For physicians, the issue of whether to offer ancillary services to their patients can be a difficult one. The availability of ancillary services boasts many up-sides, including an increase in patient satisfaction and a boost in practice income, but they can also complicate matters. Consideration must be made for the associated legal issues, including Stark Law compliance. We all know that physicians do a lot of good, but they are rarely lauded for their business acumen. Sean Weiss, a consultant with DoctorsManagement, does not hold back on this issue. “Physicians are horrible at business. Physicians make the worst business decisions that you can imagine.” Despite this opinion, many physicians are in fact business-minded and appropriately utilize ancillary services in effective ways. By consulting with the appropriate counsel and receiving guidance from experienced practice administrators and financial professionals, there is no reason why physicians shouldn’t take the opportunity to expand their practice’s offerings.
Not every practice takes advantage of the opportunities correlative with ancillary services. It appears that certain medical specialties are far more likely than others to offer ancillary services, with orthopaedic surgeons taking the lead, and primary care physicians (PCPs) offering the least. However, nearly every specialty has a plethora of ancillary services that couldbe offered to patients: ultrasounds; medication dispensing/in-house pharmacy; diagnostic testing; imaging services; nutrition counseling; cosmetic services; physical therapy; acupuncture – the list goes on and on. Consider each and every service that a physician might recommend and therefore refer out. If the physician/practice offered those services rather than referring out, the result would be more money in the physician’s pocket. Not only would the services translate to increased profits for the practice, it also gives physicians the opportunity to have a higher level of control over patient care, with each aspect of care taking place under one roof. And finally, patients, particularly those who are feeling sick, achieve a great deal of relief from having multiple services available at one location. This one-stop-shop approach is a great way to make patient satisfaction a priority. After all, medical practices are businesses and customer satisfaction is key to long-term success.
Perhaps the most important issue from the perspective of physicians who do not yet have an ownership stake in their practice is whether and how the physician-employee actually realizes any benefit or income from the services. When ancillary services are available as a revenue stream, practices take a variety of approaches to distributing income from the same. As attorney-agents who analyze and negotiate physician employment agreements, we have seen countless approaches to this issue. Some practices take a hardline approach with employees, providing that “all fees and charges related to ancillary services are the property of the Employer.” Others permit their physicians to realize income from the services pursuant to a productivity model that assigns income for “wRVUs generated for Physician that are billed by or on behalf of Employer for professional and ancillary services personally performed by Physician.” In any case, it is imperative that physicians understand the terms of their employment contract in order to accurately determine their potential income from ancillary services.
If you have questions about your employment agreement and compensation plan, contact the attorney-agents of Lauth O’Neill at (317) 989-4833 or loneill@lauthoneill.com.