I have assessed hundreds of Physical Therapy private practices in my career and I could tell you hundreds of different stories but instead, I am going to tell you about some of the most common stories I hear in just about every practice I have been in.
Most owners ignore all of the warning signs. The ones that were staring them in the face. The ones that begged them to pay attention, get help, but they didn’t. Communication was nonexistent. It is hard to ask questions about things you don’t understand.
Owners didn't look at their practice as a business. That was never first in their minds. It was the care of patients not how to run the business they focused on. They did not get that patient care was only part of a seamless operation that would provide a superior patient experience and a team culture.
Management catered to a nonproductive staff, administrative and clinical, always afraid they would leave if they said anything and then what would they do? Little did they know it would have been for the best. They did not act as leaders or provide a team culture atmosphere. They did not understand how important their leadership role really was to the practice.
There was never a clear understanding of what processes had to be in place in order to empower everyone to take responsibility and be accountable for making sure the outcome would result in getting paid for the services provided. Collections at front desk were below 50% in most cases and charging for cancels and no shows was a "no no" even if they had a policy. Most concerning was that systems of reconciliation were almost nonexistent and many were losing money by sticky fingers.
Little, if any, learning resources were extended to administration – front desk, billers, managers etc. Accounts receivables were out of control due to denials that could be easily tracked back to front desk or billing errors and lots of lost money.
Most ignored the insurance compliance guidelines. No problem, let all therapists bill under the owner’s provider numbers. What to charge and how to charge was always a big issue with the therapists – “I didn't even know that was a code” or “I’m afraid to bill Medicare” we heard over and over. We would hear about great documentation systems “so everyone’s notes are compliant”. Really – I didn't know the system could provide automatic documentation – I always thought therapists had to at least put some particulars in there.
As long as there was enough money to pay the bills and payroll, no one really worried about how much money was actually being written off – flushed down the toilet. Didn’t realize that the big stack of papers on the desk were denials but there was no time to work on those. Most billers were not experts in PT billing even if they had been doing it for years. The stories they told the owners about where or why revenue was slow or not coming in was eaten up hook, line and sinker by the owner.
Here are some easy things you can assess to get you started. If you recognize you may have a problem, get help fast.
1. Check what percentage of co-pays are collected at time of service. Your goal should be 100%.
2. Check to see if every patient’s benefits are checked before patient arrives for first visit.
3. Check how many patients have “dropped out” without a follow-up call to schedule.
4. Check how each therapist is credentialed. Each should have their own numbers.
5. Check your cancel/no show percentage. It is best to be under 10%.
6. Check number of units billed by therapists and most used codes. Are they charging correctly?
7. Check documentation for compliance.
8. Check to be sure you are in compliance with HIPAA, Medicare, etc. guidelines – would you pass an inspection?
10. Check that your billing is done daily, payments posted and reconciled at least every other day and that your accounts receivable is under control.
Make a list of things that you are concerned about but are not sure how to address.
Hopefully, you were able to check off the entire “to do” list. Most important, if you found any issues, get help fast. Remember, it’s about the business and the foundation it is built on. We are experts in growing successful private practice businesses and are here to help. Call our office at 508-422-0231 to discuss your findings.