Insights on Buy-and-Bill, Equipment, and Real Estate for Dermatology Clinicians

Two complementary sessions at Winter Clinical Miami addressed practical strategies for strengthening the financial foundation of private practice. “Tips to Optimize Buy and Bill in Your Practice,” presented by Mark D. Kaufmann, MD, and “Equipment and Real Estate: Lease vs Own,” led by Todd Schlesinger, MD, FAAD, FASMS, provided a roadmap for clinicians seeking to improve revenue streams while managing long-term capital investments thoughtfully.

Optimizing Buy and Bill

Kaufmann, associate clinical professor of dermatology at the Icahn School of Medicine at Mount Sinai in New York, New York, described buy-and-bill as an ethical, patient-centered reimbursement strategy that can simultaneously enhance access to care and generate sustainable revenue.¹ Under this model, a practice purchases a medication directly from a distributor, administers it in-office, and bills the patient’s insurer—typically under the medical benefit rather than the pharmacy benefit.

He emphasized that this approach is particularly impactful for Medicare patients. Unlike commercially insured patients, Medicare beneficiaries cannot use manufacturer copay cards for biologics under Part D. By shifting eligible therapies to Medicare Part B through buy-and-bill, dermatologists can improve patient access while maintaining continuity of care. Because the medication is administered in-office, adherence is assured, and administrative delays associated with specialty pharmacy distribution may be reduced.

Financially, Medicare reimburses at average sales price plus 6%, which can represent meaningful revenue when high-cost biologics are involved. However, Kaufmann cautioned that success depends on infrastructure. Many of these medications cost $10,000 or more per dose; a single coverage error or billing misstep can erase months of margin. He advised starting with a well-defined patient population—often Medicare patients with psoriasis or other inflammatory diseases—and confirming coverage meticulously before drug acquisition.

Operationally, practices must establish reliable processes for ordering, storage, inventory tracking, and billing. Strategic coordination—such as timing drug delivery to arrive just before administration—can reduce carrying costs and minimize inventory risk. Appropriate coding includes both the J-code for the drug and the CPT code for administration. Medicare reimbursement typically occurs within several weeks, but practices must be prepared to absorb short-term cash flow gaps.

Kaufmann underscored the importance of staff education and oversight. For practices lacking internal billing sophistication, emerging third-party services may offer outsourcing solutions. Ultimately, buy-and-bill represents an opportunity to “work smarter, not harder,” leveraging underutilized areas of the fee schedule rather than relying solely on traditional evaluation and management codes.

Lease vs Own: Equipment and Real Estate

Schlesinger, a dermatologist, Mohs surgeon, and clinical trialist at Epiphany Dermatology in South Carolina, shifted the focus to long-term capital strategy, examining whether dermatologists should lease or purchase office space and equipment.² He framed the decision around personal goals, professional trajectory, geographic stability, and market conditions.

Leasing offers flexibility, lower upfront capital requirements, and insulation from real estate market volatility. Tenant improvement allowances and full-service leases may reduce early expenses. However, leasing does not build equity, may limit tax advantages, and can expose practices to rising rents or restrictive lease terms. Schlesinger advised scrutinizing exit clauses and negotiating protective provisions, including exclusivity clauses when feasible.

Purchasing real estate, by contrast, creates a potentially appreciating asset and offers significant tax benefits. Owner-occupied loans, often supported by SBA programs, may require lower down payments, particularly if the practice occupies at least 51% of the building. Holding real estate in a separate LLC from the practice entity can protect liability and create opportunities for passive income and partner buy-in. He also highlighted cost segregation studies, which accelerate depreciation on interior improvements, enhancing early tax deductions.

When discussing equipment, particularly energy-based devices, Schlesinger noted that devices depreciate more rapidly than real estate. Capital leases can provide advantages through Section 179 deductions, allowing accelerated write-offs. He encouraged careful review of warranty terms, service agreements, and transfer clauses, and recommended negotiating purchases near fiscal year-end when vendors may be more flexible.

References

1. Kaufmann M. Tips to Optimize Buy and Bill In Your Practice. Presented at: 2026 Winter Clinical Miami Dermatology Conference; February 27-March 1, 2026; Aventura, FL

2. Schlesinger T. Equipment and Real Estate: Lease vs Own. Presented at: 2026 Winter Clinical Miami Dermatology Conference; February 27-March 1, 2026; Aventura, FL