Category: Practice Management

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

4. Claims Management

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.

The Shocking Truth And What You Can Do About It

2023 Physical Therapy Reimbursement Rates

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.

Table of Contents

• The Impact of Declining Physical Therapy Reimbursement Rates on Private Practice
• Are Reimbursement Cuts Here to Stay?
• What Owners Are Doing to Survive
• 3 Ways to Make Up for Lost Revenue in Your Practice
• How to Create a Plan for Profitability
• How One Owner Successfully Increased Revenue Per Patient
• The Bottom Line: How You Can Overcome Declining Physical Therapy Reimbursement Rates

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.

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.

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.

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.

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.

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.

Watch: How to Reactivate Patients with Email

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. 

You can build patient demand through tactics such as online advertising, email marketing, or hosting educational workshops.  

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? 

Get your answers in a free consultation with a Breakthrough Patient Demand Expert. Schedule your free strategy call today. 

How to Boost Physical Therapy Clinic Revenue and Increase Margins

Physical therapy clinic owners nationwide are feeling the financial pressure of declining reimbursements and historic inflation. As you plan for 2023, you’re likely focused on how to grow physical therapy clinic revenue and cut costs. This article will share 7 ways to increase physical therapy clinic revenue in 2023. Incorporate these strategies into your 2023 practice plan to make more money in your physical therapy clinic. 

Recently, on the Grow Your Practice Podcast, we talked with owners about 2023 financial planning. The key takeaways are included in this article. If you’d like to watch the full episode, press ‘play’ on the video below.

Wondering How to Increase Physical Therapy Clinic Revenue? Start by Designing Your Annual Physical Therapy Practice Plan 

Like any business, the key to a thriving private practice requires a well-thought-out plan with measurable and achievable goals and an all-in mentality from every team member regardless of their role. 

For physical therapy clinics, your Practice Plan should include:

• Your biggest long-term and annual goals 
• Vital practice metrics (e.g. new patients, visits, revenue, attendance rate) this year and projection for the year ahead
• Financial assessment from this year (revenue and costs) and plan for next year
• Marketing assessment from this year (what worked and what didn’t) and plan for next year, including key metrics to track 
• Personnel assessment from this year and plan for next year 

A private practice growth plan ensures predictable performance and consistent growth not only next year but over the long term.

Should You Increase Revenue or Cut Costs?

The threats of declining reimbursements, a competitive hiring market, and rising costs for space, personnel and equipment are reducing physical therapists’ already slim margins to dangerous levels. There are two main ways to combat these challenges:

1. Increase top-line revenue
2. Reduce costs

Most of your competition will approach this problem by seeking to lower costs. But you actually have less control over costs than over revenue, and cutting costs usuallys lowers revenue, particularly when it comes to marketing. There is much more upside and growth opportunity available to those practice owners who focus on increasing top-line revenue rather than decreasing costs. Therefore, the suggestions we make in this article focus on increasing top-line revenue.

7 Ways to Increase Physical Therapy Clinic Revenue

In this section, we’ll explore 7 ways to increase physical therapy clinic revenue without a significant increase in costs. 

1. Decide on Your BHAG (Big Hairy Audacious Goal)

Before you develop your practice growth plan for the year, look ahead and think about what you envision over the next 5, 10, 15 years, and beyond. If you had a magic wand and could make anything possible for your practice, would would it be? 

This is how you can determine your Big Hairy Audacious Goal (BHAG), an idea popularized by the book “Built to Last,” by Jim Collins and Jerry I. Porras.

Your BHAG is something that is long-term and achievable but at the same time, makes you feel a bit uneasy that you’re even considering it in the first place.

It should be inspirational, motivational, and something that is frequently shared with your team.

Here are some examples a BHAG for a physical therapy clinic: 

• Become the number one physical therapy provider in your region
• Help 20% more people in your community YOY
• Open a new clinic every 3 years
• Become the most popular physical therapy clinic to work at in your area

Note that your BHAG should not be a revenue goal. It’s important to have revenue goals, but your BHAG should be something motivational, inspational and compelling that makes your entire team proud to work at your clinic.

Your annual goals should be designed to support your your BHAG.

For example, if you have a BHAG that has to do with increasing your volume of patient visits, you’ll need to develop your annual goals to ensure that you have a plan in place for driving more visits, have enough space to accommodate more visits, and enough clinicians to serve additional patients. Depending on your  situation, you may decide to open additional locations or hire more staff. 

2. Break Down Goals By Quarter, Month, and Week

One of the biggest mistakes private practice owners often make is developing an annual plan and then shelving it for the year. Without a concerted effort however, you simply won’t be able to grow your practice. 

Therefore, you must be specific and set goals for each quarter, month, and week. This strategy allows you to understand what’s working and what needs to change so ultimately, you can meet your annual goals.

3. Add Cash-Pay Services

Think about ways that you can provide more value to your patients and generate more revenue by adding additional services to physical therapy. Many physical therapy practices are supporting their revenue by adding cash-based services such as therapeutic lasers, massage therapy, or dry needling. Some practice owners are even adding gym or fitness facilities on to their practice and charging for membership or fitness classes such as pilates or yoga.

4. Be Transparent With Your Staff

Keeping the lines of communication open, and sharing metrics, high-level finances, goals, and achievements with your staff gives them ownership, builds morale, and helps to retain and attract staff. . 

For starters, your staff should have full transparency into your expenses, marketing budget, reserve, and profit. With this data, they’re able to get an accurate and complete financial picture of the business. Staff will want to know that the practice is stable. When finances are tight, it gives them a better understanding of why their salary is what it is. 

As long as your staff is behind the mission of your practice, your BHAG, and the culture of your practice, they are more likely to stay on for a lower salary than what they could potentially get elsehwere.  

During weekly meetings, start with wins and recognize staff members who have gone above and beyond to help your patients or solve a problem.

Then, each staff member should share their accomplishments for the week, such as the number of visits and attendance rate, as well as what they’ll work on the following week. 

This not only builds accountability, but it helps staff recognize that they’re working  as a team to achieve a financially stable environment, grow the practice, and ultimately, help more people and leave a bigger impact on the community.

5. Create Monthly Recurring Revenue

Earlier this year, we spoke with Jeff Langmaid on the Grow Your Practice Podcast about how to grow practice revenue. One of his main suggestions for diversifying your income is to create recurring revenue that meets your minimum viable monthly expenses each month. “If you can have recurring revenue that meets your expenses, working in your practice becomes a lot more fun and way less stressful,” Jeff said. 

He offered 3 models for creating monthly recurring revenue:

• Provide ongoing services

  This can look like a monthly movement assessment, a monthly check-in, or any type of maintenance care that makes sense for you. After your patients complete their plan of care, have them check in with you once a month. A majority of time this is warranted and is not overtreating. A monthly check-in is a great way to increase patient visits and create monthly recurring revenue.

• Open an e-commerce store

  Sell items that supplement your services. Supplements are a great example of what you can sell in an online store. We know that between 50 to 70% of people going to conservative care providers take supplements each and every day, whether its a multivitamin, Vitamin D, Omegas, etc. Other options could include exercise props, therapeutic heating/cooling devices, ergonomic products for sleep or work as examples. The key to creating auto-recurring revenue is to have an online store that drop-ships direct to your patient. This way, you don’t need to have the inventory and utilize space in your clinic. 

• Offer online coaching or digital courses

  This could look like anything from telehealth all the way up to lifestyle coaching. For many providers this may feel like very new territory, but there’s an avenue there to create monthly revenue by providing value on an ongoing basis. This can be leveraged at scale online. You can create courses that can be sold online without requiring significant amounts of your time on an ongoing basis.

6. Explore Remote Therapeutic Monitoring 

Most updates in the 2023 Medicare ruling further squeeze revenue for PTs.

But there is one area that actually presents an opportunity to GROW revenue: Remote Therapeutic Monitoring (RTM).

Remote Therapeutic Monitoring is a way to contact, communicate, and monitor patients remotely outside of the clinic setting. RTM solutions may leverage certain medical devices, apps, or online tools to monitor and communicate with patients. RTM is often used for follow-up conducted remotely via phone call or two-way audio-visual communication. 

Many therapists are recognizing the opportunity to augment their services with Remote Therapeutic Monitoring to increase reimbursements.

7. Build Patient Demand to Create Consistent Patient Visits Year-Round

Private practice owners are often unsure about how to get started with marketing and which tools and platformsthey should invest in.

The best (and most affordable) place to start is with your patient list and email marketing. 

Email can help make your practice more valuable, and increase reactivations and build patient demand for your services.

Once your email marketing is in place, you’ll want to think about online advertising. However, it’s important to recognize that not all channels are created equal and what works for one practice may not work for another. 

Talk with your patients first and find out what types of media they’re consuming to figure out which channels would be the most effective. 

Breakthrough offers a complete, all-in-one patient demand platform that provides a simple, repeatable way to consistently grow your practice by attracting leads, converting leads into patients, and measuring success. 

Our team of marketing experts has years of experience working with hundreds of private physical therapy practices and delivering guaranteed revenue growth. 

Find out how to physical therapy clinic revenue and generate consistent visits year-round.

Request a free consultation today.