Ancillaries: How To Do It Properly

Douglas W. Lundy, MD, MBA, FAOA, FACSOrthopaedic Trauma Surgery

Resurgens OrthopaedicsAtlanta, Georgia

Conflict• Past co-President of

Resurgens Orthopaedics• Current Chair of the AAOS

Advocacy Council

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4Proprietary information of Resurgens Orthopaedics

Employed versus Owner?Setting

Priv soloPriv groupPriv MSAcademicMilitaryPublicHMOHospitalOther

Setting

PrivateAcademicHospitalOther

The careful balance

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Ancillary secrets• Nirvana is a rock group• Carefully consider the options• Be transparent in your

ownership• Do not change referral

patterns• Do not go down the primrose

path

Only on Saturdays…• Nirvana is a rock group• Carefully consider the options• Be transparent in your

ownership• Do not change referral

patterns• Do not go down the primrose

path

Ancillaries• ASC• Rehabilitation services• MRI• Radiology (x-ray)• DME• Risk contracts• EMG/NCS• Rx• Property ownership

ASC• Georgia Law:– Multispecialty CON– Single-specialty CON– Letter-of-Non-Reviewability

• CON threshold on 1 July 2021 is $3.395 MM

• Very complex rules with lots of compliance issues

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Physical/Occupational Therapy• One of the most

common ancillary services.

• Generally 1-2 therapists per MD.

• 25%-30% margin.

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Radiology• Standard x-ray• Ultrasound• CT • DEXA

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MRI/Imaging• Most common scenario:

– Practice owns the magnet (technical fee).

– Teleradiology performs professional services.

• Investment - $250k to $1MM+.• Medicare typically pays $350-

$500 for facility fee.

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DME

• Crutches• Walkers• Boots• Splints• Casts• Custom braces

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Rx• Prescription oral medications• Injectables• Compounded Rx

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Risks

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If you have Ancillary Services…• Ensure that you are providing

a value to your patients – use common sense.

• Consider other ancillary sources for patient benefit.

• Watch the finances of these services carefully.

• Monitor usage.

If you are considering Ancillary Services• Strongly consider a reputable

third-party administrator.• Review contracts carefully.• Carefully consider the risk that

you are willing to assume.• Ensure that you are providing

value to the patient and the payer.