Banking for dermatology rollups

Two cash flows, one front desk

A modern dermatology practice (opens in a new tab) runs two businesses at the same desk. The first is medical dermatology: insurance-billed visits for acne, psoriasis, skin cancer screening, biopsies. Those revenues come through claims, 835s, and lockbox checks. The second is cosmetic: Botox, fillers, lasers. Those revenues come through credit card and cash, billed and collected the same day.

Both flow through the same patients and the same providers. Neither flows through the same accounting buckets. If banking design does not separate them at the deposit layer, audit, payer reporting, and sales tax all become unnecessarily complicated. Rollups that add a telehealth arm layer in a third flow entirely, one that needs the banking stack built for fully digital dermatology visits (opens in a new tab) rather than the medical-cosmetic split above.

Why separation matters below the EBITDA line

Three places this shows up.

• Sales tax. Most states tax cosmetic services but not medical services. If point-of-sale systems bundle both into a single daily deposit, accounting teams must back into the taxable share monthly. Separate deposit streams allow tax filing to read directly from cash.
• Payer audit. During payer audits, auditors want to see only medical claims revenue. Commingled cosmetic revenue requires excess documentation.
• Per-location reporting. PE-backed rollups need medical and cosmetic revenue tracked by location, provider, and service line, the same discipline covered in our guide to banking for multi-location medical groups (opens in a new tab). Banking supporting this from day one saves quarterly back-office cleanup.

The architecture for a 20-location derm platform

Three account layers per practice entity:

1. A claims revenue account receiving all insurance 835s and lockbox checks with EFT enrollments and reconciliation against open claims
2. A cosmetic revenue account receiving merchant settlement deposits for credit card and cash with sales-tax-eligible revenue
3. An operating account disbursing payroll, vendor payments, and overhead, with the first two accounts sweeping into this on schedule

For 20 locations, multiply by 20. Virtual accounts under a bank that maps them onto your MSO-PC entities (opens in a new tab) provide 60 virtual numbers with one banking relationship and consolidated dashboard.

What changes for your CFO

Three metrics become accessible:

• Medical revenue per location, provider, payer (end of each day)
• Cosmetic revenue per location, service line (end of each day)
• Sales tax accrual tied to actual cosmetic cash, not estimates

These numbers become defensible for audit committees, PE sponsor quarterly reviews, and tax filings.