is absent from the anchor notes.

2. 60% of SPECT patients eventually become PET candidates — CDL’s demand projection methodology

What: Kendall: “We found around 60%, something like that of SPECT eventually becomes a candidate for PET.” Dr. Mazza’s practice annualizes to about 1,800 SPECT/PET patients per year who would qualify for PET CT.

So what: CDL uses a specific conversion rate to project PET demand from SPECT volume. The logic chain: a practice performs 1,800 SPECT procedures/year → based on clinical progression patterns, approximately 60% of those patients will need PET CT at some point → that’s ~1,080 patients per year who either travel out of state for PET, go to a competitor, or don’t receive optimal care. This projection methodology turns SPECT volume (which CDL can see in claims data) into PET demand (which is what the CON application needs to prove). It’s more defensible than population-level estimates (“everyone’s getting older and needs testing”) because it’s grounded in actual procedure volumes at the specific practice seeking authorization. The same methodology applies across CDL’s 20+ applications — once you have SPECT volume at a practice, you can project PET demand.

Speaker credibility: Kendall (methodology), Dr. Mazza (clinical validation). The source of this 60% figure — whether published clinical research or CDL’s own patient analysis — isn’t specified in this call. Kendall said “we found” which could mean either. Scope: Universal for CDL’s CON work. The conversion rate itself may vary by practice but the methodology is standard. Motion: Regulatory + targeting (same data serves both purposes).

3. Patients don’t switch cardiologists for testing equipment — the “fungible good” argument

What: Kendall: “Just because we have PET CT capabilities in the state does not mean that patients for this practice are inclined to go to a second cardiologist… it’s not the fungible good like going to one hospital or another hospital. I’m not going to go to a different doctor because they happen to have a piece of testing equipment I probably don’t even know about.”

So what: This is a central argument in CDL’s CON defense. The opposition claims existing PET capacity in Rhode Island is sufficient — patients can get PET at the hospital or through the mobile unit. Kendall’s counter: patients don’t change cardiologists to access a testing modality. A patient who sees Dr. Mazza for cardiac care and gets SPECT at his practice isn’t going to switch to a different cardiologist just because that other doctor has PET. They’ll either travel out of state for PET (leakage), skip PET entirely (underserved), or continue with SPECT even when PET would be clinically better (suboptimal care). The patient journey analysis can prove this with claims data — track Dr. Mazza’s SPECT patients and show where they go (or don’t go) for PET CT. If 40% of commercial patients leave Rhode Island for PET, that’s patients being lost, not capacity being sufficient.

Speaker credibility: Kendall (legal argument), though he acknowledged “we’re saying that, as in it’s true, we don’t know actually” — the claim needs data validation. Scope: Universal for CON arguments. The patient loyalty dynamic applies wherever patients have established physician relationships. Motion: Regulatory.

4. Competitor capacity saturation — RI Pet at ~2,700/year approaching mobile unit maximum

What: MedScout data showed RI Pet (the mobile unit competitor) processed 2,390 PET CT claims in 2024. Dr. Mazza extrapolated to ~2,700 accounting for missing payers. A mobile unit can do approximately 20 cases/day maximum, with cardiac PET cases taking longer (12-14/day realistic for cardiac).

So what: The opposition argues they have excess capacity to serve Dr. Mazza’s patients. Claims data directly contradicts this. RI Pet was projected to handle 4,700 cases/year when approved 23 years ago. They’re currently doing 2,600-2,700. Either they’re already at capacity (supporting Dr. Mazza’s application) or their original projection was wildly optimistic (undermining their credibility). The physical constraint of a single mobile unit is real — one truck can only process so many cases per day regardless of scheduling. Adding cardiac PET (which takes longer per scan than oncology) would require displacing existing oncology cases or exceeding daily throughput limits. This data point was the “aha” moment of the call — Dr. Mazza: “Dude, how can you do 20 a day when you’re already… we’ve got data to show that at minimum, you’re doing 2,600 right now?”

Speaker credibility: Data-driven observation verified in real-time on the platform. Very high. Scope: Rhode Island specifically, but the capacity saturation methodology applies to any CON hearing where existing providers claim excess capacity. Motion: Regulatory.

5. Technical vs. professional component — critical distinction to avoid miscounting

What: Rhode Island Medical Imaging showed 3,510 claims for oncology PET. Dr. Mazza immediately knew this was wrong — “They don’t do any because that’s the group that wants to get into it… but they are the readers. So across the state, all the reading.” Claims include both the technical component (performing the scan) and the professional component (reading/interpreting the result). Without separating these, you’d overstate competitor capacity by counting radiologist reads as actual procedures.

So what: This is a data quality insight that applies beyond Rhode Island. Claims data includes both performing and interpreting a procedure as separate billable events. A radiology group that reads PET scans from across the state shows up as a high-volume PET provider in claims data, but they don’t actually have a PET camera — they’re just interpreting images. If CDL used this unseparated data in a CON hearing, the opposition could point out that CDL’s own evidence overstates existing PET capacity, destroying credibility. The platform has the modifier data to distinguish technical from professional components, but it requires going to raw data rather than using the standard interface. For regulatory work, this distinction is essential.

Speaker credibility: Dr. Mazza (clinical knowledge that RI Medical Imaging doesn’t perform PET), Shaina (confirming platform capability to separate components). Scope: Universal for any claims-based capacity analysis. Particularly important in regulatory filings. Motion: Regulatory + data quality methodology.

6. “Reasonable doubt” standard — how CDL approaches data limitations in hearings

What: Dr. Mazza: “I would almost look at this like a criminal trial, right? And we’re the defendant. And all we have to do is put an element of doubt… we can say, hey, look, from the data that we could get, obviously, we don’t have the department of health… there’s no way you have capacity to do this.”

So what: CDL doesn’t claim perfect data in hearings — they acknowledge gaps upfront and use directional evidence to create reasonable doubt about the opposition’s claims. This approach has several advantages: (1) it preempts attacks on data completeness by acknowledging limitations first, (2) conservative estimates are more defensible (if they say RI Pet does 2,700 and the real number is 2,500, the argument still holds), (3) it shifts the burden — CDL doesn’t need to prove exact numbers, just enough to undermine the opposition’s “excess capacity” claim. The state-affiliated consultant has subpoena-like access to exact provider data that outside consultants can’t get. CDL can’t match that precision, so they use multiple data points (claims data, historical projections, capacity calculations) to triangulate a compelling argument.

Speaker credibility: Dr. Mazza (framing), Kendall (execution). Both have experience in these hearings. Scope: CDL’s approach to regulatory proceedings specifically. Motion: Regulatory.

7. Kendall’s bottleneck: same data, broken workflow

What: Kendall: “I communicate to Phil, then tries to translate it to somebody else that takes it, creates a report, sends it back to him. I get it and then go, no, it’s not right. And then it goes back to Phil and I was like, wait a minute, put me in direct contact here guys.”

So what: CDL’s regulatory work uses the same underlying data as their sales targeting — SPECT volumes, facility profiles, competitive landscape. But Kendall accesses it through a multi-step relay (Kendall → Phil → analyst → report → Phil → Kendall → corrections → repeat). This wastes time on every one of his ~20 applications. The irony: the platform that BDMs use for daily targeting contains exactly what Kendall needs for regulatory filings, but he didn’t have direct access until this call. Direct platform access would transform his workflow from “scrambling to find data every time” to running standardized analyses himself and adapting them per market. He committed to pursuing a license: “whatever resources you need, let’s do this.”

Speaker credibility: Kendall, describing his own workflow frustration. Very high. Scope: CDL’s internal operations. Motion: Regulatory (but the insight about sales data serving regulatory purposes is company-wide).

8. Dr. Mazza’s practice is the last independent cardiology group in Rhode Island

What: “We’re the only real cardiology group left in Rhode Island that’s private. We’re the only independent group left. The groups are all either associated with Brown Health or the Brigham or one other local hospital.”

So what: This context shapes why the CON opposition is so intense. Dr. Mazza represents the last independent cardiology practice in the state. If he gets PET CT authorization, he becomes more competitive with hospital-affiliated groups that have a stake in maintaining their advantage. The opposition (RI Pet/Acumen, owned by Stone Peak private equity) has a corporate interest in being the only non-hospital PET provider. The regulatory dynamics aren’t purely about patient care — they’re about market control. This is one case. Whether the independent-vs-system dynamic plays out similarly in other states would require checking — Rhode Island’s small market and extreme consolidation may make it an outlier rather than a template. But the insight that CON processes involve competitive dynamics beyond patient care (existing providers using regulatory processes to block new entrants) is worth tracking across CDL’s other applications.

Speaker credibility: Dr. Mazza, describing his own market position. Very high for this specific case. Scope: Rhode Island specifically, but the independent-vs-system dynamic is common. Motion: Regulatory + commercial landscape.

Transcription Notes

“Catherine” = Kathryn White (on maternity leave by this date; Meaghan is covering)
Dr. Joe Mazza — new to term bank. Lead cardiologist, Cardiovascular Institute of New England, Rhode Island. Published PET CT cost savings research in 2010s.
RI Pet / Acumen / Stone Peak — mobile PET competitor in Rhode Island. PE-backed national imaging company.
Deb Faulkner — Rhode Island’s typical consultant for CON hearings. Told Dr. Mazza his application should be approved.
78815 — oncology PET code used in capacity analysis.
78452 — SPECT code used for demand projection.
Ron — CDL COO, mentioned by Kendall as supporting resource needs.