Revenue leaks in your physical therapy practice- money you haven’t been collecting from your patients

Running a successful physical therapy private practice means a lot more than just providing top-notch patient care. It requires loads of administrative tasks that can quickly drain your bottom line if they are done incorrectly or inefficiently. And when you think of administrative errors that result in lost revenue we’re not just talking about your admin staff, sometimes the biggest offenders in your office can be your therapists! In this post we’ll run down common revenue leaks resulting from not collecting money from patients when you should; specifically, collecting money for non-covered services and supplies.

Non-Covered vs. Not Medically Necessary (there is a difference!)

First we should start by explaining the difference between what it means for your physical therapy practice if a service is non-covered verses not medically necessary. A lot of people think that those two are one in the same. In fact  they are very different, and not understanding the difference of how your PT practice collects from its physical therapy patients could be resulting in money walking out the door. When verifying insurance benefits for a patient who has a commercial insurance or Medicare and service or supply is said to be “non-covered” that means money should be collected from the patient when they are checked-out after their appointment. Yes, this even is true for your Medicare patients without having signed an ABN (Advanced Beneficiary Notice.)

When verifying benefits and something is called “not medically necessary” and you’re a preferred provider, you cannot collect money from the patient for it. Common things that fall into this category are cold laser, dry needling, and iontophoresis. Your therapists and front office staff need to be aware of the differences between non-covered and not medically necessary and know for your common payers which procedures fall into which categories.

Now-Let’s talk about supplies

Supplies are almost never covered by payers. The only exception to this is workers’ compensation and often you need to have those supplies preauthorized depending on what they are. Commercial payers and Medicare do not cover single use patient supplies. You should collect for those supplies at the time of service. Yes, even for Medicare patients! There is a common misunderstanding about not being able to collect money from Medicare patients. This is only true for covered services, but supplies are non-covered. In terms of physical therapy billing, this includes things like thera-putty, swiss balls, hand exercisers, foam rollers, supplies related to an orthotic device, and educational materials like a booklet or DVD. Payment for all of these should be collected from the patients with commercial insurance and Medicare at the time of physical therapy care. And you do not need a signed ABN (Advanced Beneficiary Notice) from Medicare because it is a non-covered service. This works the same way for commercial payers.

Work flow and processes

Your office needs to establish a system where whoever in your office is responsible for checking out the patient, he or she is notified if the patient was given a supply or other service that is not covered. This could be a paper system or done electronically in your physical therapy practice management software. When setting up your processes to record and track supplies and non-covered services it’s also important to think about staffing at your front desk. Are there times when someone other than a front desk person is working that desk? If the answer is yes, they need to be in-the-loop as to what needs to be collected from the patients and when.

Here to help

From all the clients we talk to and consult with across the country we know the chances are pretty good that your practice is guilty of leaking revenue due to poor processes and management of collecting money from patients for supplies and services that are non-covered. Our industry experience has driven the technology we’ve created to help our clients plug common practice management holes that were costing them time and money. With the right tools in place, you too can rest assured that your office is running efficiently and getting paid what you deserve.