Revenue Cycle Management | Raising Efficiency via the Physical Therapy EMR

Physical therapy clinics are clearly looking to operate efficiently on the revenue cycle. The path to improvement lies in implementing the right metrics and asking additional questions to identify where specific changes may be needed.

Revenue cycle management after all means cash flow and therefore would be top priority for any clinic owner.

Metrics that Matter

There are several metrics that will help clinics to stay on top of this process. These include:

Contractual Variance
Difference between expected payment amount as per the fee schedule and what was received from the insurance company.

Gross Collection Rate (GCR)
Payments received as a percentage of total charges, before write-offs.

Net Collection Rate (NCR)
Payments received as a percentage of total charges, after adjusting for write-offs.

First Pass Resolution Rate (FPRR)
Percentage of claims that are paid in a single claim submission, on the first pass.

Collections Per Visit
Quite simply, the amount collected per visit for an average patient.

Days in AR
Time it takes on average to get paid.

Percentage of AR older than 60 days
Percentage of older receivables that are over 60 days in age.

Claims Denial Rate
Percentage of claims denied by payers.

Claims Rejection Rate
Percentage of claims rejected by payers.

Questions to Ask

The next step should be to ask questions that should lead to positive change.

Questions on the metrics themselves:

  • What are the right metrics for the practice?
  • What are normal values for these metrics?
  • What are the factors that contribute to each measure and affect its value?
  • What are the corrective steps to take if the practice is off on a particular measure?
  • How do we capture the data for these metrics?
  • How do we present metrics on an easy to consume dashboard?

And some broader business-related questions:

  • How does your revenue cycle management compare with that at other clinics?
  • How efficient is your claims submission and management? Do you have the right payer mix?
  • How much of your billing are you collecting and how much are you having to write off?
  • How effective is your clinic in collecting billed charges in terms of amount and time taken?
  • What types of appointments and cases are more profitable?
  • How much are you spending on collection processes on average?
  • How much do insurers pay you on average as a percentage of total claim amount?
  • Is billing and coding of claims something that you can handle easily?
  • Are you able to collect 100% of patient financial responsibility before the visit?
  • How quickly are you able to turn around rejected claims after making corrections?
  • How efficient are you in submitting appeals to payers in the case of rejected or denied claims?
  • What changes do you need to make to improve revenue cycle management?

Best Practices to Forge Ahead

And here are some best practices to stay ahead:

Prevent Therapist Enrollment Challenges

Enroll new therapists quickly to avoid lost revenue, delayed payments, out-of-network services, and denials.

Mitigate and Manage Denials

Avoid coding errors, duplicate claims, lack of information, filing delays, and eligibility issues to stay clear of denials and identify patterns that may be causing payment issues.

Manage Accounts Receivable Balances

Keep AR that is over 90 days old at less than 15% for better cash flow and healthier revenue cycle management through efficient processes to address denied or aged claims.

Verify Patient Eligibility

Verify patient eligibility when it comes to billing patients, getting paid by insurance providers, and overall management of your revenue cycle.

Collect Patient Balances

Collect patient balances during the check-in or check-out process when the patient is in front of you and can pay immediately.

Analyze Processes and Metrics

Analyze rejected claims, denials, and contract compliance and identify trends or patterns that could be adjusted and avoided in the future.

Keep Patients at the Center

Strengthen patient engagement to communicate effectively with patients regarding their financial responsibility, payment options, and expectations from their visit.

Track Financial Performance

Analyze Key Performance Indicators (KPIs) on a regular basis to better understand practice financials and identify areas of revenue leaks.

Making it Happen in the EMR

Finally, here is a quick summary of how your EMR could help:

    • Documentation is where it would begin. Enable seamless capture of charges and add CPT codes and modifiers based on billing rules that are applied.
    • Next up would be claim scrubbing in the billing software. Use automated workflows to run charge review and scrubbing reports and make corrections to outgoing claims.
    • Create a batch of claims in the billing system for transmission to the clearinghouse. Review the claims one final time. Make changes by updating the claim form or by fixing the underlying patient record itself.
    • Send claims to payers electronically or by printing paper claims and create tasks to follow up on payments in the future to boost cash flow.
    • Download ERAs directly from the clearinghouse and post them in the EMR. Billers could choose to override adjustments and not write them off, leaving the amount in the primary balance or in patient balance.
    • Patient statement processing would complete the cycle. Allocate patient monies collected and send statements through the patient portal for patients who are registered with the portal and paper statements for the rest.

To sum up, strengthening the revenue cycle boils down to establishing processes and tasks to raise efficiency and effectiveness toward healthier cash flow, with the right technology to implement processes in.