How to Add (and What to Add) to Your Practice for Ancillary Revenue Opportunities

Table of Contents

1. Introduction: Why Ancillary Services Matter in 2025
2. Section 1: Understanding Ancillary Revenue
3. Section 2: The Compliance Lens — Do’s and Don’ts
4. Section 3: Specialty-Specific Ancillary Opportunities
   • Dermatology
   • ENT (Otolaryngology)
   • Ophthalmology
   • Primary Care / Internal Medicine
   • Neurology
   • Rheumatology
   • Nephrology
   • OB/GYN
   • Cardiology
   • Orthopedics
   • Pediatrics
   • Mental Health / Behavioral Health
   • Podiatry
5. Section 4: Financial & Operational Considerations
6. Section 5: How to Decide Which Ancillaries Fit Your Practice
7. Section 6: DoctorsManagement’s Role in Ancillary Strategy
8. Section 7: Group Purchasing & PowerBuying
9. Section 8: Common Mistakes to Avoid
10. Section 9: Conclusion & Call to Action

Introduction: Why Ancillary Services Matter in 2025

The financial realities of running a physician practice in 2025 look very different than they did even a decade ago. Rising overhead, staffing shortages, and tightening payer reimbursement rates have left many practices searching for ways to remain both profitable and patient-centered.

At the same time, patients are demanding more convenience, accessibility, and comprehensive care from their physicians. They don’t want to bounce between multiple offices for routine tests, wellness services, or elective procedures. They want care delivered where they already have trusted relationships.

That’s where ancillary services come in.

Ancillary revenue opportunities are additional, non-core services a medical practice can offer to increase revenue while enhancing patient satisfaction. These services range from in-office lab testing and imaging to aesthetics, physical therapy, and chronic care programs. When done strategically, ancillaries strengthen practice profitability while improving patient experience.

According to the Medical Group Management Association (MGMA), practices that integrate ancillary services generate 15–25% higher net revenue per provider compared with those that don’t.

Why Ancillaries Matter

1. Financial Stability

o    Reimbursements continue to lag behind inflation. Medicare physician pay has effectively declined by 26% since 2001 (adjusted for inflation). Ancillary revenue helps offset stagnant fee schedules.

2. Practice Value

o    Ancillaries don’t just generate cash flow — they increase your practice’s valuation. For physicians planning succession, ancillaries often represent a significant portion of enterprise value.

3. Patient Retention

o    Offering convenience (labs, imaging, therapy) in-house keeps patients loyal. Patients are less likely to “leak” to competitors if you can meet their needs under one roof.

4. Improved Outcomes

o    Ancillaries aren’t just financial. Many, like chronic care management or PT, directly improve patient outcomes through better access and continuity.

The Risk of Chasing Revenue Alone

Not every ancillary service makes sense for every specialty. Too often, practices fall into “shiny object syndrome” — adding services that sound profitable but don’t align with their patient base, payer environment, or compliance guardrails.

For example:

• An internal medicine group that rushed into aesthetics without a patient demand study struggled to cover startup costs.
• An orthopedic group that added an MRI without considering local competition faced a long ROI timeline.

The key isn’t just what you add — it’s how and why.

The Role of Advisory Support

Deciding which ancillary services to implement — and when — requires careful analysis of:

• Your specialty and patient base.
• Local payer mix and reimbursement trends.
• Startup and staffing costs.
• Compliance implications (Stark Law, Anti-Kickback, state-specific rules).
• ROI timeline and practice cash flow.

That’s why many practices turn to DoctorsManagement for structured consulting and practice assessments. Our consultants help evaluate opportunities, design compliant models, and oversee successful implementation.

Learn more: Practice Management Consulting | Practice Assessment

Section 1: Understanding Ancillary Revenue

What Are Ancillary Services?

Ancillary services are non-core medical services that complement a physician’s primary specialty. They can be clinical (lab testing, imaging), therapeutic (PT, infusion therapy), or elective (aesthetics, wellness programs).

In addition, APPs (nurse practitioners, physician assistants) represent a unique ancillary lever. When properly integrated, they not only expand access but also free physicians to concentrate on their highest-value work: new patient evaluations, complex diagnostics, and coordinating longitudinal care. In this model, physicians blend direct patient care with oversight and care coordination, multiplying their reach while maintaining clinical quality. Viewed through a business lens, APPs function as a spoke in the ancillary portfolio that drives both patient capacity and physician earnings.

The goal: provide additional value to patients while diversifying revenue streams for the practice.

Why Ancillaries Are Growing in Importance

1. Margin Pressure
   • With payer reimbursements flat or declining, ancillary services can represent the difference between a thriving practice and one barely breaking even.
2. Patient Demand
   • Patients increasingly expect a “one-stop-shop” experience. If they can get lab work, diagnostics, and therapy in the same office, they will.
3. Competitive Differentiation
   • Offering ancillary services sets your practice apart. A dermatology clinic with in-house pathology, or a cardiology group with its own device clinic, provides more complete care than competitors.
4. Cash Pay Flexibility
   • Many ancillaries, particularly in aesthetics and wellness, can be offered outside of traditional insurance constraints — giving practices more control over pricing and margins.

Ancillary services and APPs work best inside a physician-led hub-and-spoke model. The physician hub focuses on high-value activities — new patient access, diagnostics, and plan-of-care decisions — while spokes (APPs, infusion, labs, imaging, therapy) carry out continuity and maintenance care. This structure not only expands capacity and improves patient outcomes, it also provides physicians an opportunity to retain 100% of their personal collections. Rather than watching revenue leak to hospitals or outside vendors, the physician orchestrates all spokes of care, aligning clinical impact with economic return.

Key Considerations Before Adding Ancillaries

Adding ancillaries isn’t as simple as buying equipment or hiring staff. Each opportunity must be vetted through several lenses:

• Clinical Relevance: Does this service truly complement your specialty?
• Patient Demand: Will your patient base actually use it?
• Payer Coverage: Will insurance cover it, or will it be cash-pay?
• Startup Cost: How much capital is required, and what’s the payback timeline?
• Staffing Needs: Do you need to recruit new expertise (e.g., audiologists, physical therapists, technologists)?
• Compliance Risks: Do Stark Law or Anti-Kickback Statute rules apply?
• Workflow Integration: Can this be incorporated without disrupting core clinical operations?

Real-World Example

A primary care practice added CLIA-waived lab testing for flu, strep, and urinalysis. For patients, it was a win — no more running to outside labs for basic tests. For the practice, it was transformative: the service generated new revenue, improved patient satisfaction, and strengthened continuity of care.

Contrast that with an internal medicine practice that added laser aesthetics without any patient demand study. The service sat idle, draining staff time and capital, with minimal return.

The Bottom Line

Ancillary services aren’t “nice-to-haves.” They’re increasingly a core strategy for practices that want to grow, remain competitive, and deliver patient-centered care. But success depends on a structured, data-driven approach.

Learn more about how DoctorsManagement helps practices identify the right opportunities:

Ancillary Services Consulting

Section 2: The Compliance Lens — Do’s and Don’ts

Why Compliance Matters More Than Ever

Ancillary services can be lucrative, but they also sit at the intersection of financial opportunity and regulatory scrutiny. Federal and state regulators have made it clear: revenue streams that involve patient referrals, in-office labs, or vendor relationships must comply with Stark Law, the Anti-Kickback Statute (AKS), HIPAA, and applicable state laws.

Failure to comply doesn’t just risk fines — it can result in civil liability, exclusion from Medicare/Medicaid, or even criminal charges.

The Department of Justice (DOJ) and HHS recovered over $1.7 billion in healthcare fraud settlements in 2023, with ancillary services like labs and imaging often at the center of investigations.

Key Laws That Apply

1. Stark Law (Physician Self-Referral Law)
   • Prohibits physicians from referring patients for certain designated health services (DHS) — including lab, imaging, PT, and DME — to an entity in which they or an immediate family member have a financial interest.
   • Exceptions exist (in-office ancillary exception, group practice arrangements) but must be structured correctly.
2. Anti-Kickback Statute (AKS)
   • Prohibits offering or receiving remuneration to induce patient referrals or business for services reimbursable by federal healthcare programs.
   • Applies broadly — even “free rent” or discounted equipment from a vendor can be problematic.
3. State-Level Regulations
   • Many states have “mini-Stark” laws or fee-splitting prohibitions that apply even to commercial or cash-pay patients.
   • Example: Some states prohibit revenue-sharing with non-licensed individuals for clinical services.

1. HIPAA & Data Privacy
   • Ancillaries often involve new patient data flows (lab results, imaging studies, therapy notes). Each must be integrated into HIPAA-compliant workflows.

Do’s and Don’ts for Ancillary Services

Do:

• Conduct a compliance review before adding any ancillary service.
• Structure ownership properly if multiple physicians are involved.
• Document policies for ordering, referrals, and billing.
• Train staff on the specific compliance requirements of the new service.
• Use fair market value (FMV) in all contracts with vendors, suppliers, or partner entities.

Don’t:

• Assume that “in-office” automatically means Stark-compliant. Exceptions have strict criteria.
• Enter into handshake deals with vendors for revenue sharing.
• Pay physicians bonuses directly tied to DHS referrals.
• Skip legal review of contracts (equipment leases, management agreements, co-ownership structures).

Real-World Example

• The Right Way: A multi-specialty group adds in-office lab testing under the “in-office ancillary services” exception, with clear documentation, billing protocols, and compliance oversight. The service improves patient care and passes regulatory scrutiny.
• The Wrong Way: A cardiology practice partners with an outside imaging vendor that offers “free use” of equipment in exchange for guaranteed referral volume. Regulators later flagged it as an AKS violation, resulting in fines and reputational harm.

The DoctorsManagement Approach

At DoctorsManagement, we view compliance as a design principle, not a patch. That means we:

• Evaluate every ancillary opportunity against Stark, AKS, and state rules.
• Structure contracts and financial models that hold up under audit.
• Develop compliance policies and training for staff before services launch.
• Monitor ongoing operations to ensure continued compliance as regulations evolve.

Learn more: Practice Management Consulting

Key Takeaway

Ancillaries can transform your practice — but only if built on a solid compliance foundation. The right service added the wrong way can expose your practice to devastating legal and financial consequences. By designing for compliance from the start, you protect your practice while unlocking new revenue opportunities.

Section 3: Specialty-Specific Ancillary Opportunities

(Part 1: Dermatology, ENT, Ophthalmology)

Why Specialties Need Tailored Ancillaries

No two specialties face the same patient needs, reimbursement environment, or growth opportunities. A dermatology practice thrives on aesthetics and pathology, while a cardiology practice depends on imaging and device clinics. Choosing the right ancillary services is all about alignment — with your specialty, patient population, payer mix, and compliance guardrails.

Below, we break down the top 3–5 ancillary revenue opportunities by specialty — starting with Dermatology, ENT, and Ophthalmology.

Dermatology

Dermatology practices are uniquely positioned for both clinical and elective ancillaries. Because skin health crosses both medical and cosmetic domains, dermatologists can capture diverse revenue streams.

Top Ancillaries for Dermatology:

1. Pathology / Histology Lab
   • Dermatology generates a high biopsy volume. Having in-house pathology creates faster turnaround times for patients and stronger financial returns.
   • ROI: High, but requires startup capital, lab certification (CLIA), and pathologist partnership.
   • Compliance Watch: Stark Law applies — structure ownership and billing carefully.
2. Mohs Surgery Lab (for skin cancer)
   • Subspecialty dermatologists often add Mohs labs. High demand due to skin cancer prevalence.
   • ROI: Strong — particularly in high-sunlight states.
   • Compliance Watch: Ensure proper coding and documentation for medical necessity.
3. Aesthetics & Cosmetics (Injectables, Lasers, Fillers)
   • One of the most profitable cash-pay ancillary lines.
   • ROI: High; margins are strong, and patient demand continues to grow.
   • Operational Note: Requires dedicated staff or aestheticians to avoid disruption of core dermatology visits.
4. In-Office Dispensing (Sunscreens, Cosmeceuticals, Acne Products)
   • Patients trust their dermatologist’s recommendations, making in-office dispensing both convenient and profitable.
   • Compliance Watch: State pharmacy regulations apply.

According to the American Society for Dermatologic Surgery, over 70% of dermatology practices now offer cosmetic services, with injectables leading the pack.

ENT (Otolaryngology)

ENT practices treat conditions across allergy, hearing, and sinus care — making ancillaries a natural fit.

Top Ancillaries for ENT:

1. Allergy Testing & Immunotherapy
   • In-office allergy testing followed by immunotherapy (shots or drops).
   • ROI: Moderate-to-high; recurring revenue model, strong patient demand.
   • Operational Note: Requires clear patient education and compliance with allergy safety protocols.
2. Hearing Aids & Audiology Services
   • ENT groups that add audiologists capture revenue that otherwise flows to retail chains.
   • ROI: High-margin; cash-pay common.
   • Compliance Watch: Transparent pricing and adherence to state laws on dispensing.
3. Sinus Surgery / Balloon Sinuplasty
   • Office-based sinus procedures are becoming more popular, shifting from hospitals to practices.
   • ROI: High; reduces reliance on hospitals/ASCs.
   • Compliance Watch: Ensure patient selection criteria are well documented.
4. In-Office Imaging (CT, Cone Beam Scans)
   • Provides convenience and quicker diagnoses.
   • ROI: Strong in high-volume ENT groups.
   • Compliance Watch: Stark Law exceptions must apply.

ENT Today reports that ENT practices offering in-office allergy services see up to a 30% increase in per-patient revenue compared to those that don’t.

Ophthalmology

Ophthalmology combines medical, surgical, and elective services — making it one of the richest fields for ancillary opportunities.

Top Ancillaries for Ophthalmology:

1. Optical Shop (Glasses & Contacts)
   • Natural fit; patients already trust their ophthalmologist for prescriptions.
   • ROI: High, though requires upfront investment in inventory and staff.
   • Operational Note: Success depends on retail operations and patient convenience.
2. Ambulatory Surgery Center (ASC)
   • Cataracts, refractive surgery, and other procedures increasingly shift from hospitals to physician-owned ASCs.
   • ROI: Very strong in the right market; long-term investment with significant payoff.
   • Compliance Watch: Stark and AKS implications if co-owned with other physicians.
3. Aesthetic Ophthalmology (Blepharoplasty, Cosmetic Lasers)
   • Growing demand as baby boomers age.
   • ROI: High, especially cash-pay.
   • Compliance Watch: Ensure appropriate separation of elective vs. medical billing.
4. Premium IOLs (Intraocular Lenses) & Refractive Surgery
   • Offering advanced lenses during cataract surgery creates a strong upsell opportunity.
   • ROI: High, though requires patient education and financing options.

The American Academy of Ophthalmology reports that ASCs now perform over 70% of ophthalmic surgeries in the U.S., reflecting the shift to physician-controlled sites of service.

Key Takeaway from Part 1

• Dermatology thrives on labs + aesthetics.
• ENT capitalizes on allergy, audiology, and office-based procedures.
• Ophthalmology builds strong ROI from ASCs and optical shops.

Each of these specialties demonstrates that ancillary services work best when they align with patient demand and the specialty’s natural care model.

Section 3 (Part 2): Specialty-Specific Ancillary Opportunities

Primary Care / Internal Medicine

Primary care physicians face some of the tightest reimbursement margins in all of healthcare. Ancillaries here aren’t just a “nice to have” — they’re often critical to financial sustainability. But they also deliver significant patient convenience and better continuity of care.

Top Ancillaries for Primary Care:

1. CLIA-Waived Lab Testing
   • Rapid strep, flu, urinalysis, HbA1c, and other point-of-care tests.
   • ROI: Strong, relatively low startup costs, improves patient satisfaction.
   • Compliance Watch: CLIA certification required, with quality control protocols.
2. Imaging (X-Ray, Ultrasound, EKG, Dexa Scan)
   • Common diagnostics can be kept in-house, reducing patient leakage.
   • ROI: Moderate-to-high depending on payer mix; higher in value-based contracts.
   • Operational Note: Requires trained technicians and maintenance of imaging equipment.
3. Chronic Care Management (CCM) / Remote Patient Monitoring (RPM)
   • CMS reimburses for care coordination and monitoring of chronic conditions like diabetes, hypertension, CHF.
   • ROI: Recurring monthly revenue streams; strong patient engagement tool.
   • Compliance Watch: Must meet CMS documentation and time requirements.
4. Weight Management & Wellness Programs
   • Can include nutritional counseling, medically supervised weight loss, and even aesthetics.
   • ROI: Often cash-pay, bypassing insurance constraints.

The CDC estimates that 6 in 10 U.S. adults have a chronic disease. CCM/RPM services not only improve care but are a growing ancillary revenue stream for primary care practices.

Neurology

Neurology practices treat conditions that often require diagnostics, monitoring, and advanced therapeutics — all strong fits for ancillary services.

Top Ancillaries for Neurology:

1. Electromyography (EMG) & Nerve Conduction Studies (NCV)
   • Essential diagnostics for neuromuscular disorders.
   • ROI: High; most payers reimburse at strong rates.
   • Compliance Watch: Proper training/certification required for providers performing studies.

1. Sleep Studies / Sleep Lab
   • In-lab or home sleep testing for patients with suspected sleep apnea or other disorders.
   • ROI: Strong, especially when tied to CPAP supply management.
   • Compliance Watch: Must meet accreditation standards; payer coverage varies.
2. Infusion Services
   • Neurology patients with MS, migraines, and autoimmune conditions often require biologic infusions.
   • ROI: Very strong but capital-intensive (staff, equipment, inventory).
   • Compliance Watch: Requires careful drug acquisition and billing compliance.

Market analysts project the neurology infusion therapy market will grow at 8% annually through 2030, driven by MS and migraine therapies.

Rheumatology

Rheumatology practices are particularly well-positioned to add infusion therapy as an ancillary. Biologics for conditions like rheumatoid arthritis, psoriatic arthritis, and lupus require ongoing administration in a controlled environment.

Top Ancillaries for Rheumatology:

1.     Infusion Therapy: One of the most profitable and clinically relevant ancillaries for rheumatologists. Demand is steady and growing due to the rise of biologic treatments.
2.     Lab Services: In-house labs for monitoring biologic safety (CBC, liver/kidney panels) provide convenience and continuity.
3.     Imaging (DEXA, X-Ray, Ultrasound): Supports osteoporosis and joint disease management.
4.     ROI: Infusion services generate recurring, high-margin revenue. When bundled with appropriate lab and imaging ancillaries, they enhance continuity of care and patient adherence.
5.     Compliance Watch: Infusion ancillaries carry inventory, billing, and reimbursement complexities. Practices must ensure payer contracting, buy-and-bill compliance, and documentation meet CMS and commercial payer requirements.

Nephrology

Nephrologists are uniquely positioned for ancillaries tied to chronic kidney disease, dialysis, and vascular care.

Top Ancillaries for Nephrology:

1. Dialysis (Partnership Models)
   • Owning or partnering in dialysis centers is one of the most profitable ancillary routes.
   • ROI: Very high, but capital-intensive; regulatory environment is strict.
   • Compliance Watch: Stark/AKS scrutiny is significant.
2. Vascular Access Centers
   • Nephrologists performing or co-owning vascular access centers streamline care for dialysis patients.
   • ROI: Strong, with steady demand.
   • Compliance Watch: Ownership structures must be compliant.
3. Infusion Therapy
   • Anemia management, iron infusions, and biologics for autoimmune kidney diseases.
   • ROI: Strong, with recurring treatment needs.
4. Hypertension Management Programs
   • Remote monitoring, diet, and lifestyle integration.
   • ROI: Moderate but supports value-based contracts and patient outcomes.

Nearly 37 million U.S. adults have chronic kidney disease, and more than 800,000 are on dialysis, making nephrology ancillaries high-demand.

OB/GYN

OB/GYN practices are natural hubs for both medical and elective ancillaries. With loyal patient panels and long-term relationships, OB/GYNs are well positioned to offer services that expand beyond pregnancy care.

Top Ancillaries for OB/GYN:

1. In-Office Ultrasound
   • Essential for pregnancy monitoring and gynecologic diagnostics.
   • ROI: High; standard of care in modern practices.
2. Aesthetic / Wellness Services
   • Laser vaginal rejuvenation, hormone replacement therapy, and other wellness services are increasingly popular.
   • ROI: High-margin, often cash-pay.
   • Compliance Watch: Marketing must be handled carefully to avoid unsubstantiated claims.
3. Weight Management & Nutrition Programs
   • Particularly effective for postpartum and midlife patients.
   • ROI: Steady, often cash-pay.
4. Fertility Services (Where Allowed)
   • Intrauterine insemination (IUI), egg preservation, fertility counseling.
   • ROI: High; demand is growing but regulatory landscape is complex.

The global fertility services market is projected to exceed $50 billion by 2030, and OB/GYNs remain the frontline referral and service providers.

Key Takeaway from Part 2

• Primary Care = chronic care + diagnostics.
• Neurology = diagnostics + infusion.
• Nephrology = dialysis + vascular centers.
• OB/GYN = ultrasound + aesthetics + fertility.

Each specialty benefits most when ancillaries solve real patient problems while boosting financial sustainability.

Section 3 (Part 3): Specialty-Specific Ancillary Opportunities

Cardiology

Cardiology practices are among the most resource-intensive specialties — but also some of the best positioned for high-value ancillaries. Patients often require ongoing monitoring, diagnostics, and device management, making ancillaries both clinically appropriate and financially sound.

Top Ancillaries for Cardiology:

1. Stress Testing (Exercise, Nuclear, Pharmacologic)
   • In-office stress testing provides quick answers for patients while keeping revenue in-house.
   • ROI: High, particularly in larger groups.
   • Compliance Watch: Requires certified staff and equipment maintenance.
2. Nuclear Medicine & Advanced Imaging (Echo, Vascular Ultrasound, Cardiac CT)
   • Essential for diagnostics, improves continuity of care.
   • ROI: Strong; imaging is a major revenue driver for cardiology.
   • Compliance Watch: Imaging falls under Stark Law; must be structured within in-office ancillary exception.
3. Device Clinics (Pacemaker/ICD Monitoring)
   • Ongoing monitoring of implanted devices.
   • ROI: Recurring revenue; enhances patient safety.
   • Operational Note: Requires dedicated staff and workflow.
4. Ambulatory Monitoring (Holter, Event Monitors, Wearables)
   • Continuous monitoring for arrhythmias.
   • ROI: Growing due to payer acceptance and patient demand.

According to the American College of Cardiology, device monitoring services can add 10–15% net revenue per cardiologist annually while improving patient outcomes.

Orthopedics

Orthopedic practices have one of the widest arrays of potential ancillaries, from imaging to rehab to surgical ownership models.

Top Ancillaries for Orthopedics:

1. Imaging (X-Ray, MRI, Ultrasound)
   • Orthopedists rely heavily on imaging; in-office services speed up diagnosis and treatment.
   • ROI: High for high-volume practices; MRI especially strong.
   • Compliance Watch: Imaging subject to Stark exceptions.
2. Physical Therapy (PT)
   • Natural extension of orthopedic care; creates patient convenience and loyalty.
   • ROI: Strong recurring revenue stream.
   • Compliance Watch: Must comply with state scope of practice and ownership laws.
3. Durable Medical Equipment (DME: Braces, Boots, Orthotics)
   • Orthopedic patients often need braces and orthotics.
   • ROI: High margins with low overhead.
   • Compliance Watch: CMS has strict DMEPOS enrollment rules.
4. Ambulatory Surgery Center (ASC)
   • Joint replacements, arthroscopy, and other procedures are increasingly shifting outpatient.
   • ROI: Very high long-term; equity ownership creates substantial practice value.
   • Compliance Watch: ASCs face heavy regulatory scrutiny under Stark and AKS.

Becker’s ASC Review notes that over 60% of orthopedic procedures are projected to migrate to ASCs by 2030, making this one of the most critical ancillaries for ortho groups.

Pediatrics

Pediatric practices face reimbursement challenges similar to primary care — but also have unique ancillary opportunities tailored to children and families.

Top Ancillaries for Pediatrics:

1. CLIA-Waived Labs (Strep, Flu, RSV, COVID)
   • Immediate answers improve parent satisfaction.
   • ROI: Strong; low-cost setup.
2. Allergy Testing & Immunotherapy
   • Growing prevalence of childhood allergies makes this a valuable addition.
   • ROI: Moderate-to-high with recurring visits.
3. Behavioral Health Integration
   • Pediatric behavioral health demand has surged, particularly post-COVID.
   • ROI: Strong patient demand; payer reimbursement improving.
4. Vaccination Programs
   • Revenue from vaccine administration fees and VFC (Vaccines for Children) program.
   • ROI: Margins vary; valuable for patient retention and public health impact.

The CDC reports that over 25% of U.S. children have a chronic health condition, and integrated behavioral health is one of the fastest-growing ancillary needs in pediatrics.

Mental Health / Behavioral Health

Behavioral health is a rapidly expanding field with high demand and growing payer recognition. Ancillary opportunities here enhance access and expand service lines. 

Top Ancillaries for Behavioral Health:

1. Group Therapy Programs
   • Offers efficiency and access for patients while boosting provider productivity.
   • ROI: High; allows billing multiple patients per session.
2. Telepsychiatry & Teletherapy
   • Expands geographic reach and patient convenience.
   • ROI: High scalability with low overhead.
   • Compliance Watch: Licensure rules vary by state.
3. Genetic Testing (Pharmacogenomics)
   • Helps match psychiatric medications to patient genetics.
   • ROI: Growing interest; reimbursement still evolving.
4. Wellness & Integrative Services
   • Mindfulness, yoga, nutrition programs.
   • ROI: Often cash-pay, strong demand.

The National Alliance on Mental Illness (NAMI) reports that 1 in 5 U.S. adults experience mental illness annually, driving huge demand for expanded services.

Podiatry

Podiatrists often operate in niche practices with unique ancillary opportunities focused on mobility, wound care, and orthotics.

Top Ancillaries for Podiatry:

1. In-Office Imaging (X-Ray)
   • Essential for foot and ankle injuries.
   • ROI: Strong, improves continuity of care.
2. Durable Medical Equipment (DME: Boots, Orthotics, Inserts)
   • Highly profitable, frequent patient need.
   • Compliance Watch: Same DMEPOS compliance rules as orthopedics.
3. Laser Therapy (Onychomycosis, Pain Management)
   • Growing cash-pay opportunity.
   • ROI: Moderate; requires marketing and patient education.
4. Wound Care Programs
   • Diabetic foot ulcer management, debridement.
   • ROI: High demand with aging population.

The American Podiatric Medical Association notes that diabetes-related foot problems account for more than 60% of non-traumatic lower-limb amputations in the U.S., underscoring the clinical importance of podiatry wound care ancillaries.

Key Takeaway from Part 3

• Cardiology = diagnostics, imaging, device monitoring.
• Orthopedics = imaging, PT, DME, ASC ownership.
• Pediatrics = labs, allergy, behavioral health, vaccines.
• Behavioral Health = group therapy, telehealth, genetic testing.
• Podiatry = imaging, orthotics/DME, wound care, laser.

Each specialty thrives when ancillaries match patient demand + reimbursement trends + compliance guardrails.

Section 4: Financial & Operational Considerations

Why Financial & Operational Planning Matters

Adding ancillary services can transform a practice’s revenue profile — but it can also drain resources if launched without careful planning. A new lab, infusion suite, or imaging service can easily cost six figures or more. Without clear projections and integration into workflows, physicians risk investing in services that never reach profitability.

MGMA data shows that 40% of ancillary launches underperform expectations in the first year — not because of lack of demand, but due to poor planning, miscalculated ROI, or operational breakdowns.

Financial Questions to Answer Before Adding Ancillaries

1. Startup Costs
   • What capital is required? (equipment, construction, IT integration, licensing, marketing)
   • Example: A basic CLIA-waived lab may cost <$10k, while MRI or ASC buildouts can exceed $1 million.
2. Ongoing Costs
   • Staffing, consumables, service contracts, malpractice premiums, vendor agreements.
   • Practices often underestimate recurring supply costs (e.g., infusion drugs, DME inventory).
3. Revenue Projections
   • How many patients per month will realistically use the service?
   • What is payer reimbursement vs. cash-pay potential?
   • Example: Infusion therapy may generate $200–$500 per infusion, but margins depend heavily on payer contracts.
4. ROI Timeline
   • How quickly will the service break even?
   • Low-capital ancillaries (e.g., CLIA-waived labs) may break even in 3–6 months, while ASCs often take years.
5. Financing Options
   • Will you use reserves, bank loans, or vendor financing?
   • Physicians often benefit from spreading cost across financing to match ROI timelines.

Operational Considerations

1. Staffing & Training
   • Do you need to hire specialists (e.g., audiologists, physical therapists, infusion nurses)?
   • Are existing staff trained to handle compliance and workflow changes?
2. Workflow Integration
   • Can the new service be delivered without disrupting core visits?
   • Example: Adding allergy testing requires designated staff and space; without it, wait times rise.
3. Space & Infrastructure
   • Do you have the square footage, plumbing, electrical capacity, or shielding (for imaging)?
   • Lease restrictions may also limit certain services.
4. Technology & Data Integration
   • Will your EHR handle the new documentation and billing requirements?
   • Are interfaces needed for labs, imaging, or remote monitoring?

Real-World Scenarios

• The Success Story: A mid-sized internal medicine practice added CCM/RPM services after analyzing patient chronic disease burden. Low startup costs and strong payer reimbursement led to profitability within 90 days.
• The Cautionary Tale: An orthopedic group purchased an MRI machine without confirming payer contracts. Denied claims and underutilization stretched ROI to 5+ years.

The Role of DoctorsManagement

Our consultants help practices model both the financial impact and the operational requirements before adding ancillaries. This includes:

• Developing pro forma financial projections.
• Modeling ROI under different payer and patient volume assumptions.
• Assessing staffing and workflow needs.
• Reviewing compliance and space requirements.

Learn more: Practice Management Consulting

Key Takeaway

Adding ancillaries is not just about opportunity — it’s about execution. The right service at the wrong time, or without operational planning, can sink margins. By modeling ROI, planning workflows, and engaging experts, practices maximize their chances of success.

Section 5: How to Decide Which Ancillaries Fit Your Practice

Why Choosing the Right Ancillary Matters

Not every ancillary is right for every practice. A dermatology group will thrive on aesthetics and pathology, while a nephrology clinic should focus on dialysis partnerships and vascular access. The most common mistake we see is chasing what sounds profitable rather than what aligns with specialty, patient base, and payer realities.

An MGMA survey found that 32% of practices that added ancillaries without a formal assessment discontinued them within three years — citing poor ROI, compliance concerns, or operational strain.

Step 1: Start with a Practice Assessment

Before adding ancillaries, a comprehensive practice assessment is essential. This evaluates:

• Patient demographics: Age, chronic conditions, payer mix.
• Clinical volume: Common diagnoses and referral patterns.
• Financial health: Cash flow, reserves, debt capacity.
• Competitive landscape: What services are already saturated in your market?
• Operational readiness: Staff capacity, space, EHR infrastructure.

Learn more: Practice Assessment Services

Step 2: Align with Patient Needs

Ask: Does this service solve a real patient problem?

• YES Example: A pediatrics group adds allergy testing — meets clear patient demand, improves continuity.
• NO Example: A family medicine group adds Botox without gauging interest — low uptake, wasted investment.

When ancillaries align with patient needs, they drive both satisfaction and retention.

Step 3: Evaluate Payer Environment

Some services are well reimbursed by insurers (imaging, infusions), while others are best positioned as cash-pay (aesthetics, wellness). Understanding your local payer mix helps set realistic ROI expectations.

• In heavy Medicare markets → CCM, RPM, diagnostics may be strongest.
• In higher-income, commercial markets → aesthetics and elective ancillaries may thrive.

Step 4: Run the Financial Model

Ancillaries must fit your practice’s financial trajectory. Build a pro forma model that accounts for:

• Startup costs.
• Monthly utilization assumptions.
• Payer reimbursement vs. cash-pay revenue.
• Break-even timeline.
• Sensitivity analysis (What if volume is 20% lower than expected?).

Step 5: Prioritize & Sequence

Even if multiple opportunities look attractive, don’t launch them all at once. Practices that try to add three or more ancillaries simultaneously often struggle with staffing and integration.

• Phase 1: Start with low-capital, high-demand services (e.g., labs, DME, CCM).
• Phase 2: Layer in more complex ancillaries (e.g., imaging, infusions).
• Phase 3: Consider long-term investments (e.g., ASC ownership, dialysis).

Step 6: Build in Compliance from Day One

Every ancillary must pass through the compliance filter:

• Does Stark Law apply?
• Are contracts at fair market value?
• Are revenue-sharing structures legal in your state?
• Is documentation sufficient for audits?

This should never be an afterthought — compliance must be designed into the service from launch.

Real-World Example

• The Right Way: A cardiology group conducted a full practice assessment before adding a device clinic. Patient demand, payer reimbursement, and workflow capacity aligned — within 12 months, the clinic was a top revenue driver.
• The Wrong Way: An internal medicine group purchased expensive ultrasound equipment without utilization data. Low demand and poor reimbursement left the machine underused and ROI unattained.

The DoctorsManagement Approach

We help practices not only identify which ancillaries make sense, but also when and how to implement them. Our consultants:

• Conduct structured practice assessments.
• Model financial ROI scenarios.
• Vet compliance risks.
• Create phased implementation plans.

Learn more: Practice Management Consulting

Key Takeaway

The best ancillary services are those that fit your patients, payers, and practice capacity. With a structured assessment and phased plan, you avoid wasted investments and build a sustainable path to new revenue.

Section 6: DoctorsManagement’s Role in Ancillary Strategy

Why Outside Guidance Is Essential

Adding ancillary services isn’t just about finding a new revenue stream. It’s about making the right strategic choices, sequencing them properly, and ensuring every detail is compliant and operationally sound.

Most practices underestimate the number of moving parts: payer rules, staff training, workflow integration, compliance with Stark/AKS, and vendor negotiations. A misstep in any of these can mean months of lost revenue or regulatory exposure.

That’s where DoctorsManagement comes in.

For more than 60 years, we’ve partnered with physician practices across every specialty to design, implement, and optimize ancillary service lines. We don’t just recommend opportunities — we roll up our sleeves and help practices execute them successfully.

What We Do

1. Practice Assessment & Readiness Evaluation
   • Analyze patient demographics, payer mix, and clinical demand.
   • Evaluate current financial health and operational bandwidth.
   • Identify which ancillaries align best with your unique practice.

Practice Assessment Services

1. Financial Modeling & ROI Analysis
   • Develop detailed pro forma projections for each potential ancillary.
   • Model ROI under conservative, moderate, and aggressive utilization scenarios.
   • Advise on financing strategies to align with cash flow.
2. Compliance Screening
   • Evaluate every service against Stark Law, AKS, HIPAA, and state-level rules.
   • Ensure contracts and vendor agreements meet fair market value requirements.
   • Build compliance policies and staff training into the rollout plan.
3. Vendor Evaluation & Negotiation
   • Leverage our industry relationships to negotiate favorable vendor terms.
   • Help practices avoid overpriced equipment, software, or service contracts.
   • Provide unbiased guidance (we don’t “sell” products — we advocate for our clients).
4. Staff Training & Workflow Design
   • Train staff on new responsibilities, compliance protocols, and patient communication.
   • Map workflows so ancillary services integrate seamlessly into daily operations.
   • Avoid patient bottlenecks and billing errors by planning before launch.
5. Ongoing Advisory & Monitoring
   • Hold bi-weekly or monthly check-ins to review performance.
   • Monitor financial results against projections.
   • Adjust workflows, staffing, or strategy as the ancillary matures.

Practice Management Consulting

How It Looks in Practice

• Dermatology Example: DM guided a dermatology group through adding in-office pathology. We handled CLIA certification, vendor negotiations, and compliance documentation. Within 18 months, the lab contributed 20% of net practice revenue.
• Primary Care Example: A family medicine group engaged DM for chronic care management (CCM) and RPM setup. Our consultants built workflows, trained staff, and ensured CMS compliance. Within six months, the service generated $12,000 in new monthly revenue.
• Orthopedics Example: An orthopedic practice wanted to add MRI but was unsure of ROI. DM modeled conservative and aggressive scenarios, identified payer reimbursement gaps, and negotiated equipment financing. The MRI service reached breakeven in year one.

Why Practices Choose DoctorsManagement

• Healthcare-exclusive expertise: We don’t dabble in multiple industries — we live and breathe physician practice management.
• Compliance-first approach: Our consultants view compliance as a design principle, not an afterthought.
• Integrated service lines: From credentialing to HR to accounting, our teams ensure ancillaries don’t create downstream risks.
• Long-term partnership: We don’t just help you launch — we help you grow.

Learn more about how we help practices build profitable, compliant ancillary services:

Ancillary Services Consulting

Key Takeaway

Ancillary services can be a growth engine for your practice — or a drain on resources if mismanaged. DoctorsManagement brings the expertise, tools, and compliance safeguards to ensure that every ancillary you add delivers both patient value and sustainable profitability.

Section 7: Group Purchasing & PowerBuying

Why Overhead Control Matters

For many practices, revenue growth gets all the attention — but cost control is just as important. Rising supply prices, vendor contracts, and inflationary pressure eat into margins every year. Independent practices often feel disadvantaged compared to hospitals or large corporate groups, which use their size to negotiate steep discounts.

That’s where Group Purchasing Organizations (GPOs) and power buying programs level the playing field.

According to a 2024 Vizient report, practices that leverage group purchasing save 10–18% annually on medical and office supplies. For a mid-sized practice, that can mean tens of thousands of dollars in retained margin.

How PowerBuying Works

• Aggregated Volume = Better Pricing: By combining the purchasing power of many practices, you gain access to contracts normally reserved for large systems.
• Wide Range of Categories: Discounts often apply to medical supplies, vaccines, office equipment, IT, and even service contracts.
• No Added Complexity: You order as usual, but with better negotiated rates.

The DoctorsManagement PowerBuying Program

At DoctorsManagement, we’ve built a PowerBuying Program designed specifically for physician practices.

Participants gain:

• Discounted pricing on medical and office supplies.
• Vendor contracts vetted for fair terms and quality.
• Improved margins on everything from exam gloves to vaccines to office IT.
• Scalability: As your practice grows, your savings grow too.

Learn more: PowerBuying Program

Real-World Impact

• A pediatrics group reduced vaccine supply costs by $18,000 annually through PowerBuying.
• An orthopedic practice cut supply expenses by 22% in its first year by leveraging negotiated contracts.
• A dermatology group saved on both clinical and office supplies, freeing up capital to invest in aesthetics equipment.

Why PowerBuying Is Critical for Ancillaries

Adding ancillaries increases supply intensity (infusion drugs, imaging consumables, DME, etc.). Without group purchasing leverage, overhead quickly erodes ancillary profitability. PowerBuying ensures your ancillaries not only drive top-line revenue but also maintain healthy margins.

Key Takeaway

Revenue growth is only half the equation. By participating in DoctorsManagement’s PowerBuying Program, practices of all sizes gain the purchasing leverage of large systems — improving profitability, reducing overhead, and making ancillary investments more sustainable.

Join the PowerBuying Program

Section 8: Common Mistakes to Avoid

Why Many Ancillary Services Fail

While ancillaries can transform a practice, many fail to deliver expected returns. The reasons usually aren’t clinical — they’re strategic, financial, and operational missteps. Avoiding these pitfalls is as important as choosing the right ancillary in the first place.

A 2023 MGMA benchmarking study found that nearly one in three ancillary programs underperform their original ROI projections — often due to preventable mistakes.

Mistake 1: Chasing “Shiny Object” Ancillaries

The Pitfall: Adding a service simply because it’s popular (e.g., aesthetics in a market already saturated, or MRI in a low-volume orthopedic clinic).

Consequence: Underutilization, wasted capital, staff distraction.

Solution: Perform a formal practice assessment before investing. Align ancillaries with patient demand, payer mix, and competitive landscape.

Mistake 2: Ignoring Compliance Risks

The Pitfall: Launching services without considering Stark Law, AKS, or state-level restrictions. Examples include improper revenue-sharing agreements or self-referral structures.

Consequence: Potential civil fines, repayment demands, or exclusion from Medicare/Medicaid.

Solution: Structure ancillaries with compliance at the core. Have contracts and ownership arrangements reviewed by experienced consultants and legal counsel.

Mistake 3: Underestimating Staffing Needs

The Pitfall: Adding an ancillary without enough trained staff or assuming current staff can absorb new responsibilities.

Consequence: Burnout, workflow disruption, billing errors, and poor patient experience.

Solution: Budget for dedicated hires where needed (audiologists, infusion nurses, PTs) and provide role-specific training.

Mistake 4: Overlooking Cash Flow & ROI Timelines

The Pitfall: Focusing on gross revenue potential without accounting for startup costs, reimbursement lag, and utilization ramp-up.

Consequence: Practices run out of cash before the service becomes profitable.

Solution: Build a pro forma financial model with conservative assumptions. Ensure reserves or financing cover the break-even timeline. 

Mistake 5: Poor Workflow Integration

The Pitfall: Treating ancillaries as bolt-ons rather than integrated into practice operations. Example: allergy testing jammed into a primary care clinic without scheduling protocols.

Consequence: Longer wait times, staff confusion, and frustrated patients.

Solution: Map workflows end-to-end before launch. Use EHR templates and staff training to create seamless integration.

Mistake 6: Failure to Market New Services

The Pitfall: Assuming patients (or referring providers) will automatically know about and use the new service.

Consequence: Low utilization despite clear clinical need.

Solution: Create a compliant marketing plan — patient education materials, referral updates, online visibility. Marketing isn’t “selling”; it’s informing patients of valuable services you now provide.

Mistake 7: Doing It Alone

The Pitfall: Physicians trying to self-manage ancillaries while still carrying full clinical loads.

Consequence: Missed compliance details, poor financial tracking, and burnout.

Solution: Engage experts for advisory, compliance, accounting, and vendor negotiation. Let clinicians focus on care.

Key Takeaway

Most ancillary failures come not from the service itself, but from poor planning and execution. By avoiding these mistakes — and leveraging professional advisory support — practices can unlock ancillary growth with confidence.

Learn more: Practice Management Consulting

Section 9: Conclusion & Call to Action

Ancillaries as the Future of Independent Practice

Independent practices today face shrinking reimbursements, rising overhead, and stiff competition from hospitals and corporate-backed groups. Ancillary services are no longer “optional add-ons” — they are becoming the strategic backbone of sustainable physician practices.

The right ancillary services deliver:

• Stronger margins: Offsetting declining fee-for-service payments.
• Patient convenience: Keeping care under one roof.
• Improved outcomes: Through better access, monitoring, and continuity y.
• Practice value: Enhancing equity for succession, sale, or partnership opportunities.

But success doesn’t come from chasing every new service. It comes from choosing the right ancillaries, at the right time, structured the right way.

The DoctorsManagement Advantage

For more than 60 years, DoctorsManagement has helped practices across the U.S. thrive by:

• Conducting detailed practice assessments to identify the right opportunities.
• Modeling financial ROI with conservative and realistic assumptions.
• Designing ancillaries with compliance at the core (Stark, AKS, HIPAA, CLIA).
• Negotiating with vendors to secure fair market value contracts.
• Training staff and integrating workflows for seamless operations.
• Providing ongoing advisory support with bi-weekly or monthly check-ins.

We don’t just tell practices what to do — we guide them through execution, monitoring, and optimization.

Explore more:

• Ancillary Services Consulting
• Practice Management Consulting
• Practice Assessment
• PowerBuying Program

Ready to Grow Your Practice?

If you’re an established physician practice ready to expand, the next step is simple:

Schedule a Practice Assessment today to discover which ancillary opportunities fit your specialty, patient base, and financial goals.

Or connect with our team for ongoing practice management consulting to ensure your ancillaries launch successfully and sustainably.

Ancillaries aren’t just about boosting revenue — they’re about building a practice that delivers better care, better patient experiences, and a stronger future. With DoctorsManagement as your partner, you’ll have the expertise, compliance safeguards, and financial modeling needed to succeed.

Contact Us