10 Strategies for Evaluating Medical Ancillaries

In an era of declining reimbursements and increased operational costs, medical practices are adding ancillary programs at an astounding rate. In fact, Medical Economics published a survey of independent medical practices, which showed that roughly 90% of primary care practices now offer some form of ancillary program.

It’s imperative for medical practices to do proper due diligence when evaluating new potential ancillary programs. Below are 10 strategies that medical practices should use when evaluating a new product or service.

  1. Consider Cost

Many practices add ancillaries because they are facing a cash crunch, so programs with huge up-front costs can be prohibitive.

However, programs that are higher priced often have the highest financial upside.

Costs should be considered within the context on the value that the ancillary program brings to the practice.

In addition to up-front costs, practices should consider the potential variable costs associated with each program, the expected reimbursement, and the expected utilization in the practice, and use a simple ROI calculator to determine if it is a sound investment for them.

  1. Insurance reimbursement

Most ancillary programs are reliant on the insurance reimbursement model. If this is the case, then a practice would be wise to spend some time to evaluate the coverage and reimbursement with their top payors.

Practices should run test claims where possible and evaluate the requirements for medical necessity so they can evaluate the expected patient volume.

  1. Quality Measures (MACRA/MIPS)

Physicians are increasingly being incentivized to focus on quality of care with their patients. This has been stratified through MACRA, which allows physicians to capture bonuses by achieving certain Quality Use Measures.

Ancillary programs are one of the key strategies that many practices are employing to achieve higher MIPS composite scores.

If Medicare represents a significant amount of a practice’s payor mix, then analyzing the Quality Use Measures that can be achieved with an ancillary program should be a major consideration.

  1. Focus

One of the top benefits that physicians cite when choosing medical ancillaries is that it can allow them to focus on a personal interest.

For instance, many physicians are interested in emerging science in regenerative medicine, and they have found that many baby boomers are looking for these treatments. Focusing on an area of interest often presents an opportunity to increase revenue while following a passion.

  1. Location

Unfortunately, some programs are region-specific, and may only work well in certain States.

Some programs have State exclusions, or just may not work as well in certain parts of the country for various reasons.

  1. Ease of implementation

One of the biggest reasons cited for the failure of ancillary programs to achieve success in a practice is the lack of staff training. Many programs look good on paper, but if it is going to be overly cumbersome or complicated for the staff, the chances of a successful implementation are small.

A practice should spend time going over all details of staff requirements and making an honest assessment on whether they can perform added roles or procedures. Practices can also ask what additional training and support is provided after implementation in case of staffing changes.

  1. Patient Volume & Demographics

Not every medical ancillary program is right for every doctor, despite what vendors may tell you.

It is futile to try to squeeze a square peg into a round hole. Practices are much more successful when they find programs that are right in their sweet spot.

For instance, if you have a low percentage of Medicare patients but the program is highly reliant on Medicare coverage, it’s obviously not going to have a high impact on your practice.

Also, some programs have economies of scale built in, so considering your patient volume could be a key factor.

  1. Space

Before considering an ancillary program, a practice should evaluate their space capacity. Many ancillary programs require a dedicated exam room.

If a practice has several unused exam rooms, medical ancillaries present a great opportunity to turn those into profitable testing or treatment centers.

If a practice does not have available exam rooms, then the focus would be on programs that do not require dedicated space.

  1. Evaluate the Vendor

There are literally thousands of vendors in the medical ancillary sector. To ensure the highest chance at success, a practice should evaluate the potential vendor; how long have they been in business? Is the program backed by research? Do they have clients who are currently successful?

  1. Use a Practice Development Manager (PDM)

A Practice Development Manager (PDM) can save practices significant time!

PDMs understand the full landscape of the ancillary sector and can help tailor strategies based on the individual needs of each practice. They help practices isolate the ancillary programs that will have the highest impact.

PDMs have an entire library of resources for over 40 ancillary programs, saving hours of research for the practice.

For more information about adding medical ancillaries to your practice, speak with your Every Ancillary PDM.