Here are five things orthopedic practice administrators should know about adding ancillary services.
1. If you are considering physical therapy, employ therapists to reduce risks. Physical and occupational therapy is one of the most common ancillary services offered by orthopedic practices; however, there are still a number of orthopedic practices, especially smaller practices, referring out this service. Glen Prasser, CEO of Beacon Orthopaedics and Sports Medicine in Sharonville, Ohio, says his practice has been offering in-house physical therapy since 1998. "While there is certainly a revenue aspect to this service, what is important to us is patient convenience. Patients come to Beacon and remain here for therapy and other services and don't have to travel outside these walls," he says. "It also helps to differentiate us from other practices. Our patients value the convenience, and they actually end up being an extension of our marketing efforts by telling their friends and family about their experience."
To reap the most profit, a practice would employ its own physical therapists and assistants and bill for their services. Generally, 1-2 therapists per physician are required to meet referral demand (though referral volumes do vary by subspecialty), and practices can expect to generate $100,000-$200,000 in collections annually per provider, with a 25-30 percent profit margin, says Mr. Davis. "My thinking has always been that orthopods use physical therapy as a treatment modality as much if not more often than pharmaceuticals. If they use it so much, why don't they just provide it?"
While other arrangements exist where an outside physical therapy business might pay rent to a practice to offer in-house services, Mr. Davis recommends practices employ their own physical therapists and use the same tax ID number for the program as their practice in order to reduce legal risk associated with referral laws.
2. Ultrasound is an option, but training on the technology can be tricky. Surgeons interested in bringing ultrasound to their orthopedic practice usually attend one or numerous courses and undergo one-on-one training with other physicians to make sure they are comfortable with how the technology works. Some surgeons also shadow other experienced physicians to see how they incorporate ultrasound into their clinical routine. "I have a physician shadow me about once per month," says Ben DuBois, MD, an orthopedic surgeon with Grossmont Orthopaedic Medical Group in La Mesa, Calif. "They can visit with me at the clinic one day and observe how I've integrated it into my practice and see the efficiencies I've built in. This can be helpful for first timers to experience how it works in the flow of the daily office."
Once you've purchased the equipment, you can practice for your patients by looking at the anatomy of your employees or family under the ultrasound. "The ultrasound can be tricky because if you turn the probe 90 degrees, you are getting a completely different image," says Dr. DuBois. "Being trained from the beginning to do it the right way is very important."
When you are familiarizing yourself with the technology, it's important to begin with what you know: the standard MRI. "If a patient comes in with an MRI already, that's a perfect opportunity to perform an ultrasound and compare what you see with what the MRI looks like," says Dr. DuBois. "You don't necessarily need to charge for this image, and if you explain to the patient that you just want to practice on the technology, they're often more than happy to help."
3. Know the government regulations associated with your ancillaries. The healthcare reform legislation also modifies the "in office ancillary service" exception under the Stark law that allows orthopedic practices to own, use and refer to MRI and CT scans in-house, says Wayne J. Miller, Esq., a healthcare transaction and regulatory attorney and a founding partner of Compliance Law Group in Thousand Oaks, Calif. However, now, before conducting such diagnostic tests, the practice must provide patients with a written disclosure containing information about other local facilities providing the same services. This creates more paperwork for the physicians and could cause patients to seek imaging services elsewhere if the practice prices are not competitive.
4. More space may be needed. A patient needing occupational therapy for a hand injury will need less rehabilitation space than a patient undergoing physical therapy for a knee or hip injury. Consider your patient base and make sure there is an adequate amount of space designated for physical therapy, says Andre Blom, a physical therapist at the Illinois Bone and Joint Institute based in Morton Grove, Ill. Patients undergoing rehabilitation for knee, hip and back injuries often need large equipment, such as a treadmill, which may require building on to the existing facility. "If the building wasn't designed to include a large rehabilitation space, that can be an issue," says Mr. Blom. "Fortunately, therapy space isn't that expensive. You are mainly creating an open gym area and office space. It's generally cheaper to add space to the existing building than to construct a whole new building."
5. Make sure your billing staff can handle the additions. Practices will need to consider if the existing business office staff will be able to support the billing, coding and collecting processes for the ancillary services and programs. There are different codes involved in billing for physical therapy and imaging services, so additional education for existing employees may be necessary in addition to adding personnel to compensate for the influx claims. If the program is big enough, a dedicated business office employees may be needed.
Related Articles for Orthopedic Practices:
7 Steps to Improve the Financial Performance of Orthopedic Practices
7 Key Elements of Comprehensive Orthopedic Care Centers
6 Ways Practices Can Boost Word-of-Mouth Marketing
1. If you are considering physical therapy, employ therapists to reduce risks. Physical and occupational therapy is one of the most common ancillary services offered by orthopedic practices; however, there are still a number of orthopedic practices, especially smaller practices, referring out this service. Glen Prasser, CEO of Beacon Orthopaedics and Sports Medicine in Sharonville, Ohio, says his practice has been offering in-house physical therapy since 1998. "While there is certainly a revenue aspect to this service, what is important to us is patient convenience. Patients come to Beacon and remain here for therapy and other services and don't have to travel outside these walls," he says. "It also helps to differentiate us from other practices. Our patients value the convenience, and they actually end up being an extension of our marketing efforts by telling their friends and family about their experience."
To reap the most profit, a practice would employ its own physical therapists and assistants and bill for their services. Generally, 1-2 therapists per physician are required to meet referral demand (though referral volumes do vary by subspecialty), and practices can expect to generate $100,000-$200,000 in collections annually per provider, with a 25-30 percent profit margin, says Mr. Davis. "My thinking has always been that orthopods use physical therapy as a treatment modality as much if not more often than pharmaceuticals. If they use it so much, why don't they just provide it?"
While other arrangements exist where an outside physical therapy business might pay rent to a practice to offer in-house services, Mr. Davis recommends practices employ their own physical therapists and use the same tax ID number for the program as their practice in order to reduce legal risk associated with referral laws.
2. Ultrasound is an option, but training on the technology can be tricky. Surgeons interested in bringing ultrasound to their orthopedic practice usually attend one or numerous courses and undergo one-on-one training with other physicians to make sure they are comfortable with how the technology works. Some surgeons also shadow other experienced physicians to see how they incorporate ultrasound into their clinical routine. "I have a physician shadow me about once per month," says Ben DuBois, MD, an orthopedic surgeon with Grossmont Orthopaedic Medical Group in La Mesa, Calif. "They can visit with me at the clinic one day and observe how I've integrated it into my practice and see the efficiencies I've built in. This can be helpful for first timers to experience how it works in the flow of the daily office."
Once you've purchased the equipment, you can practice for your patients by looking at the anatomy of your employees or family under the ultrasound. "The ultrasound can be tricky because if you turn the probe 90 degrees, you are getting a completely different image," says Dr. DuBois. "Being trained from the beginning to do it the right way is very important."
When you are familiarizing yourself with the technology, it's important to begin with what you know: the standard MRI. "If a patient comes in with an MRI already, that's a perfect opportunity to perform an ultrasound and compare what you see with what the MRI looks like," says Dr. DuBois. "You don't necessarily need to charge for this image, and if you explain to the patient that you just want to practice on the technology, they're often more than happy to help."
3. Know the government regulations associated with your ancillaries. The healthcare reform legislation also modifies the "in office ancillary service" exception under the Stark law that allows orthopedic practices to own, use and refer to MRI and CT scans in-house, says Wayne J. Miller, Esq., a healthcare transaction and regulatory attorney and a founding partner of Compliance Law Group in Thousand Oaks, Calif. However, now, before conducting such diagnostic tests, the practice must provide patients with a written disclosure containing information about other local facilities providing the same services. This creates more paperwork for the physicians and could cause patients to seek imaging services elsewhere if the practice prices are not competitive.
4. More space may be needed. A patient needing occupational therapy for a hand injury will need less rehabilitation space than a patient undergoing physical therapy for a knee or hip injury. Consider your patient base and make sure there is an adequate amount of space designated for physical therapy, says Andre Blom, a physical therapist at the Illinois Bone and Joint Institute based in Morton Grove, Ill. Patients undergoing rehabilitation for knee, hip and back injuries often need large equipment, such as a treadmill, which may require building on to the existing facility. "If the building wasn't designed to include a large rehabilitation space, that can be an issue," says Mr. Blom. "Fortunately, therapy space isn't that expensive. You are mainly creating an open gym area and office space. It's generally cheaper to add space to the existing building than to construct a whole new building."
5. Make sure your billing staff can handle the additions. Practices will need to consider if the existing business office staff will be able to support the billing, coding and collecting processes for the ancillary services and programs. There are different codes involved in billing for physical therapy and imaging services, so additional education for existing employees may be necessary in addition to adding personnel to compensate for the influx claims. If the program is big enough, a dedicated business office employees may be needed.
Related Articles for Orthopedic Practices:
7 Steps to Improve the Financial Performance of Orthopedic Practices
7 Key Elements of Comprehensive Orthopedic Care Centers
6 Ways Practices Can Boost Word-of-Mouth Marketing