In part one of our software in cash-based practice series, we reviewed all of the software you will need to treat patients, including the differences between the needs of brick-and-mortar clinics versus those of a mobile practice. Now that we’ve laid the foundation, it’s time to shift focus from the clinical space to the back-office space—and specifically, what types of software you’ll need to optimize the financial operations of your business. So, let’s dive into that today!
(Of note, our third and final installment of this blog series will cover the software you need to streamline business operations, administration, and personnel management. Hang tight!)
Software for Financial Management
While every practice has a unique set of needs depending on your patient population, practice size, and model of care delivery, the following are common software needs when running a cash-based PT practice:
- Payment processing,
- Claims management, and
- Business accounting.
Please keep in mind that while payment processors and other financial tools may be exempt from HIPAA regulations, you—as a healthcare professional—are still liable for protecting your patient’s personal health information. So, research your preferred software by reading reviews, talking to peers, reviewing data security best practices, and engaging with sales representatives before making a decision.
From our experience at MovementX—which operates in the cash-PT world—patients have attempted to pay us in a myriad of ways. From negotiating a trade for services to writing a check to offering foreign currency—we’ve seen it all. For the most part, however, patients want to use a credit or HSA card to pay for physical therapy. To do this, you’ll need to sign up with a payment processing software such as Stripe, PayPal, Square, Worldpay, or one of the many other options.
When determining which payment processor is right for you, ask yourself the following questions:
- Do I want to physically swipe a credit card, process a payment online, or have the option to do both?
- When will the charge be processed—upon booking the session, before the start of the appointment, or after the appointment has finished?
- What are the processing fees for using the software and are they negotiable? Furthermore, are there any additional hidden fees that may appear as my revenue grows?
- Does the payment processor integrate with any of my other software (e.g., QuickBooks, Squarespace)?
At MovementX (and WebPT for that matter), our payment processor integrates with our EMR, which makes documenting and processing payments seamless. While this works for us, some people require a separate payment processing system apart from their EMR. If this is the case for you, make sure you have a strong system that enables you to track payment for each session so that you aren’t leaving any cash on the table. While on the topic, I highly recommend collecting payment at the point of service to avoid the time-consuming process of tracking patients down and asking for payment.
This brings me to Venmo. There is now Venmo for business, which allows patients to seamlessly pay you for care. However, you are operating on the honor system that the patient will send you the money. If you have a small practice where you are very close with your patients, this system may work for you—but is likely not a scalable option.
If your patient plans to submit their out-of-network coverage for reimbursement with you, a receipt from your payment processor isn’t going to cut it. They will need submit a superbill to their insurance provider.
Many EMRs have the functionality to automatically generate and email a superbill to patients. If this isn’t the case for you, however, I recommend utilizing a template that can be saved in a HIPAA-compliant document editor. (Of note, WebPT has a customizable superbill template you can download for free.) For maximum time efficiency, save a template for every patient, make a copy for every new date of service, and only edit the information correlating with your date of service. Be sure to save a copy of every superbill you generate as insurance will likely ask you for specific details about the bill.
Billing and Claims Management
I know, I know—billing and claims management for a cash-based practice?! As I’ve discussed previously, though, you can’t completely sever ties with insurance companies when operating in this care model—especially if you issue superbills. Plus, many clinics, including the team at MovementX, are moving away from the straight cash-for-care model and more towards a direct out-of-network care model. This means that insurance picks up a portion of the tab of our cash rate and the patient pays the remainder. While you may be cringing at the thought of dealing with payers, the payoff is that this care model:
- Opens your practice up to a wider variety of patients; and
- May also attract a broader array of referrers willing to send their patients to your practice.
To operate in the direct out-of-network billing model, you will need a billing software that allows you to submit claims electronically. Ideally, your billing software and clearinghouse will integrate with your EMR and payment processor to keep all of your clinic’s accounts in one place.
Food for Thought
When you are setting up your practice, ask yourself about how big you hope to grow over the next one, five, and even 10 years. If you know you’ll eventually want to start billing insurance, choose software that is scalable (so it can grow with you) and is able to integrate with other solutions. Whatever you decide, take time to find what suits you, your workflows, and your patients, first and foremost.
Whether you have an LLC, are a sole proprietor, or are an independent contractor, you’ll want to keep track of your business finances to maximize your bottom line. The three components you’ll want to consider for this are:
- Bookkeeping: Software like QuickBooks integrates with your business bank account and categorizes all income, expenses, accounts receivable, accounts payable, and more. In short, it gives you both a high-level overview and detailed summary of your financial picture—which is critical to maintaining accurate bookkeeping records (especially around tax season).
- Expense tracking: As a business owner, there are endless ways for you to deduct expenses from your income, thus lowering your tax burden. Tracking your expenses can be done by saving receipts and logging items into a spreadsheet, or by utilizing a software that does this for you, like Expensify.
- Tax reporting: if you are a skilled financial wiz and decide not to hire an accountant to do your taxes, you can utilize a software such as TurboTax. Ideally, all your accounting software will integrate with one another to allow you to manage your business from one central location.
Overwhelmed by trying to manage your cash-based practice’s finances? Take a deep breath and remember that there are tools and resources that can help. Beyond what we covered here, there are a plethora of online resources to help business owners better understand how to manage their business financials. Check out YouTube, podcasts, your local business startup groups, entrepreneurs’ foundations, the APTA Private Practice Section, or reach out to mentors within the PT profession. You’ve got this!