For many private practice clinic owners, it’s apparent that the healthcare system and insurance reimbursement model leaves a little to be desired. With today’s average reimbursement rate hovering around $81-83, depending on the location, clinic owners are feeling the pinch. As reimbursement continues to decline and fixed rates for many physical therapy clinics are decreasing, there is an urgent need for change.
“Reimbursement is falling, inflation is skyrocketing and payroll costs are out of control.”
So the question remains: How can you keep your PT clinic profitable?
To help you diversify your income and increase your cash-flow, MEG Business is offering four tactics to try out in your business.
4 Ways to Offset Decreasing PT Insurance Reimbursement Rates
1. Offer Cash-Based Services in Your PT Clinic
More and more physical therapy clinics are getting paid at fixed rates, and that fixed rate is going down, creating an income squeeze on private practice owners. In fact, about 58% of practice owners are looking to bring in more cash-based services to avoid third-party agents and billing costs.
It’s clear that private practice physical therapy is leaning into cash-based services. Not only do they diversify the offerings of a clinic, but cash-based services also magnify the gross income to outpace the costs of inflation. MEG Business recommends that 20% of your clinic’s revenue come from cash-based services.
Here are our favorite cash-based service ideas for PT clinics:
Post-physical therapy discharge is a critical period where patients need to continue their exercise regimen to fully recover. Offering personal training sessions can help patients stay on track with their recovery journey. By bringing in a certified personal trainer who can create customized exercise plans, your clinic can provide a valuable service that helps patients achieve their fitness and recovery goals while generating additional revenue.
The NEUBIE (Neuro-Bio-Electric Stimulator) Protocol is an innovative approach to rehabilitation that uses electrical stimulation to activate specific muscle groups during active exercises. It is different from traditional e-stim as it involves active recovery programs and is designed to relax the Central Nervous System (CNS), enabling patients to perform better. Offering the NEUBIE Protocol as a cash-based service can help your patients achieve better results while providing a unique service that sets your clinic apart from competitors. You can learn more about the NEUBIE by visiting NeuPTtech.
Dry needling is a technique used to treat myofascial pain and trigger points in muscles. It involves inserting a thin needle into trigger points in the muscles to release tension and reduce pain. Offering dry needling as a cash-based service can provide relief to patients suffering from chronic pain and muscle tension while generating additional revenue for your clinic.
Incorporating advanced physical therapy technologies such as laser therapy, Pulsed Electromagnetic Field (PEMF) therapy or Heart Rate Variability (HRV) monitoring can provide more effective treatment options for your patients. For example, laser therapy can help reduce pain and inflammation, PEMF therapy can promote healing at the cellular level and HRV monitoring can help assess and manage stress levels. Offering these technologies as cash-based services can enhance your clinic’s treatment offerings while generating additional revenue.
Massage Therapy, Yoga, or Other Fitness Classes
Offering additional wellness services such as massage therapy, yoga or other fitness classes can help address the holistic needs of your patients after their PT care. Not only do these cash-based options provide added value to your patients, they also help build a community within your clinic to increase client retention.
2. Outsource to Reduce Liabilities
Inside MEG Academy, Brian Gallagher advocates for private practice owners to adopt a progressive PT clinic model by outsourcing front desk operations, billing, credentialing and digital marketing. This helps lower overall liabilities, allowing you to get more done in less time.
As payroll costs continue to rise with inflation, it’s important to reduce your payroll and hiring expenses. One way you can do that is through outsourcing. Then, your primary focus can be attracting and retaining the best DPTAs, PTAs and Techs.
3. Negotiate Higher Rates
Negotiating higher rates is crucial for the financial health of your clinic. It is not just about asking for more money, but about presenting a strong case as to why your clinic deserves higher reimbursement rates. Here are some strategies to build a compelling case to negotiate with your payers:
Collect Patient Testimonial Letters
Gather at least 10 testimonial letters from satisfied patients who have benefited from your services. These testimonials should highlight the positive impact your clinic has had on their recovery and overall well-being.
Achieve a High Net Promoter Score
A Net Promoter Score (NPS) is a measure of customer loyalty and satisfaction. A score of 100 indicates that all your patients would recommend your clinic to others. Strive to achieve a high NPS by consistently providing excellent service and actively seeking feedback from your patients.
Obtain Objective Clinical Data
Gather objective clinical data that demonstrates the effectiveness of your treatments. This could include data on patient outcomes, recovery times, and any other metrics that showcase the positive impact of your services.
4. Educate Yourself on the American Physical Therapy Association (APTA)
The American Physical Therapy Association (APTA) plays a significant role in influencing policies related to reimbursement. Therefore, it is essential to understand the APTA’s stance on reimbursement and the efforts they are making on a national level to lobby for better rates. Stay informed about the latest updates from the APTA and actively participate in their initiatives to strengthen your knowledge and position when negotiating rates.
Maintain Steady Income by Prioritizing Outcomes Over Revenues
While it may be tempting to worry about your income in turbulent times, never chase the money. Instead, focus on providing great results, great outcomes and differentiating yourself. By implementing MEG’s strategies for fighting decreased reimbursement, you can effectively create a steady, worry-free income stream at your clinic.
Learn more about cash-based services and other valuable topics at MEG’s sponsored session at APTA’s Private Practice Annual Conference.