Accounts Receivable for Rehab Therapy Practices: Signs You're Being Too Reactive

Colleen Bailey is a Senior Solution Architect at WebPT and a medical billing expert. With decades of experience in revenue cycle management, Colleen specializes in medical billing across multiple specialties. Since joining WebPT in 2016, she’s played key roles on the billing and enterprise onboarding teams, helping major clients successfully implement WebPT’s EMR and billing solutions. Now, as a Senior Solution Architect, she combines her deep industry knowledge with platform expertise to support both members and internal teams.

You’ve probably heard the saying “garbage in, garbage out”; unfortunately, that applies to billing and revenue cycle management (RCM) as much as any other process. Here at WebPT, we recently did an audit of denials among our RCM Members to figure out the root causes. What we found was that 67%—fully two-thirds—of denials could be attributed to poor front office processes. 

Not only are these denials frustrating, but they’re also costly for practices. Your billers are incredibly knowledgeable and can probably overturn many of the denials you receive, but the time spent fighting those denials is costing you hours of manpower that could be spent tackling your more complex claim denials, as well as the additional administrative costs and the delays in receipt of revenue.  

To solve this problem, practices and their billing teams need to get off the back foot. Instead of waiting until a denial comes back and then addressing the problem, you have to be proactive to catch these issues before they result in rework. So, I’m sharing where I’ve seen clinics go wrong in their billing and RCM practices to end up in a reactive cycle, and how you can get out or stay out of that cycle and avoid unnecessary denials.  

Why Rehab Therapy Practices Fall Into a Reactive Rut

There are a couple of major reasons practices end up reacting to denials rather than acting to prevent them. I like to say that reactive clinics have a “churn and burn” mentality:  they’re looking to fill their schedule and get patients in the door, often at the expense of key processes and workflows. 

• They’re not emphasizing validating patient information or insurance coverage, which can lead to payment delays, denials, and ultimately lost revenue. 
• They’re not verifying patient eligibility or following payer requirements for prior authorizations—which, yes, are definitely over the top in 2025 but are still required.  
• They’re not collecting from patients at the time of service. 
• They’re not equipping providers to document according to the payers’ specifications.

Instead, these clinics are putting the entire burden of receiving payment on their billing department, when the truth is that it’s a whole practice responsibility.  In a reactive clinic, there are too many people who don't see how their individual duties are tied to the success of the clinic as a whole, or don’t have a great understanding of how each role in the organization plays into the success of the clinic as a whole—and that includes owners and managers as well as front office staff.

That leads me to the second reason for reactive processes: time, or a lack thereof. Having fractured workflows creates inefficiencies, and those inefficiencies lead to additional work that takes more time. Worse yet, it can lead to conflict between members of your team. Is your front office always mad at your biller for asking for help?  Is your biller frustrated by the amount of manual processes or lack of information?  Are your providers missing key elements in their documentation?  Unfortunately, having fragmented workflows leads these clinics into a cycle where there’s never enough time to enact a more proactive approach, even if they want to do so.  

How Denied Claims Are Holding up Your Revenue

Unfortunately, there are too many practices that don’t recognize that they’re reactive. One clear way to tell if you’re guilty of this is to take a look at your accounts receivable (A/R) for slow or no payments. We all know that denied claims lead to delays in getting paid (assuming you get paid at all), but you might not know why exactly.  Let me break down how the process works and why you need to know the rules in your state in order to avoid delays in payment.   

 When a claim is submitted to an insurance company, there are state-mandated adjudication rules that the insurance company must follow. Insurance companies have a required time frame to investigate and process a claim and then make a decision on whether to pay or deny that claim. These are called “prompt pay” or “clean claim” laws.  These laws are put in place to regulate insurance companies that operate in each state in which the company does business.  As you can see in the map below, the claim goes through a series of validations to approve payment. 

If a claim fails any of the validations, it is denied. Any failure in the journey of the claim will result in a denied claim and no payment for services.  Denied claims do not fall under the same strict adjudication rules as a clean claim.  This will result in, at best, a payment delay.

If you’re not already familiar, I’d recommend you read up on your state’s adjudication rules;  this information is available on the website of your state’s Department of Insurance. To find your state’s site, go to the National Association of Insurance Commissioners (NAIC) website and click on the link titled “NAIC States and Jurisdictions.” If available, you might try using the “Search” function at the relevant site to help you locate information about the state’s “prompt payment law.” If you have trouble finding the prompt payment deadlines on the website, call the Department of Insurance directly using the phone number listed on the site.

How State Adjudication Rules Impact Your A/R

So how do those rules influence how you think about your aging claims?  In your Insurance Aging or AR reports, you will see that the outstanding balances are sorted by aging buckets: 0-30 days, 31-60 days, 61-90 days, and so on. Knowing your state's required processing statute will guide you as to where you should see the bulk of your outstanding claims. For example, if your state has a 30-day statute, you can expect to see that the weight of your outstanding balances will be in the 0-30 bucket, as insurances will need to complete processing by the 30th day.  (Surprisingly, many payers actually provide notification of processing and payment earlier than that deadline.)  If your aging buckets greater than 30 days show a large volume of unpaid claims, on the other hand,  this would be cause to research and review those claims.

What Proactive Practices Are Doing Differently

We’ve talked a lot about where clinics have made mistakes that lead to having to chase payments and rework claims; let’s take a look at what proactive practices are doing to avoid that mess. 

For a start, a proactive A/R process is evident through every touchpoint with a patient. From the initial contact to the patient discharge, each team member should be aware of the impact they have on a successful patient outcome. Everyone understands a successful physical outcome, but many do not understand a successful fiscal outcome.

During patient intake, a patient should not only be screened for their medical reason for the visit but also for the financial responsibility of the care. Using digital patient intake is a great way to collect all the information you need; not only does it afford patients additional time to complete their paperwork, but it also gives your front office the opportunity to request details and supporting information that may not be reasonable to request when the patient shows up for their first appointment—like copies of their insurance cards, details on possible other therapy treatments that have been provided, and notification of financial expectations. 

You should have a process to verify benefits and obtain any required authorizations before the patient begins care. Surprisingly enough, the easiest claim denial to avoid is making sure the patient actually has coverage for the services you are going to provide.  Verifying benefits either through an online portal or an electronic benefit verification process will help minimize the amount of time spent on the phone with a payer in hopes of getting the correct information. Your eligibility information should include:

• Confirmation of the insurance ID and group numbers.  
• Verifying that the patient does in fact have active coverage and the effective dates of the coverage.  
• Requirements for services to be covered by the payer.  (Prior authorizations,  limits to the number of visits or types of visits under this patient's plan)  
• Checking if the patient used any of their therapy benefits prior to being seen in your clinic.

Whether you verify benefits online or use an electronic benefit verification tool, you should store a copy of the benefits information in the patient's chart.  This will equip your billing team with helpful information if they need to appeal an inaccurate denial.

While claims can be a big source of A/R headaches, we can’t forget about collecting what a patient owes. When you verify eligibility, you will find out if the patient has a copay, coinsurance, or deductible, or any combination of the three for therapy services. How can you get paid for those in a timely manner?  Simply ask!  Patients expect to pay something at the time of service.  Even if they are not insurance experts, most understand they will have a responsibility for a portion of the payment due.   It is easier to request a payment at the time of service than it is to chase the patient weeks or months later when the balance has continued to accrue into a much larger amount.   You’ll even have some patients who will ask to make a payment at the time of service. But, generally speaking, if you don't bring it up, neither will they.  So, bring it up. 

Managing a proactive approach is about the mindset of your team as much as the processes.  Everyone on your staff should be committed to supporting the patient's journey and realize that you’re all there for the success of the patient and the practice.  Every interaction with a patient should involve some sort of cross-team handoff.

In order to avoid A/R issues down the line, you need to have solid systems and workflows in place for administrative success in every aspect of the patient's engagement with your team. Everyone should know the administrative responsibilities of each team, and you should have strong processes, including robust intake, consistent verification of benefits, authorization tracking,  leveraging insurance setup, and settings to follow through with insurance requirements for documentation. Armed with this information, there will be multiple points of validation throughout the course of care for the patient.

How to Avoid Claims Ending up on A/R

I’m also fond of the saying “an ounce of prevention is worth a pound of cure,” meaning that it’s better to prevent the problem in the first place rather than having to solve it. That’s definitely the case when it comes to A/R; it’s much better to take a quick few steps early in the billing process than to work on an expanding aging report. 

Know your payers. Get familiar with the processing timelines of your largest payers. How quickly do they typically turn around payment? Do they usually have a special requirement for processing? By understanding that, you can get a better idea of when you should expect payment—and when you need to investigate delays. 

Status check unprocessed or open claims. As discussed earlier, insurance companies have a mandated time frame to process clean claims. If you have not gotten processing within that time frame, reach out to the payer to status the claim. Do not just resubmit all open claims. Mass submissions have a high likelihood of being denied as duplicate claims if you have not confirmed that the payer is missing the claim. By status-checking unprocessed claims, you will have insight into possible processing/payment issues for your organization. For example, if a claim has been processed and paid, but you have not received the payment, that could be an indication of a banking or clinic address issue.        

Do not ignore denials on your EOBs / ERAs. Have a system in place to work denials immediately upon receipt. As we talked about earlier, insurance companies do not have a mandated timeframe in which they need to reprocess claims. To maximize your chances of getting paid in a timely manner, get those denials worked right away.  

Follow through. Identifying an unpaid claim is the easy part; the true work is turning that unpaid claim into a properly processed claim and payment. Once you status check and work the claim for reprocessing, continue to follow up and push for processing. To illustrate my point, imagine if you didn't make your car payment and the bank called you for payment. If you tell the bank that you are sending a payment on Friday, and you don't send that payment, what do they do? They follow up and follow through.    

In this instance, you have completed all of the administrative requirements of the insurance company and treated the patient in good faith based on your provider contract. The insurance company now has the responsibility to process that claim under the same contract. Don't let them slide.

What Numbers and Reports Should I Be Tracking?

The best way to check how you’re doing with your A/R is to look at the data. But what are the right reports to check to determine the financial health of your practice? Here are the things I’d be looking at on a regular basis.

• Key Performance Indicator Reports  (KPI’s) provide data on the total number of claims billed, the payments received toward those claims, and statistics such as average charge for visit, average charge per unit, and average payment per visit. KPIs provide high-level insights into the productivity and revenue performance of the practice. These reports will provide visibility into baseline performance and increases or decreases in practice revenue.
• Your Accounts Receivable or Aging Report is a great place to see payer or patient balance concerns. Most systems will provide these reports, and they are broken down by aging buckets.   The highest number should be in the lowest buckets. So the largest amount of open balances should be in the most recently billed bucket. Regardless of how hard we work to bring payments into the organization, there will always be a handful of claims that require additional attention and take longer to pay. The metric for a percentage of claims over 90 days in your aging buckets should be less than 25% of your overall accounts receivable balance.  
• I’d also highlight your Authorization Reports, which I think are often underutilized. Your Authorization Reports should be managed proactively to obtain subsequent authorizations without gaps in approvals. 

Key Takeaways

Hopefully, you're taking everything I’ve said to heart and, more importantly, putting it into your practice to help bring down your A/R. But I know that I’ve given you a lot, so here are some of the simple, high-impact changes you can start making today in order to be a proactive clinic when it comes to billing. 

• Verify Benefits. Confirming that the patient has coverage will remove the number one avoidable denial. Have a process to verify benefits and obtain any required authorizations BEFORE the patient begins care, leverage system reports to track benefits and authorizations, and proactively reverify or submit additional authorization requests before the original authorization expires.
• Let your software work for you. Things like digital patient intake and electronic benefit verifications reduce your staff’s workload and can avoid human errors caused by manual input.   Leverage the automation to assist with proper payer rules, requirements, and formatting.  If you’re a WebPT Member, you can use this Discover article to optimize your EMR settings to your liking. 
• Submit claims on a daily basis. Consistent submission of claims turns into consistent receipt of revenue.
• Have set administrative processes throughout the course of patient care. Remember that the clinic is in the practice of caring for patients, but it is also a business. Practices that maximize efficiencies within their systems and establish solid processes for administrative operations will achieve higher overall performance, resulting in maximized revenue.
• Follow up and follow through!

If there’s one thing I wish more practices knew, it’s that billing is a team sport. Whether you are on the front lines bringing patients to the practice, establishing them in the system, providing care and documenting that care, or rolling up your sleeves to take insurance companies into battle, we are all here to serve the patient and support the success of the clinic. Leadership teams that understand their billing performance and implement administrative changes in the practice to support excellence in billing are able to see the practice as a whole and easily identify where there may be gaps so they can proactively work to fix them.

It seems obvious, but we need more practices to recognize that financial success depends on being paid for services rendered. Your billing team is a very valuable piece of the puzzle. Struggling with billing is not a failure but a wake-up call to make some changes. Make sure you are putting the financial stability of your practice in the hands of a person or team that has experience in helping successful businesses thrive, and that you’re giving them the support and tools they need to help you get paid.