Blog Post

How to Rate Your Current PT Billing System

You may think your physical therapy billing system is fine, but are you leaving money on the table? Learn our tips on rating your current billing system!

Charlotte Bohnett
5 min read
June 10, 2014
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If claims go out the door and money comes back in, you assume your accounts receivable—your billing—and all of its associated systems, processes, and software are totally fine. But how do you genuinely know whether you’re doing a good job? Mastering billing is a challenging task, and it can be tricky to determine if what you’re doing is working. Here are some tips for scoring your current billing system.

Audit Your Billing

Whether you bill in-house or outsource, you should audit your existing method. Examine your billing process and answer the following questions:

  1. Do you feel your in-house biller or outsourced billing team lacks specialized PT knowledge?
  2. Do you feel your claims could be processed more quickly?
  3. Are there times when you experience a lag in reimbursements?
  4. Do you experience more than one denial due to claim errors per month?
  5. Does your current billing process interfere with your ability to provide quality patient care?
  6. Do you or your team ever need to come in early or stay late to complete your claims?

If you answered “yes” to any of these questions, it’s time to modify your current billing process or change your billing system altogether. (For advice on ways to maximize your current billing system, check out this post. For advice on selecting a new billing system altogether, check out this white paper.)

Manage the Financial Flow

In an article on Advance, PT business consultant Chuck Felder explains that “managing the financial flow is critical to a private practice's success.” He continues to say that—based on the results of his five-year benchmarking study—total accounts receivable should be roughly 15% of annual charges. So how do you achieve that?

Aging Buckets

Typically organized by current (under 30 days from submission), 30, 60, 90, and 120 days or higher, payment cycles—or A/R aging—is a critical factor in achieving a healthy A/R. Obviously, you want the shortest payment cycles possible. The majority of your aging should be in the current and 30-day buckets. If they aren’t, then it’s time to follow up with your payers and possibly adjust your payer mix. To determine what’s going on with your payment cycle, perform month-to-month comparisons for each payer; look for patterns, and then follow up. For example, if you know that Cigna generally pays within 30 days and you start seeing payments occurring after 30 days, have your biller investigate those claims to see if there is a particular issue they have in common—maybe it’s a clearinghouse problem, or perhaps there have been changes in the electronic claim format or your provider file. You won’t know, though, unless you monitor and follow up.

Claims Processing

Once you’ve established processes for monitoring your A/R aging, it’s time to examine the claims processing side of things. Organize your payers by timely filing requirements, starting first with those that have the shortest time period. From there, work your way from your oldest to newest claims. If a single patient with multiple claims is the culprit for a higher aging, find out what the insurance needs in order to finish processing the claims. Pinpoint the problem and resolve it. It might be as simple as the patient completing his or her annual Coordination of Benefits form.

A healthy billing and A/R system is essential to the growth and success of your practice. And the above pointers are just the tip of the iceberg. What advice do you have for scoring your current billing and A/R processes?


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