What to know about the No Surprises Act and Good Faith Estimates. How to prepare for medical audits.

No Surprises Act, Good Faith Estimates, And How to Prepare for Audits

In a recent podcast episode, Breakthrough Founder Chad Madden, MSPT speaks with Mary Daulong, PT, CHC, CHP, President at Business & Clinical Management Services, Inc. (BCMS). Chad and Mary discuss what you need to know about the “No Surprises Act” and Good Faith Estimates. Mary and her team have worked hard on providing resources to help PT practice owners comply and thrive in the new regulatory landscape. 

Who is Mary Daulong?

Chad: Mary is the Queen of Compliance. She has more than four decades of private physical therapy practice experience. And I want to compliment and thank you for keeping us legal, compliant, and ethical.

Today, we’re talking about the “No Surprises Act,” which became effective as of January 1st, 2022. It’s being discussed in all of the online group forums at essentially every physical therapy or healthcare provider website that I’m on. There’s a lot of confusion about this new legislation amongst owners. Can you give us a summary of what it is?

Part 1 of No Surprises Act: Disclose Out-of-Network Charges at In-Network Care Facilities

Mary: Well, the “No Surprises Act” was a surprise, right? When it was first contemplated, it really was to protect patients from having “surprise” bills. Say they went to an in-network hospital for surgery, but there was an assistant surgeon or maybe an anesthesiologist there who wasn’t in-network. And as a result —surprise — the patient gets billed at out-of-network rates. That’s what part one of the “No Surprises Act” addresses, and I’m in favor of that. But it has kind of ballooned from there.

Part 2 of No Surprises Act: Application to Private Physical Therapy Practices

Mary: The idea in itself is good, but the dispute resolution system really doesn’t lean towards the provider. So if the patient complains about the bill in this process then you have arbitration, where someone decides what the fair amount is that the patient should pay. And that doesn’t always turn out to be favorable for the provider, as you might guess. Also, we have a lot of PTs who are out-of-network because they accept cash, and we don’t have any clarification about whether this will implicate them, but it could.

On “Good Faith Estimates”

Mary: This is the part where we’re all pulling our hair out and saying, you gotta be kidding me. Recently, I got a text from one of my dear clients that said, “I’m just going to sell my practice. I provide the services, I do the billing, I do all the administrative tasks. I can’t add this to my things to do.” And we’re hearing this all over. People are very frustrated. 

So, what does it mean? Basically, therapists have to tell patients who are uninsured—as well as those who are insured but choose to self-pay—what our best estimate is for how much the service is going to cost. And because we have repeat services, that makes it very, very complicated.

How to Make this Information Public

Mary: One thing we do know absolutely for sure is that we have to post a notice with all the information about good-faith estimates, timelines, and dispute resolutions. And that’s the easiest thing we have to do. The notice needs to be posted in your clinic in a prominent area, where a patient would be likely to see it. It needs to be posted in areas where you collect for services rendered or do billing. And it needs to be posted on your website. (CMS provides a standard form for good-faith estimates here and details on what should be included in the notice here.)

Chad: What exactly does the notice need to say? 

Mary: The notice is for people who are uninsured or who were not using their insurance—with the exception of federal payers. It basically says that we’re required to tell them what the services for episodic care are expected to cost. I’d suggest basing it on a plan-of-care period, because you might change things at that point. And you can certainly charge them less than that. But you have to tell them that if the estimate is exceeded by $400, they have a right to dispute it. And you have to tell them how to dispute it, and who to contact. So it’s a simple notice; that’s the most clear thing. What becomes unclear is it doesn’t apply to patients who have benefits with federal payouts.

So as healthcare providers, we have to post this notice in all our clinics. It should be in the waiting rooms with licenses or certificates of occupancy or something like that, in prominent display. If you’re an owner and you don’t have it, you can contact BCMS for a template. Medicare also has a template on its website. So you can go to cms.gov and they have a “No Surprises Act” webpage and their own template as well. Number one on everybody’s checklist is we have to get that done.

How to Train Your Staff on the No Surprises Act

Chad: The next thing is that we really have to train our staff, especially reception. If somebody asks how much this is going to cost, we have to be able to tell them.  Regardless of whether they’re in-network or out-of-network. Is that true?

Mary: That’s right. First, we ask if they’d like to file insurance. If not, we’re required by federal law to give them a good faith estimate for the services that we would render for this condition.

Chad: At my practice, we’ve been doing cash pay. I’m guessing our rate is exactly $100. It might be $104. And we’ve always said, $100 per visit. Is that sufficient? Or do I need to say, you’re coming in for an ankle sprain, and that’s likely going to be six visits, so $600. Or: you’re coming in for a whiplash injury or something like that, and that’s going to be 16 visits, so that’s $1600.

Mary: Right. They created “required elements” for the good faith estimate form. So what you have to do is tell them how much it’s going to cost. If you’re flat-fee, or if you do fee-for-service, or whatever, you’re going to have to make sure your estimate gives you enough latitude to not go over by $400. On the form we have, it will give you some options. The thing is, you have to identify what you’re doing. This is the hidden consequence that we’re going to have to deal with. For years, we’ve tried to discourage third-party administrators and payers from saying they’re going to authorize X number of visits or X number of CPT codes. Are we supposed to always have a crystal ball to know exactly how we’re going to treat them? We don’t, so that’s problematic for sure.

Good Faith Estimates Should Mirror Your Plan of Care

Regardless of how you’ve set up your estimate, you’ll have to do some prognosticating about what you’re going to need from the patient. So the more inclusive you are, the better. But the important thing is that the good faith estimate really mirrors your plan of care. If they’re going different directions, that’s a problem. And if you decide the patient isn’t responding well, and you want to change things dramatically, then you have to go back. But if you’re under your estimate, that’s not a problem.

When you evaluate somebody, that’s when you determine how you’re going to treat them. So it necessitates two good faith estimates. There’s one for the evaluation, and then you have to create another one because you have to give it to them in advance of treatment. Now, is there a consequence for not giving it to them in advance? If the patient says, “I want to be treated right now,” then it shouldn’t be a problem. Also, we don’t know yet what the penalties are because they’re not anywhere to be found. We don’t know if it’s fines, penalties, or administrative sanctions. But it’s the law, so we have to comply.

Show Intention to Comply

Chad: In your SIPA summary, you mentioned the importance of the intention. As business owners, we need to show that we’re attempting to comply with the law. What do you mean by that?

Mary: Well, there are some providers who totally defy what’s logical. When HHS tells you what should be in the notice and you choose not to include it, that’s pretty purposeful. You have to tell the customers that there’s a dispute resolution if it goes over by $400, and that applying for this costs $25. Those things have to be in the notice, or else you’re not compliant.This is especially for all of those who have been audited or are thinking that they want to protect themselves.

Green Envelopes: What to Do When You Get an Audit

Chad: So let’s switch over to the Supplemental Medical Review Contractor (SMRC) audits. What is that?

Mary: The notice comes in a notorious neon green envelope. Typically, it comes in the middle of an episode of care. It’s not uncommon for auditors to request one day to service records, maybe 30 or 40 charts. We’ve been flooded with people asking what to do for their initial evaluation.

Chad: Got it. So I get one of these fluorescent green envelopes in the mail. What should I do?

Mary: First, pull up all the resources in the SMRC packet. It tells you exactly what to do. We have one that says how to respond to a payer’s request for records. It’s quite lengthy, but it has some graphics, so it’s not terrible reading. Do not throw the envelope away. Read the letter, then read the letter again. Look at who’s sending it to you. Go through the SMRC packet step-by-step. You want your submission to be organized, legible, and easy to follow.

At BCMS, we produced a template for a table of contents. We have a template cover letter and a form for identifying the billing personnel they asked for. We also have provided some clips from the Medicare benefit policy manual that says we don’t have to have long-term goals. If you need further support, you can email Alicia at [email protected]

Chad: Mary, Alicia, and the BCMS team have put together other training sessions for you that are highly recommended on billing and coding, and also on documentation. So if you’re looking for any of the resources that we’re talking about, you can email Alicia and she can set you up with that. And if you  contact Alicia, they’ll also get the FAQ for the SMRC audits, which is pretty extensive.

What’s Changes Can We Expect in the Future?

One final question for you here. And thank you for extensively reviewing the good faith estimate and also the SMRC audits, because I know a lot of owners are paying attention to those two things right now. Is there anything else in store for us as private practice owners in 2022 that you see coming down the pipe? Is there proposed legislation or anything like that on your radar right now?

Mary: Well, we all know the PTA payment differential is a killer, but I want to tell you, it’s not going away. Sorry if I’m the fun sponge on this, but our colleagues, the nurses, PAs, all of them have been dealing with this for years, if not decades. So it’s going to be very hard for us to say, “hey, this shouldn’t apply to us.” 

So let’s put our endeavors where we’re gonna get the least resistance. Let’s get rid of the plan of care certification. Let’s get general supervision across the board. Then we won’t have problems with somebody signing something that they’re not enrolled in. I’d encourage everyone to look at some of those important things. That’s my little soapbox.

Chad: I appreciate the look into the crystal ball, Mary, and into what’s coming down the pipe for us in the future as private practice owners. Another quick reminder: if you’re looking for any of the resources that Mary mentioned in this episode, you can email Alicia Mahoney, at [email protected]. You can also check out the BCMS website, BCMScomp.com. 

Well, Mary Daulong, Queen of Compliance, thank you very much for being here and helping us as private practice owners.

Looking for more resources to help you manage your practice? Visit Breakthrough’s Resources Hub for free content on marketing, hiring, financing, and more.

Practice Growth Plan

How to Make Next Year the Best Year Ever for Your Private Practice

The holidays are approaching and we’re all looking forward to a much needed break and time with family. But before closing out the year, I highly encourage you to spend time building your 2022 private practice growth plan. With patient visits starting to wind down, now is a great time to get clear on what you want to achieve next year. 

We recently hosted a Webinar on this exact topic, so this video will walk you through the entire strategy and plan!

Why Create a 2022 Private Practice Growth Plan?

Because if there’s one activity I’ve seen that separates successful practices from struggling ones, it’s this: Setting measurable objectives and creating a practice growth plan that gets you there. An astounding number of practice owners don’t go through this process. And they’re usually the ones left wondering what went wrong. 

As healthcare practitioners, we face many challenges associated with a broken system. But with a bit of planning and strategy, you can take control of your own destiny and build a legacy that lasts. 

It’s always important to have a clear plan, but this year it feels even more urgent. With high inflation and a competitive hiring market, our costs are higher than ever. There’s not much we can do about it. That means we need to get very strategic about what we can control: The amount of revenue we bring in. Follow the practice growth planning process below to develop your strategy for increasing top-line revenue. 

How to Create an Annual Practice Plan

To do this process right, you should dedicate around two full workdays to building out your practice growth plan. If you have a leadership team, you can work through this process together.

I’ve created a tool to help guide you through annual planning: The Ultimate 2022 Planning Tool. Download the tool and sign up for the 2022 Planning Webinar, where I’ll walk you through how to best use the tool for your planning process. 

For any private practice, there are 3 pillars of successful practice growth. An effective way to begin is by assessing each of these key areas and determining what’s needed to achieve your goals in each one. 

3 Pillars of a Practice Growth Plan

1.Financial Plan

What are my projected revenues and costs? Do I need to make changes to increase top-line revenue? 

According to Greg Crabtree’s book, Simple Numbers, Straight Talk, Big Profits!, service-based businesses in the healthcare field typically have profit margins between 10 to 25%. The average margin in physical therapy is 14%. 

I prefer to aim for the high side of that range, and regularly see margins upwards of 20% in my practice. 

If your earnings are 10% or less, your business is at high risk. If this is you, then developing a strategy to improve profitability should be your #1 priority if you want to stay in business. 

To calculate your profit margins, subtract your costs from your earnings. Start by calculating these numbers for 2021, then project out to 2022. 

You can calculate total gross revenue by multiplying the number of treatment plans with treatment plan value. 

Expenses are derived from personnel, billing, marketing, space, office expenses (e.g. office supplies), and clinical expenses (e.g. medical devices). 

Once you’ve calculated 2021 earnings, it’s time to forecast 2022 profitability. Ask yourself questions like: 

  • How many treatment plans do I expect?
  • Has the value of a treatment plan changed?
  • How can I increase the value of each patient? 
  • Do I need to make any personnel changes?
  • What is my marketing strategy and what ROI can I expect? 
  • Are there any changes in financial expenditures? 

 2. Personnel and Hiring Plan

Do I need to make any personnel changes to grow profitability? 

If you have a full schedule, a waitlist, and space, then guess what — it might be time to bring on another clinician. Bringing on more clinicians enables you to serve more people in your community and increase profitability.

It’s a competitive hiring market, and there are a lot of changes in supply and demand in the workforce right now. This doesn’t mean you shouldn’t hire right now. You likely only need one or two new clinicians. Even in a competitive market, it’s very possible to find a great fit. 

Follow best hiring practices: In your job ads and interview process, be very descriptive about what you’re looking for in the role. Make sure it’s a good culture fit and paint a picture of growth at your practice. Learn more about hiring mistakes and best practices in the upcoming 2022 planning webinar

3. Private Practice Marketing Plan

What strategies and systems will I use to increase revenue? 

Your marketing strategy is your biggest lever for increasing top-line revenue. When evaluating what changes you want to make to your marketing strategy for 2022, I recommend asking yourself the following questions: 

  • How will I attract more patients?
  • Can I increase per patient revenue? 
  • What’s my plan for reactivating past patients? 

As you answer these questions, consider: What goals do you want to achieve in each area? Which tools, systems and channels will you use? How much ROI can you expect from each strategy? 

To keep your practice profitable and growing, you should spend around 10% of your total revenue on marketing. For established practices, you can split your marketing budget between attracting new patients and reactivating past patients. Newer practices (under 2 years old) will want to allocate the majority of marketing budget towards cold traffic and spend a smaller amount on engaging past or existing patients. 

Ready to start planning for 2022? Let’s chat about partnering and automating your patient demand: head over for a free consultation

patient centric marketing

When talking to potential patients, most Physical Therapy practice owners focus only on their programs and products. They spend all their time talking about the PT services themselves, but by doing so, they’re neglecting a huge piece of their marketing strategy: the takeaway

In other words, what is the audience going to take away or remember about your message? What knowledge will they gain? If there’s nothing adding something worthy to their lives, they’re not going to act on your message, and they’re likely not going to remember it. 

You don’t want to get hung up on the details or start talking in professional terminology that only someone in the industry would understand, but this is the reality for a lot of PT practices when they’re trying to market themselves. It’s hard for them to step outside of the office and look inward from a patient’s perspective to develop messaging that speaks to the patient’s understanding of their own needs.

How can you shift from Physical Therapy Medical talk to delivering tangible, honest value to prospective patients? It starts with creating your unique value proposition and learning how to translate it into every component of your marketing strategy. Let’s dive in.

What is Patient Centric Marketing? What does it mean to be truly Patient focused?

Patient centric marketing flips the script and prioritizes value to the patient. Instead of talking about you, it pulls the patient into what you can do for them. You’re not just sharing content or creating workshops that will help the patient; you’re also trying to put the benefits into a perspective that the patient can understand, digest, and decide if it’s right for them.

Patient Centric gives a nod to fully immersing the patient in the experience, from their first click to the website experience to the way you navigate them through the funnel. It ensures that the view of your brand will be all about healing and helping the Patient recover.

Physical Therapy Medical Talk vs Patient Care

Promoting a Service vs. Promoting Value

Before we get into specifics, let’s visualize a quick example: 

If you’re shopping for a car, and the salesperson is telling you the car has a powder coat paint finish, you might politely nod in agreement. But when they tell you that the powder coating is more resistant to chipping, scratches, and wear and will keep your car looking like new for longer, then you might start tuning in.

It’s a similar story with physical therapy marketing. PT practice owners tend to focus too much on the service side of the business rather than the education.

And it’s through education that your audience will start to connect their own dots, draw their own conclusions, and decide to take action without you having “sold” them anything. 

Physical Therapy clinic owners often invest in self-serving marketing. They try to promote a program, a Physical Therapy workshop, or a new product, and even though these things will benefit the patient, the messaging is ultimately focused on the practice. 

To do this well, PTs need to first identify their value to the patients. You can help them eliminate pain, avoid expensive surgery, live a better quality of life, heal from an injury—there’s a lot of value in working with a Physical Therapist over another type of healthcare professional. 

But first and foremost, you need to translate this value in a way that patients can relate to. 

Finding Your PT Practice's Value Proposition

Finding Your PT Practice’s Unique Value Proposition

By definition, a unique value proposition (UVP) is a clear statement on the benefits of what you offer, how you solve your patients’ needs, and what makes you different from the competitors. These are what make your PT Practice truly patient centric.

In physical therapy, every practice should have two value propositions:

The first is what sets them apart from other healthcare options, such as surgery, a general practitioner, or a chiropractor. In a recent webinar, I asked our attendees (who were all physical therapists) where they thought people would go if they had back pain. Around 90% of them said a chiropractor, and that’s a big indication that we haven’t done a great job in building the value of what we do to become a go-to choice for the conditions we treat.

The second value proposition that PT practices should create is what sets them apart from other PT practices in the area. People have options, and the few that do choose PT as their treatment of choice will need to know why they should select you versus a POPTs or HOPTs practice, or even another private practice nearby. 

Take time to flesh out ideas that not only make you unique but also valuable in the eyes of your patients and prospects. These ideas aren’t necessarily something you’ll show to the public, but you can use them when developing your marketing messages and test your content against them. 

If you find that your Physical Therapy marketing isn’t reflective of your value propositions, then you’ll know you need to do some tweaking.

4 Ways to Promote Your Value in Your Direct Access Marketing

We’ve given value a face and a name, so now, let’s explore some ways you can make your value tangible for your patients. Remember, the typical audience isn’t going to understand PT terms and procedures the same way you do. It’s not their background, so they need an easy way to put your benefits and value into perspective from the outside looking in.

Here are four common Patient Centric PT marketing tools that are ideal for highlighting value:

Physical Therapy Workshops

Physical Therapy Workshops

Seminars, webinars, and workshops are too often synonymous with sales pitches, and that shouldn’t be the case in physical therapy. 

Your overall goal, of course, is to get more people to learn about your practice and the services you provide. But ultimately, the seminar itself is about the patient. You’re sharing information about a problem they’re experiencing, tackling potential causes of that problem, helping them understand ways to prevent the problem from recurring, and most importantly—proposing a clear solution that will solve their problem.

Your seminar should be designed so that no matter how many people sign up for a program of care or call for more information, every person will be able to walk out of your doors with something helpful, insightful, or important and not feel like they’ve wasted their time listening to a sales pitch.

Content Marketing

Content marketing is the collective term for blog posts, social media posts, videos, e-books, and all the other content you create and publish to promote your practice. This is by far the easiest and most effective way to promote your value because your content doesn’t have to say anything about your practice or services. 

The main goal of content marketing is to position you as the subject authority in your area. People who read your content will learn from what you’re sharing, and they’ll know who to turn to if they ever have a problem you can help them solve.

Added benefits include increasing brand recognition, improving relationships with your patients and community, building trust, and giving you something to use to start conversations with your prospects. 

Good content isn’t overly salesy in nature but rather focuses primarily on the educational aspect of marketing. Let people draw their own conclusions from it, or include a call-to-action that encourages them to reach out for more information.

Online Reviews and Testimonials

Online reviews are powerful in patient centric marketing. Studies show that 84% of people trust online reviews as much as a referral from a friend or family member, while 82% of consumers read reviews before making a purchasing decision. 

The interesting part here is that your patients are the ones who are delivering your value proposition; not you. They’re sharing their own experiences with your practice, how you helped them, why they chose you, and why they’ll do business with you again. 

Patient Retention Marketing

Retaining Physical Therapy patients is only possible when you’ve done a thorough job of promoting value throughout their experience. When you start a patient retention or reactivation marketing strategy, you should continue sharing valuable content and education that will remind them of how much you helped them in the past. 

Similar to the influence of online reviews, patients who continue to seek your services after completing a program are living proof of your value. They achieved great results, they’re living a higher quality of life, and they won’t hesitate to visit you if they get injured again or experience a new problem. 

In Closing

The biggest takeaway in pivoting  is that you not only need to show your prospects how you’re different but also why that difference is important. They’ve been sold enough by doctors and other providers, and this is your chance to step up and show them there’s a better way.

For more direct marketing access insights and patient centric marketing strategies, head over to our Physical Therapy Marketing & Business Resource Center to check out our newest online training.

growing your practice

From 1929 to 1939, the world endured a severe economic downturn that would later be referred to as the “Great Depression.”

This economic turmoil resulted in a difficult period for most companies…but not all of them.

Some brands where able to make great strides during this time. These successful companies were different sizes and came from different industries. What they had in common was the fact that they kept investing in growth while others cut back.

Right now, the entire world is dealing with the effects of the coronavirus pandemic. So we are sharing 3 tips for private practice owners looking for ways to grow their practice during hard times.

Trim the Fat

Now is the time to be brutally honest about the necessities in your business…

And to cut anything that is unnecessary.

This sounds simple, but it’s a task that many business owners struggle with. Particularly when it comes to making hard decisions about personnel. Or past investments that have yet to produce a return.

Now is the time to take a deep dive into your numbers to find areas to cut back.

Marketing expenses are often the first thing put on the chopping block when it comes to trimming the fat. But eliminating marketing will also impact your revenue and may slow your recovery. Keep the big picture in mind before making the call to stop or cut back on marketing.

Realize that Everything is Cheaper Now

Be fearful when others are greedy. Be greedy when others are fearful.

Warren Buffet

Over the past few months, the hiring market for PTs has completely flipped. In the past, some owners struggled for months to fill PT job vacancies. Many private practice owners expressed how hard it was to compete with HOPTs and POPTs practices when it came to hiring new grads.

Now, that situation has flipped. And the same is true for the real estate market. Now is a great time to hire new PTs and/or renegotiate the terms on recurring expenses like rent.

Plan Ahead Now

No one can predict exactly what will happen in the economy. But, it’s a given that there will continue to be cycles of growth punctuated by periods of decline.

In the last two decades, the U.S. experienced recessions in 2001, 2007, and right now in 2020. And there will likely be another recession approximately 10 years from now.

Again, the exact time and circumstances are unknown, but that doesn’t mean you can’t plan ahead.

One exercise is to develop a “Grey to Black” plan for your practice. This Grey to Black plan is a financial forecast that looks at what would happen if you lost 25%…50%…or even 100% of your revenue.

How much time could your practice remain open? What steps would you take to minimize the damage?

Taking the time to plan ahead now will help you make better decisions during an actual crisis. Don’t let yourself be caught off-guard a second time.

Right now, times are tough for businesses. But growing your practice is still possible.

PTs provide a vital service helping people in pain. It’s important that PT owners do what they can to ensure their practice survives hard economic times so you can continue to provide this service to your community.

We’ll be going more in-depth on the topic of Growing Your Practice During Hard Times during the upcoming Breakthrough Virtual Summit.

Tickets for the Summit are free, and the event will take place 100% online. Click here to reserve your spot.

PT Hiring Process

Improve your management style, get your team aligned on goals, and create more time freedom when you start using scorecards as part of your hiring process.

Click here to grab a free copy of the scorecard used in this training. 

A scorecard is a personnel tool that you’re going to use in all of your personnel decisions. Hiring, incentivizing staff, firing, promotions, et cetera. 

Everything revolves around the use of this tool. 

Growing your practice beyond a certain point requires having the right team members on your staff. Autonomous, solution-oriented employees who get stuff done without hand-holding and micromanaging. 

Problem solvers who are fun to work with and who help your business hit new milestones and revenue goals. 

The ability to effectively hire is a skill most Practice Owners overlook. But its a skill that differentiates owners who are constantly stressed-out, overwhelmed, and time-starved…

From owners with an enviable level of time-freedom and the ability to take time off from their practice WITHOUT everything falling apart. 

The training above contains my “Scorecard” Method for hiring and managing PT staff. 

If you want to attract, train, and motivate rockstar private practice employees…

Who take problems off your plate and make life easier for you…

Then be sure to check this out.

And also download a free scorecard template to use at your practice. 

In the past, we’ve discussed the state of PT and our aspirations to Flip the Pyramid and make conservative care the first choice for people in pain – ahead of injections, medications, and surgery.

But the current state of PT looks a lot different than it did just a few months ago due to the COVID-19 pandemic and the chaos and uncertainty it’s created in the world.

The truth is that similar events and challenges have occurred throughout history. Case in point: just 12 years ago, the financial crisis of 2008 hit and shook PT practices everywhere. At Madden PT, we were already battling encroachment from HOPTs and POPTs practices and ended up losing $98,000 in a single quarter. Back then, we were focused on physician referrals, but that crisis made us realize the need to diversify our income and create systems that would put us in a much better position during a future crisis.

Understanding these events can help us to better shift our thoughts and behaviors that will allow us to thrive now and in the future.  

Exploring the Transition Curve

In the past, PT owners have typically followed a transition curve, where we start our PT practice with uninformed optimism that turns into informed pessimism when something goes wrong or business doesn’t come as easily or quickly as we’d hoped. Soon after, a crisis of meaning follows, where we explore what we really need and want from our practice. This leads to either crashing and burning or informed optimism, in which we are more aware of what it’s going to take to be successful and have new hope for the future of the practice. 

PT during Covid

But today, the transition curve looks much different. We’re now on a cycle of market emotions.

But now, just within the last week, we’re starting to see the bounceback. Patients are trickling in once again. They’re wearing masks and acting with caution, but we’re finally starting to see some hope for normalcy. 

Learning How to Pivot (and Pivot Quickly!)

Just two months ago, our goals at Breakthrough looked drastically different than they do now. As a rule, our goals have always been to help private practice PT owners become successful while helping our own patients get back to normal naturally and make PT the first option they think of when they’re in pain.

We haven’t lost sight of those goals, but we immediately shifted our focus so that we could help other owners and the PT industry at large survive this crisis. We’re doing this by focusing our content and training on things to do during the pandemic, such as where to turn for financial relief and how to stay connected to your team and patients (even if you’re not treating them at the moment). 

Just like we have four seasons in a year, we also have four “seasons” of the economic cycle in a given year. And it’s important to understand these seasons so that you can be in the best financial position when the market starts going up again. There will be an “end” to this pandemic, and when that end finally comes, PT owners should be prepared for the rebound.

The State of PT and the One Goal to Set Moving Forward

Bob Kowalick from Revenue Cycle Solutions shared some interesting stats with us recently on the financial state of private practice. His research found that about a third of practice owners are not in a financial position to survive this crisis. They’re in the same boat with about 43% of small business owners throughout the country that are saying they’ll likely not be able to reopen their doors when the pandemic is over. 

For PT owners, avoiding this situation might mean not taking a salary for a little while. You still need a staff, a facility, and a way to pay for these things, so you might have to make the ultimate sacrifice. 

Kowalick also found that almost half of owners only have a partial financial bridge. Of those, the majority are about 5% off their goal. If they need $50,000 in total to make it through, they are likely just $2,500 short of their goal. Some may be able to cut enough corners to come up with what they need, but if you can’t, your goal should be to do what you need to do to get into this next group of owners—the 19%.

Roughly one in five owners have a clear financial runway to the end of this crisis. Those 19% are at a major advantage because they’re going to be able to advertise and gain market share when the majority of their competitors cannot. They’re going to be in a better position to rebuild and hire the best staff and continue to grow their practice, both now and when the pandemic is over. 

For the remaining 81% of owners, it should be the goal to become among the 19% that can weather tough storms like COVID-19 and be in a better position to continue growing. 

For us to do this during the financial crisis of 2008 and the following months, we shifted our focus to three things:

  • Marketing direct to the consumer to become less dependent on physician referrals
  • Learning how to influence your payer mix and build a financial bridge
  • Building a better culture through personnel

When the pandemic conditions started rising earlier this year, these are the same three things we focused on. That’s because physician referrals have been in a tailspin, along with declining reimbursements. And since many people aren’t hiring right now, we’re using this opportunity to attract top talent to the practice to create an optimal patient experience.

PT practice owners can put these same ideas into motion to become one of the 19% (and ideally turn that 19% into 100% by the next time crisis strikes). To start, you need to know where you are right now, then understand where you need to go. 

We have tons of resources available at Breakthrough University that can help you take the necessary steps to connect your present situation to your ideal destination― learn more about Breakthrough University today.

On a recent Breakthrough webcast, we talked about flipping the pyramid in the healthcare industry to capture more of the spend on health services.

Right now, about 72% of what’s spent on healthcare each year goes to surgery, injections, medications, and diagnostic imaging. Just 2% goes to physical therapy, occupational therapy, and speech combined. We want to be the number one skilled healthcare expert of choice, and to do this, we must become the foundation of skeletal and neurological health.

The recent pandemic has thrown a monkey wrench into this mission. Many practices are seeing declining appointments and revenues, which means you may not be helping as many people as you can. But if we’re going to push the PT industry forward and continue our greater objective to help people get back to normal naturally, we must survive the current crisis.

Let’s look at how you can do this on three different levels and be better prepared to help others:

Step #1: Managing Yourself

There’s a reason why airline companies tell you to put your own oxygen mask on first in the event of an emergency. You can’t help others if you’re not in a position to first take care of yourself. 

The times we’re living in are unprecedented. Many of us are experiencing extreme levels of stress and added worry about the future. It’s changed our entire way of living, even if it’s only temporary. If you’re not taking care of yourself first, it can put you in a dangerous position if you try to reach out and help others.

Right now, there’s a common fear of what this increased isolation will do to us as a society in the long term. Some people may not be mentally handling these changes well. The best thing that each of us can do is take care of ourselves so that we can continue to reach out and be valuable to others:

Sleep

Matthew Walker’s Why We Sleep is an excellent resource that talks about how sleep is a daily detox of the brain and the way it affects the rest of your health. Ideally, you can use this extra time away from work to catch up on sleep and build healthier sleep habits.

Eat Well

Prioritizing the right foods can help us take care of ourselves for the short and long term. Some resources to check out are The Switch, Boundless, and Peter Attia’s podcast.

Exercise

Exercise and nutrition go hand in hand for a healthy lifestyle. Take this time to build more exercise and movement into your day, even if it’s “just” walking. At the very least, it can help combat the effects of stress eating.

Meditate

Finding clarity and making mental space in your day can help promote positive feelings and crowd out any stress caused by the coronavirus. 

Socially Distance But Stay Connected

Socially distancing yourself doesn’t mean you have to cut all forms of communication. Stay connected with your employees, family, and even your patients via text, Zoom, phone calls, or social media to maintain the human element.

Step #2: Managing Your Family

We’ve talked about this before at Breakthrough, but if you’re not taking care of your family, you won’t be able to handle the highest responsibilities of being a practice owner. 

Staying on a schedule can help everyone in your home maintain a sense of normalcy. Also, showing your spouse, children, and even parents your love and gratitude can make a difference in the dynamics within your home. Gary Chapman’s The Five Love Languages is a powerful resource for helping identify ways in which we give and receive love that is well understood by others.

Step #3: Managing Your Business

When you and your family have put on your oxygen masks, you’ll be in a much better position to help your practice, employees, and patients. We talk a lot about the three pillars of a successful practice: Finance, Marketing, and Personnel. These pillars are just as important during the pandemic as ever, but the way in which you approach them may need to be adjusted.

Finance

You’ll want to focus on financial planning. How are you going to bridge gaps and survive until things get back to “normal?” Before the crisis, one of our top concerns was figuring out finances with declining reimbursements. Today,  a new challenge we have to factor in is what our income will look like based on grants, loans, and accounts receivables, as well as any new expenses you may have incurred due to loans, personnel changes, and potential vendor negotiations. One thing worth mentioning is that you may be able to negotiate some relief on your lease. Right now, not a lot of people are renting commercial property, and the last thing a landlord wants is to lose a tenant because they can’t afford rent due to closure.

Marketing

Before the crisis, one of the biggest marketing concerns was declining physician referrals. Many PTs are diversifying by going direct to the consumer and trying to influence their payer mix.

Staying in touch with patients will be key. Some practices may even consider offering telehealth options to give patients another option. The virus hasn’t taken pain away. If anything, it’s probably caused a lot of patients who were undergoing treatment to regress. Continue to provide value to your patients to stay connected.

Personnel

You should think through your current salary cap and how you can continue to employ your people and still be able to afford them. The PPP and the Cares Act offer some valuable help here, which we covered in an earlier blog post.

If you’ve had to lay off or furlough employees, you’ll want to consider how a reduced workforce will affect your ability to serve patients once you reopen. The good news is that not many people are hiring right now, so it should be relatively easy to build a pipeline of PTs and related personnel. Be transparent about your projections to rebuild and grow after the pandemic. 

We have a hiring course in Breakthrough University and other resources that support the three pillars of a successful PT practice. Visit LearnWithBreakthrough.com to learn more about Breakthrough University.

Physical therapy practices across the country are facing unique working conditions during the COVID-19 pandemic.

Some practices are closed altogether, while others are operating under limited conditions. In either case, the situation is giving way to several employment questions and potential issues. In addition, the federal government has rolled out a stimulus package available to small businesses under certain conditions.

We recently spoke with Scott Leah, an attorney who specializes in employment law, to answer important questions that will help PT owners make sense of handling employment changes during COVID-19. 

What Are the Two Types of Paid Leave?

Two new paid leave types have been introduced by the federal government: paid sick leave and the FMLA (note: the FMLA isn’t new, but the rules surrounding it have been changed during the COVID-19 pandemic).

Paid Sick Leave

Paid sick leave provides qualified employees with up to 80 hours of pay if they meet one or more of the following criteria:

  • They’re under quarantine
  • They’ve been ordered by a medical doctor to stay at home for a certain period of time
  • They’re receiving testing for COVID-19
  • They’re caring for a family member who is getting testing for COVID-19 or is under quarantine
  • They’re taking care of a child whose school or daycare is closed due to COVID-19 concerns

There are a few differences to consider when it comes to the amount your employees will receive. In some cases, they’ll be eligible to receive their full salary. Under other circumstances, they’ll get two-thirds of their normal salary. Employees must have been working for you for at least 30 days to be eligible.

There’s a lot we still don’t know regarding this pay—such as how employees can apply for it—and more details will hopefully emerge soon.

There’s also a provision for employers to get a dollar-for-dollar credit on their payroll taxes if they provide this benefit to their employees. Again, there are still a lot of unknowns about getting this tax credit, so it’s a good idea to bring this situation to your accountant. There will probably be a special form to fill out and documentation to provide before taking advantage of the tax credit.

Family Medical Leave Act (FMLA)

The FMLA has also expanded to accommodate more employees. Historically, most PT practices didn’t have to concern themselves with the FMLA unless they have more than 50 employees in a 75-mile radius. 

The FMLA provides up to 12 weeks of paid leave under new circumstances:

  • Caring for a family member
  • Caring for a child under the age of 18 because school/daycare is closed

The first two weeks are unpaid, while the remaining weeks are at two-thirds of the normal pay. Under the new law, the employee can get paid during the first two weeks using the new paid sick leave (which is 100% or two-thirds of their salary). They can also leverage any existing PTO, vacation, or sick time (although you can’t require they use their PTO).

The amount paid during the FMLA is a refundable tax credit, which is significant for small business owners. This means that if you pay out $1,000 in benefits and owe $750 in taxes, you’ll get a net of $250 back from the government.

What Are the Two Types of Unemployment?

Many practices are facing tough decisions in choosing to lay off or furlough employees. These are dire circumstances we’re in, and while you want to do what’s best for your employees that take care of your practice, you also want to do right by your practice.

The government is helping to provide small businesses with funds that can help them avoid both laying off and furloughing staff, including a stimulus package (which we cover in another blog post) and paid leave requirements for employees. 

The problem is that many practice owners may not be able to afford to keep all employees on long enough to take advantage of these options. Yes, you get back the money you pay for leave as a tax credit, but you have to be able to front the money first. 

In this case, many owners wonder which is more beneficial: layoffs or furloughs?

In a layoff, the employee is no longer working for your company, and they are eligible to collect unemployment. Furloughs allow the employee to remain employed and work on a reduced schedule (even down to zero hours per week). They’re still eligible for the paid leave options and benefits, and they should also be eligible for unemployment compensation. Once the pandemic conditions lift, they can come back to work and handle business as usual. 

The one caveat with furloughing employees is to check with your insurance broker to see how many hours an employee needs to work to maintain their benefits coverage. In some cases, reducing them to zero hours may not save their insurance benefits.

Can You Qualify for Unemployment as an Owner?

Unemployment is largely state-driven, so each state will have its own rules surrounding eligibility for unemployment. In Pennsylvania, the general consensus is that business owners are not eligible for unemployment benefits. 

In essence, unemployment is designed for employees, not employers. The idea is that if employers could receive unemployment benefits, then anyone could start up a business, fail, and collect benefits. 

An exception would be someone who owns a small portion of a practice that doesn’t have much say in how the business is run from day to day. Alternatively, if you’re a C corp, you may be able to file, as you’re not technically the “owner” of the company. These are rare cases, but they do happen.

However, we’re in unique times, so there’s a possibility that some states may allow small business owners to file for benefits. The best step to take is to work with an employment lawyer who can look at the specific state requirements and help you support your case. 

Finding Ongoing COVID-19 Support

We know these are challenging times to be a practice owner, and we’re committed to helping you get answers to your most complicated questions and navigate new legislation. Join our free Facebook community – Private PT Practices: Standing Up Through Crisis for more resources.

As many practice owners continue to struggle financially during the COVID-19 crisis, the new Paycheck Protection Program may offer a ray of hope.

The PPP is part of a $1 trillion+ stimulus introduced by the federal government that provides a financial cushion for small businesses in the form of a loan—some or all of which may be forgiven.

As you explore ways to pull your practice through declining revenue, the PPP should be among your options. Here’s what we know about the PPP so far:

What Is the Paycheck Protection Program Intended For?

The PPP was introduced as part of the larger CARES Act as a means to help small business owners continue to keep employees on their payroll, even if they had to bring business to a grinding halt. The alternative, of course, is to lay off employees, which would allow them to draw unemployment benefits. The goal is to continue to compensate employees through the PPP, regardless of whether there’s work for them to do. 

What Determines Loan Eligibility

To qualify for a PPP loan, you’ll first need to determine what your payroll costs are on a month to month basis. Then, you’ll multiply those costs by 2.5 to get the maximum amount you’ll be eligible for. You will need to provide supporting documentation of payroll costs so that your lender can determine your eligibility. 

Nearly every bank and credit union is now approved to issue PPP loans, but your own bank is the best place to start. It’s advisable to apply wherever you already have a strong banking relationship, as most banks are not taking non-customers for this loan. 

How SBA Loans Relate to PPP

The PPP is part of the larger CARES Act, and many small businesses may have already applied for an SBA loan in addition to the PPP. If you’ve already received an SBA loan, you should be able to roll that loan into your PPP. For example, if your PT payroll costs are $50,000 per month, and you received a $25,000 SBA loan, then your total loan amount would be $150,000 ($50,000 x 2.5 + $25,000). 

How Are You Allowed to Use the Loan?

Once you receive your loan money, you begin an eight-week period in which you must spend your loan. This period is also used for comparative purposes to determine how much of your loan is going to be forgiven. Ideally, a large part of this loan will essentially be free money for PT owners. 

The allowable use covers payroll costs and other operating expenses, including rent, utilities, mortgage interest, and debt service. You’ll be required to provide documentation of these expenses. During the eight weeks, the amount of loan money you spend on qualified expenses becomes the amount that is potentially forgivable.

How Much of the Loan Can Be Forgiven?

Once you have a potentially forgivable sum, you’ll need to calculate how much of the loan can actually be forgiven. To do this, you’ll compare your FTE from February 15 to June 30 to this same period one year ago (another option is to review FTEs in January and February before the pandemic began). You’ll also need to compare how much you’re paying in wages during this time compared to this same time frame a year ago.

This goes back to the PPP’s intention: to keep people on payroll instead of cycling through unemployment.  

The forgiveness process has yet to be defined, but you will need to apply for loan forgiveness. It’s advisable to work with your accountant to help you accurately calculate payroll costs that can affect your loan eligibility and forgiveness.

You can watch Bob Kowalick from Certified Reimbursement Solutions do a full training on PPP in the free Facebook community, Private PT Practices: Standing Up Through Crisis.

COVID-19 is on a lot of owners’ minds these days, and for good reason: it’s a threat to the health and well-being of our loved ones and the businesses we’ve worked hard to build over the years.

Many practice owners are struggling in different ways during the pandemic: cancellations might be at an all-time high. You may have had to lay off personnel to cut costs. The venues you relied on for your marketing workshops may have temporarily closed, which will impact your new patient flow.

At Breakthrough, we talk a lot about the three pillars of a successful private practice: personnel, finance, and marketing. These three pillars haven’t disappeared during this crisis, but the way in which you approach them has certainly changed. Let’s look at what you can do with each of these pillars during the COVID-19 crisis to help your practice survive the storm with as little damage to your bottom line as possible.

Fixing Finances

The majority of PTs are having dramatic reductions in visits, which means we’re also seeing a drop in how much we’re billing out. Most PTs we’ve spoken with have seen a loss of about 75% of their business, while others are completely closed. 

Under normal circumstances, billing is about managing accounts receivables, posting accurate balances to patient accounts, and submitting claims. Right now, claims submissions and posting balances are down because patient visits are down. If you’re looking for a silver lining, you now have more time to focus on your accounts receivables and invest enough time to devote to converting AR to cash. 

Bob Kowalick shared with us a breakout he uses to determine where his monthly revenue is coming from in terms of the age of the claim. Through his research, he found that about 50% of revenue comes from claims made within 0-30 days of treatment; about 34% comes from a month ago; about 10% comes from 2-3 months ago; and the rest comes from 120+ days ago. He notes that once you hit 60+ days, the majority of that revenue isn’t attainable unless you have someone actively trying to do something about it—that’s at least 25% of your revenue that would be lost without someone working those claims for you.

Instead of laying off your entire billing staff, you can reallocate those hours to focus on accounts receivables and satisfy unpaid claims.

Managing Personnel

PT practice owners are facing numerous options when it comes to their employees. Some practice owners are entertaining layoffs. Others may opt for furlough, which allows employees to remain employed and receive benefits, but with a reduction in earnings.

But at the end of the day, we’re talking about making decisions that make the most sense for your business. Usually the biggest expense in a practice is payroll, and even though practices can’t survive without people, there are fewer patients to treat, less work to go around, and declining revenue—none of which can justify maintaining a full staff.

The natural, responsible action from any business owner is to preserve cash when times are tight. The stimulus bill issued by the government is designed to help fill the gap between the cost of your staff and the loss of revenue. Ideally, the funds you receive from the bill will help you avoid making any major personnel changes that will negatively impact your people (and later, your practice). The goal is to stay connected to your employees in a way that keeps them paid and retained. 

The biggest moving part to consider is how much of these funds you’re eligible to receive, what you can do with them, and how much of the loan can be forgiven. 

Fueling Your Marketing

In loose terms, marketing refers to how you position your services. You rely on marketing to get patients through the door, but we’re in a time where new patient flow is proving difficult for many practices due to shelter in place orders and general fear.

Right now, there’s a lot of interest among PT owners in telehealth, and at a time where people are wary of going out in public, it seems like a much-needed answer. 

However, I will say that not many PTs have had much success in turning telehealth into a revenue-generating service. Reimbursements are much lower for telehealth, which is why I tried to use it as a cash-pay service several years ago. (At the time, legal and compliance were very grey, so we shut it down.)

But for practices that want to offer telehealth as an option for patients (especially if you’re completely shut down), it’s important to look not only at the service itself but also how to implement it and what to expect as far as revenue goes.

One option would be to offer an e-visit to connect with existing patients virtually to discuss their health. You’re already treating them, so this is just like another communication with your patient. E-visits can be billed over a 7-day period of time using different codes that are related to the duration of the visit. However, reimbursements are substantially lower—starting at about $13 for a 10-minute visit. I wouldn’t go into any great expense if you plan on offering this as a service to existing patients. 

Telehealth is essentially doing an in-clinic visit outside of the clinic (e.g., exercises). Reimbursements are all over the place, so it’s essential complete verification for any kind of virtual services. You can have new patients become telehealth patients, provided you get prior approval. 

From a marketing perspective, it’s important for practice owners not to look at e-health or telehealth as income replacement options but rather as tools to keep in touch with existing patients. Once we’re on the rebuilding end of COVID-19, we’ll still have these relationships that will reactivate and continue to come to us for their PT.

The situation with COVID-19 is changing every day. To help owners get ongoing support and resources, we’ve created a free Facebook Community.

Click here to join the Facebook community – Private PT Practices: Standing Up Through Crisis today.