Physical Therapy Billing | To Outsource Or Not To Outsource, That Is The Question

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Is patient volume going up but collections flat or even dropping? Is income keeping pace with clinic growth?

With the decreases in reimbursements over the last several years, it has clearly become more important than ever for a physical therapy practice to get paid every penny that is deserved. Narrowing margins in the physical therapy industry mean that even a slightly less than optimal performance by the billing function could potentially result in visits making a net loss instead of a net profit.

At the same time, billing continues to become more intricate and challenging. Patients have a much greater financial responsibility today and therefore often face hurdles in paying their bills. Payer policies have become difficult to stay on top of. Regulations keep changing and becoming more complex. Exploring all options has therefore become critical to get paid faster and in full.

Insource or Outsource Question

The next question is whether to insource or outsource billing. There is obviously no “right answer” to this question. As always, it depends.

  • Do you have a unique billing process that is different from most other clinics and that could make it harder for an outsourcer to take over?
  • Does your billing team have the experience and expertise in billing along with a deep bench of professional billers?
  • Do you know what the cost of the billing process is in terms of resources and activities? Do you find it to be in line with expectations?
  • Do you have the time to regularly review all billing reports and take corrective actions along with your team?

If the answer to any of these questions is “no” or “not really,” then outsourcing may be a good option to start thinking about.

Analyzing the Current Billing Process

It starts with taking a closer look at the billing process and data, the billing metrics, and billing reports (including the AR report, the unbilled report, the errors report, among others). Reviewing the metrics should be done regularly, at a minimum once a month.

A typical, well-run billing operation should be characterized by:

  • Over the counter collections and insurance verifications at the front end of the process.
  • Documentation and notes that support billing with charge capture at the source at the time of documentation.
  • Claims going out on time and ERAs/EOBs getting posted quickly and efficiently.
  • Sending out claims with all the right modifiers, right codes, and right tracking to avoid rejections.
  • Scrubbing individual claims, ensuring they are clean, batching them together electronically, and submitting claims through the clearinghouse.
  • Getting feedback from the clearinghouse quickly, say within two hours, on anything to be fixed, cleaned, or modified.
  • Posting payments, handling adjustments, and collections follow up as per a planned schedule.
  • Patient statements and payment follow-up that is being done in a systematic manner.

Additionally, what will help is building a strong relationship with the patient, early in the cycle, so that when it comes to billing/collections, patients are likely to find it difficult to avoid making payments. With an effective front-end process, the back end of billing and collections should run smoothly.

Right Outsource Partner

Are you currently working with a PT billing company or a medical billing company? If yes, then there are a few additional questions that you should probably ask about your current billing partner.

  • Does the company chase down every dollar and file appeals or do they just go for the low hanging fruit?
  • Do they also take care of claims for workers compensation carriers (paper / digital claims) and submit them?
  • Do they help with patient collections and follow up?
  • Has the vendor instituted a quality control process on the billing to check what is being done?

With reimbursements seemingly in decline year on year, it is indeed critical to ensure that money is not lost because of avoidable people/process/technology errors in the billing operation. To outsource, or not to outsource, that is the question.