As expenses increase and reimbursements decline, the profitability of private practices is decreasing. Owners often seek out solutions to this conundrum by adding service lines or looking for the ever-elusive self-pay patient. But what if the solution to this problem lies within each Physical Therapist?
PTs are trained to see their role as being 100% focused on patient care, without much thought to the financial implications of a PT practice. This paradigm probably stems from a PT’s desire to help and a lack of knowledge of healthcare economics. Regardless of how it begins, we know how it ends: with less money in every owner’s pocket. As reimbursements continue to decline clinic owners need to create a culture that is focused on providing exceptional, evidence-based care and getting paid for that care in a manner that is profitable.
An analysis of the revenue generated by each individual PT in an organization very often reveals vastly differing billing practices. PTs, particularly new graduates, have no experience and very little knowledge of the coding system. They may enter a payer code, find that it has been rejected, and not use that code again, without ever learning what the original problem was. Training on appropriate billing practices should be mandatory when therapists are hired, as well as throughout their employment, focusing on correctly coding from both a compliance standpoint and a revenue generation standpoint.
Occupancy and labor costs are rising and aren’t going down any time soon, while reimbursements are predicted to decline in coming years. You may already be feeling the pressure to sign payer contracts that ensure you will make less money in the next 12 months than the previous 12 months. What that means is that you need to be able to give the same service, if not better, at a lower cost to you. To be cost-effective you need to look at operational efficiencies related to staffing and scheduling.
Additionally, it can be cost-effective to look into outsourced options which can centralize those functions to a large, cohesive team that has standard operating procedures and efficiencies of scale due to having dedicated staff for each function (billing, collecting, posting, credentialing, etc.) It is more efficient to get paid the right amount the first time and to have resources to follow up on every claim that doesn’t get reimbursed properly
Your clinic’s philosophy is the driving force behind all business systems. The care that is given to each patient and what your PTs do during each treatment session is the key to your business. How does your organization’s philosophy lead to better results? If you believe that more frequent PT sessions lead to better outcomes you should be monitoring this weekly. What about the length of a session? What does your organization believe provides the “best care,” is it modalities, manual therapy, exercise, patient education, or a specific combination of these? Are you monitoring CPT codes to see if this is happening? Do you monitor the number of visits and patient evaluations?
Patient satisfaction is paramount to the clinics’ survival and growth. Is there a standard of care across all employees? If a new graduate joins your practice you need a system in place that ensures that you are delivering a stellar experience and outcome at the same cost. How do you identify a problem? How do you intervene and train for the future? You need a method to train, monitor, and provide feedback to employees.
Just as with patient satisfaction you need training, monitoring, and feedback to ensure the best consistent clinical outcomes. Practices need to prove they are better, know why they are better, and identify areas where our organizations or individual PTs need to improve and have resources devoted to fixing these deficits. Do you provide employees with customer service training? How do you identify therapists that need help in this area?
As a private practice owner, you might think that you can’t afford to find out all the answers to these questions. You might feel like you know the answers but can’t possible afford to fix things. I would argue that in a consolidating marketplace, with big practices getting bigger and little guys getting pushed out, you can’t afford to not do these things if you want to survive and thrive in the world of PT for the next 5 years.
Benjamin Barron is Director of Business Development for ProEx Physical Therapy, a physical therapist-owned private practice specializing in orthopedics, spine, and sports medicine with 14 clinics throughout New England, and Collectivity Billing and Consulting, a PT billing, collections, and consulting company service private physical therapy practices throughout the country.