Physical Therapy Marketing: Understanding and Choosing the Best Payers For Your Practice

By Nitin Chhoda PT, DPT on February 5, 2013

Contracting with payers can be like playing with landmines. Discover strategies to contract with the best payers and understand different types of payers, so you can negotiate increased pay rates.

marketing physical therapyPhysical therapists quickly discover that not all payers reimburse at the same rate, forcing clinic owners to make tough decisions.

In the new economy, that can effectively eliminate a significant number of potential patients and works to defeat the purpose of the Affordable Care Act.

It also presents a moral and ethical quandary for physical therapy marketing and management.

Having Sufficient Income Is Very Important

Therapists provide essential treatments and services to relieve pain, restore mobility and enhance quality of life. They must also generate sufficient income to operate the practice and make a living, which can be difficult to achieve when insurers are reducing coverage, limiting visits and capping payments.

To provide access to the greatest number of patients, it’s essential for therapists not only to have effective physical therapy marketing, but also to identify and contract with insurers that maintain the best reimbursements.

Different Methods of Payments

A preferred provider network (PPO) may look attractive, but therapists can find that those offering such contracts pay a set fee that often falls far short of the actual cost of treatment. Clauses and exceptions may require the therapist to accept the PPO reimbursement as total payment.

A wealth of these types of situations will prove financially detrimental to the physical therapy marketing practice.

A fee-for-service (FFS) agreement is a similar arrangement. The advantage is that therapists can provide coding for  billing purposes that explains each service, including physical therapy marketing and management, in detail. Some insurers offer per-visit payments that deliver a flat reimbursement rate each time the client is treated.

Per-visit payments resemble an FFS, but insurers often use this lump sum payment method as a means of capping the total amount paid per visit. An increasingly popular reimbursement program is the per-payment method, a bundled solution that provides payment for all services connected with a single incident/injury, while Medicare and Medicaid impose per-year payment caps on business and physical therapy marketing services.

physical therapy marketing jobsMore Methods of Payments Discussed

Capitation is a bundled payment method in which therapists receive a lump sum amount each month.

An insurer pays the therapist for each of their covered members that the physical therapy marketing practice owner treats.

This method pays well if the client requires minimal services, but it’s financially destructive for the therapist when patients needs multiple or complicated treatments.

Not as common, but equally detrimental to the financial health of a physical therapy marketing practice is the multiple procedure payment, also known as a cascade payment.

This model reimburses at 100 percent for the patient’s initial visit, but reduces payments by a set percentage for each visit thereafter. It’s becoming more popular within Workers’ Compensation programs.

Self-pay programs require payment from the patient at the time services are rendered, either in cash or via credit card. The method allows for increased cash flow and eliminates the submission of bills to insurers.

The disadvantage of the system is that many patients may not have the financial resources to pay for services, eliminating a significant number of individuals from the pool of patients.

Make Sure to Have a Balance Income

Each therapist must balance their desire to bring relief to their patients with the need to be paid adequately for their services.

Part of superior physical therapy marketing and management includes a careful examination of all contracts and a thorough understanding of how each mode of payment will affect the bottom line of the practice.

About Nitin Chhoda PT, DPT

Nitin Chhoda PT, DPT is the CEO of In Touch EMR and In Touch Biller Pro, an electronic medical records and medical billing software system built be leaders in the physical therapy software industry, with thousands of satisfied customers across the world. For more information, please visit www.InTouchEmr.com and www.InTouchBillerPro.com

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  1. Pingback: Physical Therapy Marketing: Identifying and Allocating Expenses in Your Practice - EMR NEWS

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