A practice that adds ancillary services also has the ability to gain new patients through word of mouth, explains Ken Hertz, a principal consultant with MGMA. "If [a practice] has a dispensary and I can get my meds right there, I am going to tell my friends," says Hertz.
Weiss has another straightforward rule when it comes to practices that are thinking about adding ancillary services. "Take a look at what your most popular referrals have been. Access the demand," he says.
How does the practice code and get paid for the service?
Prior to adding ancillary services, practices need to look at both the payer and coding components. Practices need to be sure payers are going to cover the costs of performing the services, Rahman says. "Is [the payer] going to pay the costs you need per procedure? You need to call and explain which codes you are going to bill and see what you will get [reimbursed] for them," says Rahman.
Graham says coding is the most important part of adding an ancillary service. A practice needs to know what the true reimbursement will be before adding an ancillary.
"Even though Medicare says they will pay for [a service], a doctor should always check with their local coverage determination. Some of these ancillaries will have a global CPT charge, a professional fee, and a technical fee," says Graham.
Practices also need to realize the risk they are taking on when adding ancillaries. The physician is ultimately responsible for billing out the services and making sure the procedure is done properly, which is why Hertz emphasizes the need for physicians to think "before they plunge."
"Adding a service is adding a new business line, this has to be thought through from the ground up. Not thinking through the entire process is the biggest mistake I see," he says.
Similarly, Graham warns of potential issues between practices and outside contractors performing the ancillary services. "Physicians and practice owners need to vet the contract between the practice and the company performing services. There are billing intricacies involved. Practices can get in trouble with the billing being more intricate," says Graham.
Lastly, if a practice's new ancillary service turns out to be a financial detriment and not a boon, the best thing to do is to identify the problem and move on, according to Ken Hertz, a principle consultant with MGMA. "If for some reason it's not successful, shut it down and move on. Some practices hang on...no, it's a business proposition, take an honest assessment and move on."