A new industry of high-technology rehab and physical therapy billing has mushroomed under the auspices of its promise to streamline the collections process and leave doctors with more time to care for their patients. Though many high-quality services and systems exist, an overwhelming variety of options and attractive (yet unsubstantiated) performance claims from some providers have charmed busy doctors into making poor strategic decisions for their practices.
"No physical therapy or rehab education program prepares us for the harsh realities of daily struggle with insurance companies to get paid in full and on time," says Yaffa Liebermann, PT, GCS, and CEO of Prime Rehabilitation Services, Inc. "A recent physical therapy program graduate lacks basic knowledge about payer-provider adversity, HIPAA compliance, audit mechanics, SOAP note management, reporting tools, billing profitability metrics, and outsourcing opportunities. And no program teaches us how to use modern computer technology and Internet to accumulate and leverage our collective health care and practice management knowledge."
Billing Quality Statistics
In order to understand how bad the providers' financial situation is, it is important to recognize that in an average practice, 17.7% of accounts receivable are 120 days past due. In other words, about 1 in 5 procedures billed today won't get paid until four months from now. 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. This may be good news for insurance companies, but it is certainly bad news for physical therapists.
Importantly, the very fact that these statistics are news to some practices is part of the problem: many rehab or physical therapy practices don't even know their basic financial parameters such as "AR past 120."
Uneven Playing Field
Providers and payers are playing tug-of-war on opposites sides of the same claims, but the payers have made significant investments in infrastructure and personnel. Providers, on the other hand, are playing in the worst of conditions. Except for the initial claim submission, they are completely passive at every step. They wait for the payer to review the claim, wait to receive the errors, wait for the review of the corrected submission, and wait, and wait.
In the physical therapy practice this "waiting" can be difficult to appreciate because everyone is busy with new submissions, resubmissions, and appeals. There is little time to take a more active role.
Vericle - a Shared Repository of Billing Solutions
The rules of the game will not change in the foreseeable future, and the payers will continue to own the tables for at least that long, but today's physical therapy practice is not doomed to lose every hand. More and more practices are learning that by playing the game smarter, they can spend less time thinking about collections and more time with patients. What's the secret? It boils down to finding errors before the payer even knows the claim exists, to formulating and encoding the rules about finding and correcting the errors, and to insisting on a disciplined follow up on every delay and underpayment.
Yuval Lirov, PhD, is author of 