There’s been plenty of debate over the price tag on the ICD-10 transition. In fact, a recent AMA study—cited in this Information Week article—claimed that by the time everything is said and done, the total cost could be three times more than what original estimates predicted, which means small practices could take a hit of around $226,000. While that projection is probably a bit far-fetched, experts do expect there to be more than a few transitional hiccups in the wake of the switch. And a lot of those hiccups are beyond your control as a provider—which means that, as the old sports cliché suggests, your best offense is a good defense.

To combat payment delays and other logistical lags, coding gurus recommend going into the transition with up to a half-year’s worth of revenue on hand. But most small therapy practices barely have enough budgetary wiggle room to purchase a new set of exercise weights—let alone weather one of the biggest changes the healthcare community has seen in several decades. But you don’t have to overcome that financial hurdle on your own; as financial expert Lisa M. Enright explains in this article, your bank can help. If you’re interested in securing a new loan or increasing an existing line of credit, here’s what you need to do:

1. Assess your practice’s financial needs. It’s much easier to do this if you’re working with a bank that has experience serving businesses in the healthcare industry. According to Enright, some banks have units dedicated exclusively to healthcare professionals. “A knowledgeable banking partner who understands the full scope of your industry and operation—from posting and managing your receivables to establishing loans and lines of credit—can design financing plans that anticipate your short- and long-term needs.” A couple of expenditures you should definitely consider in the case of ICD-10 implementation: software upgrades and staff training.

2. Consider the hidden costs. That is, think about the financial setbacks you could suffer by no fault of your own. Even if you enter the transition more-than-adequately prepared—with a fully educated staff, an ICD-10-equipped EMR, and a top-of-the-line billing service—you can’t control whether your payers will be ready to handle the new codes on the go-live date. And if they’re not, it could create a massive traffic jam of claims—and that could delay your payments for who knows how long. So, unless you want to spend weeks—possibly even months—losing sleep over your clinic’s dwindling revenue stream, you’ll definitely want to have some extra cash on hand. As Enright says, “To backstop a longer receivables cycle, you should have access to three to six months of working capital reserves.”

3. Get your paperwork in order. Before you set up a meeting with your bank, create a file with all of your practice’s relevant financial records—including tax returns for the last three years, year-to-date financials, a current personal financial statement, and your most recent accounts receivable aging report. Having these documents ready prior to beginning the loan authorization process will expedite your credit review and will help give your banking rep a more complete picture of your practice’s financial situation.

4. Conserve your cash balance. Now that ICD-10 has been delayed until at least October 1, 2015, you have even more time to build up your cash reserves—but it’s important to start saving sooner rather than later. As we move closer to the transition, you can keep more money in the bank by paying monthly bills with a business credit card. This will stretch out your payments, especially if you have the option of switching to a longer billing cycle (e.g., 50 days instead of 30 days). But be sure to pay off your balance in full each time it comes due—otherwise you’ll be stuck paying interest.

Has your practice considered taking out a loan to help offset the cost of the ICD-10 transition? If not, how do you plan to address the potential payment delays? Share your thoughts in the comments section below.

Retention, Please: Why Patient Dropout is Killing Rehab Therapy Practices— and How to Stop It - Regular BannerRetention, Please: Why Patient Dropout is Killing Rehab Therapy Practices— and How to Stop It - Small Banner
  • The PT's Guide to Billing Image

    downloadJun 7, 2016

    The PT's Guide to Billing

    When it comes to physical therapy billing, you have to know your stuff—because even the simplest mistakes can cause denials. Of course, knowing billing backwards and forwards doesn’t have to be complicated. That’s why we created a comprehensive billing resource specifically for PTs. Take the guesswork out of billing. Enter your email address below, and we’ll send your free guide.

  • The Ultimate ICD-10 FAQ Image

    articleSep 1, 2015 | 21 min. read

    The Ultimate ICD-10 FAQ

    Yesterday, we hosted the largest webinar in WebPT history . Thousands of rehab therapy professionals attended the live session, which focused on ICD-10 coding examples . As expected, we received a lot of questions. Below is a collection of the webinar’s most frequently asked questions. The Seventh Character Craze What is the seventh character? The seventh character didn’t exist in ICD-9 , so it’s caused a great deal of confusion. Essentially, it’s a mechanism for applying greater …

  • Data—Do It; Do It Now: Key Takeaways from Ascend 2015 Image

    articleSep 22, 2015 | 5 min. read

    Data—Do It; Do It Now: Key Takeaways from Ascend 2015

    Ben Franklin once said that “diligence is the mother of good luck.” That may have worked in the days of our founding fathers, but today, in our vastly more complicated world, diligence doesn’t quite cut it. One thing that can certainly up the good-fortune factor, though? Data. In yesterday’s Ascend 2015 recap post , I explained why data is inherently linked to the future of rehab therapy. Specifically, I detailed how many speakers at this past weekend’s …

  • ICD-10 Checklist for PTs Image

    articleApr 24, 2014 | 2 min. read

    ICD-10 Checklist for PTs

    To expand on yesterday’s blog post in which I discussed developing an ICD-10 prep plan for your practice, here is a checklist of specific items you should consider and cross off as you prepare. Compile educational resources—such as websites, webinars, and videos—and register for training courses. Assess your current diagnosis coding processes. Start looking at the diagnosis code processes you have in place now and figure out how to tweak them to accommodate the new codes. In …

  • Last Legs: The Compliance Vulnerabilities of Dead or Dying Software Image

    articleOct 24, 2016 | 5 min. read

    Last Legs: The Compliance Vulnerabilities of Dead or Dying Software

    Rusty mechanical equipment. Creaky carnival rides. Wobbly chairs. People are naturally skeptical of things that are dilapidated, rundown, or slipshod—and with good reason. After all, that which is ramshackle usually isn’t reliable. Now, imagine it’s the physical therapy software you use everyday to run your rehab therapy practice that’s gone derelict. Take PTOS EMR, for example , because if you didn’t know, this therapy office software is going out of business, and it has ceased all updates …

  • ICD-10 Talk with Dr. Heidi Jannenga: What’s the Deal with Auto Insurances? Image

    articleOct 1, 2015 | 1 min. read

    ICD-10 Talk with Dr. Heidi Jannenga: What’s the Deal with Auto Insurances?

    In this edition of ICD-10 Talk, Dr. Heidi Jannenga explains why some payers aren’t required to make the switch to ICD-10 this week. Wondering which payers aren’t subject to the transition mandate? Watch now to find out, and stay tuned to the WebPT Blog for more great ICD-10 videos throughout the month.

  • On a Scale of 1 to ICD-10, how Prepared are You? Image

    articleFeb 2, 2015 | 5 min. read

    On a Scale of 1 to ICD-10, how Prepared are You?

    Like yet another season of Survivor , ICD-10 is inevitable, and while the Department of Health and Human Services (HHS) won’t drop you on a remote, hostile island when the ICD-10 switch happens, the new coding terrain may be just as unfamiliar, uncomfortable, and treacherous—unless you’re ready. Here’s how to win at ICD-10 (no shelter-building or fire-making required). Hit the Books Switching from a code set with roughly 13,000 codes to one with about 68,000 codes is …

  • Mythbusters: The ICD-10 Special Image

    articleAug 3, 2015 | 5 min. read

    Mythbusters: The ICD-10 Special

    Healthcare coding is having a bit of a cast change: ICD-9 is out and ICD-10 is taking over. By now, you’ve heard all about the new code set—but do you really have all the facts? In this special blog post, I’ll be busting some common ICD-10 misconceptions. (Sadly, my myth-busting measures don’t involve swimming in syrup, experimenting with explosives, or blowing up boats—we’ll leave that to the experts .) Let’s get to it! 1. The World Health …

  • The Ultimate ICD-10 FAQ: Part Deux Image

    articleSep 24, 2015 | 16 min. read

    The Ultimate ICD-10 FAQ: Part Deux

    Just when we thought we’d gotten every ICD-10 question under the sun, we got, well, more questions. Like, a lot more. But, we take that as a good sign, because like a scrappy reporter trying to get to the bottom of a big story, our audience of blog readers and webinar attendees aren’t afraid to ask the tough questions—which means they’re serious about preparing themselves for the changes ahead. And we’re equally serious about providing them with …

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