As a practicing PT, OT, or SLP, you’re a businessperson—whether or not you want to consider yourself one. After all, in order to be successful in your practice, you must understand—and apply—the principles of business, including the fundamentals of process as well as profit and loss (P&L) statements. It’s the only way you’ll be able to keep your clinic’s lights on and bring home enough money to keep doing what you love. With that in mind, here are three processes your practice needs to adopt or enhance in order to get paid—and thus skew that P&L ratio in a positive direction:
1. Establish—and enforce—a check-in and check-out protocol.
We’ve covered the importance of establishing check-in and check-out processes before—specifically, here, here, and here. And that’s because these two processes are crucial pieces of the patient experience puzzle and absolutely imperative for you to get paid. For check-in, you must ensure that your front-office staff is diligent about not only collecting the correct demographic and insurance information, but also using that information to perform an insurance eligibility check within 72 hours of the patient’s first interaction with your clinic—or at the very least, before that patient’s first (or next) session. That way, your staff will have:
- a solid understanding of the insurance carrier’s requirements (e.g., specialized forms, additional documentation, or pre-authorization) and
- enough time to provide patients with a cost estimate for your services before they arrive—thus ensuring they’re prepared to pay their share of the cost at the point of service.
As I wrote here, this type of policy “allows patients to make more informed healthcare decisions, gives you time to fill cancelled appointments, and helps protect your practice from bad debt.” Failing to do so could result in claim denials—and missed patient payment collections.
As you create processes, it’s important to account for irregular cases—for example, when a father schedules an appointment for his child, but the child is actually on the mother’s insurance. If you don’t train your team to ask the right questions and suss out accurate information upfront, you may very well end up having to spend extra time and resources on the back-end to remedy the situation. According to MGMA, in 2014, the average cost to rework a denied or rejected claim was about $25. So, if your clinic receives 100 denials in a month, you’ll shell out an additional $2,500 just to collect the money you’ve already earned (and that’s not even taking into consideration the inflation that’s surely brought that estimate up in the years since MGMA published that resource). The best way to get your claims accepted the first time around—so you get paid quickly—is to ensure they’re accurate from the get-go.
When a patient finishes his or her therapy appointment, don’t just send him or her out the door. Instead, require all patients to stop by the front desk once more before they leave. This simple step provides your staff with a second opportunity to collect patient copays, coinsurances, and supply payments and schedule or confirm the patient’s next appointment.
2. Incentivize the right front office behavior.
To be clear, private practice providers should collect patient payments—whether those be copays, coinsurances, or outstanding balances—at the time of service at least 90% of the time. In fact, it’s never a good idea to wait and send a bill later if you can help it. After all, only 21% of patient balances that aren’t collected at the point of service are ever collected. And that’s a lot of money to leave on the table merely because you’re not making it a point to collect payments when patients are in your office.
To make the collection process easier, consider requiring your staff members to use the phrase, “How would you like to pay today? Credit card, cash, or check?” rather than “Would you like to pay your copay today?” According to the APTA, clinics attained much better collection rates using the former question. (To learn more about combatting patient objections to providing payment at the point of service, check out this post.)
I would also recommend developing an incentive program for front-office staff based on their collection rates—after all, the increase in collections will more than offset the cost of the incentives. You can create a similar program for minimizing patient cancellations and no-shows, thus ensuring that your schedule remains full and your patients receive the care they need. If you have set definitions for reschedules (e.g., the patient is rescheduled within a week) and cancellations (e.g., the patient can’t be rescheduled within a week), then you can start rewarding your staff for hitting certain reschedule rates.
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3. Keep up on reconciliation.
While attempting to maximize your payments is a wonderful start, it won’t do you much good if you’re not consistently reconciling them with what you’ve billed. After all, how will you know how much you’re actually collecting if you don’t keep your books clean? Not to mention, this kind of negligence could put you at risk for theft. When I was a clinic director at a large national organization, one of the clinics wasn’t reconciling their payments, and the employees knew it. So, one of those staff members took advantage of that knowledge and actually began stealing money. It wasn’t until our company began enforcing stricter rules that the thief was caught. So, do yourself a favor and keep tabs on what’s going out and what’s coming in so you can prevent those types of losses and maintain an accurate P&L picture. Clean books will also be immensely important if you want to accept funding, grow your practice, or sell it. And, while we’re on the topic of better reconciliation practices, I recommend most practices use accrual accounting—not cash accounting. Check out number three in this post to learn why.
Looking for even more great information on ensuring your practice gets paid? Register today to attend “Down with Denials! 5 Claim Fixes to Make Sure Your PT Clinic Gets Paid”—a free webinar I’m co-hosting with claim denial expert Diane McCutcheon on May 24 at 9:00 AM PDT / 12:00 PM EDT. Can’t attend live? Register anyway, and we’ll send you the recorded version via email a few days after the event.