It’s common knowledge that acquiring new patients is significantly more expensive than keeping existing ones. How much more expensive? According to this Harvard Business Review article—which WebPT’s Kylie McKee cited here—“Depending on which study you believe, and what industry you’re in, acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one.” Even if your numbers are on the low end of that range—and that seems unlikely for healthcare providers—that’s an awful lot of money to spend making up for lost patients, especially when there are relatively simple things you can do to keep your current ones. We’ve already covered several strategies for reducing patient churn in a previous post. But today, we’re going to discuss the concept of the patient loyalty program (a.k.a. patient rewards program). Here’s what you need to know:

Physical Therapist Salary Guide - Regular BannerPhysical Therapist Salary Guide - Small Banner

Loyalty programs are becoming increasingly popular in health care.

While loyalty programs once only seemed appropriate for grocery stores, coffee shops, hotel chains, and air travel companies, they’re now showing up in health care. After all, as the author of this Modern Healthcare article points out, “frequently switching clinicians can result in fragmented and poorly coordinated care, yet addressing the issue has not been easy. Loyalty programs might be one way to think outside of the box. And the concept is slowly generating interest among healthcare leaders.” According to this Advisory Board post, a 2016 article published in The Journal of the American Medical Association recommends healthcare organizations take advantage of these programs, which in the past have been relegated to the retail industry. Apparently, the article’s authors “argue that hospitals can adapt the approach to fit the health care market, offering perks such as parking vouchers or discounted cafeteria food.”

They’re good for patients and providers.

Adopting such a program is good for both patients—who not only earn “perks and rewards,” but also experience consistent care—and healthcare organizations, as these programs can strengthen the patient-provider or patient-organization relationship. Furthermore, the Advisory Board said, these types of programs may encourage healthcare providers to “partner with gyms, pharmacies, or other healthcare organizations to provide loyalty rewards—incentivizing patients to focus on their health, which can lower the cost of care.”

The Botsford Hospital in Farmington Hills, Michigan launched its VIP program in 2010: card-carrying members can access “free valet parking, a concierge to help connect them with a physician or specialist, access to a physician within 24 hours, and a 10% discount at the gift shop and on nonprescription drugs at the outpatient pharmacy.” Additionally, the Primary Health Network offers patients points every time they see their doctors, which they can then redeem for things like branded merchandise (up to a $50 value per calendar year).

It’s important to reward the right behaviors.

Some providers and administrators have voiced concerns that implementing loyalty programs in healthcare organizations and provider offices could cause “patients to seek unecessary care just to rack up rewards”—which, the JAMA authors say, can be avoided when providers base rewards on “the duration of the relationship, rather than how many times the patient visits.” Others doubt the effectiveness of loyalty programs because “patients care more about clinical excellence than anything else.” Thus, they may be willing to “wait in line, struggle to get an appointment, and endure subpar service if it means they can get great care.” But, the authors of the JAMA article believe it’s a both/and situation: “a combination of excellent care and quality customer service is a new way to attract and retain patients in a highly competitive market.” We couldn’t agree more.

But, it’s equally important to provide value.

According to Jason Wolf—president of the Beryl Institute, a global community dedicated to improving the patient experience—in the above-cited Modern Healthcare article, organizations must ensure they’re providing value to their patients before implementing a rewards program: “Dropping a rewards program into an organization that is not focused on improving outcomes or making care affordable will not make a difference,” he said. A reward program is an “extra layer,” not a standalone solution. Renuka Tipirneni—author of the above-cited JAMA article—“agreed and warned against creating incentives that encourage overuse of low-value services or those that create inequitable access to care. It's not about increasing their number of visits, but rewarding patients for taking the appropriate steps to better their care.”


Now, rehab therapists are all about providing high-value care that produces exceptional outcomes. Thus, you may have the perfect setting to experiment with a loyalty program for your patients. While the possibilities are nearly endless, to help get you started, here’s a short list of things rehab therapist could reward their patients for:

  • Going to all scheduled sessions and completing their plans of care
  • Showing up to all appointments on time
  • Completing their home-exercise programs
  • Reading specific content related to their condition
  • Bringing a friend or caregiver to their appointment for support
  • Attending complimentary educational seminars

There are loyalty program pitfalls, especially with Medicare patients.

As WebPT’s Charlotte Bohnett explains here, the APTA says providers may offer incentives to patients or prospective patients when receiving reimbursements from federal healthcare programs (e.g., Medicare) as long as the “incentive is to promote the delivery of preventive care services” and that “the delivery of such preventive services is not related to the provision of other services.” Furthermore, you may not give cash, anything that can be converted into cash, or anything with a value that is “disproportionately large in relationship to the value of the preventive care services.” You must also ensure “that the provision of the gift does not have the purpose of securing your services to a patient.” Confusing? You betcha. According to Wolf, loyalty programs are “an innovative but conceptually tricky proposition,” especially with regard to CMS’s patient marketing rules, such as the Federal Anti-Kickback Statute and the Medicare Inducement Law. Here’s what you need to know about each:

The Federal Anti-Kickback Statute

According to this Lexology article, “The federal anti-kickback statute makes it a criminal offense to knowingly and willfully offer, pay, solicit, or receive any remuneration to induce or reward referrals of items or services reimbursable by a Federal health care program.” And violation of this statute is a felony that could land providers with up to five years of jail time and/or fines of up to $25,000.

The Inducement Law

According to the same source, “The Inducement Law prohibits any person from offering or transferring remuneration to a Medicare or Medicaid beneficiary that the benefactor knows or should know is likely to influence the beneficiary’s selection of a particular provider, practitioner or supplier or any item or service for which payment may be made, in whole or in part, by Medicare or Medicaid.” In short, this means that providers are prohibited from “offering or transferring inducements [which you can think of as bribes] to Medicare or Medicaid beneficiaries.” Failure to comply could lead to civil fines and/or being unable to participate in Federal healthcare programs. Now, the Office of the Inspector General has stated that nominal incentives (i.e., those valued at no more than $10 per item or $50 total annually) aren’t prohibited under the Inducement Law. (Notice the $50 annual limit that Primary Healthcare Network places on its reward program.)

The Bottom Line

Unless you happen to be a compliance expert and/or healthcare attorney yourself, I would strongly suggest that you get professional help to ensure your reward or loyalty program is structured in a way that satisfies all compliance and legal requirements—and that recommendation stands whether or not you’re working with Medicare patients. Also, the APTA recommends all providers review their state laws and practice acts before implementing any type of patient rewards program.

And the ROI isn’t clear yet.

The Advisory Board points out that while “several health systems” have already begun “offering loyalty programs to their patients, it’s not yet clear whether they generate ROI.” Regardless, though, the Board does support “the need for health care organizations to adopt a more customer-service oriented approach.” After all, its research has found that “after care quality, the strongest predictors of loyalty—in both primary and specialty care—are patient experience factors such as physician respect, staff patients, and helpfulness, patient education, and short wait times.”

What do you think? Would you consider implementing a patient loyalty program in your practice? If so, consider this: the Advisory Board urges all providers to focus first “on efforts that increase access, minimize critical service flashpoints, and deliver a consistent, exceptional experience to the patient.”

  • The Healthcare Provider's Guide to HIPAA-Compliant Marketing Image

    articleSep 14, 2017 | 6 min. read

    The Healthcare Provider's Guide to HIPAA-Compliant Marketing

    In 1966, US Congress passed the Health Information Portability and Accountability ACT (HIPAA). And as we explained here , this “dense piece of legislation...has serious implications for virtually all medical professionals, including physical therapists, occupational therapists, and speech-language pathologists.” Specifically, all HIPAA-covered entities—and that includes providers, payers, and business associates—“must follow certain rules governing the way patient protected health information (PHI) is collected, shared, and used.” And consequences for HIPAA breaches can be severe. While you may …

  • A 10-Point Plan for Smart and Secure Electronic Communications with Patients Image

    articleMar 15, 2018 | 8 min. read

    A 10-Point Plan for Smart and Secure Electronic Communications with Patients

    As emails and text messages have become ubiquitous, patient expectations around provider responsiveness have increased. Gone are the days when providers set aside time each afternoon to return calls; now, they can simply respond to their patients’ texts—but should they? Many physical therapists, regardless of their practice model or patient population, are surprised to learn that they may not be allowed to interact with patients in the manner they—or their patients—prefer. These same providers are typically even …

  • Suppressing Sticker Shock: How to Handle Your Patients’ High-Deductible Health Plans Image

    webinarFeb 23, 2017

    Suppressing Sticker Shock: How to Handle Your Patients’ High-Deductible Health Plans

    Copayments, coinsurances, unresolved balances—oh my! Any one of these can cause headaches for healthcare providers, but as healthcare reform efforts shift more and more financial burden to insurance beneficiaries, today’s practitioners are increasingly facing all three. And these challenges are not only hurting their patient acquisition and retention rates, but also their bottom lines. Tired of spending time verifying benefits only to lose those patients to copay sticker shock? Stuck in a constant cycle of pursuing past-due …

  • Founder Letter: 3 Ways to Become a Better PT, OT, or SLP in 2019 Image

    articleJan 8, 2019 | 11 min. read

    Founder Letter: 3 Ways to Become a Better PT, OT, or SLP in 2019

    It’s official; we’ve closed out 2018 and are stepping into a brand-new year. While I don’t recommend saving up those important intentions and resolutions for the kick-off of a new year, it does represent a potent time to release the things that no longer serve us—and embrace more of what does. In the past, I’ve used this occasion to put out some predictions for the year to come—and I’ve done that again here —but right now, I’d …

  • Is Your Practice HIPAA-Compliant? [Quiz] Image

    articleDec 12, 2018 | 1 min. read

    Is Your Practice HIPAA-Compliant? [Quiz]

    Back in 1996—long before the days of social media and smartphones—Congress passed the Health Insurance Portability and Accountability Act (HIPAA) as a means of governing the manner in which providers, insurers, and business associates collect, share, and use patient protected health information (PHI). Ultimately, it’s in everyone’s best interest to ensure that patient information remains private, but adhering to all HIPAA rules can be a daunting task for even the most seasoned provider—especially in the age of …

  • Cloudy with a Chance of Reform: 5 Key Healthcare Forecasts for 2017 Image

    webinarJan 5, 2017

    Cloudy with a Chance of Reform: 5 Key Healthcare Forecasts for 2017

    Predicting the weather is tough—just ask any meteorologist who has called for sun on the day of a major downpour. Well, predicting the fate of the US healthcare system isn’t much easier—there’s a lot up in the air, after all. But, even without a healthcare equivalent of Doppler Radar, there are a few key trends that are sure to have a major impact on PTs, OTs, and SLPs in 2017 and beyond. And to keep your practice …

  • Common Questions from Our Patient Sticker Shock Webinar Image

    articleMar 31, 2017 | 33 min. read

    Common Questions from Our Patient Sticker Shock Webinar

    From copays and deductibles to payer contracts and benefits verification, understanding all the nuances of third-party insurances is tough enough for healthcare providers—let alone their patients. In WebPT’s most recent webinar— Suppressing Sticker Shock: How to Handle Your Patients’ High-Deductible Health Plans —co-hosts Heidi Jannenga, PT, DPT, ATC/L, the cofounder and president of WebPT, and WebPT CEO Nancy Ham provided a lot of great advice on how to have productive conversations about healthcare costs with your patients—without …

  • 5 Things Small Practices Need to Know about HIPAA Image

    articleSep 20, 2017 | 9 min. read

    5 Things Small Practices Need to Know about HIPAA

    The Health Insurance Portability and Accountability Act of 1996 —a.k.a. HIPAA—does not distinguish between large and small practices. Fortunately, regulators do. While the law imposes the same requirements upon solo practitioners and large rehab hospitals, the manner in which those requirements are applied may depend upon your practice size. Contrary to what many providers believe, the onus of HIPAA’s requirements won’t hamper your clinical practice. In fact, I’ve found that they actually do the opposite: HIPAA provides …

  • The PT Patient's Guide to Understanding Insurance Image

    downloadApr 3, 2017

    The PT Patient's Guide to Understanding Insurance

    Patients are shouldering a greater portion of their healthcare costs than ever before. But when they don’t know the specifics of their coverage, they can end up with much bigger bills than they bargained for—and that often leads to unpaid balances and unfinished treatment plans. Bring them up to speed—and improve your practice’s collections and patient retention—with this guide. Patients will learn: What it means for a service to be “covered.” How to define common insurance terms. …

Achieve greatness in practice with the ultimate EMR for PTs, OTs, and SLPs.