What Your Linear Accelerator Service Contract Is Actually Buying
Equipment service agreements, uptime, downtime, and where contracted hours go unused.
Medsolve Dynamics reviews equipment service agreements for cancer programs before renewal, using the same cost basis the vendor prices from.
Answers to the questions cancer program administrators ask before a service contract renewal. Each one links to the episode it came from.
What does a LINAC service contract actually cover?
A comprehensive agreement is priced as a flat percentage of the equipment’s original list price, set once at signature. It does not move as the machine ages or as the cost to serve it changes. What it buys is parts, labor, guaranteed response, escalation to factory engineering, and the transfer of catastrophic component risk off your balance sheet. What it rarely itemizes is how much of the fee is service and how much is software.
June 26, 2026 · Listen
How much should a LINAC service contract cost per year?
The only modern published measurement tracked 32 linear accelerators over 675 days: parts averaged $41,600 CAD per machine per year, and $94,000 CAD including in-house labor. That is a service cost ratio of 3.13 percent, roughly two-thirds of it labor. Full-service vendor contracts are generally understood to run 6 to 7 percent of equipment cost. The gap is a starting question, not a verdict — the measured figure excludes software, facility and insurance.
March 17, 2026 · Listen · Capital decisions
How do I calculate my own service cost ratio?
Divide each machine’s annual contract price by its original capital cost. Compare across your own fleet before comparing to anything external. Programs that run this find machines of similar age and workload carrying materially different ratios, usually because they were bought in different years under different negotiations and nobody went back and squared them. If the capital file is gone, CMS lists an equipment price input of $3,000,966 for an IMRT accelerator.
March 17, 2026 · Listen · Run the numbers on your own contract
What is an evergreen renewal clause, and what does missing the window cost?
Standard language renews the agreement automatically for a full term, typically one to three years, unless written notice arrives 60 to 90 days before expiration. The vendor has no obligation to surface that date before it closes. On a $200,000 annual agreement, missing it commits $200,000 to $600,000 of spend on a decision nobody made. Ask for a 30-day notice window and a written vendor obligation to notify at 120 days.
April 29, 2026 · Listen
How do I negotiate the escalator on a service contract?
The escalator is where recoverable money concentrates, because it is the provision least likely to have been negotiated at signature. A 4 percent escalator on a $380,000 agreement adds roughly $15,000 in a single year with no meeting having occurred. A $200,000 agreement at 3.5 percent costs about $237,000 by year five. Cap the annual increase, require documented index data, and negotiate the right to suspend it in any year the vendor missed service commitments.
April 21, 2026 · Listen · See the gap on your own agreement
Should software and AI licenses be bundled into the service agreement?
Bundling folds licenses, treatment planning, remote monitoring and AI modules into a single fee terminable only by terminating the whole agreement. Two costs follow. You cannot drop or switch a software component without losing service coverage, and the bundle hides what service costs against what software costs. Require service, software and AI stated separately on every invoice from the first one. It costs the vendor nothing and builds the baseline you were never given.
March 24, 2026 · Listen
How should uptime be defined in a LINAC service contract?
The percentage matters far less than the definition underneath it. Scheduled maintenance is typically excluded. So is downtime the vendor classifies as customer-caused. The measurement window is often keyed to vendor business hours rather than your treatment day. A 99 percent guarantee reads as 3.65 days a year, but if the definition excludes early mornings, evenings and weekend catch-up, the vendor sits in full compliance during the hours downtime actually costs you treatments.
June 26, 2026 · Listen
What should I track before a service contract renewal?
Five numbers, all of which your vendor already tracks on you: uptime delivered against contracted, dispatch response against the service level agreement, preventive maintenance hours scheduled against delivered, parts covered against parts billed outside coverage, and first-call resolution. Four sit in the vendor’s service portal already. The fifth — the distance between responded and engineer on site — needs a four-column log you start yourself.
May 28, 2026 · Listen · Listen · Request a diagnostic review
Does Medicare pay separately for radiation oncology AI?
No. In the CY2027 outpatient proposed rule CMS proposed renaming Software as a Service to Software as a Medical Service, designating 36 HCPCS codes and moving 21 into New Technology payment classifications. None of the designated codes describe radiation oncology. The set is diagnostic and analytic — ophthalmology, cardiology, neuroradiology, bone density, pathology. Radiation oncology AI stays bundled inside delivery and planning codes, with no payment of its own.
How did the 2026 CPT changes affect radiation oncology payment?
On January 1 delivery moved to a complexity-based structure keyed to isocenter count and active motion management, and the prior intensity-modulated codes were deleted along with the G6001 to G6017 set. The effect is redistribution, not a uniform cut, and direction depends on case mix. A fraction that paid $578.47 as intensity-modulated delivery in CY2025 pays $564.51 at Level 3, or $394.05 at Level 2. A conformal fraction that paid $262.98 now pays $394.05.
March 17, 2026 · Listen
What is my real annual service cost?
The contract price plus every invoice for parts and labor billed outside coverage. Those arrive separately, land in accounts payable, and are almost never reconciled against the agreement that was supposed to cover them. Add twelve months of them together. That total, not the contract line, is the number to put against a time-and-materials model or a third-party bid. Programs that skip this step benchmark the wrong figure and conclude the contract is competitive.
April 7, 2026 · Listen · Calculator
Why does the service contract matter more in 2026 than it did last year?
Service contracts are fixed. The revenue underneath them is not. CMS built CY2026 rates on an assumption that the top complexity tier would carry 35 percent of delivery volume, then reported it running near 18 percent in the first quarter. The temporary 2.5 percent payment increase applies only to services furnished before January 1, 2027. A cost line that rises automatically against a revenue line that does not is a structural problem.
May 18, 2026 · Listen
More field notes: Vendor negotiation · Capital decisions · all seven topics