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Expand Your Practice With Ancillary Care Services

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Expand Your Practice With Ancillary Care Services

As medical practices shift towards value-based payment, many physicians have seen a decline in revenue. More and more are choosing to include ancillary care services into their practice to recoup revenue that would otherwise be going out the door.

How can your practice benefit from including ancillary care services?

To identify the key factors, let’s break down onboarding ancillary care services, which ones you should consider, and the benefits you can expect.


There is no question that ancillary care services are on the rise. The question is: should you incorporate these into your practice?

As your practice grows, incorporating ancillary care options into your model makes your business more appealing to patients, and when done correctly, can yield large returns in the long run. But doing so relies on investment, accreditation, and the needs of existing and future clients.

Here are some steps to consider when you begin the process of building out ancillary services:

  • Analyze services most referred to outside providers
  • Price out the investment in time, money, and legal costs
  • Understand compliance around ancillary care services
  • Confer with payors to understand reimbursement

Looking at each of these through a granular lens…


The biggest challenge that practices face when incorporating ancillary care services into their practice comes from a lack of planning. People tend to be of two minds when it comes to this: either diving headfirst into unknown waters, or resisting change. Neither of these provide optimal results. Instead, try:

  • Before incorporating any new service into your practice, consider the things you are outsourcing most—this is potential revenue that is being lost.
  • With the implementation of electronic health records, uncovering this information is at your fingertips. Keeping a log of what kind of referrals you are making will help you understand your client base and predict future needs.
  • Taking stock of your competition will allow you to better position yourself. Independent practices are losing out against specialty care like urgent care centers and ambulatory surgical centers.

One of the easiest ways to determine whether patients will use ancillary services is to simply ask. Whether at the end of an appointment or by survey, doing this not only provides insight into what ancillary services are, but also promotes interest.

Identify ways you can expand your business, and then determine if this can be reasonably implemented.


Depending on the type of ancillary services you intend to provide, costs can range from thousands to millions of dollars. Consider these costs when expanding your practice:

  • Facilities – Does adding an ancillary care service to your practice mean you will have to procure more space? Make a judgement as to whether you will be able to add an ancillary service into your existing building, or if you will need to lease more space.
  • Equipment – Some ancillary care services like weight loss services or diabetes counseling, might require little to no equipment, while radiography equipment is expensive and requires lead-lined walls. Equipment costs must also factor in running costs, construction costs, and other hidden fees.
  • Staffing – Depending on what you’re planning to offer, staffing fees will vary by each ancillary service. Training and accreditation will also increase staffing costs.

With so many costs to consider, it should come as no surprise that the majority of physicians have opted out of expanding their services. While this conservative approach may be beneficial in the short-term, trends in healthcare suggest that this comes with-long term risk.

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Compliance and Legal Fees

As ancillary care services are rarely performed by a physician, a variety of state and federal laws must be factored in during the initial stages. Consulting a healthcare attorney is highly recommended before implementing any ancillary services.

Successful implementation of any of the list of ancillary services in healthcare provides more than just increased revenues—it makes your practice more enticing. On the other hand, poor implementation does more than just make your practice look bad—penalties, legal fees, and even criminal penalties like jail time work against you.


Once you have decided to incorporate an ancillary service into your practice, you need to speak with your payors to see if this investment will be worth it. This is the most critical stage in the process, as it will determine what kind of reimbursements you can expect.

Insurance plans vary in the amounts that they cover for different services. Even when they do not cover a certain service, they can sometimes be persuaded to do so when proof is offered that it will reduce cost of care.

Negotiating ancillary contracting is one of the areas that providers struggle with the most, and can often negate the effectiveness of expanding your practice with ancillary care completely. Services like PayrHealth specialize in this field of work, and have all the tools necessary to maximize contract reimbursements without having to hire extra staff for this purpose.


Depending on your region, patient demographics, and competition, the kinds of services that a practice should incorporate are going to vary. Some ancillary care services are more generally adopted, while others hit more niche needs that can differentiate you from the competition.

The second most popular ancillary care option is lab services, of which 69% of family medicine and 53% of internal medicine practices.

  • Discrepancies vary between office- and hospital-based providers, with hospitals tending to rake in greater reimbursements for the same services

The more services that you offer, the less trips your patients will have to make to off-site locations and the less revenue leaking out of your doors. But each service comes with costs. Here are a few of the most popular ancillary services being integrated into practices:

Laboratory Services

In order to do their job properly, physicians require lab results to make a diagnosis. Adding in laboratory services is a convenient way to make visits easier for both patients and clinicians.

In order for this to be cost-effective, however, this requires a great deal of volume. Aside from this, lab equipment is expensive and requires accreditation and trained staff to function properly. If high patient volume is not a problem for your practice, laboratory services can be an excellent addition to your practice.


  • Convenience
  • Efficiency
  • Can net high yields in returns
  • Setup costs tend to run $50,000


  • Requires high volume of patients to yield returns
  • Staff must be trained and accredited

Diabetes Counseling

The number of Americans with diabetes is projected to rise 165% by the year 2050. Although the evolution of treatment methods over the past 50 years have made diabetes easier to manage, case rates continue to spike.

Depending on the region that you are operating out of, adding diabetes counseling to your practice may be beneficial for your patients. Setup costs are minimal, and demand is high.

Of course, this comes with a slew of caveats. Accreditation for diabetes counseling is challenging to procure, and reimbursements tend to be low. However, adding this ancillary care service is increasingly seen as beneficial for your patients, and the need will only grow.


  • Need for services projected to increase over time
  • Low setup costs
  • Attractive draw to existing and future patients


  • Low reimbursements
  • Difficult accreditation

Physical Therapy

One of the more lucrative avenues a practice can implement, physical therapy has low setup costs (starting around $25,000) and high reimbursement (at around $2,000-3,000 per patient). These services can quickly pay for themselves.

Whether this is feasible to implement, however, depends heavily on your client base. If you are referring a lot of people to PT appointments, adding this can provide excellent returns for your business. If not, taking the time to find trained staff may be detrimental to your overall model.


  • Cost-effective
  • Lucrative
  • Great for physicians serving aging demographics or high incidence of sports injuries


  • Requires specialized staff
  • Access to populations requiring PT


With ancillary services being the burgeoning industry that it is, and with so many options to provide, one might be surprised that only one in five physicians have started providing ancillary care services.

The primary focus of a physician is operating their business and keeping patients well. With all of their energy dedicated to these tasks, opening new avenues of revenue is not always the number one priority. Negotiating contracts with payors only increases the risk, a task many are not prepared to do.

Adding ancillary care services is expensive on its own. Utilizing services like PayrHealth will help you get the highest reimbursements right away, without having to hire on additional staff.


For over 25 years, PayrHealth has helped practices negotiate the best contracts, ensuring that ancillary care services provide your patients with the best care while netting the highest reimbursements.

PayrHealth provides support for every part of the negotiation process, from credentialing, analysis, contacting, and renegotiation. As an extension of your team, PayrHealth offers affordable and effective negotiation services.

Contact us to see how we can support you, while you support patients with the best care possible.


Nixon Law Group. Increase Medical Practice Revenue With Ancillary Services.

MedConverge. Ancillary Services to Increase Revenue for Your Medical Practice.

RevelMD. 5 Ancillary Services to Increase Your Practice Revenue.

Medical Economics. Grow Your Practice With Ancillary Services.

Medical Economics. Ancillary Services: A New Cost Benefit Analysis.

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