As reimbursements decline and economic woes persist, physicians are casting about for ways to boost revenue. Some avenues are traditional and some quite unconventional, and many do hold promise.

 

Yet, Lucy Carter, partner with Carter Lankford CPAs in Nashville, has a word of caution: “What may seem like a good idea on the front end may end up being a lot of cost and hassle on the back end. The big consideration is, what am I going to get paid for this and what is it going to cost?”

 

Buying equipment to augment in-office services is a tried-and-true, practice-management solution. For example, X-ray equipment is standard in many primary care offices today, and the addition of ultrasound in obstetric practices has been a boon. “There are a lot of intrinsic advantages to the patient and to the physician to having these ancillary services in the physician office,” Carter added. “It’s more convenient, for one thing.”

 

When considering such additions, physicians should consider not only the cost of the equipment, but the costs associated with supplies, staffing and training, office improvements and whether the addition will require a state-issued certificate of need.

 

They also should keep a close eye on regulations and reimbursement shifts from the federal Centers for Medicare and Medicaid Services and the Stark Law’s provisions against self-referring, Carter advised. “We’re still seeing practices looking at CT and MRI, which is a pretty risky thing right now with reimbursement changes,” she said.

 

For physicians considering seeking an in-office exemption for the addition of a surgery center, Carter said reimbursement changes may help or they may hinder, depending upon the physician’s specialty. Stark does allow in-office exceptions for new equipment, services and surgery centers as long as some stipulations are met. “But you still cannot compensate the physicians in that practice based on the volume or value of referrals to that Stark-designated health service. That’s where it becomes sticky,” Carter said. “If you put something like this in your office, are you going to be willing to share the revenue from it equally?” Trying to come up with Stark-compliant compensation systems is particularly challenging for larger practices, she added.

 

To augment revenue, physician practices also are turning to retail sales, and the results can be a financial advantage. Some pharmaceutical distribution companies will set up points of sale in physician offices and train staff to dispense commonly prescribed drugs, with doctors getting a cut. Other physicians may choose to sell health-related books, herbal and nutritional supplements, and other health aids.

 

Some physicians have gone as far as setting up holistic spas for services such as skin care, acupuncture, therapeutic massage, and even manicures and pedicures. Healthy Reflections Medical and Day Spa in Covington, Wash., is associated with a physician practice, and it even features a boutique selling jewelry, wigs, women’s apparel, teas, cards, candy and music, Carter noted, adding, “In our state, sales tax is a huge issue.”

 

Carter said another revenue-changing alternative that some clients have chosen is concierge medicine – dropping dealings with third-party payers and going to a cash-only practice. “There have been some success stories in doing that,” she said. “When you look at how much of the practice can be cut out from an expense standpoint, you can drop fees to patients and still make more money. It’s a great strategy for somebody who wants to keep practicing, but doesn’t want to see 25 patients a day.”

 

Carter acknowledged, however, that there’s a legitimate concern when it comes to concierge medicine, usually set up so that patients pay a monthly or annual flat rate. “Are we creating what we dreaded, a two-tiered system of healthcare? I think we are,” she said. She also pointed out that CMS isn’t a fan of the concierge idea. “They don’t like it at all, but they haven’t found a way to do anything about it,” she said. At least not yet.