Physical Therapy Business Control | How Do You Get What You Want in Your Own Clinic? Part 1

Chris Martin interviews Diane McCutcheon

Chris: In your experience, what are the top 3 reasons for sub-optimal practice performance, Diane?

Diane: Any service has 3 key components: process, people, and technology. When the practice owner neglects any one of them or fails to operate all three of them correctly, the practice starts operating sub-optimally, or bleed cash.

The cost of doing business will increase without a concerted effort on the part of management and staff to focus on the company’s mission and vision by working smarter not harder.

Steps to developing a well-organized and seamless operation will take time and effort on the owner’s part to learn signs and symptoms that are indicative of problems or concerns. This skill is key to insuring that matters are handled immediately – before they get out of hand and begin costing the practice money.

Let me give a few examples for typical reasons for sub-optimal performance:

  1. Processes not conducive to a seamless operation – for instance, no set procedures in place that commit to follow through.
  2. No system to set goals, lacking understanding what outcomes help to identify deficiencies in the system, e.g., denials, referral and authorization management.
  3. Untrained or incorrectly incentivized staff – Staff is “shown what to do” instead of being trained on the methodology behind the processes in place.
  4. The staff and owner not understanding what is needed to run a seamless operation.
  5. The staff receiving a flat hourly salary regardless of practice collections or their performance.
  6. Weak technology – out of date hardware and software. Staff fear of moving from paper to electronics.
  7. Insufficient software functionality, or conversely, multiple systems instead of an integrated approach that eliminated redundant data entry and identifies errors.

Chris: Diane, you said there are three parts to any service: process, people, and technology. Let’s talk a little about the people component. Isn’t this kind of obvious: we just look for nice and diligent people who work hard and accept low salaries? What else do we need to know about hiring the right staff?

Actually, the people component of the service starts with the practice owner. Again, control is key aspect. The question is: how to set their incentives and how to select your personnel in such a way that you can make adjustments midstream, every time when you discover that you are going to miss your goals?

Hiring the right staff is a major component to success. You can hire anyone to perform functions but if they are not performing functions that result in quality work then you don’t need them as they will cost you money. An owner has to know what function each staff member is performing, how long it should take to perform tasks, and what constitutes success. If staff is aware that they know much more than the boss at some point they will take advantage of that – it happens all the time.

Training must be part of orientation, standards must be set and staff must be held accountable. You cannot control what you don’t know. You cannot manage what you don’t know.

Chris: What would be the ideal way to align your staff incentives with your own?

Have them work on commission. Is it easy? Well, in some cases, yes.

Some incentives are based on percent of arrival, minimizing cx and ns, keeping slots in the schedule full. If they are doing in-house billing staff may be incentivized on keeping all accounts under 120 days or less. Sharing profits with staff on any one of these things is an excellent way to keep them motivated. If your staff is working hard to keep slots filled, reduce cx/ns and make sure the schedule is maximized more profits will come in to the practice – if staff is not motivated to do this revenue will be lost. Sharing profits is more cost effective in the long run.

And in those other cases, when it’s not so simple, think out of the box. Why do you need staff who refuse to align their incentives with yours?

Staffs who refuse to align incentives with owners (which happens all the time) is almost 100% because the owner is not an effective leader, they do not understand the value of the incentives and present a “look what I’m doing for you” attitude and do not promote a team environment.

Physical Therapy Billing | Understanding AR | Gain a Peace of Mind and Double Your Profitability

Yuval Lirov, PhD and Eldad De-Medonsa, PhD

Physical Therapy clinic owners complain about nightmares and headaches because of lack of control and low predictability of their cash-flow. Without the ability to predict your cash-flow, you cannot measure or control your profitability.

Your cash-flow fluctuates from month to month because of uneven patient flow and charge differences between various patient conditions. More importantly, your cash-flow fluctuates because of payers delay and underpay reimbursements.

A diligent and disciplined billing process helps reduce payer delay and underpayments. It starts with the ability to measure your accounts receivable (AR).  This article shows how to use simple calculations to reliably predict your cash-flow based on your earlier charges. Once we are able to predict it, we also show a simple and effective path to double your profitability.

Some practice owners approximate their next month payment expectations by averaging previous months’ payments. This method is flawed as it ignores the charge fluctuations due to month-to-month differences in patient visits.  Others extrapolate their next month payments by computing a ratio of payments to charges over previous months and applying it to the current month. This method is flawed too as it ignores month-to-month changes in billing performance.

The method described below avoids this flaw by computing a ratio of payments to charges over previous months and applying it to the current month extrapolation.

1. % AR > 120 – Definition

Insurance companies delay their payments to PT practices. According to the PTB-12 survey, insurance payment delay has the following distribution:

Physical Therapy Billing_chart

There are two ways to look at this chart:

  1. When will you get paid for the charges you posted this month?
  2. How much will you get paid this month for the charges posted in the previous months?

The table below illustrates both ways of interpreting the chart above and the impact of the payment delay:
physical therapy billing_AR

For instance, this month you will get paid 46% of the current month payments, 18% of previous month’s, 9% of the earlier month, and 6% of 3 months ago. The remaining 21% of 4 months and above will probably not get paid ever.

For this reason, the AR beyond 120 days is a reliable proxy for overall billing performance.  The Percent AR>120 is the percentage of charges not paid for over 120 days as part the overall AR.

2. How to compute monthly payments?

Ignoring the AR beyond 120 days that is unlikely to get paid, we arrive at a convenient way to predict our payments, given the past history of your charges:


3. Why a Reduction of %AR>120 is Important to Your Bottom Line?

To answer this question, let’s see what’s sensitivity of your bottom line to billing performance fluctuations. To this end, let’s take a change of 1% in %AR>120 and see what difference it makes to your collections.

1. Calculate sensitivity


2. Calculate the impact of significant performance improvement


physical therapy billing_AR120_Chart


physical therapy billing_AR120_Closeup


4. How Does an improvement on %AR>120 Impact Your Profitability?

Our research shows that industry average profit of a practice is 14.4%.


Returning to the example in the earlier section, the impact of reducing %AR>120 down to 9% is 15% in collection or $9,288 in added revenue. The extra $9,288 is all profit since all expenses were already paid. Therefore, the new monthly profit is a sum of the previous profit ($8805) plus the new addition due to improved billing performance:


physical therapy billing_profit

Physical Therapy | Brain Injury Prevention Program

PT, physical therapy, software, billing, notesThe initiative was developed to raise awareness about preventing, recognizing, and responding to fall-related traumatic brain injury (TBI) in older adults. The Help Seniors Live Better, Longer: Prevent Brain Injury initiative reaches out to children and caregivers of adults 75 and older with messages to help them understand ways to prevent falls, the leading cause of TBI among older adults, learn the symptoms of TBI in older adults, and how to respond to a TBI should one occur.

TBI is a special health concern for older adults. People ages 75 and older have the highest rates of TBI-related hospitalizations and death. In addition, they recover more slowly and die more often from these injuries than do younger people.


  • More than one-third of the adults 65 years and older in the United States fall each year.
  • Twenty to 30 percent of people in this age group who fall suffer moderate to severe injuries such as bruises, hip fractures, or head traumas. These injuries can make it hard to move around and limit independent living. They can also increase the risk of early death.
  • Falls are the most common cause of TBI. In 2000, TBI occurred in 46% of fatal falls among older adults.
  • Among older adults, falls are the leading cause of injury deaths. They are also the most common cause of nonfatal injuries and hospital admissions for trauma.
  • Approximately 85% of deaths caused by falls in 2004 were among people age 75 years and older.
  • People 75 years and older who fall are 4 to 5 times more likely than younger people to be hospitalized in a long-term care facility for a year or longer.

Article Source; APTA, Geriatric Section

The CDC launched its - Help Seniors Live Better, Longer: Prevent Brain Injury - communication initiative in March 2008.

Physical Therapy Billing | Win the Reimbursement Battle and Increase their Patient Visits in the New Year

PT, physical therapy, software, billing, notes

Bellmore, NY (PRWEB) November 5, 2010

Measurable Solutions, a management training and consulting company, and bestPT a physical therapy billing service network, are joining forces to provide practice owners with needed tools to improve their reimbursements and expand their practices.

“I hired my second PT in 3 months! My third PT after 7 months! I am still hiring and growing. I love how my own personal economy is indifferent to whatever else is occurring!”

~Dr. Lisa J. Allen, PT, owner of BioMechanic Physical Therapy in Leesburg VA, and a client of Measurable Solutions.

“We invited Measurable Solutions, a management training and consulting company, to teach our growing network of practice owners the needed tools to expand their practices in a turbulent economic environment,” says David Macolino, President of bestPT, a platform for physical therapy practice management, documentation, and billing.

“The first most important aspect of managing your own practice is to maximize all activities that generate revenue and minimize the time you have to spend on any activities that cost you resources or time,” says Shaun Kirk, physical therapist and President of Measurable Solutions. “So that means that if more people knew about how good you are at what you do, then your practice expands. But if you spend lots of time documenting your visits or following up on billing instead of marketing or caring for your patients, then your practice will stagnate and you will drive yourself sick working too hard for too little.”

“Healthcare cost reduction will continue to be the mantra of our economy,” says David Macolino. “But we want our clients to continue to grow their profitability. So our answer to declining reimbursements and increasing regulatory scrutiny is patient growth and office management automation. Measurable Solutions helps build thriving practices by turning clinicians into effective executives.”

“We discovered that bestPT is especially effective in reducing practice administration costs and increasing its revenue. It’s unique all-in-one automated solution covers every aspect of profitable practice management from patient loyalty management, to rapid and compliant documentation, and to disciplined, 100% transparent, and accountable billing,” concludes Shaun Kirk.

About Measurable Solutions

Measurable Solutions trains private practitioners to become executives in their practice. The primary focus is on applying an effective public relations and marketing program that increases patient volume. Their simple step-by-step program called the New Patient Course has helped nearly 2000 private practices expand without the owner having to leave the office and visit physicians. It works for the big and the small practices alike.

BestPT unites hundreds of physical therapy and rehab billing systems nationwide on a single system. By consolidating operations, bestPT tracks payer performance from a single point of control, shares payer compliance rules globally, and continuously matches its physical therapy and rehabilitation billing rules to evolving payer’s environment. Every provider on the network can view in real-time, the status of every single claim in process 24 hours a day, 7 days a week.

Physical Therapy Business | 20-Step Plan for Opening Up a Private Practice

This is an overview of the 20 Step Plan for opening up a Private Practice that is available to members of the Private Practice Section of the APTA.
The entire 20 Step Plan for Opening Up a Private Practice is available to members under the Practice Management section by visiting the APTA web site. This overview of the 20 Step Plan is a chronological timeline that is intended to be used as an overall guide during the process of opening a practice. While this timeline is not meant to be comprehensive and set in stone, it is intended to be customized to your own individual practice and unique situation.
StepActionHow-to-Manual Chapter Reference

Article Source: Private Practice section of the APTA

Be sure to continue your success with implementing an all -in-one EMR and medical billing program such as bestPT. Keep your hands on the patients and not fighting with insurance companies for payment.

NDT – Neurodevelopmental Theory and Treatment

PT, physical therapy, software, billing, notesBy Gerilyn M. Gault, BSPT

NDT or Neurodevelopmental Theory and treatment is a functional approach to treating and handling clients with a neurological disorder. The approach is based on the understanding and philosophy that clients who have sustained a neurological insult have the ability to improve their posture and movement over a long and sustained period of time. This in turn leads to better positioning, breathing, improved functional mobility and a better quality of care.

Alignment of your body is vital to the execution of normal, functional movement. In order to have good alignment and posture, you must re-establish or re-set your body’s biomechanical alignment. This includes:

  • Which muscles are lengthened/shortened?
  • Which non-contractile tissues (joints, ligaments) are tight/lax?
  • A normal length-tension muscle relationship must be re-established

Therapists trained to provide NDT based treatment programs are able to offer extensive hands-on direct treatment programs in order to address and prevent overstretching of tissues/ligaments, guide soft tissue work, and abate the possibility of further dysfunction! As an NDT trained therapist you believe “The sooner you identify the problem, the sooner you can treat it!”

Treatment must be aimed at improving trunk stability and mobility with the ability to maintain a balance between flexion and extension. The need to maintain balance and to keep the rib cage stable will improve breathing and lung function vital to a recovering individuals overall health and well-being. Control at the trunk results in increased overall potential as seen by improved function of the arms, better quality walking, overall confidence in mobility, better voice quality and improved quality of respirations.

When providing a client with Neurodevelopmental Treatment (NDT), it is important to remember that normal function is an option! With an emphasis on early intervention from all disciplines who each develop and establish a baseline for how a client will perform a function, a recovery plan of care is established. With the introduction of normal movement patterns from the beginning of the injury and by putting tasks into the context of function with select, appropriate feedback to achieve carryover, recovery of function is attainable!

Gerilyn M. Gault, BSPT, is co-owner of the rehabilitation company and PT Billing Specialist for bestPT. Gerilyn is an advanced neurological clinician with years of experience in professional staffing, contract and fiscal management.

The Bottom Line of Physical Therapy Billing

PT, physical therapy, software, billing, notesby Nina Silberstein @ Physical Therapy Products, January 2011

Whether you keep it in-house or outsource, navigating billing and reimbursement procedures can be a tricky process

As much as you enjoy treating your patients, billing and claim reimbursement are most likely not on the top of your list of pleasurable tasks. You probably didn’t learn a lot about running a practice and keeping your finances in order in physical therapy school. But understanding the business side of your job is just as important as seeing clients. Here are two questions to consider: Do you assign the billing/reimbursement duties to a member of your office staff, or do you send things out to a medical billing company? We’ll discuss the pros and cons of these decisions as well as effective billing and documentation practices.


There are advantages and disadvantages to this, but “The answer depends on the volume of the insurance claims,” says Yuval Lirov, PhD, co-founder of Bellmore, NY-based bestPT, which specializes in billing services and practice-management software. “The payers make profit on the float, so they hold onto the money that must be paid to the provider for as long as possible. The payers have developed solid processes, built state-of-the-art technology, and hired Harvard MBAs to accomplish their business goals,” he says.

Lirov believes that if the volume of your insurance claims is small, then you can process your billing in-house. But as soon as you start seeing many insurance patients, your billing process, technology, and follow-up team must be able to match the payors’ process, technology, and personnel. Lirov has five patents in artificial intelligence and computer security, and has authored three books.

For physical therapy practices, his company integrates a single technology infrastructure that includes scheduling, documentation, and electronic billing; a shared billing knowledge base; and disciplined claims processing. It will track payer performance from a single point of control, share payer compliance rules globally, and match its physical therapy and rehabilitation billing rules to the evolving payer’s environment.

If you plan to do your billing yourself, there are many things you’ll either need to know or to have: good licensed billing software; proper billing, diagnosis, and CPT codes; correct insurance terminology; your state’s laws; easy-to-understand patient forms; and knowing when to bill/collect from the patient. There’s much more, according to Lirov. “You need to build a process to discover delays and underpayments, to follow-up on every delay and underpayment until it’s paid in full and on time,” he says.

Then you need to continuously monitor and perfect that process. “Depending on the nature of the claim, the payor, and the quality of your follow-up process, the time frame may vary between 14 days and never,” he says. “You need to measure that delay and act aggressively when it starts growing.”

Consider that when you have high insurance claim volumes, you need a very high degree of process transparency and control to make sure that you submitted a claim for every patient visit, that the claim includes correct patient demographics and charges, that your notes support the charges in case you get audited, and that it was accepted by the insurance company and paid in full and on time.

“There are certain reasons why it becomes more cost-effective to have it internally in your practice or clinic,” adds Lynn Steffes, PT, president/consultant at Steffes & Associates Consulting Group in New Berlin, Wis. “The capabilities of that have increased, there is a move toward electronic medical records, and many of those [systems] also generate bills.” The other element is managing the process on the front end. It becomes so important when patients’ responsibility is growing. “For example,” Steffes says, “Twenty years ago, a patient might have had a $5 co-pay. Now there’s a $50 co-pay, and you’re only collecting $40 from the insurance.”

Because such a high percentage of collections are patient-related, Steffes recommends you have a process for gathering insurance information, verifying benefits and eligibility in a customer-friendly way, and setting up payment expectations. “That’s important,” she says. “Part of taking care of people is the financial equation.”

Steffes’ consulting group offers rehab providers services nationwide to improve reimbursement results and conform to compliance guidelines, including rehab documentation, payer relations and contracting, billing and coding, compliance, rehab agency management, and application of the guide to physical therapy practice. She is also network administrator for a group of more than 50 private-practice clinics and is the Wisconsin Physical Therapy Association Reimbursement Specialist.

Steffes is in and out of about 100 clinics per year and finds that if they aren’t being carefully managed at the front end, they are losing money. Or, patients may come in, get billed on the back end, become upset with their bills, neglect payment, and then resist returning to therapy when they need it because of large outstanding balances.

“Therapists have to understand what the eligibility is; they have to be able to negotiate a plan of care with the patient,” Steffes says. “There are good reasons to bring it in-house—the technology we’re currently using, informed consumers, cash flow, all of that. The flip side, if you do that, you need someone who is skilled and knows to stay up-to-date. A lot of practices hire someone with minimal experience and then provide them with no supportive training. That’s a huge problem.” Steffes thinks where practices tend to stumble is not having the tools and training for doing it right.

In practices of all sizes, often the person responsible for billing and collections also wears one or many other hats within the practice. This person is usually found at the front desk—doing registration, answering patient inquiries, filing, faxing, keeping referrals up-to-date, corresponding with physicians—and that can leave billing to be just one more thing on the plate that needs to get done. Things inevitably fall through the cracks and can’t get done as quickly due to the demands in the office.


“I think the very top of the list would have to be whether or not the outside source has any experience doing physical therapy billing,” says Dave Stuart, president and COO of Syncopation Revenue Solutions Inc, a full-service medical billing company in New Gloucester, Me. “If so, do they focus exclusively on PT? Do they have dedicated people who do just PT billing? Those would be the most pressing questions.”

Stuart also suggests that your practice consider what the effectiveness of your current system is and what the cost of continuing your in-house process is versus sending the process to an outside company (along with the potential improvement in cash flow). “Sometimes, cash flow may be improved enough to justify any additional cost that an outside agency might involve,” he adds. “Often, outsourcing can help to control costs and provide for peace of mind in not having to deal with the human resources-related issues—ie, sick time, vacation time, corrective action, management of the process, etc.”

In addition, you might also consider if any of the principals of the billing firm have any direct experience in owning/managing a privately owned PT practice. PT billing is different from other specialties and should be handled accordingly.

“If you plan to outsource your billing, you must make sure that the billing company you hire is able to level the playing field with the payors,” Lirov says. “That it has the required level of transparency and control as well as the ability to adjust its processes and technology in step with the changes continuously inflicted by the payors.”

Full article here.

Physical Therapy Billing | Service Outsourcing | Zero-Sum Argument and Cost-Benefit Analysis

Over 17 percent of accounts receivable for an average physical therapy practice are beyond 120 days since the date of service. Although this may not seem to be a problem, as it would be expected that the money will come eventually, in fact an unpaid claim that is 180 days overdue has less than 1% chance of ever being paid. In other words, the average rehab practice delivers almost one fifth of its services for free. Would billing outsourcing be an appropriate solution for this problem?

[youtube_video] CZfgslH1woQ [/youtube_video]

Extra Time and Reduced Cost Benefits

Traditionally, advocates of outsourced physical therapy billing bring up extra time and cost gains as two main arguments in their favor. The rehab practice owner uses the extra time for patient care, family, or practice development. Cost gains are typically measured in terms of salaries and benefits of reduced billing personnel. However, the first argument (extra time) is often irrelevant to therapists satisfied with their schedules and practice sizes, and the second argument too often turns into a wash in light of commission-based fees typically charged by the billing services.

Zero-Sum Argument Against Outsourcing

Opponents of outsourced rehab billing often use the deficient denial follow up argument, which is a variation of a zero-sum argument. It is based on an assumption that physical therapy billing service has a limited capacity for follow up and physical therapists receive selective follow up based on arbitrary criteria, such as unpaid balance. A win in terms of follow up effort for one physical therapist is a loss for another. The rehab billing service provider may skip follow up entirely, collecting the fee only on claims that were paid without any manual intervention and causing the payments to each physical therapist to shrink because of forfeited erroneous or delayed claims. But the rehab practice owner with in-house billing operation has all of its follow up capacity focused on a single practice and so, the argument goes, the in-house billing service must deliver better results than the outsourced service.

Measuring physical therapy billing quality, i.e., the percent of accounts receivable beyond one hundred and twenty days, exposes the fallacy of this argument. Note that ten percent improvement in overall billing quality means ten times more to the bottom line than one percent reduction in billing costs. Therefore, an outsourced physical therapy billing service provider charging a percentage of total collections has a larger incentive to improve overall payment performance and maintain better client loyalty than to sell a deficient service to another physical therapist.

In conclusion, rehab practice owners must establish objective performance and compliance criteria and use them systematically and within individual practice context when deciding about billing service outsourcing. Note that billing quality is a key component of the billing cost computation and the decision to outsource the billing service is based on a multi-fold improvement in billing quality. The rule of thumb is that the new combined percentage of fees and uncollected revenue outperforms in-house costs and A/R, and such performance improvement can be verified independently and continuously.

physical therapy billing success principles

bestPT Mission Statement

Our mission is to help you build your dream practice and focus on your patients by providing you with the most effective billing service and the best software for Physical Therapy practice management, patient education and practice marketing. -bestPT Team

Caps on Physical Therapy Sessions Detrimental to Business Growth

This year has been a year of many changes to the medical system. While some of these changes have been beneficiary, a few have been detrimental to professions such as physical therapy. Many physical therapists are facing tough times today. The market is saturated with physical therapists but not enough patients. Laid off physical therapist Jessica Summers explains why.

A few years ago, patients had a cap on how many sessions were covered by their insurance. Medicare made exceptions for patients that suffered from physical ailments such as osteoporosis, Parkinson’s disease and stroke victims and granted them extensions because they were more likely to need more physical therapy sessions. However, as of October 2012, this is no longer the case.

On October 1, 2012, The Middle Class Tax Relief and Job Creation Act of 2012 (H.R. 3630) amendment was passed which states:

In applying this paragraph with respect to a request for an exception with respect to expenses that would be incurred for outpatient therapy services (including services described in sub- section (a)(8)(B)) that would exceed the threshold described in clause (ii) for a year, the request for such an exception, for services furnished on or after October 1, 2012, shall be subject to a manual medical review process that is similar to the manual medical review process used for certain exceptions under this paragraph in 2006. Middle Class Tax Relief and Job Creation Act of 2012

Because of this new amendment, patients that previously had extensions on their therapy sessions were cancelled and their insurance would no longer cover it. Additionally, patients who had exceeded their session limit had to be denied treatment because they could not afford the care.

According to Summers, patients can file an appeal to extend their coverage but because filing the claim and getting it through takes so long, most have been denied. Additionally, there is a typo in the law that makes Speech Therapy and Physical Therapy share a budget. This places a lot of physical therapists and patients in a tough situation. Summers posed the example of a stroke victim who can have multiple issues such as swallowing, walking and speech deficits. Because of the limit, she has to restrict which therapies she can provide and would have to decide which of these would be priority. Based on the previous example a patient would receive treatment for swallowing problem, but the walking and talking deficits would have to wait for another year.

Fortunately, the amendment which enforced the cap is up for vote in January. Jessica, along with many others in the medical profession are hoping for an extension. This would help bring more patients in and create a bigger demand and more jobs for physical therapists.