Diversifying income through low-overhead retail revenue offerings can enhance both patient outcomes and practice profitability—but it must be done with full awareness of legal and regulatory requirements.
Diversifying income through low-overhead retail revenue offerings can enhance both patient outcomes and practice profitability—but it must be done with full awareness of legal and regulatory requirements.Navigating the healthcare landscape requires a delicate balance between delivering exceptional patient care and maintaing a sustainable business model. For chiropractic practices, particularly those adopting an integrated approach, establishing a low-overhead retail revenue stream can be transformative. This strategy diversifies income, while offering patients convenient access to high-quality products that support their recovery and long-term wellness. However, it is crucial to adopt a compliance-forward mindset, ensuring all sales are conducted legally to avoid significant penalties.
The legal landscape
Understanding the legal landscape is essential for effectively implementing this business model. Key legal considerations include the Anti-Kickback Statute and the Stark Law, both of which are designed to prevent financial incentives from influencing medical decisions, but with distinct scopes and penalties.
The Anti-Kickback Statute
The Anti-Kickback Statute (AKS) is a federal criminal statute prohibiting knowingly and willfully offering, paying, soliciting or receiving “remuneration” in exchange for referrals for any items or services funded by federal healthcare programs such as Medicare or Medicaid. The term “remuneration” is broad and encompasses anything of value, not just cash.
In the context of a chiropractic office’s retail operation, AKS poses the most significant concern. The core principle states that financial transactions, such as product sales, must not be used to induce patients to seek reimbursed services. For instance, offering a “free” lumbar support pillow with a paid adjustment for a Medicare patient could be construed as an inducement to seek the covered service.
The legal standard for compliance with the AKS is known as the “one purpose” rule. If any part of an arrangement is intended to induce referrals, it can be deemed a violation, regardless of any legitimate motives involved.
The Stark Law (Physician Self-Referral Law)
Stark Law is a civil statute prohibiting physicians from referring patients to entities for designated health services (DHS) if they or an immediate family member have a financial relationship with that entity. Unlike the AKS, the Stark Law operates under strict liability, meaning no intent is necessary for a violation to occur. A violation happens if a referral and a financial relationship exist for a DHS, unless a specific exception applies.
For DCs, the Stark Law may generally pose less immediate concern compared to the AKS, as chiropractic services are not classified under DHS. However, integrated practices with medical doctors (MDs) or doctors of osteopathy (DOs) must remain vigilant. If services such as physical therapy, diagnostic imaging or lab services fall under DHS, doctors must ensure any referrals to these parts of the practice adhere to “safe harbor” exceptions.
Exploring low-overhead retail revenue streams
With the legal framework in place, practical and low-overhead retail options can enhance a chiropractic or hybrid practice. Choosing products and services that resonate with your practice’s mission of promoting health and wellness can seamlessly extend the care provided.
Supportive equipment: Consider integrating ergonomic pillows, chair supports, foam rollers, resistance bands and massage devices. These items are often recommended to patients, making in-house sales a convenient option.
Topical products: Offer topical pain relievers, CBD creams and essential oils targeting muscle and joint discomfort. These products provide immediate relief, empower patients to manage symptoms at home between visits and can be sold as self-care, which is a massive movement in the US.
Branded merchandise: Create a line of branded products, such as water bottles or T-shirts, featuring the clinic’s logo, or even custom supplements. This not only generates revenue but also helps market the practice, turning patients into brand advocates.
Nutritional supplements: Consider offering high-quality vitamins, joint supplements or meal replacement shakes. This aligns perfectly with the holistic approach of chiropractic care, allowing patients to be guided toward optimal health.
Health and fitness trackers: Partner with a company that makes fitness trackers or smart watches. You can even offer these devices at a competitive price and teach patients how to use them to monitor their activity, sleep and recovery, reinforcing the importance of a healthy lifestyle.
In-office workshops: Offer paid workshops on topics such as posture correction, stretches for desk workers or even nutrition basics. This isn’t a physical product, but it’s a great low-overhead revenue stream that leverages your expertise. You can also package this with a product sale, such as a workshop and a foam roller, for a bundled price.
Online store: Don’t limit yourself to in-office sales. Set up an ecommerce store on your website. This allows patients to purchase products from you at any time, even when the office is closed. You can link to your online store in your email newsletters and social media posts, expanding your reach beyond your physical location.
Compliance-forward best practices for retail
Separate transactions and revenue streams: The simplest way to mitigate risk is to clearly separate your clinical and retail operations. It is recommended retail sales be handled as entirely separate transactions from the patients’ professional service and insurance billing. Don’t commingle invoices or offer packaged deals that bundle a service with a product.
Maintain fair market value pricing: All products should be sold at their fair market value. Avoid artificially inflating prices and then offering “deep discounts” to patients. The price should be consistent for all purchasers, whether they are a patient, a family member or a member of the general public.
No inducements for referrals: In the realm of compliance, this serves as a strong reminder to avoid providing products as incentives for patient referrals. This is the definition of a kickback. Instead, marketing should be focused on the intrinsic value of the products themselves.
Transparency and documentation: Emphasize the importance of clear pricing, detailed documentation of all sales and a transparent return policy. If a practice ever faces an audit or legal inquiry, having impeccable records is the best defense.
Develop a formal compliance plan: The Office of the Inspector General (OIG) has created guidance for compliance programs, even for small physician practices. This includes:
- Written policies and procedures for retail sales
- Designating a compliance officer (even if it’s the practice owner)
- Conducting regular internal audits to check for billing and sales errors
- Providing staff with training on the legal risks
Final thoughts: Grow smart, grow safely
Creating a low-overhead retail revenue stream is a smart business move for any chiropractic or integrated practice. It empowers patients with the tools they need for long-term wellness, while contributing to the practice’s financial health. However, this growth must be grounded in a deep understanding of the legal landscape.
Before launching a new retail line or promotion, you must first consult a healthcare attorney who is an expert in state and federal anti-kickback laws. This proactive, compliance-forward approach is the only way to build a resilient and sustainable business that benefits both the practice and its patients without risking serious legal and financial consequences.
Erin Stubblefield, DC, CPPM, graduated from Palmer College of Chiropractic in Davenport, Iowa, in 2006. After practicing privately for several years, she transitioned to full-time teaching. Currently, Stubblefield is a specialist with KMC University and the owner of Sunflower Consulting LLC, a healthcare consulting and management group. She resides outside of Kansas City and is a published author and continuing education presenter. For further information, you can reach her at drerin@kmcuniversity.com.
