How to Use Ancillaries to Increase Revenue

September 28, 2010

Although the primary purpose of our profession is to help heal and maintain the health of our patients, we are still business owners with salaries, taxes, and operating expenses to pay. This often means that we have to find ways to generate additional revenue, which raises the question, “Will offering ancillary services improve the profits in my practice?” They very well could.

It’s no secret that it is becoming more and more difficult to make a reasonable profit practicing medicine these days. Although the primary purpose of our profession is to help heal and maintain the health of our patients, we are still business owners with salaries, taxes, and operating expenses to pay. This often means that we have to find ways to generate additional revenue, which raises the question, “Will offering ancillary services improve the profits in my practice?” 

They very well could. First, let’s define ancillary services.

Ancillary services are supplemental services which may include radiology, physical therapy, laboratory, and pulmonary services. They usually fall into three broad categories: diagnostic, therapeutic, and custodial. These services can be offered inside your practice as an add-on the day-to-day services that you already provide.

For example, if you send your patient out for a service such as physical therapy or an X-ray, then you are using an ancillary service. However, if you were to implement such service into your practice instead of sending the patient elsewhere, then you can capture the revenue for that service and create a convenience for the patient.

The key is to know how to properly code these ancillary services so that you obtain your full potential reimbursement for providing the service.

If you are already ordering a test for a patient, and your staff has to spend the time to refer the patient out to someone, then why not keep the patient right inside your practice? This enables you to duplicate your effort, as you have done the work once but now you get to reap the benefits twice. When you begin to use ancillary services in your practice, an in-house practitioner does the work, and you get to bill for it. Now, your patient is benefiting from the therapy or service right in your office.

The first issue to address is whether or not the services you provide would support in-house ancillary services. Then you must determine which ancillary services you feel comfortable providing. The choices are essentially yours. Below is a partial list of ancillary services which you should consider depending upon your practice and your personal philosophy and desires:

1. Therapy, such as physical, occupational, and speech
2. Pulmonary function testing
3. Weight management
4. Education classes, such as those on diabetes, nutrition, and fitness
5. Durable medical equipment
6. Infusion therapy
7. Radiology, such as X-rays and CT scans
8. Stress testing
9. Ultrasounds
10. In-house labs
11. Sleep studies
12. Trigger point injections
13. Facet injections

Once you have decided on which services you would like to offer, then you must determine whether your practice is a good fit for the ancillary services you’ve selected. Stayed tuned for Part 2 for more on the decision making process of adding ancillary services to your medical practice.

Adam Alpers, DO, is a family-practice physician in private practice in Ocala, Fla. A medical coding expert, Alpers also helps other physicians learn how to maximize their insurance reimbursements and writes heavily on the subject at his blog medbillingncoding.com.