5 Signs You Need to Outsource Your PT Clinic Billing

The first clue that maybe it’s time to outsource your PT clinic’s billing is usually a surprising trend of decreased revenue.

If that sounds like you, the next step is to determine if the billing staff / processes are the issue. These days, in order to effectively get paid everything you are owed requires a lot more sophistication than a few years ago. Even though your billing team was previously able to manage successfully, they may not have kept up with the knowledge, processes and technology required to excel in today’s healthcare environment.

Simply put, it is a lot harder these days to get paid everything that is rightfully yours. But just because it is harder, that doesn’t mean it isn’t possible. In fact, not achieving this is a fast way to ruin.

If an outpatient physical therapy company is experiencing issues with its billing entity, there are several key signs to watch for. Here are five common indicators:

1. High Rate of Claim Denials or Rejections
   Do you feel your denials and rejections have increased? Insurance companies seem
   to be increasingly looking for excuses to deny claims. Many insurance companies have quotas for how many claims their staff need to deny each day. If your billing team isn’t preempting and fighting these, the result can be devastating reductions in revenue.
   A higher volume of denied or rejected claims can signal poor billing practices, errors in coding, or a lack of knowledge about payer-specific requirements.
2. Delayed Payments
   Your average speed of payment can easily be measured by calculating your ARC ratio. That is simply your total AR, divided by the average of your last three months’ charges (all not including auto and attorney claims).
   Slow payment turnaround is a major red flag. If the billing team is consistently submitting claims late, not following up on unpaid claims, or not providing clear timelines for payment processing, it can disrupt revenue cycles.
3. Lack of Transparency and Reporting
   A PT billing entity should provide regular, detailed reports on key performance indicators (KPIs), such as:i) accounts receivable aging
   ii) accounts receivable aging over time
   iii) the percentage of A/R over 120 days
   iv) The ARC Ratio
   v) main causes of claims not being paid in 30 days.
   vi) amount of write-offs

   If the reporting is inconsistent, vague, or absent, it may indicate inefficiency or an attempt to hide errors.

4. Frequent Patient Complaints About Billing
   Unfortunately there will probably always be patients who are unhappy with their bill. Reasons may include:
   i) patient balance changes due to payer actions after the patient statement has been sent
   ii) the front desk staff did not sufficiently explain to the patient their financial responsibility
   iii) health care billing is confusing for patients, particularly the elderly.

   However, there are actions that can be taken to minimize these issues:
   a) your billing entity should be able to send patient statements via SMS / email to ensure more accurate balances
   b) better up front processes to ensure good patient education
   c) Patient, kind and professional demeanor by the billing clerk that speaks with patients about their bill.

   If you are finding that patients more frequently call to report confusing bills, incorrect charges, or poor customer service from the billing department, this is a red flag. Errors in patient statements can lead to dissatisfaction and damage the clinic’s reputation.

5. Declining Revenue with No Clear Explanation
   As mentioned above, declining revenue is often the first indication that there are problems in the billing department.
   Certainly there can be reasons for declining income unrelated to the billing team performance: patient volume; denials due to front desk errors; a change in payers in the local community are all possible explanations.
   However, a sudden or gradual decline in revenue without changes in patient volume could indicate issues with under-billing, missed charges, or failure to appeal denials. If the billing entity cannot explain the drop, it’s a cause for concern.

Each of these signs points to inefficiencies that, if unaddressed, could severely affect a clinic’s financial health. If you suspect that your billing team is not keeping up with the demands of successful Physical Therapy revenue cycle management, we can conduct a Billing Assessment for you. That will allow you to know for sure if you should outsource your PT Clinic Billing.