Revenue Cycle Management Blog | GroupOne Health Source

5 Ancillary Services to Increase Your Practice Revenue

Written by Kathy Kuhn | February 21, 2016

Looking for new ways to grow your practice and increase revenue? It's not just a matter of drawing in more patients who need the medical services you provide. Many physicians have strategically determined ancillary services that can bring in more money from their existing client base in order to fight the neverending battle of declining reimbursement. 

Some ancillary medical services might not be right for certain practices. However, all have the potential to boost your revenue whether the services are covered by insurers, or out of pocket by patients who are willing to pay for non-covered services that they think are worthwhile.

Here are 5 ancillary services that, depending on your practice size and patient base, could provide a positive return on investment and a significant boost to your income.

1. Med Spa Services

Med spa services can be a lucrative add-on for practices that have a lot of patients seeking services to help minimize the effects of aging. In fact, in some cases med spa services can bring in as much income as the medical practice itself, though it can take time to build a reputation that makes this possible.

Popular med spa services include Botox, dermal fillers, laser hair removal, and skin care products. Start-up costs are reasonable unless you include lasers, which can be pricey. This might not be a good service to offer in urban areas where the market is already saturated. If there isn't a Med Spa service nearby in your community then you might be surprised to find out how much revenue opportunity exists for these services.


2. Physical Therapy

Practices serving patient bases with high rates of sports injuries, osteoporosis, and joint problems may have the volume necessary to support an in-house physical therapy program. Start-up costs are relatively low, and reimbursements can reach $2,000-$3,000 per patient.

Smaller physician groups may start out by only offering physical therapy services two or three days a week, and then expanding if demand grows. If you're doing a lot of physical therapy referrals, then in-house physical therapy may be worth doing a feasibility study on, to see if you have the medical billing levels necessary to support it. If so, the potential income boost could be significant.

3. Radiography

Radiology equipment is expensive, and it requires special construction techniques, like lead-lined walls for x-ray rooms. However, for practices with sufficient medical billing volume and excellent management, in-house radiography can increase income while providing more convenience for patients.

Some practices find that they need to add evening or weekend hours to bring in sufficient radiography patient volume. However, people who suffer sports injuries or other injuries during evenings and on weekends generally want to know right away if they have a fracture, and if they can find that out without an ER visit, it's even better.

4. Laboratory Testing

Many practices know that lab testing is lucrative, because they request lab tests all the time. Some conclude that bringing in capability to perform moderately complex lab tests in-house can increase income while making things more convenient for patients and clinicians.

The caveats are that lab equipment can be expensive, and you must obtain accreditation and hire trained technicians to operate your lab. That said, if you have high patient volume and excellent management, an in-house lab could bring in several hundred thousand dollars per year while saving patients a trip to yet another facility for testing.

5. Weight Loss Services

It's not uncommon for a medical practice to discover that a significant proportion of its patients are overweight. Adding a well-managed weight loss program on-site can be effective for patients (many of whom experience more success with the accountability of vising their doctor), and start-up costs are minimal.

Once-a-month patient visits, plus meal replacements and weekly group sessions can help patients lose weight and keep it off over the course of an 18-week program. Though the profits per patient aren't that high, many medical practices have a high enough volume of overweight patients to make weight loss services a reliable income stream.

Adding Services The Right Way

The addition of strategically selected medical services to your practice can increase practice revenue significantly, often without adding a large volume of extra expenses.

However, the right ancillary services depend on what your core services are as well as your patient demographics, and a few other considerations like physical space. Ericka Adler, a partner at the firm of Roetzel & Andress, advises to watch out for some of the legal restrictions with adding ancillary services.

In an article published on Physicians Practice, Adler explains how practices can add ancillary services the right way:

"In determining whether you can bring ancillaries into your practice, there are also legal issues to address. Under Stark laws, physicians are able to self-refer for certain designated health services (“DHS”) covered by Stark (which include such services as diagnostic testing, physical therapy, and laboratory services) by using the “In-Office Ancillary Services” exception. This exception requires that groups qualify as a “group practice” and meet billing, supervision, and location requirements. Most group practices are able to qualify and you should talk to counsel to make sure you meet the required exception.

There are always concerns about physicians overutilizing ancillary services so it’s important to audit your practice to make sure there is documented medical necessity for all tests. In addition, there are specific rules on how income from ancillary services can be distributed to referring physicians under Stark and this should be reviewed by counsel as well."