A recent industry survey conducted by Clinicient Inc reveals that only 15% of outpatient rehabilitation practices are poised to collect full payment from patients. That was the conclusion drawn from the responses of more than 400 private practice outpatient rehabilitation practice owners, administrators, and therapists who completed the survey, titled “Collect Every Dollar.”
Six survey questions gauged the ability of respondents to secure timely payment for treatments. Only 15% among the survey participants responded that they had confidence they know how often their claims are paid on the first attempt, believe that they are collecting payments in an efficient and scalable manner, and understand how patient collections affect their AR.
That same 15% likewise responded they have confidence that staff is signing off on all notes the day of treatment, analyze why claims are being denied, and track why patients drop out of treatment before completing their plan of care.
The results suggest that more than eight out of 10 practices fail to do what is necessary to collect full and fair compensation, according to a media release from Clinicient.
Double Whammy On Providers
The conclusions from the survey are echoed by APTA member Chuck Felder, PT, owner of HCS Consulting. Felder spoke with Physical Therapy Products on recommendation from the APTA to explain why the shortfall in compensation persists. Two major factors that hinder full payment, Felder says, are the Medicare multiple payment procedure reduction, and payor timely filing rules.
Felder describes the multiple payment procedure reduction as a “flawed methodology” for physical therapy, particularly as it relates to Medicare’s practice of paying therapists according to the units a therapist bills. “The multiple payment procedure reduction reduces payment for the second or more units that you bill in a given visit. It’s bad for physical therapy, but it works for surgery because basically what Medicare is saying is, ‘Well, if you have the patient on the table, you’ve already done the stuff we paid you for in the first procedure.’ So for a second procedure, you don’t get paid more,” Felder says.
That doesn’t fly for physical therapy, Felder says, because physical therapy codes are time-based.
“They’re designed to be 15 minutes long. So the second unit, you’re not getting your appropriate amount of administrative and facility cost,” Felder says. “Medicare is cutting that out, so they are cheating therapists out of money every single day.”
According to Felder, who is also executive director of the Physical Therapy Business Alliance, the APTA and other groups fought the policy. To date, however, Medicare has successfully held the practice in place as a money-saving measure.
“Every single payment that goes out underpays PTs over what they’re supposed to be paid by statute,” Felder says, “but Medicare has made an administrative rule that allows them to get away with it.”
Clean Claims for Better Odds
Timely filing rules put in place by payors can also cause clinics to see their revenues shrink. Felder says the most aggressive of the rules require a clean claim to be submitted within 90 days, which in some cases skews the odds of being paid fully against the provider.
Though practices may work hard to submit clean claims, there are a number of things that can go wrong, often through no fault of the provider, according to Felder.
“Either the patient gave incorrect information or the address changed, or something happened and the claim didn’t go through and they didn’t catch it quickly enough to get it back to the payor, so the payor gets to skate and not pay the provider.”
The unfortunate upshot, Felder says, is that the payor collects the premium from the patient, the patient receives the service, but therapists end up working for free.
“It is critical to submit a clean claim the first time. If you don’t submit a clean claim the first time, then all your payments are going to be delayed,” Felder says. “And,” he adds, “when you look at the time value of money to a practice, that is really important.”
Rick Jung, chairman and CEO of Clinicient, mirrors Felder in comments Jung made in a recent release connected to the Clinicient survey.
“Therapists know that the key to getting paid is submitting clean claims the first time and collecting from patients promptly. But many arduous administrative tasks slow them down and eat up time that could be used for treating patients or simply enjoying work/life balance,” Jung states in the release.
Pushing for Change
The fix for these problems may not come easily. The problem is multi-faceted and involves the bureaucracy of both public insurers and private payors. At best, perhaps, the physical therapy community can hope that any resolution will be one that does not come slowly. The first step, Felder suggests, would be a push from the practitioners to make a compelling case to the payors that the existing payment policies are inappropriate.
More likely, Felder acknowledges, the physical therapy community will have to seek change through legislative remedies in each state, perhaps working through offices such as state insurance commissioners.
In the interim, many practices will have to devise their own strategies to optimize payment for their services. A resource designed to help clinics improve the amounts they collect is the Collect Every Dollar Playbook, a digital resource kit offered by Clinicient that aims to help practices master activities for collecting every dollar rightfully owed. These activities include collecting patient balances up front, billing clean claims and analyzing denials, and measuring success with the right metrics.
—By Frank Long and Debbie Overman