Senior Content Marketing Manager at Breakthrough.
On a mission to build patient demand for conservative care, one practice at a time.
Proposed Medicare Cuts and What You Can Do About Them
The Centers for Medicaid and Medicare Services (CMS) issued the 2024 Physician Fee Schedule (PFS) proposed rule on July 13, 2023. The proposed changes include a 3.3% cut to the conversion factor — yet another cut to physical therapy reimbursements. The current conversion factor is alreadylower than in 1994, when the U.S. dollar held52% more value (before decades of inflation).
CMS is accepting public comments on proposed policy changes until September 11, 2023. If approved, the changes will take effect on or after January 1, 2024.
To get a better understanding of what’s in the 2024 Physician Fee Schedule proposed rule, Chad Madden spoke with Mary Daulong, President and CEO of BCMS. Mary shares the biggest takeaways from the Proposed Rule. Together, they discuss what practice owners can do to maintain profitability.
This article summarizes what we learned. Continue reading for expert insights into the proposed policy changes and practical steps you can take to navigate Medicare Cuts.
Understanding the 2024 Proposed Physician Fee Schedule
The 2024 Physician Fee Schedule includes another cut to the conversion factor, and policy changes to telehealth services, caregiver training and codes, the KX modifier threshold, the supervision policy, and more.
Readers are encouraged to participate in the comment process and advocate for changes that benefit your practice and your patients.
While the proposed reimbursement cuts pose challenges, there are steps you can take to maintain profitability and continue providing high-quality care to your community.
Let’s take a look at the major updates in the 2024 Physician Fee Schedule.
Conversion Factor
The primary concern in the proposed rule is the 3.34% reduction in the conversion factor compared to 2023. The proposed 2024 conversion factor is $32.75, a decrease of $1.14. This cut to the conversion factor represents the fourth consecutive year of cuts. Congressional funding for 2024 is projected to offset the reduction by 1.25%, which is less generous than the previous year. With congressional funding factored in, the expected reduction is 2.09% from the 2023 conversion factor.
Supervision of Physical Therapist Assistants
Since 2005, CMS has required PTs in private practices to conduct direct supervision of PTAs. CMS is soliciting comments on whether they should change the direct supervision requirement for outpatient therapists when working with therapy assistants to general supervision. They are particularly interested in aspects such as quality of care, patient safety, and utilization changes. Advocating for improved patient access to services and stable outcomes can be key points in your comments.
CMS is also proposing a regulatory change to allow for general supervision of PTAs for remote therapeutic monitoring (RTM) services.
Expansion of Telehealth Services
The proposed rule expands the definition of telehealth practitioners to include physical therapists, occupational therapists, and speech and language pathologists. This extension can be beneficial as it maintains the non-facility rate for reimbursement, which is generally higher for physical therapy services.
Telehealth Supervision
CMS is also seeking comments on whether they should extend the definition of direct supervision in telehealth. Focusing on quality, patient safety, and access to care can be powerful points to make in your comments.
Caregiver Training and Education Codes
CMS has introduced three new codes for caregiver training and education, which can be utilized by therapists when it’s part of a patient’s care plan. These codes aim to educate caregivers in assisting patients with specific diseases and illnesses, emphasizing the importance of the patient’s functional performance. This aligns with a recent Biden-Harris Administration Executive Order on Increasing Access to High Quality Care and Supporting Caregivers. If finalized, it would help support care for persons with Medicare by better training caregivers.
Undervalued CPT Codes
In early 2023, the APTA argued to CMS that 19 different codes, including therapeutic exercises, neuromuscular reeducation, gait training, and therapeutic activities, were undervalued by the AMA Relative Value Scale Update Committee that sets payment rates typically adopted by CMS. These codes were simultaneously subject to reductions associated with the Multiple Procedure Payment Reduction (MPPR) system. APTA argued that discounting the codes twice was unacceptable.
In the proposed rule, CMS directs the AMA committee to review its earlier recommendations. If the recommendation proposed by APTA is adopted, the value of the codes on the list could increase.
The full list of codes affected can be found onpage 66 of the proposed rule.When commenting, be sure to advocate for the APTA’s recommended increases to the value of these codes.
KX Modifier Threshold and Targeted Medical Review Threshold
The KX modifier threshold for PT and Speech has increased to $2,330. This is a $100 increase over 2023. The targeted medical review threshold is $3,000 and will remain so at least through 2028.
Provider Enrollment
CMS is proposing several regulatory provisions regarding Medicare and Medicaid provider enrollment. The most important of these is a proposed requirement to report additions, deletions, and changes to practice locations within 30 days.
How to Submit Comments on the 2o24 Physician Fee Schedule Proposed Rule
It’s crucial to participate in the process by providing comments on the proposed rule. Comments are due by September 11, 2023 so don’t miss this opportunity to make your voice heard. APTA’s comment submission tool includes templates to make commenting easier and more effective. Submit your comments athttps://regulations.gov/.
How to Survive Medicare Cuts in the 2024 Physician Fee Schedule
Practice owners cannot afford to be complacent in this challenging environment. To survive years of cuts, it’s critical to take strategic actions in your practice to hedge against declining reimbursements.
The key is to identify ways you can increase revenue and improve profitability. Those who do nothing are taking on major financial risk. Unfortunately, most practices won’t take action. Those who take strategic actions have an opportunity to reduce financial risk and stand out from the crowd.
So what you can do to successfully navigate Medicare Cuts?
The Profitability Checklist
Chad Madden and Breakthrough developed a profitability checklist based on expert advice and proven strategies.
Here are some key steps to take to increase your practice profitability:
Increase Utilization: Focus on filling up your schedules and optimizing your clinic space to increase patient flow and revenue.
Insurance Contract Review: Assess your insurance contracts. Negotiate rates – see one practice owner’s success negotiating a 10% YOY increase from his biggest payer for three years. Consider dropping your lowest payer. Identify ways to attract more patients covered by your best payers.
Increase Lifetime Patient Value: Lifetime Patient Value represents the total revenue generated by a single patient over their lifetime of their journey with your practice. Explore opportunities to boost lifetime patient value by adding cash pay services, reactivating past patients, and sourcing patient referrals.
Get Consistent with Marketing: In order to maintain full schedules consistently, year-round, it’s essential to consistently implement effective marketing. Consistency is the key. Focus your marketing on strategies to reactivate past patients and attracting better-paying patients.
Despite the challenges posed by proposed Medicare cuts, you can proactively manage your practice’s profitability. By implementing the strategies outlined in the profitability checklist, you’ll be better equipped to navigate the challenging landscape for private practice owners.
Remember that profitability is not solely dependent on reimbursement rates but also on your ability to stay agile, adapt, innovate, and optimize various aspects of your practice. By focusing on increasing utilization, reviewing insurance contracts, increasing lifetime patient value, and optimizing your marketing, you can position your practice for success in 2024 and beyond.
Still unsure how you’ll navigate your practice through the proposed changes in the 2024 Physician Fee Schedule?
Chad Madden spent decades of his career and hundreds of thousands of dollars to discover and implement strategies to help navigate the constantly changing healthcare landscape. These exact strategies resulted in a 5X growth in practice value, from $4 million in 2016 to $20.8 million in 2023. Through Breakthrough, Chad has helped hundreds of other practices implement the exact same strategies.
You can learn more about strategies to help you navigate 2024 Medicare Cuts in a free strategy call with Breakthrough.
We encourage you to utilize the provided resources and take action to protect the future of your practice. Together, we can navigate these challenges to maintain the financial health of your practice so you can continue to provide exceptional care to patients.
As the President and CEO of BCMS, Mary Daulong has dedicated more than 30 years to helping physical therapists make sense of the complexities of billing and compliance. Physical therapy billing and compliance is anything but simple. But it’s incredibly important. Especially today, with reimbursement rates declining, costs increasing, and profit margins slimming.
In a recent Breakthrough Patient Demand Summit presentation, Mary Daulong shared important compliance strategies. Implementing these best practices can prevent unnecessary financial loss and increase profit.
3 Compliance Strategies BCMS Recommends for Increased Profit
Read on to discover three key compliance strategies for boosting profitability.
1. Changing Payment Methodology
Navigating Medicare’s payment system can be challenging, but it’s important to have a good understanding of your options in order to maximize your reimbursement rate.
Daulong advises changing your enrollment status from “participating” to “non-participating” supplier between mid-November and December. This lets you collect more payments.
Specifically, you can collect more total allowable money as a non-participating provider. In addition, you can collect payment directly from the beneficiary at the time of service, similar to cash-based practices. This may require some consideration, as collecting cash from patients can be difficult. However, there’s an incentive to make this change—you can collect 115% of Medicare’s normal allowable fee for physical therapy services as a non-participating provider.
The BCMS CEO says that implementing this approach can significantly improve your cash flow because you no longer have to wait for payment. Instead, you receive payment at the time of service.
It’s important to understand that Medicare will pay the patient directly instead of reimbursing you since you’ve already collected payment. Also, Medicare will pay the patient 75% instead of the usual 80% of the allowable fee schedule. So, collecting from the patient is crucial to make this system work effectively.
As you can see, there are some risks involved in this change. Medicare reduces the fee schedule for patients by 5%, which means they’ll have to pay more. Additionally, Medicare pays the patient directly for their co-share. If you’re not willing to collect payment at the time of service, then don’t switch to a non-participating status.
Medicare’s 8-minute rule often stumps physical therapists. It determines how units are counted and reimbursed for service. The BCMS CEO breaks down how it’s calculated and how you can use it to increase revenue:
8 to 22 minutes: 1 unit
23 to 37 minutes: 2 units
38 to 52 minutes: 3 units
53 to 67 minutes: 4 units
Each additional 15 minutes: add 1 unit
However, the American Medical Association (AMA) has a different rule: anything over 50% of the total 15 minutes per unit can be billed as one unit.
Whether you use the Medicare or AMA methodology, you must utilize the most up-to-date version of the Current Procedural Terminology (CPT) codes (with a few exceptions). You should also determine which methodology your payer follows. Do a thorough review of their coverage policies. If Medicare is mentioned but there’s no explicit information, it’s generally safe to assume they adhere to the 8-minute rule.
BCMS Examples: How the Billing Methodologies Differ
The key difference between the Medicare and AMA methodologies is how minutes are counted. Medicare calculates the total minutes and then determines the number of units. However, AMA counts minutes per CPT code and expects at least 50% of the 15-minute allowance for each unit. To receive two units of the same CPT code under AMA, you must reach the full 15 minutes plus an additional eight minutes.
BCMS illustrates some examples in this presentation. We’ll look at two of them.
In the first example, AMA would allow three units based on a total of 24 minutes, while Medicare would generate two units because the total minutes do not meet the required threshold.
Source: BCMS
In the next example, AMA would only allow one unit because the total minutes don’t meet the minimum requirement. But Medicare would provide two units based on the total minutes.
Source: BCMS
You must understand the differences between the Medicare and AMA methodologies to bill units accurately and maximize your revenue. Carefully analyze the minutes for each CPT code and ensure compliance with the specific requirements of your payer to optimize your billing process.
3. Utilize ICD-10 Codes To Tell the Story on the Claim
Another key to increasing your revenue is to utilize ICD-10 codes (International Classification of Diseases). According to the BCMS CEO, the right codes can help convey the complexity of the patient’s condition.
Suppose you have a patient with a total hip replacement who also presents with other significant comorbidities. In this case, it’s crucial to include this information, supported by the referral or medical provider’s documentation. When you add the relevant impairment diagnoses to the claim, it illustrates the intricate nature of the case. The reader then understands the complexity involved.
It’s also essential to progress beyond basic exercises and range of motion activities for your patient to help them achieve functional independence. Diversify the exercises throughout the entire episode of care.
When you incorporate therapeutic activities, utilize action words such as bending, lifting, and pivoting. These activities indicate the involvement of multiple joints and muscle groups, providing a challenging workout for the body.
By accurately documenting the complexity of a patient’s condition and incorporating varied therapeutic activities, you can effectively convey the challenges and progress achieved throughout the treatment. This comprehensive approach ensures your procedure encompasses the multifaceted nature of the patient’s needs and can be billed higher.
Many practitioners resort to redundant or convenient coding practices, which can be problematic. The BCMS CEO says compliance with Medicare guidelines and HIPAA regulations is essential and requires utilizing the appropriate codes and their definitions.
Use progressive coding instead, where patients start with basic interventions and gradually progress to more advanced activities that promote independence and functional improvement. Make sure your coding aligns with the specific activities performed and their intended purpose.
Inaccurate coding can have financial consequences for your practice. Most notably, you won’t receive the full entitled amount. It may be small, but it can cost you thousands of dollars in lost revenue over time. So, always ensure accurate coding protocol to keep your practice compliant and protected.
Don’t Stop at These BCMS Tips—Increase Revenue With Breakthrough
To manage your revenue cycle efficiently, you must code and document every procedure to ensure appropriate reimbursement. The goal is to get paid 100% of what’s allowed quickly and efficiently.
Breakthrough’s program: Profitability Under Pressure: A Program Exclusively for Physical Therapy Practice Owners, provides eight weekly group calls, access to online resources, and the ability to attend in-person events to support you in some of the daily challenges you face within your practice.
Click here to learn more and apply for Profitability Under Pressure.
Looking to grow your physical therapy practice and increase profitability? Adding a cash-based PT product or service to your standard offerings can greatly add value to your practice and your patients.
We took the best insights from that conversation to develop this article. Read on to learn about the benefits and challenges of adding a cash based PT service in your practice. Discover three of our favorite technologies that practice owners are selling as a cash-based service today. Gain an understanding of the process for implementing a cash-based service in your private practice.
Why Add a Cash Based PT Service?
Increase Profitability
Physical therapy clinics often operate with tight margins. In the last few years, margins have been squeezed further by declining reimbursements and rising costs. Many practices are operating with substantial financial risk. Some have had to close for good or sell prematurely.
Whether you’re looking to reduce financial risk or stay ahead of the curve, adding a cash-based PT service is a proven way to become more profitable.
Differentiate Your Practice
Have stiff competition from local practices and hospitals? Having additional forms of treatment can be the differentiator that makes your practice stand out from the crowd.
Enhance the Patient Experience
Medical devices can complement physical therapy treatment to offer improved patient outcomes. Some patients will experience relief or another desired outcome within a single visit, making them more likely to return and recommend your services.
Increase Lifetime Patient Value
Lifetime Patient Value is the amount of revenue an individual patient generates throughout their journey with your practice. It’s more cost-effective and efficient to maximize lifetime patient value than to attract new patients. There are two ways that adding a cash based PT service can help you increase lifetime patient value.
1) You can increase the value of your plan of care. If you’re at maximum capacity or have experienced staffing challenges, then adding a cash-based service could be a great way to increase revenue without having to increase your patient volume.
2) You can increase past patient reactivations. Adding a cash based PT service presents an opportunity for you to reengage past patients and attract them back to your clinic.
3 Cash-Based Services for Private Practices
Cash-based PT services should add unique and discernible value to your patients. If your patients feel a difference within just a few treatments, the value of this service will exceed its costs. For this reason, selecting a service that offers exceptional patient health outcomes is important. Consider these outstanding options:
LightForce® Therapy Lasers and Focused Shock Wave Therapy
Image courtesy of Enovis™ Chattanooga® LightForce®
Enovis™ Chattanooga® LightForce® offers numerous medical devices that help improve patient outcomes. Two of their most popular devices are the LightForce® Therapy Lasers and Focused Shock Wave Therapy. LightForce® Therapy Lasers are used to treat chronic and acute musculoskeletal conditions as well as post-activity recovery. As a non-drug, non-surgical solution, LightForce® Therapy Lasers have been proven to reduce pain without the side effects of medication.
Focused Shock Wave therapy is another non-invasive treatment option for patients with trapezius muscle pain, shoulder pain, elbow pain, knee pain, achilles tendon pain, or plantar and heel pain. It can treat large areas in a short treatment time.
With both devices, patients often report noticeable pain reduction with just a few treatments.
Many practice owners in the Breakthrough community have adopted these technologies with great results.
Practice owner Tony Cere has added $300,000 in annual cash-based revenue. “Patients will come in for the laser, and turn into physical therapy patients,” he said.
According to Tom Loyd, Practice Owner at Bryn Mawr Sports Therapy, “The Lightforce 40-watt laser generates improved patient outcomes and adds an accessory form of income.”
The Neubie by Neufit
Image courtesy of Neufit
The Neubie by NeuFit is a direct current (DC) electrical stimulation device. It targets the nervous system to reset broken and blocked neural pathways. It can be used to reduce pain, restore function after neurological injury or disease, produce a faster path to recovery after an injury or surgery, and improve fitness and performance.
The unique value proposition that Neubie adds has demonstrated extraordinary revenue potential. For instance, a private practice owner in Tampa, Florida, Jason Waz, boosted monthly cash-based revenue at his practice from $8,000 a month to $50,000 a month by implementing the Neubie device. In fact, the first year he implemented Neubie, his revenue per visit improved by $15 per visit across all payers.
Jason even managed to have the best month in his 10-year history while moving locations, which he attributes to the value differentiator of the Neubie.
3D Running Technology From RunDNA
Image courtesy of RunDNA
RunDNA provides specific value to runners by combining technology and education to assess and improve their movement. The technology allows you to analyze patient movement, craft unique injury profiles, and create comprehensive plans for runners’ success.
If you’d like to attract more runners to your practice, RunDNA’s solution could be a great fit. It will enable you to attract your ideal patient and increase revenue per patient.
Challenges of Adding a Cash-Based PT Service
Any time you change your services or add a new one, you may encounter resistance as you guide your patients and staff through new protocols. As always, the goal is to maintain the highest standards of patient care throughout the process, which may require additional client and staff education measures. Your staff, in particular, will want to see evidence the technology works before recommending it to patients. Be prepared with research and evidence. If possible, give your staff an opportunity to trial the technology themselves.
Patient education is also critical. Some clients will be used to having insurance cover their treatment and may hesitate to pay for services directly. Ensure your staff clearly communicates the cost and value.
In addition, keep an eye on the services your competitors offer and industry trends. Stay updated on the latest treatments so you can quickly adapt to emerging technologies.
How to Effectively Implement Cash-Based Services
Effective change management starts with a plan. To get the most immediate value out of offering cash-based PT services, you should implement them strategically. Here are some key factors to account for:
Patient Experience: Determine how a new cash-based service offering would fit into your patient experience. Is it offered as a standalone service or as an add-on to the plan of care? Create a roll-out plan that offers a seamless patient experience for existing and new patients.
Target Market: To choose the right cash-based PT service, you need to identify your primary target market. Will this service help facilitate healing and recovery for the primary conditions you treat? Is there a willingness to pay cash for this type of treatment? You might be surprised to discover how many patients are willing to invest in solutions to improve their health and reduce pain. Consider asking your existing patient base or conducting a survey to gauge interest and willingness to pay.
Selling: Your patients don’t necessarily need a sales pitch, but they often need to be educated on the personal value they’ll get from a specific service. Train your staff on how and when to educate patients about your new offering. Consider including it as part of your recommended plan of care for new patients. You can also incentivize staff to encourage adoption.
Marketing: Run campaigns to past patients to spread the word about your new offering and encourage past patient reactivations. You can also run workshops for people in your community who could benefit from the treatment. Workshops can take place in the community by partnering with a local gym, employer, or other organization with a lookalike audience to yours. Alternatively, you can host an educational event at your practice or virtually. Promote it through your social channels, email, or online advertising.
Grow with a Community of Like-Minded Practice Owners
Strategically implementing cash-based PT services is one of the most effective ways to improve revenue per patient. However, this is just one aspect of increasing profitability so you can grow your practice, increase practice value, and leave a lasting legacy in your community.
Running a practice is harder than ever. Declining reimbursements, staffing challenges, and rising costs require owners to innovate and come up with creative solutions if they want to succeed.
Why do this on your own when you can learn from others?
You don’t have to reinvent the wheel and come up with new ideas by yourself. Many practice owners have achieved success and want to share their knowledge and experience with other practice owners to benefit our industry as a whole.
Introducing Profitability Under a Pressure: A Program Exclusively for Physical Therapy Practice Owners.
The program includes a course, weekly group calls, access to an online community of practice owners, and opportunities to attend in-person events with other practice owners facing the same challenges you are who are committed to finding solutions.
Click here to learn more and apply for Profitability Under Pressure.
Gain Billing Efficiencies to Increase Cash Flow
Since 2016, physical therapists have become one of 26 healthcare categories to face reimbursement reductions. As a result of declining reimbursements and rising costs, profit margins are shrinking. One way to mitigate financial risk and increase revenue is to make improvements to your Revenue Cycle Management processes. By gaining efficiencies in your billing processes, you have an opportunity to unlock significant revenue potential.
At Breakthrough’s recent Patient Demand Summit, Bob Kowalick, PT and CEO of Revenue Cycle Solutions, helped define Revenue Cycle Management and identify strategies for improving billing processes to unlock hidden revenue. You can watch that session or continue reading to learn the key takeaways.
What Is Revenue Cycle Management for Physical Therapists?
Revenue cycle management involves all administrative and clinical functions that manage claims processing, payment, and revenue generation. It includes insurance eligibility verification, claims submission, payment follow-ups, and everything in between.
Traditionally, RCM involves both front- and back-end components. The front end involves patient-facing tasks such as appointment scheduling, eligibility, and authorization, patient registration, and upfront payment collections. Back-end functions include claims management, medical billing, reimbursement, and final payment collections.
In addition, there are structural and operational elements to consider. Structural elements affecting your RCM processes include your practice model, payer mix, and the systems you use. Operational elements include patient registration procedures, provider documentation, and accurate coding.
Why Revenue Cycle Management is Key to Your PT Practice’s Success
Efficient Revenue Cycle Management is essential for successful cash flow and for the financial health of a physical therapy clinic. It ensures you receive the maximum reimbursement for services provided. By optimizing revenue cycle management, you can:
Reduce the number of denied claims
Enhance payment speed
Advance cost-effectiveness
Improve overall financial performance
Additionally, clear communication with patients regarding insurance coverage and financial responsibilities improves patient satisfaction. By reducing the time spent on billing-related inquiries, you enable practitioners and staff to focus more on patients and provide a positive experience. This fosters loyalty, repeat visits, and word-of-mouth referrals.
Revenue Cycle Management Has Become More Complex
Private physical therapy practices once received the overwhelming majority of their revenue from a handful of insurance companies or Medicare/Medicaid. Today, payment sources include a broader mix of insurance companies, Medicare/Medicaid, and cash-pay sources — making revenue cycle management (RCM) more complex than ever.
Shifts in payment responsibilities, authorizations, higher deductibles, and a lack of transparency across multiple systems are just some of the issues practices face as they collect payments from patients and insurers.
5 Ways To Improve Revenue Cycle Management and Unlock Hidden Cash Flow
Let’s look at some of the most common problems affecting physical therapy revenue cycle management and steps to improve efficiency and unlock revenue.
1. Scheduling
Not following scheduling best practices can cost your practice greatly. Long wait times, double bookings, inefficient follow-ups, and no-shows all lead to lost revenue.
Scheduling is critical to minimize wait times and ensure practitioners see patients constructively. Front-office staff can confirm appointments by using multiple communication methods such as text, email, and phone calls to minimize no-shows.
What’s more, it’s important to incorporate proactively schedule follow-up visits as part of a complete plan of care. When last-minute cancellations are unavoidable, aim to fill canceled slots with short-notice bookings. This will help to ensure you fill your schedules and maximize your space, improving your Return on Investment (ROI).
2. Patient Registration and Eligibility Checks
After scheduling an appointment, the next step in revenue cycle management is registration and eligibility verification. It’s surprising how often front-end staff fail to adequately verify patient data. In fact, eligibility issues with missing or incorrect patient information are among the top reasons for claim denials.
While front-office staff may verify eligibility on a first-time visit, they must also understand the critical nature of verifying data and eligibility on subsequent visits. Gathering accurate data before a patient arrives for their appointment is key to facilitating smooth revenue flow through the cycle.
By completing prior authorization requirements, front office staff can avoid claim denials on their end. Additionally, payers are increasingly requesting confirmation of reimbursements before patient visits.
3. Upfront Collections
With increased high-deductible health plans, patients are liable for many of their own healthcare costs. Settling co-payments and deductibles at your front desk at the time of the appointment can significantly alleviate back-end payment collection struggles. It also saves administrative costs and frees back-end staff for more critical functions.
You can improve point-of-service payments and help simplify your revenue cycle management in three ways:
Offer a credit card facility
Provide financial estimates before appointments
Allow patients to pay off balances over a set period
After an appointment, back-end staff execute a charge capture by converting services and practitioner time into billable charges. This process is often complicated by coding changes and varying payer guidelines. However, 90% of medical claim denials are preventable, and two-thirds can be recovered. This shows that with vigilance from your team, almost all practice claims should be granted.
To prevent denials, ensure codes are accurate and remain updated. Revenue staff should be knowledgeable about payer-specific guidelines and criteria. And because poor clinical documentation can lead to inaccurate charge capture and revenue loss, they should also:
Confirm clinical documentation accuracy
Verify patient and health insurance information
Ensure proper coding and modifiers
Devote part of the billing team’s time to managing claim denials rather than just processing new claims. Make it standard procedure for your team to review denials daily to ensure reimbursement.
In addition, ensure your revenue cycle management staff checks that you receive the correct payments in agreement with your contract for eligible claims.
5. Medical Billing and Patient Collections
As with claims and denials, patient collections can be very challenging. Physical therapy practices can increase patient collections by offering electronic payments through patient portals. Patients can conveniently view their bill online, the amount owed, and what it’s for, and then pay immediately with a credit card.
Once all payments are collected, back-end staff complete the revenue cycle management process by designating payments to the patient case and closing the account.
Streamline Your Revenue Cycle Management
While different staff members may handle various parts of revenue cycle management, every part of the process affects its overall success. Breaking down the silos between front- and back-end administrative functions can improve a practice’s efficiency and financial performance.
For support with optimizing Revenue Cycle Management, reach out to Bob Kowalick at Revenue Cycle Solutions.
How One Practice Increased Physical Therapy Reimbursement Rates by 15%
Private practice owners have been hit with a double blow over the past few years. Inflation has driven a significant increase in operational costs. At the same time, the physical therapy industry as a whole has experienced reimbursement cuts:
There was a 15% cut in 2022 for services provided by physical therapist assistants (PTAs).
If you think there’s nothing you can do about physical therapy reimbursement rates, you may be surprised.
While many practices have seen profit margins decrease, Kinetix Physical Therapy in Gainesville, Florida has almost tripled revenue in the past six years. One of the key components of their success has been their ability to successfully renegotiate with insurance providers. This has allowed them to secure better reimbursement rates.
The practice has been able to increase PT reimbursement rates by an average of 15% over the last couple of years.
At Breakthrough’s recent Patient Demand Summit, Tony Cere, Co-Owner at Kinetix PT, shared his exact experience with renegotiating reimbursement rates. You can watch that session or continue reading for the key takeaways.
Tony Cere, Co-Owner of Kinetix PT, shares his experience renegotiating physical therapy reimbursement rates
Growth Oriented Practice Seeks to Increase Physical Therapy Reimbursement Rates
Tony and Melissa Cere opened Kinetix Physical Therapy in 2008. At the end of 2016, Kinetix PT partnered with Breakthrough to help them compete locally and grow. They attribute great gains in their business to this partnership.
In just two years, Kinetix PT’s revenue doubled from $950,000 to $1.8 million and expanded the size of their clinic. And that was just the beginning.
In 2022, they grew to $2.8 million in revenue and are now opening another clinic. This will allow them to double their current practice size.
Working on the Business, Not In It
As part of the Breakthrough community, Tony learned the importance of focusing his time on his responsibilities as a business owner. This meant backing out as a full-time clinician. This transition proved to be a real game-changer. As a result, he is able to identify revenue growth opportunities. One of the most valuable activities he is now able to spend time on is negotiating better physical therapy reimbursement rates with insurance providers.
In 2020, Kinetix PT—like everyone else—saw expenses increase and reimbursements continue to decrease. There seemed to be little light at the end of the tunnel. Their saving grace? At the time, it was cash-based services. By adding cash-based services such as Lightforce lasers, foot levelers, diagnostic testing, and MSK ultrasound, Kinetix was able to provide significant buffer to its profit margin. Last year, Kinetix PT brought in around $340,000 in cash-based revenue.
However, as a physical therapy practice, the Ceres felt the practice should be profitable without relying on cash-based services. These added services should only cushion their already-healthy revenue. So they took a closer look at their payer mix and average cost per visit.
A Shocking Revelation About Physical Therapy Reimbursement Rates
When he dove into the numbers, Tony realized they were actually losing money by seeing patients with certain insurance providers. It was time to decide to either drop those payers or renegotiate their contracts.
The Process of Negotiating Physical Therapy Reimbursement Rates
The Ceres decided they would try contract negotiations first. The process was challenging and required significant commitment and perseverance. But Tony says it’s one of the most valuable things he’s done for the practice. It’s helped to secure healthy physical therapy reimbursement rates. Not only for 2023, but for years to come.
Tony started negotiations with one of their biggest payers. It made up 35–40% of their patient population. The process entailed multiple rounds of trying to find (and then reach) the right contact person within the insurance company.
Tony set up detailed presentations stating their case. He showed the significant inconsistencies between reimbursements for their private physical therapy practice and other institutions such as hospitals. The report also included figures explaining how some patient visits were actually draining practice finances due to the low reimbursement rate. He highlighted cost increases over the past few years and the lack of reimbursement adjustments to compensate.
The Results of Contract Negotiations
Tony conducted continuous follow-ups and escalated their request to more senior staff members at the company to get noticed. Eventually, it worked. He negotiated a 10% increase annually in 2021, 2022, and 2023. This totaled a 30% increase over 3 years and raised their per-visit reimbursement with that payer from $62 to $83. Factoring in the volume of patients over 12 months, this improvement has had a noteworthy impact on their revenue.
Tony followed the same procedures with other network partners. He achieved some reimbursement increases from these as well. Results have been mixed. But even a $5 reimbursement increase per visit adds up to a great improvement over 12 months.
9 Steps for Renegotiating Your Physical Therapy Reimbursement Rates
Private PT practice owners are all facing the the same challenges Tony and Melissa have tackled over the past few years.
But most don’t realize they can do something about it.
Tony and Melissa’s perseverance and strategic approach shows us there’s hope. Try applying these best practices to achieve the same success negotiating with insurance providers.
1. Identify the payer(s) you want to negotiate with
Prioritize negotiations with the insurers that have the highest patient volume and lowest reimbursement rates. Payment levels can vary significantly amongst different providers.
2. Decide what rate you would need
Look at your revenue per visit and cost per visit. Decide how much more revenue per visit you would need for a healthy profit margin. For instance, Tony aims to make 20% revenue on top of the cost to see the patient.
3. Find the right person to talk to.
Tony recommends talking to the provider relations department of your insurance carrier. Aim high and get in touch with the most senior-level contacts you can.
4. Be persistent in your outreach.
This process takes time. You may not get a response right away. They may even say no. But keep going. Contact them by phone and email. Keep following up regularly until you reach someone who is willing to talk. If needed, set up a follow-up schedule for yourself. Once you have success with one company, it can give you further motivation and hope for others.
5. Gather your data.
Once you get a meeting with the insurance carrier, ensure you have all the necessary data. Use figures to highlight that current rates are non-viable for a private physical therapy practice to provide high-quality care. Your numbers should include PT total compensation costs per unit, per patient, and total per visit costs. Organize it clearly and concisely in a graphical format (such as PowerPoint) for maximum impact.
6. Write a letter to your contact requesting a rate increase.
Include the following steps, 7 through 9, in your letter.
7. Make it clear how you are a benefit to your community.
Show how you excel above your competitors in the area. Use patient reviews and testimonials if available. Emphasize your differentiators and high success rates. If your practice is great at physical therapy marketing and attracting patients, highlight that as a differentiator.
8. Explain how your business costs have increased.
Support this with documentation. Show how the current physical therapy reimbursement rates you’re receiving from them are causing financial losses for your practice. If you haven’t received a reimbursement increase from this payer in a long time or ever, be sure to note this.
9. Describe how financial losses negatively impact your patients.
Reiterate that a fair and sustainable reimbursement structure is crucial for deliver high-quality care to the insurance company’s members. Express your commitment to providing exceptional care.
Perseverance is Key
Many practice owners believe their practice is too small to negotiate with payers. But in fact, payers can benefit by working with you. Even with an increase in your rate, they’ll still be reimbursing you less than what they pay to hospitals.
If you set out with a well-formulated argument and willingness to persevere, follow up, and persevere some more, you can successfully turn your bottom line around with better payer physical therapy reimbursement rates.
Get Support to Increase Your Physical Therapy Reimbursement Rates and Improve Profit Margins
Running a physical therapy practice is harder than ever. Inflation, declining reimbursements, and decreasing physician referrals require practice owners to step up their commitment and innovate if they want to succeed.
If you’re reading this, my guess is that you’re looking to increase profit margins and gain financial stability.
You don’t have to reinvent the wheel. Many practice owners have achieved success and want to share their knowledge and experience with other practice owners to benefit our industry as a whole.
That’s why Breakthrough has launched a new program called Profitability Under Pressure: A live 13-week masterclass exclusively for PT practice owners.
Through weekly calls, templates, group support, and one-on-one guidance, you will:
Conduct a financial analysis for your practice
Create a custom plan to increase your profits
Discover how to drop your lowest payer and renegotiate insurance contracts
Learn about the different cash-based services available and how to implement them
Shrinking profit margins pose a significant threat to private practice as physical therapy reimbursement rates in 2023 continue to decline and operating costs rise.
Since 2016, physical therapy reimbursement rates have decreased by more than 10%. You’re getting reimbursed less for the same amount of work. Yet we in the industry know that physical therapy provides the best outcomes per dollar.
The Impact of Declining Physical Therapy Reimbursement Rates on Private Practice
The combined impact of declining reimbursements and inflation may leave you at your wit’s end, spinning your wheels to preserve profits, and taking on more patients to make up for the revenue loss. Ultimately, it’s leading to shrinking profit margins, hiring and retention challenges, and PT burnout.
Shrinking Profit Margins
Profit margins in outpatient PT are taking a big hit from declining reimbursements and rising costs. In 2018, the average profit margin for a PT private practice was 14.6 percent. Today, that’s no longer the case. Bob Kowalick shared on a recent podcast episode that he’s seen a record number of practices with profit margins under 10 percent. When your profit margins go below 10%, you’re skating on thin ice. Your business is at risk.
Eventually, the severity of this issue may threaten the viability of your practice (if it hasn’t already).
Hiring and Retention Challenges
The rising cost of living also means employees at many clinics are asking for higher wages, at a time when there’s no profit margin to spare. The cost of PT school has gone up, so recent grads are taking on massive student loan debt and expecting higher wages. If you can’t meet therapists’ salary demands, those therapists may end up working at a hospital or bigger clinic. Hiring and retaining staff is incredibly challenging in this environment.
Owner and Staff Burnout
You’re probably working harder than ever while facing uphill financial battles. You’re overworked and underpaid, a classic recipe for burnout. And your staff isn’t immune to this either. At the end of the day, this could be impacting your patient care and your ability to enjoy patient care.
Physical Therapy Reimbursement Rates in 2023: Are the Cuts Here to Stay?
When we look at what’s happening today, there’s a clear trend: Overall expenditure on healthcare is going up, while reimbursements for physical therapy services are going down.
Between 2016 and 2021, healthcare expenditure increased by one trillion dollars.
In 2016, $3.3 trillion was spent on healthcare. In 2021 (the latest numbers recorded) it was up to $4.3 trillion. That makes healthcare 18% of the total US GDP, nearly twice as much as the average industrialized nation.
While the overall market for healthcare has gone up by 35% since 2016, physical therapists have seen little of that growth. Combined, there was $34 billion spent on physical therapy and occupational therapy in 2021. PT and OT made up less than 1% of the total healthcare spend.
And things are getting worse. We’re expecting more reimbursement cuts in 2024. The bottom line is you can no longer rely on doctors and insurance providers to have your best interests in mind.
So, what can you do in this situation?
What Owners Are Doing to Survive
When profit margins get squeezed and what you’ve relied on in the past isn’t working, you know it’s time to make a change.
You need to find a way to solve your financial challenges and get your profit margins back to a healthy range (between 10 to 20 percent). Here’s what most owners are doing in an attempt to survive:
Cutting costs
This typically means pay cuts for owners and therapists alike. However, reducing wages or being unable to compensate employees fairly makes it difficult to retain top talent and continue providing high-quality care.
Marketing is another area where owners will look to cut expenses. But this will come back to bite you when patient volume goes down and your top-line revenue takes a hit.
Working long hours and treating more
Some owners are giving up on hiring and treating more patients themselves. It’s true that taking on more patients is one way to increase revenue (we’ll cover that more down below). However, if you take on too many patients as the practice owner, that doesn’t leave much time left over for taking care of business. And when profit margins are declining, you as the owner should really be focused on developing and executing a business plan to increase profitability.
Trying to negotiate better physical therapy reimbursement rates
One viable solution is renegotiating insurance contracts or dropping low-payers to increase your revenue per patient. This can definitely help in the short-term, but is not a long-term solution. Dropping your lowest-paying insurance providers may increase your average transaction value, but leaves you vulnerable to future reimbursement fluctuations.
Ultimately, these strategies lead to further decline in profitability and increase risk that a practice could end up closing for good or selling for pennies on the dollar.
Instead, focus on the proven strategies for increasing profitability outlined below.
3 Ways to Make Up for Lost Revenue in Your Practice
In his book Getting Everything You Can Out of All You’ve Got, Jay Abraham argues that there are three main ways you can boost revenue. These tenets can be applied in your PT practice to address financial challenges so you can either continue to serve your community for years to come or eventually sell at a profit.
1. Increase the number of clients you see
If you don’t have consistent patient volume, you should address this so you’re filling schedules and filling space consistently.
Take this hypothetical scenario about Practice A and Practice B.
Practice A: 2 PTs, 80% full, $90/visit, 80 v/w
Practice B: 2 PTs, 95% full, $90/visit, 95 v/w
What’s the difference in profit margin?
Profit B generates $1,350 more each week than Practice A.
If you don’t have a waitlist, then you’re not at full capacity and could benefit from adding patient volume.
2. Increase your average transaction value
There’s a lot of opportunity for practices to increase revenue through additional revenue streams. You can increase your average value per patient through insurance-based means, such as negotiating rates, dropping low-payers, or adding new insurance-based services such as RTM. However, it’s impossible to predict future changes to insurance-based reimbursements. What’s clear is that the US healthcare system doesn’t understand or heed the importance of physical therapy. Until that changes, efforts to improve reimbursement rates are likely to be difficult at best.
One great way to increase your average revenue per patient is to add cash-based services such as laser therapy, spinal decompression, dry-needling, or other cash-based products or services that you can incorporate into your patients’ treatment plans.
Tony Cere, Practice Owner of Kinetix PT, shares how he increased revenue per patient by dropping his lowest payers, renegotiating insurance contracts, and adding cash-based services.
3. Increase the frequency of repurchases
In outpatient PT, we refer to this as maximizing Lifetime Patient Value (LTPV). This means reducing patient drop-off, graduating your patients from their plan of care, and reactivating patients so they return for additional treatment when needed.
You can reduce patient drop-off by following best practices for conversion in the initial exam and creating a plan of care.
Reactivation is where many practices are missing out on opportunities. Imagine that you have a patient who graduates from their plan-of-care, then later has a different issue that needs treatment. Will they know to come to you for their problem?
If they go to their doctor first, they may end up getting surgery or going to a competitor. They may not get treatment at all or realize they have problem.
On the other hand, if you consistently run reactivation campaigns and market to your past patients, you can stay top-of-mind for them. You can educate them about the various problems you can solve so they think of you when one of those issues arises.
Reactivating past patients is typically much easier and more cost-effective than attracting brand new patients to your practice.
Leverage your past patient list is the lowest-cost way to fill your schedules and fill your space.
How to Create a Plan for Profitability
All three revenue-generating strategies can help you overcome the impacts of declining physical therapy reimbursement rates in 2023 and beyond.
To do these well and increase profit margins so you can gain financial stability, you’ll need to develop a profitability plan.
The foundational aspect of your plan must focus on building patient demand. Patient demand refers to the amount of desire and interest that exists for your practice’s services amongst your past patient base and your community. Building adequate patient demand is the key to being able to effectively drive revenue growth and improve profit margins.
By creating a plan for profitability and increasing patient demand, you’ll be able to:
Fill your schedules and space consistently.
If you don’t have a waitlist, you definitely need to build patient. That means you’re not at full capacity and you’re missing out on revenue potential.
Drop your lowest payers.
If you don’t have a waitlist and you’re not fully utilizing your schedules and space, you can’t cut your lowest payers. By building more patient demand, you’ll be able to attract better-paying patients and create a cost-per-visit threshold that you adhere to.
Add cash services.
There are a variety of cash-based services that are proven to work for physical therapy patients. Part of your profitability plan should be to determine which cash-based service would fit best within your practice.
You’ll also need to build demand for those services. Without patient demand, you can offer cash services, but you’ll have difficulty selling them.
Increase Lifetime Patient Value.
Your former client list is a valuable asset. You can leverage it to reactivate past patients through email and text campaigns. Doing so will encourage patients to come back to you anytime they have a problem that physical therapy can support. This will increase the lifetime patient value and create more revenue.
How One Owner Successfully Increased Revenue Per Patient
Tony Cere, Owner of Kinetix PT worked with Breakthrough to add the Lightforce laser to his practice and now brings in an extra $220,000 annually in cash-based revenue. He adds this service to plans of care for new patients and markets it to past patients through email and SMS campaigns. Tony has seen 300% revenue growth at his practice within 6 years.
“Breakthrough’s email and SMS campaigns are really helpful for getting past patients in the door and getting the word out about our laser cash services. To make a big investment like that, you’ve got to know you can bring in the income. With Breakthrough, we didn’t have to worry…we had patients coming in for laser who ended up becoming PT patients.”—Tony Cere, Owner, Kinetix PT
The Bottom Line: How You Can Overcome Declining Physical Therapy Reimbursement Rates
If you are physical therapy practice owner who…
Feels the pressure of declining physical therapy reimbursement rates
Wants to stay ahead of the trend of shrinking profit margins
Has a growth mindset
Then you could be a great fit for Breakthrough’s Profitability Under Pressure Masterclass. In this 13-week course, you will join a cohort of other practice owners who are working through the same things together. Through small group calls with step-by-step instructions, templates, and one-on-one guidance, you will:
Go through a financial analysis exercise for your practice
Create a custom plan to improve your profits
Learn how to drop your lowest payer and renegotiate insurance contracts
Discover how to implement a cash-based service
Find out how to systematically attract better-paying patients
Learn how to fill your schedules and space consistently
We’re stronger together than alone. To learn more about the Profitability Under Pressure Masterclass, click the image below.
In this how-to guide, you’ll learn why physical therapy marketing is the key to better profit margins. You’ll also discover how to implement revenue-generating marketing strategies in your private practice.
The strategies included in this guide have helped hundreds of physical therapy practices—such as Altitude Physical Therapy and Ratner Physical Therapy, to name just two success stories—double patient visits in less than 2 years.
Physical Therapy Marketing: How to Win in Today’s Healthcare Environment
As a private practice physical therapist, you’re operating within a complex system that can be incredibly challenging to navigate. You’re faced with declining reimbursements, inflation, and diminishing physician referrals. If you feel undervalued within the current US healthcare system, you’re not alone.
Take the fact that a whopping $4.3 trillion was spent on healthcare in 2021, yet less than 1% went toward physical therapy. The US spends significantly more on invasive procedures and addictive medications than on conservative care like physical therapy.
In this environment, some practices will, unfortunately, be forced to close their doors for good. But there will also be those who overcome the challenges and succeed.
Practice owners who prioritize revenue growth and take a proactive approach to physical therapy marketing will gain the ability to increase revenue per patient, boost profit margins, offer competitive wages, and leave a lasting legacy in their communities.
Source: Shutterstock
Common Physical Therapy Marketing Mistakes to Avoid
Before developing your physical therapy marketing plan, it’s helpful to consider what not to do. Every physical therapy practice has a unique selling point to convey to consumers; however, most practices fail to convey their benefits in a compelling way. Refining your marketing will take some trial and error. But you can skip a lot of the headaches by avoiding these common pitfalls many owners fall into.
1. Failing to Understand Your Target Market
Many practices miss an important step in marketing: defining the target market. A thorough understanding of your ideal patient profile and your target audience is crucial—after all, your entire marketing strategy centers around them. Ask yourself questions like:
How old are they?
What is their gender?
How much money do they make?
How do they talk about their health problems?
What activities do they enjoy?
How and where do they spend their time?
Understanding your target market helps you align your messaging and marketing channels with your audience. This will drive better results from your marketing and attract more of your ideal patients.
2. Focusing Too Much on Features, Instead of Marketing Your Benefits
The key to attracting patients is to let them know how you can solve their problems. Touting your qualifications and cutting-edge techniques (aka your features) won’t do this—but telling them how they can quickly relieve pain and regain their lives will. Communicate your benefits and advantages to show how your patients’ lives will improve by working with you. Avoid focusing too much on your practice, and focus more on your patient.
Source: Breakthrough
3. Not Building and Capitalizing on Your Patient List
When it comes to physical therapy marketing, your pastpatient list is one of your most valuable assets. Too many practice owners focus their marketing entirely on attracting new patients and ignore their past patients. This is a big mistake. Your past patient list is the lowest-cost, highest-return audience you can market to.
Be sure to maintain a past patient list and communicate with it regularly. Past clients who previously graduated from a plan of care are more likely than any other audience to become future patients. You already have a relationship with them, so it’s easier to sell additional services. They’ll also refer you to friends and family.
4. Inconsistent Marketing
Here’s a far-too-common scenario we see in private practice: Practices only invest in marketing when they see patient visits decline. At that point, they do some marketing, and it works! Then things get busy, and maybe they even get a waitlist. So they stop marketing. Eventually, visits decline again, and the cycle repeats itself.
We call this roller-coaster marketing—and it’s not effective. To maintain a consistent flow of patients year-round, it’s important to decide on a regular cadence of marketing activities and stick to it.
Source: Breakthrough
5. Investing Too Much in Branding
Far too many practices shell out all their marketing dollars on brand marketing that doesn’t convert any patients. Think logos, signage, and newspaper ads. The problem isn’t the exact medium, but it’s the focus on brand marketing rather than direct response marketing.
Branding investments make sense for large companies selling commodities to consumers. They don’t make sense for physical therapy practices.
Direct response is, as the name implies, marketing designed to elicit an instant response by encouraging prospects to take a specific action. Unlike branding, it’s easy to measure, cost-effective, and begins generating ROI immediately. Direct response can also build your brand while maintaining a positive ROI.
Source: Shutterstock
6. A Leaky Sales Funnel
Once you generate leads—whether through marketing, word of mouth, or doctor referrals—it’s essential to follow up and nurture them. The process of a lead becoming a patient is called conversion. Conversion is a major issue for many practices, and most don’t realize it. Many new patients are lost as a result of not adhering to conversion best practices during their follow-up process. This is called a leaky funnel.
Various factors can cause this. It could be as simple as your front desk staff taking too long to follow up on an inquiry, not following up enough times, or using ineffective follow-up call scripts. Try to consistently nurture leads and audit your follow-up process to ensure your staff is following conversion best practices.
Source: Breakthrough
7. Ignoring Marketing Analytics
When it comes to marketing, most practice owners don’t know what’s working and what’s not. If you continue to use ineffective marketing tactics, you’ll waste resources, time, and money—and hand opportunities to your competitors. Instead, monitor your marketing initiatives and analyze the data to identify successes and failures. Use analytical tools to track site visits, email opens, social media interactions, and conversion rates.
The Fundamentals of Physical Therapy Marketing
Now that we’ve covered what not to do, let’s pivot to what you should do. But before diving into specific strategies, let’s start with a high-level overview of core marketing principles to integrate throughout your patient journey.
1. Market-Message-Media Match
The first important principle of marketing is Market-Message-Media Match. For your physical therapy marketing to be successful, these three elements must be in alignment. Let’s break this down further.
Source: Breakthrough
Market
This is the ideal target audience you want to focus on. If you don’t identify your primary audience, you can’t formulate an impactful message or choose the right media to reach them.
For instance, you might focus largely on sports injuries, older adults, or even workers’ compensation cases. These are very different demographics—and each target group will require a different marketing strategy.
Message
Your message comprises the words you use (and even the audiovisual elements) in your communication. This should align with your target market; after all, how you market your services to college sports teams will vary significantly from how you approach the elderly.
Regardless of who your target market is, your marketing should be about them and how you can solve their problems—not about your qualifications and services. Your audience wants to know that you can relieve their pain and aid in injury recovery. You only have a few seconds to capture their attention, so nailing the message is essential.
Source: Shutterstock
Media
Legacy media such as print, radio, and television are costly. Even worse, it can be difficult to measure the results of these strategies and determine whether your marketing is effective.
Digital marketing includes any media consumed on your mobile phone or digital device—social media, emails, and online videos. When you apply direct response marketing principles to digital media, it enables you to target the specific audience you want, while maintaining cost-effectiveness and ROI visibility.
When choosing the right media channel for your audience, consider where your target audience is most active. Track tangible outcomes, such as whether you’re gaining new clients and whether your list is growing. You can get an idea of what media your audience uses by talking to your patients: ask what media platforms they’re active on and prefer communicating through (e.g., email, text, Instagram, or Facebook).
2. Direct Response Marketing
When you think of marketing, you probably think of branding. But as mentioned earlier, focusing on direct response marketing presents a more effective, less costly way to attract new patients. So what sets direct response marketing apart?
For starters, with direct response marketing, there’s always an offer, and it’s always measurable. Every ad has a clear CTA, such as: book an appointment, call today, register for workshop, read a blog, or get a free screening.
In addition, direct response marketing enables you to provide your clients and prospects with valuable information through videos, workshops, podcasts, or blogs. This ties in directly with the next physical therapy marketing fundamental: patient education.
3. Patient Education
In physical therapy marketing, patient education helps build trust and credibility. Your patients or prospects can also better understand their condition, treatment options, and overall health through education. Educated prospects who see you as a source of trusted information about their health are more likely to think of you when they have a health concern and become loyal patients.
You can offer educational content through workshops, seminars, webinars, and podcasts. You can also post videos, blogs, landing pages, and social media material. The key is that your content must be valuable and relevant to your clients’ needs. Answer pressing questions and offer tips to solve common problems, such as lower back pain, shoulder pain, or knee pain.
Providing engaging and informative content can greatly expand your reach beyond your local community. This is ideal if you offer online consultations or coaching services.
Source: Breakthrough
4. The Patient Demand Flywheel
The Flywheel Effect is a business concept developed by Jim Collins in his book Good to Great. It’s inspired by the working principles of mechanical flywheels: it’s tricky to initiate the spinning of a flywheel, but once it gets going, it offers continuous power with little force required to keep it in motion.
“Imagine that your task is to get the flywheel rotating on the axle as fast and long as possible. Pushing with great effort, you get the flywheel to inch forward, moving almost imperceptibly at first… You keep pushing in a consistent direction… the flywheel builds up speed… Then at some point — breakthrough! The momentum of the thing kicks in in your favor… the huge heavy disk flies forward, with almost unstoppable momentum.” —Jim Collins, Good to Great
Similarly, building the foundational systems and processes needed to grow a business can take time and effort. But once these are in place, your wins will build on each other to create repeatable, predictable growth without much effort. The key to realizing the flywheel effect and its benefits is to build systems and processes that grow patient demand. When you have high patient demand for your services, you have the ability to consistently reactivate patients, increase revenue per patient, easily add and sell new services, and improve margins.
There are three essential components of building patient demand: Attract, Convert, and Measure. As you develop your marketing plan, be sure to include systems and processes that support all three.
Source: Breakthrough
Attract
This is the first point of contact, where you introduce and draw customers to your practice. Attract your target clients by creating and distributing educational content on their pain points. For new prospects and past patients, you can leverage various channels such as email, social media, online advertising, and your website.
Convert
Next, engage your prospects by communicating with them via email, calls, and texts. Train your staff to follow up quickly on inquiries, leveraging multiple mediums. Data shows it may take up to seven tries to connect with a prospect following an inquiry—so don’t stop contacting them after only one or two attempts. Leverage email and call tracking software to ensure your staff follows best conversion practices.
Measure
By measuring the effectiveness of your campaigns, you can make better decisions about what to continue and what to stop. It’s much easier to repeat what’s successful than to reinvent the wheel all the time. By analyzing results, you can do more of what works—and stop wasting time and money on marketing that fails to drive results.
Source: Shutterstock
Building Your Physical Therapy Marketing Plan and Budget
Developing and implementing a physical therapy marketing plan is your biggest lever for improving top-line revenue. Your plan is a comprehensive strategy designed to get your patient demand flywheel rolling so you can attract prospects, retain patients, and expand your referral sources. It also streamlines marketing efforts for increased effectiveness, simplifying the tasks ahead.
A Step-by-Step Guide to Developing a Comprehensive Physical Therapy Marketing Plan
A physical therapy marketing plan will require thought and clarity about your vision for the practice. Block out several hours to develop it, and involve your team throughout the process as much as possible to increase buy-in.
Source: Breakthrough
Step 1: Determine Your Practice Goals
First, think about your vision for your practice. Where do you want to be in five, 10, or 15 years? From there, you can set annual, quarterly, and monthly goals.
Step 2: Decide on Your Marketing Goals
When setting your goals, be specific about what you want to achieve. Marketing performance should be measurable and tangible. Aim to triple the return on your marketing investment.
Your goals should also be achievable and align with your business vision. Finally, be flexible and adjust your goals based on feedback and results.
Track high-level metrics such as new patients, visits, gross monthly revenue, and attendance. If these numbers are healthy, your marketing strategy is working.
Step 3: Determine Your Market/Message/Media Match
Outline your target audience and the pain points you want to address. Highlight the key messages and call to action you want to promote to that audience. Determine the media channels that best enable you to reach your target market.
Step 4: Decide Your Budget
Setting your budget shouldn’t be guesswork. Instead, calculate your marketing budget concerning your total revenue. For business-to-consumer (B2C) service businesses, 10–11% of annual revenue is the generally recommended amount for marketing. However, this will depend on what you want to achieve. Businesses that just want to keep running can go as low as 5%, while those aiming for aggressive growth may opt for more than 10%.
To calculate your budget:
List your expected revenue for the year. You can start with a number between the past year’s actual revenue and your growth target.
Calculate 7–10% of your expected revenue, depending on your growth goals.
Divide the number by 12 to get your monthly average marketing budget.
Step 5: Decide What Metrics to Track
When discussing goals, we mentioned tracking high-level targets such as new patients, visits, gross monthly revenue, and attendance. Think of these as your overall practice vitals.
In addition to these high-level goals, it’s a good idea to track marketing metrics as well. This helps you get a better idea of what’s working and what’s not.
Important metrics to track include leads, cost-per-lead, cost per plan-of-care, and lead-to-plan-of-care conversion rate. Let’s take a look at each:
Leads are potential patients who express interest in the practice’s services by filling out one of your online forms, calling your office, or emailing you. Tracking leads is key to understanding how well messaging and media are working to drive interest in your practice.
Cost per lead measures how much it costs to generate each new lead.
Cost-per-plan of care measures the total cost of the marketing campaign against the number of plans of care sold.
Your lead-to-plan of care conversion rate is important for understanding how many leads are turning into actual patients. Let’s say that on average, 50% of your leads converted into patients last year. But this year, you’ve noticed that only 30% of your leads are converting to patients. That information could indicate you have a leaky funnel and may need to audit your staff’s follow-up processes.
Tracking metrics is crucial for understanding what’s working and what’s not at each stage of your patient acquisition process.
Step 6: Share the Plan
Consider how to share the plan with your team to ensure everyone works together to reach these goals. Furthermore, focusing on the “why” behind each goal can improve employee buy-in. Schedule regular meetings to review performance and feedback.
Step 7: Revisit and Revise
Metrics can help you deliver better patient care, make your practice more profitable, and optimize your marketing plan.
By analyzing your conversion rates, bounce rates, ROI, and the average cost-per-lead for each marketing channel and campaign, you can identify which are the most effective and where you may be wasting resources. You’ll then want to fine-tune your budget distribution accordingly.
Test new elements for campaigns with a low ROI. If most viewers are dropping off on a certain web page, sign-up, or contact form, you might consider a redesign for smoother functionality.
Your practice’s overall patient satisfaction rate also significantly impacts growth. Track this by analyzing the average wait time, cancellations, return visits, and referrals. Low ratings here can mean unhappy patients and fewer referrals or online reviews. In this case, engaging with unhappy clients is essential to see if you can patch dissatisfaction. You’ll prevent poor reviews and win back loyal customers.
Once you’ve analyzed marketing campaign performance, you’ll know what works best, what can work with some adjustments, and what won’t work at all.
Creating a Physical Therapy Marketing Calendar
A marketing calendar is a tool for scheduling marketing activities over a set period, whether a month or a year. The calendar should cover your marketing activities for attracting new patients and reactivating past patients. A pre-planned marketing calendar helps your team stay on track so you achieve the goals set in your marketing plan. It also allows you to reduce your reliance on physician referrals.
Source: Breakthrough
During the planning stage, you identified your business and marketing goals. Now, you’ll schedule and implement the campaigns and activities to help you achieve them.
When it comes to physical therapy marketing, consistency is key to success. Determine a consistent cadence of marketing activities. If you plan to email your past patients, decide how frequently you want to email them, put that in your calendar, and stick to it.
You might also identify holidays that could influence availability or demand, or time your biggest campaigns around traditional slow seasons to boost demand.
Your calendar can include a variety of organized campaigns, from virtual workshops and webinars to in-person events, social media content, email campaigns, blogs, and promotions.
Pick one target market to focus on monthly and break down the steps needed to launch your campaign. This will include creating content, setting up your campaign structure and metrics tracking, and following up on inquiries.
It can be helpful to block out several hours each week to devote to marketing. Encourage those involved in executing your marketing plan to do the same.
Once you establish your marketing calendar, use it as a template for your entire team. This creates a marketing system that will ensure you stay on budget, offer consistent value to your patients, and keep your flywheel turning continuously.
Top 5 Digital Marketing Strategies for Physical Therapy
When deciding on your digital marketing plan and filling in your marketing calendar, consider these top strategies:
Email and Text: These are undoubtedly the top tools to reactivate past clients.
Content: Quality content is vital to support email and search engine optimization (SEO).
Online Advertising: This is a powerful way to attract new clients.
Reviews and Testimonials: These play a significant role in building trust and converting patients.
Website SEO: This ensures your content ranks high in search results and gets seen by your target audience.
Let’s take a deeper look at each and the tools you need to take advantage of digital marketing channels.
1. Physical Therapy Email Marketing
Most baby boomers (74%) view email as the most personal communication channel for businesses and brands. Gen X follows with 72%, millennials with 64%, and Gen Z with 60%. Email marketing can be leveraged to attract past patients to your clinic, engage new patients, and nurture prospective patients who have responded to an online ad or website inquiry.
Email marketing is an effective way to build relationships by providing valuable information and driving engagement. It’s also the most cost-effective way to reactivate past patients, increase bookings, and generate referrals. Your emails can be single-question emails, workshop invitations, or special offers.
Email marketing is a key channel for physical therapists to leverage. There are a few best practices that can make or break your efforts:
Offer value by focusing on the readers’ needs and solving their problems. This could include stretches to relieve back pain, post-op recovery tips, or advice on injury treatment.
Be consistent with the frequency of your email campaigns. Whether you send one email a month or a week, stick to a consistent cadence.
Always include a clear CTA, such as registering for a workshop, leaving a review, watching a video, or scheduling an appointment.
Measure results such as open rates, click-through rates, and reply rates.
Balance offers and educational content.
SMS Marketing for Physical Therapy
Your audience is most likely texting: 81% of Americans text regularly. Seventy-eight percent of those Americans wish they could have a text conversation with a business, too—perhaps yours can be the first.
Texting is the ideal marketing and communication tool for instant, direct notifications. It puts your number at your client’s fingertips, which makes engaging with your practice effortless.
Texts are useful ways to notify patients about specials and discounts and follow up after appointments to gauge patient satisfaction. You can also send texts with a link to educational information online and payment information. In addition, mobile messaging is the preferred means to send appointment confirmations, holiday operating hours, and emergency updates due to power outages or weather-induced closures.
All of these communications contribute to building your client relationships and supporting past patient reactivations.
2. Content Marketing for Physical Therapy
Content marketing encompasses various digital media types, including email copy, videos, blogs, ad creatives, and social media posts. Simply put, you’re creating content that’s valuable to your target audience and then distributing it in channels where they will see it.
Source: Shutterstock
Follow these best practices to create physical therapy marketing content that will engage and convert:
Adopt a Patient-Centric Mindset
Select a specific pain point or difficulty you want to resolve for every piece of content you create. This applies regardless of whether you’re creating an educational article or promoting a service or product. Essentially, this is why people engage—they want their problem solved.
Research how people experiencing pain express themselves. YouTube comments, Reddit posts, and Facebook or Google reviews are great sources to get feedback. Utilize any descriptions from patient comments as an alternative to how you would describe the pain.
By tapping into the first-hand experiences of patients, your content will be incredibly relatable. Readers or viewers will feel understood and more hopeful about their situation.
Leverage and Repurpose Video Content
Source: Breakthrough
Video has become the most engaging medium and is often more convenient for users to consume than traditional written forms—so leverage it whenever possible. Free online transcription services can quickly turn your video into blog content, boosting SEO. You can then turn part of that blog post into a social media feature and repurpose it into email material for your patient list.
Use the AIDA Copywriting Framework
The AIDA copywriting framework is widely used for creating effective marketing messages. There are four stages:
Attention: Grab the reader’s attention with a compelling headline or opening statement.
Interest: Generate interest in your message by nailing your audience’s pain points.
Desire: Build desire by showing how your product or service can solve the reader’s problem or meet their needs.
Action: Encourage the reader to act by providing a clear and compelling CTA.
Find a structure that attracts your exact target audience. Be specific about what you offer and how it will change the reader’s life. Use particular phrases to get their attention: “Are you in chronic pain?” “Do you have shooting pain in your legs?” Then, follow with interest, desire, and your CTA.
For instance:
“Tired of being in chronic pain? Our new Shockwave treatments help you walk pain-free, get up without help, and play golf again. Stop letting your pain rule your life. Call now and get back to doing what you love.”
Use Images
Leverage free stock photo sites and use images your audience can relate to. Ideally, you want happy people from your key demographic—this conveys that there’s hope for becoming pain-free. Also, include relevant images of specific areas of pain (i.e., someone with shoulder pain) or someone receiving therapy. People want to see themselves in the imagery.
Source: Shutterstock
3. Physical Therapy Ads
Digital channels such as Facebook, Instagram, TikTok, and Google offer cost-effective strategies for physical therapy marketing. Advertising on social platforms provides a remarkable opportunity to reach a specific target group and engage with customers directly and instantly.
Implementing the market-message-media match principles, leading with education, and displaying a clear, actionable CTA is key to generating new patients online.
Here are some of the differences between running ads on Meta (which owns Facebook and Instagram), TikTok, and Google.
Meta (Facebook and Instagram) Ads
Source: Breakthrough
Facebook and Instagram—both owned by Meta—offer you the opportunity to reach a large audience. They offer advanced audience targeting options, allowing you to focus your advertising spend on people matching your ideal patient profile. You can target people based on factors such as age, location, interests, and behaviors. Both platforms are relatively cost-effective compared to other advertising channels such as print, TV, or radio ads, so you can set a budget that suits your needs and goals.
When advertising on these platforms, it’s key to lead with educational messaging that focuses on your target audience’s pain point to grab the user’s attention. You can use the platform to educate people in your community about how physical therapy can solve their health issues. When a user clicks on your ad, you can direct them to a landing page that offers additional education and encourages the viewer to take the next step with your practice, whether that’s to book an appointment, register for a workshop, or attend an info session. Meta makes lead tracking simple, so you can ensure you’re generating a positive ROI.
Source: Breakthrough
TikTok
Many service professionals in other industries are successfully growing their businesses through TikTok advertising. Yet data shows that physical therapists are underutilizing the social network. Unlike other platforms like Facebook and Instagram, your competitors are likely not advertising on TikTok. That means it’s a wide blue ocean: you can reach your target audience with very little competition. And there’s a good chance you can get more eyeballs on your content at a lower cost than other, more saturated channels.
Think your target patients aren’t on TikTok? You’d be surprised. The fastest-growing audience segment on TikTok is baby boomers. The amount of baby boomers on the platform has doubled each year in the last two years.
TikTok is a video-based platform, so you’ll need to create video ads if you want to advertise there. Tony Cere, Practice Owner at Kinetix PT, has gained local attention and credibility in his community through video advertising on TikTok.
Source: Breakthrough
“I wasn’t quite sure about TikTok, but so far it’s been working really well. It’s definitely getting out there because people we know are saying they’ve seen me on Tiktok. Most people think it’s only kids, but people my age also have TikTok and they’re seeing the ads. So it’s been nice to have another avenue to get the word out.” —Tony Cere, Owner, Kinetix PT
Google
Advertising with Google can be a great addition to your physical therapy marketing strategies. It’s estimated that more than 3.5 million searches are conducted on Google every day, making it the world’s most popular search engine. With Google, you have the opportunity to reach people who are actively searching online for physical therapy. It’s different from Facebook, Instagram, and TikTok, where you have to interrupt and grab peoples’ attention while they’re doing something else.
On Google, you can advertise to help ensure that you show up when people are searching for services like yours. It can help you compete with other providers in your area. There’s typically less education and content creation required to advertise effectively on Google. You can use the platform to drive people directly to book an appointment on your website or call your office.
Be Sure to Verify Platform Rules
No matter which advertising channels you use, it’s important to verify the platform rules before running any healthcare-related ads. Some channels—especially Facebook and TikTok—have stringent regulations around healthcare in the U.S.
Partnering with a service like Breakthrough, which has run thousands of ad campaigns for physical therapy clinics, helps ensure your ads get approved, follow best practices, and avoid account suspensions. Unfortunately, it’s not uncommon for PT providers to experience account suspensions when they try to manage their own ads or work with an agency that lacks experience in running
4. Patient Reviews
Google and social media reviews are essential to maintaining your local reputation and acquiring patients. Having lots of positive reviews can help you rank higher in online search results, which attracts and builds trust.
Consider Primus Physiotherapy, one of Breakthrough’s clients. Primus PT averages an impressive three to five new reviews each week without extra spending. Since its inception in 2018, Primus has received 397 reviews, the most in its city (which has 207 clinics).
Source: Primus Physiotherapy
These reviews have resulted in eight to 15 new patient appointment requests through the website monthly. Primus also gets 12–15 new patient calls directly to the clinic. That’s 25–30 new patients monthly without spending money on other marketing. By generating consistent high-rating reviews, Google places Primus as a top result for physical therapy searches in its area.
Source: Shutterstock
Knowing your patients will give reviews creates additional accountability for clinicians around treatment effectiveness and service. Consider these tips when setting up a system that drives reviews for your business:
Let your admin team handle feedback requests so clinicians can give their patients the best service.
Send a Net Promoter Score (NPS) feedback request via text within 30 minutes of appointment completion. The experience will remain fresh in your client’s minds, and they’ll be more likely to open and respond to your messages.
Make it easy for clients to post reviews.
See poor reviews as an opportunity to improve. Always respond to patients who have had a poor experience by trying to rectify the situation and regain their trust.
5. SEO for Your Website
SEO can help your website stand out from competitors on search engines like Google. With more people relying on online searches for health and medical information, optimizing your site to improve visibility is important. While this can be a complex process, there are some simple actions you can take to boost your SEO ranking.
Keywords
Keywords are critical for boosting SEO. These are terms used by your customers to find your services and content. Examples might include “physical therapists in [location]” and “best exercises for back pain.” Research relevant keywords and include them in headings and text on your web pages, blogs, and even social media.
Publish High-Authority Content
Medical content doesn’t have to be dry and uninspiring. Create engaging content to reach and attract customers, such as infographics, blog posts, articles, checklists, white papers, podcasts, and videos. These types of content are popular and effective, especially when maintained consistently.
On-Page Ranking Factors
To optimize every page of your website, ensure page titles reflect what your content is about. Use one H1 heading per page. This helps the search engine understand the focus topic of your content.
Don’t copy and paste articles or blogs from other websites—you’ll get penalized. Your content should be helpful, informative, and unique. Another way to boost SEO is to include images throughout your website and blogs. Ensure images aren’t subject to copyright and that they’re unique and relevant to the content.
Backlinks
Backlinks, which are also known as inbound or external links, are hyperlinks that point from one website to another website. They play a critical role in search engine optimization (SEO) as they are used by search engines like Google to measure the credibility and authority of a webpage.
It’s a good idea to obtain backlinks from credible sites. There are a few strategies you can implement, such as creating high-quality content that other websites are likely to link to, guest posting on other websites, influencer outreach, and promoting your content on social media.
However, it’s important to note that the quality of the backlinks is more important than the quantity. Obtaining high-quality backlinks from reputable and authoritative websites can significantly improve your search engine rankings.
Systems and Tools to Support Your Marketing Strategies
Successfully executing these physical therapy marketing strategies and campaigns can seem overwhelming. But with the right digital marketing tools, it doesn’t have to be. These physical therapy marketing tools will speed up and optimize content design, schedule and streamline campaigns and help you stay on top of your client database.
Email Marketing Tools
Email marketing tools often provide generic, one-size-fits-all templates and enable you to email many subscribers. At Breakthrough, we’ve designed an email marketing platform with physical therapy-specific emails ready to go from day one. Furthermore, you don’t have to spend hours building your emails from scratch. The platform also offers performance analytics so you can understand what drives results.
Source: Breakthrough
CRM or Lead Management System
A customer relationship management (CRM) tool is key to staying on top of your client database. For instance, Breakthrough’s lead management tool tracks leads from all your marketing campaigns in a single dashboard. That means you can quickly follow up without missing any hot leads. You can also see where clients drop off and make the necessary adjustments.
Social Media and Digital Ad Tools
Designing, posting, and managing comments on multiple social media channels can be a full-time job. Breakthrough’s optimized, done-for-you ads use patient-focused direct response messaging. We work daily on your ad campaigns so your marketing runs smoothly with 100% HIPAA-compliant, media-approved ads.
Reporting Tools
Tracking the performance of all your campaigns on multiple channels is labor-intensive. Breakthrough puts all your marketing campaign metrics in one place. This empowers your team to review real-time results for data-driven decisions. You can easily compare campaigns and view performance data in an actionable, easy-to-understand format.
Call-Tracking System
A call-tracking system automatically keeps track of inbound calls and patient follow-ups. So, there’s no need to manage multiple systems, no additional paperwork, and no searching for that sticky note with the call you were supposed to return.
Two-Way Texting Platform
A two-way texting system lets you send and receive text messages from the office desktop. This lets you send bulk texts for urgent updates, instantly connect with patients, and conveniently confirm or book appointments.
Achieve Your Desired Revenue without a Bunch of Complex Systems
Remember the patient demand flywheel? It’s the process of attracting leads, converting leads to patients, and measuring results.
There’s no doubt that it can be challenging at first to get the Flywheel turning and working for you. But the systems you put in place today will over time gain enough momentum to make revenue growth a seamless, repeatable, and predictable process.
Still, the fact remains that you’re likely faced with shrinking margins, are time-starved, and have a million responsibilities in the clinic. So how do you find the money to invest in all these systems and the time to manage them?
Here’s the big secret: You don’t have to.
Breakthrough offers an all-in-one patient demand software that makes marketing easy. No separate systems for email automation, advertising, SMS/text, or call tracking are needed—all of that is built into a single system with Breakthrough. Our Patient Demand Software empowers private practices to attract and convert patients through proven, top-performing marketing campaigns.
From prebuilt and optimized emails written specifically for physical therapy campaigns to two-way texting and database management, our all-in-one platform enables you to:
Attract
Physical therapy ads, email, and SMS marketing help fill your schedules fast
Done-for-you past patient reactivation campaigns enable you to increase the lifetime value of your patients
Pre-built email campaigns and ad templates for popular cash-based products and services empower to you boost revenue per visit
Convert
Lead management and automated follow-up reminders take the guesswork out of following up with prospective patients
Instant access to hundreds of online training videos and certification courses makes it simple to train your staff on conversion best practices
Call-tracking makes gives you visibility so you can identify areas for process improvements
Measure
Intuitive reporting makes it easy to measure the performance and ROI of your marketing campaigns
Lead-to-plan of care conversion reports help you identify or rule out possible leaks in your funnel
Source: Breakthrough
Breakthrough’s Patient Demand Software has helped hundreds of physical therapy practices get more patient visits, increase revenue per patient, boost profit margins, and grow practice value.
“My practice was in a rough patch financially when we found Breakthrough. Since working with Breakthrough, we’ve doubled our patient visits in 3 years. It gives me peace of mind to know I have a trusted partner to help bring in patients who continue to come and see us, who help spread the word, and who help guarantee our continued financial profit.” —Sean Weatherston, Owner and PT, Altitude Physical Therapy
It’s time to reverse the downward revenue trend in private practice PT. Get your patient demand flywheel turning more quickly—and get your profit margins back where they need to be—with our patient demand platform. Talk with our experts today to see how Breakthrough can transform your practice and bottom line.
As a physical therapy private practice owner, increasing revenue is always top of mind. Insurance reimbursements are declining annually, inflation is at a historical high, and therapists are demanding higher salaries. These combined factors make it increasingly difficult to achieve healthy margins.
There are numerous ways to address these financial challenges so you can become more profitable, grow your practice, and hire and retain staff. In this article, we’ll explore six ways to grow profitability by increasing revenue per patient.
Increasing Revenue in Your Practice: An Overview
There are many ways to increase revenue in your practice. One way is to see more patients. For instance, if you treat 100 patients today you can set an achievable goal to grow that number to 120 patients per week. To learn more about how to get more patients, check out this article: How to Get More Physical Therapy Visits.
Some practices, however, have reached full capacity with their caseload. They either don’t have enough staff or enough space to serve more patients. Yet they may still struggle to make ends meet. If this sounds like you, you will likely benefit more from learning how to increase revenue per patient. At a high level, you can increase revenue per patient by:
Charging more per visit. If your average revenue per visit is $80, you could set a goal to increase your average revenue to $90 per visit.
Adding more visits per patient. You can increase visits per plan of care. Or, find ways to get past patients to come back into the clinic for additional treatment.
In this article, we’ll explore 6 ways to increase revenue per patient. Some of them enable you to charge more per visit, while others will empower you to increase the number of visits per patient.
Watch Chad Madden answer questions about making up revenue from low reimbursements:
6 Ways to Increase Per Patient Revenue
1. Add cash products and services
Many practice owners today are adding cash services to supplement income from insurance reimbursements. Numerous therapeutic devices and services exist that pair well with physical therapy. These options add value to your patients and can help them get better faster. At the same time, they generate cash income for your practice and increase revenue per patient. Examples of cash-pay products and services that are working today include:
Therapeutic lasers
Shockwave therapy
Traction / Spinal decompression
Massage
Dry needling (covered by insurance in some cases, but not by all providers)
Fitness classes/gym facilities
Online coaching or digital courses
E-commerce offerings such as nutritional supplements
Cash-based products and services like these can help you increase revenue without relying solely on insurance reimbursements.
3 scenarios showing the difference between 1) relying solely on reimbursements, 2) relying on cash pay only, and 3) combining both reimbursements and cash pay services.
Some practice owners I’ve talked to express concern about their patients’ willingness to pay for cash services. The answer to this likely depends on the area you live in and the affluence of your local population. Yet dozens of practice owners in the Breakthrough community have found success generating strong ROI from cash-based products such as Lasers and Shockwave.
One practice owner based in Gainesville, Florida recently shared that he generated more than $100,000 in additional annual income by adding LightForce® Lasers to his offering. He marketed those services through Breakthrough’s Patient Demand Platform.
When launching new cash services, it’s a good idea to develop a marketing strategy to get the word out and grow demand for your services. Breakthrough can help you develop a marketing strategy and implement it with pre-built email campaigns and done-for-you online advertising funnels.
“Breakthrough has helped us get the word out about our cash pay services with email campaigns promoting Lightforce Lasers. We’ve had patients coming in just for those cash-pay services that we offer and then they end up becoming physical therapy patients too.” -Tony Cere, Practice Owner
2. Reactivate past patients
Reactivating past patients goes hand-in-hand with adding cash-based services. When you add new services, you can market them to past patients as a way to attract them back into your clinic.
It’s often easier and more cost-effective to reactivate past patients than to acquire new ones. Your patient list is your lowest-cost, easiest-to-use tool to quickly boost patient visits and increase revenue.
I know PTs who have generated a dozen plans of care from a single email to past patients, even with a modest-sized patient list. Who better to focus your limited time and efforts on than those people who already know, like, and trust you? These are the people who are most likely to come back for additional treatment or another condition.
A common mistake practices make when engaging their patient list is to send their patient newsletter via email. Unfortunately, this is typically ineffective at generating replies or inquiries.
What works better is to craft email campaigns that a) provide “goodwill” value to your target patients and b) offer a call-to-action.
Balance “goodwill” emails (such as exercises they can try at home to lower back pain) with “offers” (such as an invitation to come in for a new service). You’ll build trust and credibility with your past patient list while providing them with opportunities to come back for additional treatment when they’re ready.
Running campaigns to reactivate past patients helps to increase the number of visits per patient, which is a more cost-effective way of boosting revenue than acquiring brand-new patients.
Deepak Sharma, Owner of Primus Physiotherapy has been working with Breakthrough since he launched his practice in 2018. He uses Breakthrough’s pre-built email campaigns to reactivate past patients. Today, around 85% of his patient base are either past patients or referred by past patients.
“We know that if your primary base is your past patients, then they will never let you down,” Sharma said. He hit his 7-year growth goal in only 3 years and generates over $1 million in annual revenue from a single location.
“We don’t do any other marketing,” he said. “All our marketing is through Breakthrough.”
3. Reduce no-shows and patient drop-off
No-shows and patient drop-off can be a significant drain on revenue.
Not only is it bad for business, but it’s also just plain discouraging to put effort into helping a patient, only to have them cancel last minute or even disappear altogether. This can leave therapists feeling disrespected and undervalued.
By creating a Plan of Care for each patient, scheduling all appointments in advance, and implementing appointment reminders, you can help prevent no-shows and patient drop-off.
These tactics are key for maximizing visits per patient. Ultimately, this will allow you to increase revenue per patient.
4. Drop low payers or negotiate better rates
If you’re working with payers that reimburse at lower rates, dropping these payers or negotiating better rates can help increase revenue per visit. By focusing on better payers, you can increase revenue without necessarily increasing the number of patients.
If you can generate $120/hour instead of $90/hour, you could create a lot of lot more margin for the business.
Something we see a lot is that practices are seeing patients that are capped at say $60/hr, while they have prospective patients covered by $120/hr payers on their waiting lists.
You can avoid this by implementing a strategy where you cap visits below a certain revenue threshold and focus on attracting patients above your threshold.
5. Expand insurance-based services
We’ve talked about adding cash services to increase revenue, but there are also some insurance-based services that can help to increase revenue per visit.
For example, if you’re a physical therapist, there’s an opportunity to add Remote Therapeutic Monitoring (RTM) services. The RTM codes in the 2023 CMS guidelines offer generous opportunities for practice owners to add new revenue streams while potentially improving the patient experience.
You can check with your payers to discover other services that may be covered under insurance and reimbursing at decent rates. This will vary by provider, but some that may be covered include dry needling and traction.
It’s important to remember that if you rely solely on insurance-based revenue streams, services covered and reimbursement rates are subject to change. This can make revenue difficult to predict. In general, it’s a good idea to diversify your services and payer mix to hedge against changing reimbursements.
6. Build patient demand
It used to be that physical therapists could rely on a steady supply of physician referrals for patients. That’s no longer the case. Today, physicians are primarily sending referrals to hospital-owned and physician-owned clinics.
This transition has been difficult for many practices, but to give up hope would be a disservice to our patients. Instead, practice owners must shift their thinking in terms of how to acquire patients.
You have the power to go out and build patient demand for your services. To get patients for yourself, without relying on doctors to refer. Public demand for physical therapy is growing, largely due to aging baby boomers who are staying active later in life than previous generations. Practice owners need to get strategic about capturing the existing demand in their market.
Building patient demand enables you to focus on higher-paying patients. When you have a large following of interested and engaged prospects, you can drop lower payers and increase your revenue threshold. Plus, you’ll have an engaged group of followers that you can target when you have new services to offer.
Patient Demand Is Key to Increasing Revenue Per Patient
The more that you focus on building patient demand, the larger of a list you will gain, which you can continue to engage over time. With more people aware and interested in your services, you’ll gain the flexibility to:
Increase revenue per patient and treat better-paying patients
Rapidly create interest in new services
Fill your schedules so you can hire and expand
One important note on hiring: A lot of practices are struggling to hire because they can’t keep up with therapist salaries offered by the competition. Keep in mind that a growing practice with healthy finances and a steady flow of patients will be able to pay better wages and will be more attractive to therapists.
A key part of your role as a practice owner is to identify ways to build patient demand in order to create consistent patient volume, increase revenue per patient, and attract/retain clinicians.
What questions do you have about how you can increase revenue per patient and build patient demand?
Why Every Cash Based Practice Needs a Strong Marketing Strategy
Whether you’re a cash-based practice owner selling physical therapy, chiropractic, or integrated care services, you want to help as many people as possible. But with so many options for medical care, it can be difficult to stand out and attract new clients. If you run a cash-based practice, or you’re thinking of switching to a cash-based model, marketing is even more important.
There are a few reasons why it matters so much for cash based practices to develop a strong marketing strategy.
First of all, cash based practices or out-of-network providers need to put a big emphasis on marketing since they can’t get patients through insurance companies.
Cash-based practices need to work twice as hard to convince people that their practice is the right one to meet their needs.
After all, you’re asking people to pay for your services upfront and out of pocket. But if you can reach the right people with your marketing and effectively demonstrate the benefits of your services, you can run a successful cash-based practice.
Top Marketing Strategies for Cash Based Practices
In this section, you’ll learn successful strategies for marketing your cash based practice. There are both online and offline strategies.
The Old School Way: Marketing Your Cash Based Practice Offline
Before the Internet, marketing was done differently. Think printed signage, direct mail, newspapers, radio, etc.
It’s great to bring some of those elements back into your modern-day marketing. But as cash based practice, it doesn’t make sense to spend a lot of money on branding that doesn’t generate measurable results. Here are some ideas that will go a long way in building stronger connections with your patients.
Mail Hand-Written Notes
Hand-written welcome notes when a new patient joins your practice can go a long way in building patient loyalty and retention. You can also send hand-written thank you notes to referral sources to build continued goodwill.
Yes, these things can take time. But, how much is a healthy and sustainable relationship with your patients worth?
To save time, there are print and direct mail services that can write and mail hand-written notes for you. A quick google search for ‘Send handwritten notes’ will generate several options.
Network with Referral Sources
Building relationships with other healthcare providers can be incredibly beneficial for cash based practices. For instance, if you’re a physical therapist, you can build referral relationships with chiropractors, massage therapists, local gyms, or local employers. Attend local events, join professional organizations, and offer to give workshops for referral partners’ clientele.
The New School Way: Marketing Your Cash Based Practice Online
Online marketing is where you will want to focus the majority of your marketing efforts. Online marketing makes it possible to measure the results of your marketing and ensure you’re generating a strong Return on Investment (ROI).
Email Your Patient List
A past patient list is your most valuable asset. These are people who already know, like, and trust you. With a little bit of outreach from you, they are likely to return for more treatment the next time they have any pain or conditions you treat.
To save time and get the most out of email, you’ll need a software platform that automates email. With email automation, you’ll be able to:
Send an indoctrination email sequence when someone becomes a new patient
Send nurture email sequences to your past patient list
Automatically trigger email conversations when someone interacts with your website or online content
Focus on Patient Educationin Your Content
Across all your marketing channels, you want to focus on patient education. Patients who understand the benefits of your type of treatment are more likely to choose your practice over others. They’re also more likely to become loyal patients when you build trust and credibility by demonstrating your authority and expertise. You can create educational resources like blogs or videos, and share them on social or via email to your patient list.
In educational content, use lay-person language rather than medical terminology. Focus on educating your patients about the different conditions you treat.
One mistake many owners make is to focus on branding their clinic and talking about why prospective patients should choose them. The moment you shift the focus from them and their problem is the second we see most people losing interest. Instead of highlighting what you do and how good you are, keep your patient and their problem the focus of your messaging. Make it all about them and their paint points. You can create content that educates patients about their condition and learn how your services can help them get back to normal naturally.
An example might be a video or article on the importance of a good posture whilst working from home and best practices to optimize the work-from-home setup. The goal is to provide value and educate. Again, this is a great way to engage your patient base and to make sure your practice is top-of-mind.
Encourage Patients to Post Online Reviews
Encourage satisfied patients to leave positive online reviews about your practice. This can help you attract new patients and establish trust with potential clients. When a patient graduates from their Plan of Care, this is a great time to email or text them asking for an online review.
Leverage Organic and Paid Social
Social media platforms like Facebook, Instagram, and TikTok can be powerful tools for reaching new patients. Share articles, videos, and testimonials about your services and interact with your followers.
Online advertising via paid social or Google is a proven way to attract new patients. You can test different types of ads and offers. The key is to ensure that you’re generating a strong Return on Investment (ROI). So you need to be able to track results from online advertising, from leads to paying patients. Use patient-centric language and direct response copy that includes a call-to-action (e.g. register for workshop, book an appointment, watch video). The goal of your ads should be to drive people into your clinic and generate new patients.
Optimize Your Website
A professional website can help you showcase your services and reach new patients. Make sure your website is user-friendly, easy to navigate, and optimized for search engines. Again, keep the focus on educating patients and illustrating how your services can transform their lives.
How A Patient Demand Platform Can Help
Adding both off- and online marketing strategies to your workload may seem time-consuming, but it’s key to running a successful cash based practice.
Leveraging a Patient Demand Platform streamlines and optimizes every marketing touchpoint with your clients — from attracting new leads, to converting leads to patients, to reactivating past patients, and measuring your results.
With a Patient Demand Platform, you can:
Reactivate past patients with pre-written, automated email and SMS campaigns with just one click
Reach your target audience with digital advertising campaigns
Attract new patients with educational workshops and online ads
Make it easy for your staff to follow up with leads at the exact right time with pre-populated task lists
Track ROI so you can do more of what works, with done-for-you reporting
Build your team’s marketing skillset with on-demand courses, training, and networking
It’s important to work through all the pros and cons as you decide whether to manage marketing yourself, hire a marketer, or invest in a marketing partner. Even if you do all the work yourself, you’ll ultimately need software to scale your marketing efforts.
Remote Therapeutic Monitoring for Physical Therapy
The healthcare system is evolving to offer more services virtually, and that extends to physical therapy. The 2023 updated Medicare rules from the Centers for Medicare & Medicaid Services (CMS) include changes that expand Remote Therapeutic Monitoring (RTM) treatment options.
Recently on the Grow Your Practice Podcast, Chad Madden interviewed Practice Manager Brad Saunders about his experience rolling out Remote Therapeutic Monitoring (RTM) in his practice. Watch the episode to learn the details of Brad’s experience with RTM:
Most of the recent changes in CMS guidelines (including a 4.4% reimbursement cut) are largely viewed as detrimental to physical therapists. However, the addition of Remote Therapeutic Monitoring (RTM) codes offers positive opportunities for physical therapists to add new revenue streams and improve the patient experience. Yet it is still relatively new, and practice owners are looking to understand how to adapt their practice to offer RTM services.
Continue reading to learn:
What is Remote Therapeutic Monitoring?
What RTM codes can physical therapists use?
The benefits of offering RTM services
One practice manager’s experience rolling out RTM across 10 practice locations
7 steps for rolling out Remote Therapeutic Monitoring in your clinic
What is Remote Therapeutic Monitoring?
Remote Therapeutic Monitoring is a way to contact, communicate, and monitor patients remotely outside of the clinic setting. It typically leverages the use of medical devices, apps, or online tools to monitor a patient’s progress using on-physiological data. RTM supplements in-person visits with follow-up conducted remotely via phone call or two-way audio-visual communication.
It has become popular since updates to CMS guidelines have made it an affordable offering to patients that reimburses therapists well. There are a variety of vendors and startups that offer apps, online tracking and other ways to communicate with and monitor patients remotely.
Imagine one of your patients has a home exercise program to treat back pain— they document and track their progress through your RTM app. One day they report increased pain. You can provide feedback remotely on adjusting the exercises to meet that particular need.
Everything is transparent between you and the patient. You log the days and times you interact with the patient. At the end of the month, you can bill out the care they received.
Not only does this provide more revenue and growth to your clinic, but it also provides increased flexibility and treatment options for your patients.
Remote Therapeutic Monitoring (RTM) Codes for Physical Therapists
According to a recent webinar where the CEO of Billing & Clinical Management Services shared 2023 Medicare changes, these RTM codes are payable for 2023:
98980 Qualified Healthcare Provider (QHP) interactive session 1st 20’; billed at the end of the calendar month
98981 QHP interactive session each additional 20’; billed at the end of the calendar month
98975 Initial set-up and patient education
98976 Device/supply-monitoring &/or alerts every 30 days Respiratory System
98977 Device/supply-monitoring &/or alerts every 30 days Musculoskeletal System
Important things to know about each code include:
Codes 98980-98981 cannot be billed for services < 20 minutes
Codes 98975, 98976 and 98977 can only be billed if the device used is defined by the FDA as medical device; it does not require specific FDA approval
Codes 98975, 98976, and 98977 will not be paid unless monitoring is ≥ 16 days
PTA/OTA Payment Differential applies only to 98975, 98980, & 98981 All therapy licensees may provide RTM services, but CMS did not stipulate the supervision level for assistants
Remote Therapeutic Monitoring (RTM) Benefits
Remote Therapeutic Monitoring offers all parties new opportunities and options. The key incentive for therapists is the ability to create a new revenue stream to augment your existing services. Other benefits include:
1. Create new revenue streams
RTM codes give you more services you can get paid to treat through Medicare and other payers. As Medicare cuts continue, RTM offers an important measure you can take to retain and grow revenue.
Additionally, therapists can see more patients when they meet with some remotely.
2. Create flexible options
Remote therapeutic monitoring was initially created largely in response to the pandemic. When patients can meet virtually, the risk of spreading disease goes down. But there are other benefits to meeting remotely besides disease prevention.
Patients are busy. They work, travel, or don’t like driving to the clinic more than they have to. Remote Therapeutic Monitoring gives them more control over how they receive care.
Perhaps a patient decides to vacation for a few weeks. Or, a patient works so many hours and wants to spend their little free time at home. Now they can receive care remotely.
Flexible options open up more opportunities for patients and for therapists. This flexibility becomes a value add for your clinic that makes you more attractive to prospective patients.
3. Offer enhanced care
With RTM, patients feel a sense of security, and closeness with your care, improving the therapeutic experience. That’s because you can offer real-time responses to any questions or issues that arise. So even though you’re communicating remotely, you can provide more consistent care.
Physical therapists can use the data collected to give them your best care and direction. For example, as they adjust exercises after communicating with a therapist on an app, they can experience progress faster.
4. Strengthen accountability
If patients aren’t motivated to heal, it will be impossible to see improvement. That’s why a therapist needs to encourage their patients and uplift them as they work to reach their goals.
RTM offers accountability. Physical therapists and patients have clear data that tracks exercises and follow-through.
5. Increase billable hours
Since a good RTM app or software can track and log hours, clinics can bill for more time spent on care outside of the clinic. With remote care, therapists are not limited to time and location compared to a physical location.
Physical therapists can provide documentation and transparent information on the care they provide.
6. Offer more affordable options
Not everyone can afford the amount of care they prefer. However, patients can now overcome many of these barriers, whether it’s an insurance limitation, financial, or an issue of time.
RTM offers affordable and convenient options for patients. Therapists can increase accessibility, offering more care to more patients. As a result, they open their clinic to more billable hours and impact the community.
One Practice Manager’s Experience with Remote Therapeutic Monitoring (RTM)
When Brad decided to implement Remote Therapeutic Monitoring this year, at first he didn’t where how to start. It was fairly new, but he knew he wanted to do it after CMS guideline changes.
He said, “…we started in the springtime to investigate some different options… [for] an interactive communication with the patient after they leave the clinic.”
He led the charge to beta test 3 companies for RTM. Two were through an app and one was an online tool. An important factor he was looking for was ease of access for the therapist, to avoid overburdening staff.
With 90 team members across ten sites, he knew this would be a significant shift for everyone. He wanted to be able to offer RTM without making it taxing on the the therapists. He knew the benefits would outweigh the initial transition if he could find the right tools.
One option he found compelling had a special wearable device for patients that can track exercises and movements. But with associated costs, time, and logistics that come with a unique device, he shifted to something that fits his practice better.
Brad hired a licensed clinician remotely to support RTM service calls and two-way visual audio communication through the app. She ensures patients are compliant and she reports back to the clinic.
Since then, he has rolled it out to all 10 of his practice locations. A majority of patients, about seven out of ten, now utilize RTM care. It brings more clinic revenue, an improved patient experience, and helps grow the practice.
Through small steps, Brad and his team have used RTM to provide the physical therapy of tomorrow.
7 Steps for Rolling Out Remote Therapeutic Monitoring (RTM) in Your Clinic
Remote Therapeutic Monitoring is in an early stage within our field. However, if you adopt it now, you’ll gain a first-mover advantage and be able to increase revenue while providing more care and options to your patients.
That being said, rolling out RTM requires some creativity and research. Here are 6 steps to take to roll out Remote Therapeutic Monitoring in your practice.
1. Collect info from your staff and patients
As you’re researching RTM technology options, work with your staff to identify the criteria that will work best for your team. Ask questions, such as: Should you communicate on one app? What should you track? How often should you communicate, and with what boundaries? Write down a list of these questions and answers to identify the right app when it’s time to look.
Research what your patients need. What are their most common concerns? What is the popular positive and negative feedback you receive for the clinic? Develop an RTM program that can address these gaps.
2. Is the program user-friendly?
Ensure you pick something your patients can navigate easily and get started without a steep learning curve.
The app should also be enjoyable to use. If there’s a lot of friction involved, users won’t spend too much time on it and will avoid using it again.
3. What languages do your patients speak?
RTM is a valuable care to add to your clinic because it provides therapy to more people. Whether it’s because of cost or time restraints, patients can choose your practice because it fits their needs.
If your RTM only serves those who speak English, you can’t help others who speak another popular language in your region.
If there are two contenders and one app offers other languages, you can care for more of your patients.
4. Do you need special devices?
Can the patients download it on their phones? If they can, is it available on most phones? Research and pick the app that provides service to most patients.
Phone apps offer many advantages, like using already-existing wearables. Imagine if your patients could use their smartwatches or phones to track the needed data.
If you choose a particular wearable, consider the additional costs and management. If your clinic decides to purchase devices, it also involves patients returning them on time if they’ve ended their care.
5. How will you make it transparent?
Since RTM is part of your care and, therefore, part of billing, everything should be documented and trackable.
Great RTM software gives you the tools to document your care. When patients see the record, they can reference interactions. You can provide a more positive experience when patients visit a tangible logbook of what you’ve provided.
6. How does it fit with your billing?
Remote Therapeutic Monitoring is another revenue source that can grow your practice. Analyze your current organizational model, like how you bill and your primary sources of revenue.
Then, find the best pricing structure for your RTM. Ensure you review insurance requirements and consult your billing company for the best strategy.
Afterward, pick a few apps that fit your model. Ask for demos and test each app out. Be very specific and ask any questions or scenarios that come to mind. It’s the best way to get a feel for the apps before you commit.
7. Market your new RTM services
Once you implement RTM, you’ll want to spread the word to drive patient visits.
Adding new services is a great way to increase patient visits. Run marketing campaigns that promote your new services to past, present, and prospective patients.
The Growth Advantage
Those who adopt new technologies will always be at the forefront of innovation. When a clinic leads the charge, they reap the rewards. Patients spread the word about your care. And through word-of-mouth, you can grow in your region.
Not only can your practice thrive because of high satisfaction, but also from additional revenue streams. Remote Therapeutic Monitoring is an exciting method of care that benefits everyone.
Summary
RTM monitors non-physiological data as therapists communicate with and monitor patients outside of the clinic.
The care offers many benefits, like more billable hours, remote team possibilities, better data to provide the best care, and increased patient visits. Physical therapists have more information to provide real-time guidance to their patients. And their patients benefit from direct access to their clinic from the comfort of their homes.
As clinics pursue Remote Therapeutic Monitoring, they can research the best apps and find one that fits their needs.
Once you launch RTM, use a patient demand system to easily market your new services.
Want to start generating consistent patient visits today? Learn how Breakthrough’s Patient Demand System makes physical therapy marketing easy.
