11 Ways to grow gastroenterology practices through ancillary services
Reduced insurance reimbursements continue to create pressure on medical practices, particularly gastroenterology (GI) – a specialty that I’m most familiar with. Ancillary services offer a way to buffer a practice from financial pressure.
Before considering ancillary services, it’s important to streamline billing and technology at your practice. Efficient billing maximizes reimbursements. Better technology-driven processes minimize waste and improve efficiency.
When you operate an efficient practice, you’ll create savings (or increases) in revenues that can be utilized towards starting ancillary services. Below are 11 ancillary services for gastroenterology practices to consider.
What exactly to offer depends on these factors:
• the size of your practice
• patient needs
• availability of space and staff
• ability to invest or take a loan
• alignment with practice philosophy of care
• geographical concentration of your services
• competitive dynamics with local hospitals
• inclination to partner with an outside company
• regulatory restrictions in your state
• insurance coverage
- Move procedures from the hospital to your ASC. Building an ambulatory surgery center (ASC) requires time and effort. However, an ASC has the potential to significantly increase revenues through facility fees that would otherwise go to the hospital. Further, it’ll result in better efficiency through common technology and more coordinated care for patients. There are companies that partner with GI physicians to start ASCs.
- Start a pathology lab. Gastroenterology groups generate a variety of lab samples. Insourcing the technical component (TC), professional component (PC) or both will add significant revenue streams. Note that insurances do not easily go in-network with most new labs. To maximize reimbursements, you’ll need to have the ability to conduct ongoing negotiations on out-of-network claims with third-party administrators and insurances.
- Offer infusion and/or other biologics. Drugs for inflammatory bowel disease are expensive with small margins. You can’t afford to receive any denials from insurances because you already pay upfront to buy these drugs. However, if billing is rigorous on all claims and there’s suitable patient volume (e.g. patients of Crohn’s disease), then biologics can be a profitable endeavor.
- Start imaging services. If there’s enough need for imaging in the area and a large patient volume, a practice could consider investing in CT and ultrasound equipment. This creates a new channel of revenues for the practice.
- Offer hemorrhoid banding. One gastroenterology practice we know improved its overall patient satisfaction levels when it began offering this procedure. It’s relatively simple to offer this procedure and provides faster relief to patients. It can be performed both in the ASC and in an office setting with promising reimbursement levels.
- Build anesthesia partnerships. Several gastroenterology practices offer anesthesia as an ancillary service at the ASC with great success. It reduces pain for patients during procedures and therefore improves patient satisfaction. Again, anesthesia claims might require separate tracking and negotiation if fee schedules aren’t agreed upon. Note: the Centers for Medicare and Medicaid (CMS) recently made coding changes in anesthesia resulting in a reimbursement drop.
- Earn from clinical research. If the practice is academically inclined, you can develop a clinical trials program to evaluate new drugs, medical devices or tests. This can add a new revenue stream. For example, gastroenterology practices run trials for ulcerative colitis, irritable bowel syndrome, opioid-induced constipation and so on. It’s important to note that comprehensive research programs have inherent risk and take longterm commitment from doctors to create value.
- Add nutrition and weight management programs. Unlike some other ancillary services, adding a nutrition program requires less upfront investment. These income streams sometimes work better with a cash payment model. Focusing on diets specific to digestive disorders (e.g. anti reflux diet, FODMAP diet, gastroparesis diet etc.) can help patients manage their conditions better. Some practices offer procedures such as Endoscopic Sleeve Gastroplasty (ESG) and gastric bypass to help patients with weight management.
- Dispense medicines at your practice. You can consider partnering with an in-house dispensing company and dispensing your top 20 drugs at the office. It saves patients a trip to the pharmacy. Note that laws in some states strictly prohibit drug dispensing at doctors’ offices. Some practices also sell nutrition supplements, vitamins and probiotics that aid in digestive care.
- Add advanced GI procedures. Procedures such as Peroral Endoscopic Myotomy (POEM) and Endoscopic submucosal dissection (ESD) are advancing the field of endoscopy. Smart Pill and small bowel capsule are others to consider. One of the practices we work with has a partner who focuses mainly on advanced gastroenterology procedures most of the time. Billing and coding is complicated and requires continuous attention to get paid correctly from insurance companies. Adding advanced procedures help practices be recognized as leading the field.
- Specialized centers of care. Some practices offer specialized centers of expertise for conditions such as Crohn’s Disease, combining endoscopic services, biopsy reviews, infusion therapy, diet, and onsite lab testing. Another example is a liver center to manage liver disease and transplants. More advanced GI groups can consider starting centers of care based on patient needs
Bonus: Offer genetic counseling and diagnostic testing for gastroenterology. More and more patients are getting a genetic test and seeking their doctor’s counsel. While the areas of billing and coding for genomics is still evolving, you can expect this area to grow in demand.
(Aside: Blueprint Genetics offers the following panels for GI: cholestatis, congenital diarrhea, congenital hepatic fibrosis, gastrointestinal atresia, pancreatitis and so on).
Outside of direct contribution to revenues, ancillary services have the benefit of helping patients more comprehensively, improving satisfaction and even attracting new doctors to work at your practice.
These services enhance the practice’s reputation in the community. They create opportunities to serve new patients (and their families) who might’ve otherwise not known about your practice.
- GI Practices: Don’t Overlook Ancillary Services For Revenue Growth, Expert Roundtable by Gastroenterology & Endoscopy News.
- 9 Ancillary Services That Can Boost Practice Revenue, Medscape.
This article is part of an upcoming 50+ page ebook, Navigating the Next Wave: Private Equity in Gastroenterology (releasing on March 6th, 2019). Click here to receive it first.
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