Issue link: https://viewer.e-digitaledition.com/i/1190306
of ancillary services, molecular and genetic testing, for example, provide opportunities to run more accurate tests for illnesses like the flu, RSV and strep that can generate higher revenue amounts than traditional swab tests. Genetic testing also allows for the practice to sell supplements to the patients after the results are delivered. In general, internal care, family medi- cine, pediatrics and OB/GYN practices could see 7% to 12% of their revenue coming from ancillary services. Other disciplines, cardiology for example, could expect to see up to 23% of their revenue from ancil- lary services. A t horou g h a s se s sment mu s t b e performed before considering ancillary ser- vices. Take the time to evaluate issues, such as legal and Stark Law issues, patient needs, payment of service, competition, qualifica- tion of staff and available office capacity. Implement a patient needs assessment and fully understand all patient demographics. Calculate the costs associated with the implementation of these services, such as equipment and supplies, staff labor, and professional labor. Take into account the return on investment in terms of patient volume. Physicians within the practice must fully analyze whether using these services can generate revenue in a very business-minded approach. Some ancillary services should be per- formed under a separate and distinct legal entity, separate from the existing medical practice. As an example, research work is often done under a separately created limited liability company. The medical practice's tax advisor may suggest that this limited liability company elect to be taxed as an "S" corporation. Advice from the tax advisor and legal counsel should be considered before engaging in any new ancillary service. As the healthcare industry continues to develop, successful physicians may need to alter their activities from delivering hea lth ser vices within their practice toward an extensive range of services that will meet their patient expectations as well as practice income goals. At the end of the day, a medical practice is also a business that needs to develop and change with the intent to make a profit as healthy as it makes its patients. Christopher Davis, CPA, is a Senior Tax Manager with Sol Schwartz & Associates P C a n d h a s b ee n p ra c t i c in g p u bli c accounting since 2008. Davis practices in various areas of public accounting includ- ing tax compliance and consulting for individual, corporate, S corporation and partnership taxation. He is a member of the firm's Healthcare niche that specializes in identifying and implementing solu- tions to achieve the goals of the physician clientele we serve. You can contact Davis at 210-384-8000, ext. 118,or via email at cbd@ssacpa.com. Er ic F lores , CPA , is a Se nior Ta x Associate with Sol Schwartz & Associates PC. F lores is a member of the fir m's Healthcare niche and enjoys helping individuals, corporations, partnerships and tr u sts with their tax issues and franchise tax matters. You can contact Flores at 210-384-8000, ext. 136, or via email at eef@ssacpa.com. n M D N E W S . C O M /// M D N E W S S A N A N T O N I O ■ 2 019 1 5