Primary Care Ancillary Services: Financing Lab, Imaging, DEXA
Primary care ancillary services such as in-office lab testing, imaging and bone density scanning can make a practice more convenient for patients and add a revenue stream beyond office visits. For many independent internists and family physicians, ancillaries also affect how buyers and lenders view the practice, since they can strengthen margins and make the business less dependent on visit volume alone.
Adding a service line is a business decision as much as a clinical one. It usually involves equipment, space, staffing, certification and a careful review of the rules that govern in-office services. This article explains how to evaluate an ancillary and how the equipment and build-out are typically financed. Billing, coding, certification and physician self-referral rules are complex and vary by service, state and payer, and nothing here is legal, billing or compliance advice. Healthcare counsel and qualified billing or compliance professionals should review any new service before you invest.
Ancillary Services Primary Care Practices Often Consider
The right ancillary depends on your patient population, your space and your local market. Services internists frequently evaluate include:
- In-office laboratory: blood draws and certain point-of-care or moderate-complexity testing
- X-ray: basic diagnostic imaging for patients who would otherwise be referred out
- Ultrasound: abdominal, vascular or thyroid imaging, depending on training and staffing
- DEXA bone density scanning: screening and monitoring for patients at risk of osteoporosis
- Cardiac and pulmonary testing: ECG, stress testing, Holter monitoring or spirometry
- Other services: allergy testing, infusion, sleep testing or weight management programs
Each service carries its own equipment costs, staffing needs, certification requirements and reimbursement profile.
How to Evaluate Primary Care Ancillary Services
Before you buy equipment, test whether the service fits your practice. Questions to work through include:
- Volume: how many patients you currently refer out for this service, and how many would likely stay in-house
- Reimbursement: what your major payers pay for the service and whether prior authorization is required
- Staffing: whether you need a licensed technologist or additional trained staff
- Space: whether the service requires shielding, plumbing, electrical upgrades or a dedicated room
- Certification: laboratory certification, imaging registration or accreditation requirements
- Compliance: whether the service fits within physician self-referral rules and in-office ancillary exceptions, as reviewed by counsel
- Payback: how long it may take for revenue to cover equipment payments and operating costs
A conservative volume estimate, based on your own referral data, gives a more realistic picture than projections built on best-case assumptions.
Budgeting for a New Service Line
The total investment usually goes beyond the equipment itself. A budget may include:
- Equipment purchase or lease, including installation and training
- Space modifications, shielding or utility upgrades
- Software interfaces with your records and billing systems
- Service contracts and maintenance
- Supplies, reagents and consumables
- Staff hiring, training and certification costs
- Working capital during the ramp-up period
If the service requires construction, our article on medical office build-out financing explains how tenant improvements are typically funded. Our guide to internal medicine practice equipment covers the core equipment most practices need before adding ancillaries.
Financing Options for Ancillary Equipment
Most practices finance ancillary equipment rather than paying cash, so they can preserve reserves for operations. Typical approaches include:
- Equipment loans: the practice owns the equipment, which typically serves as collateral
- Equipment leases: lower upfront costs and, depending on the structure, the option to upgrade or purchase at the end
- Term loans: used when the project combines equipment, build-out and working capital
- SBA financing: may be used for equipment and related improvements, subject to program rules and lender review
The right choice depends on how long you expect to use the equipment, how rapidly the technology changes and your tax situation. Your accountant can help you compare the tax treatment of leasing and buying. Our equipment and technology financing page explains these options in more detail, and you can estimate payments with our conventional loan calculator. Estimates are for planning purposes only and do not represent an offer or approval.
What Lenders Review
For equipment financing, lenders often focus on the practice’s existing cash flow, the cost and useful life of the equipment and the owner’s credit. For larger projects, they may also review projected volume and reimbursement for the new service, the staffing plan and any construction budget. A practice with stable financials and a well-documented plan for the ancillary generally presents a stronger request.
How Ancillaries Can Affect Practice Value
Well-run ancillaries can improve a practice’s margins and make it more attractive to future buyers, partners and lenders. That said, value depends on documented earnings and on whether the service can continue after an ownership change. Buyers will look at equipment age, remaining lease obligations, certification status and whether the service depends on one physician or technologist. If you are planning an eventual sale, our seller’s guide to what your primary care practice is worth explains how buyers may weigh these factors.
Final Thoughts
Primary care ancillary services can improve patient convenience and strengthen a practice’s finances, but they work best when the volume, reimbursement, staffing and compliance picture is clear before the equipment arrives. Starting with your own referral data and matching the financing to the life of the equipment can help keep a new service line on solid footing.
US Medical Funding helps internal medicine and primary care practices finance diagnostic equipment and new service lines. Learn more about our internal medicine practice equipment financing and leasing.
