Maximizing Revenue by Managing PT billing units
In addition to managing PT billing units, rehab therapists should also pay attention to referrals and delivering high-quality care.
Running a successful rehab therapy clinic revolves around providing the highest level of care for our patients. But providing these effective and efficient levels of care is only possible when we have the resources to support our teams and our operations. In other words, managing our bottom line not only protects the longevity of our businesses, but it empowers us to deliver the best care possible to the ones who need care the most.
An effective and proven method of increasing our bottom line is to manage a revenue funnel based on referrals, evaluations, PT billing units and visits. Instead of piece-mealing each step of the process, a coordinated effort from start to finish can help ensure we’re maximizing PT billing while delivering the highest levels of care possible.
In this blog, we’ll examine six metrics that can you can use to successfully grow your revenue stream.
These six metrics are:
- Total number of referrals
- Total number of evaluations performed
- Total number of completed visits
- Total PT billing units
- Completed visits per episode of care (ratio)
- PT billing per visit (ratio)
What’s a physical therapy revenue funnel?
In rehab therapy, our revenue funnel starts with referrals, and follows those patients through the evaluation process and finally through the completion of treatment. We don’t expect to turn 100% of referrals into positive treatment outcomes — thus the funnel — as people go from referral to patient to completed treatment.
The most effective rehab therapy revenue funnels are ones that can:
- Drive more referrals and leads into the top of the funnel. Net Health offers digital marketing services to help rehab therapy practices drive more leads and referrals.
- Minimize drop-off between steps by maximizing conversions throughout the process
- Maximize PT billing units through methods that simultaneously increase the quality of care
- Collect enough data to benchmark against the industry as well as measure success internally against previous periods and over time to identify trends
How do we go about implementing a successful revenue funnel in our rehab therapy practice? It starts with understanding and effectively employing data. What gets measured can be managed.
By monitoring six Key Performance Indicators (KPIs) throughout each step of the revenue funnel, we can better train our people, more efficiently employ our resources, and make stronger decisions that simultaneously drive revenue and increase quality of care.
#1 Total number of referrals from all sources
The success of a rehab therapy funnel starts with the number of people that enter the funnel—our referrals and leads. By tracking not only the total number of referrals we receive but also the quality and diversification of those inbound sources of revenue, we can really start our revenue funnel off on the right foot.
Let’s say we’re getting a good number of referrals that are driving quality revenue opportunities into the funnel. While this might look great on the surface, what happens if we dig a little deeper into the data and realize that 60% of those leads are coming from one doctor?
While it’s great that we’re working with such a rock star, it leaves our practice exposed to a higher level of risk if that doctor ever leaves. Identifying these instances can help focus on diversification, as well as better allocating our resources to stronger performers. Invest in marketing that’s geared towards driving quality and diversified leads by leveraging the unique opportunities available in your area.
#2 Total number of evaluations performed
Let’s say that an evaluation is the first scheduled visit with a patient where a plan of care is established. As the proverbial “tip of the spear” of the revenue funnel, this is the most important KPI when it comes to better understanding the actual opportunity we can count on within our volume projections. When looking at this KPI, there are several quantitative and qualitative questions we need to ask:
- How many referrals are we converting to evaluations?
- What’s the drop-off percentage for converting referrals to evaluations?
- If there is a drop-off, what are the causes?
Here’s an example: In most situations, this KPI makes it easy to identify a drop-off from referrals to evaluations. Let’s say that our business normally sees a high number of evaluations compared to referrals, but that number significantly drops after we hire new front- end reception staff.
This could be a sign that the staff might not be properly managing the schedule to minimize wait times or that the staff might not be trained as well as they could be on having value-based conversations.
Consider these steps:
- Work to increase access by minimizing the wait time between referral and evaluation as much as possible
- Train front-end staff on how to have value-based conversations with inbound referrals and leads that call in by phone
#3 Total number of completed visits
The total number of completed visits is the metric that shows how many times we’re seeing a patient for treatment after evaluation through the end of their treatment. Alone, this metric isn’t very helpful in drawing conclusions. However, when we start to benchmark externally across our peers, we can glean a lot of helpful information.
Case in point: Let’s say that we see that our total number of completed visits is significantly lower than the industry average.
This can signal that we need to start asking some important questions:
- Are we too targeted in on one patient population that doesn’t need as much care?
- Should we look into diversifying into a more medically complex patient mix?
- Are we effectively managing our load forecasting based on this data?
The best way to capitalize on this KPI is through effective benchmarking. A helpful tool that gives us instant access to a database of results across the industry is Focus on Therapeutic Outcomes (FOTO). FOTO has logged data (including the total number of completed visits) for over 26 million patient assessments, which makes it one of the most powerful tools on the market for external benchmarking in the rehab therapy.
#4 Total PT billing units
Billable units are simply the smallest divisible unit of revenue. Generally, this is a 15-minute unit of time but may be slightly different based on payer contracts. At a macro-level, though, the concepts are the same. The value added from this KPI for rehab therapy companies is two-fold— the ability to see laser-focused trends as they develop and the ability to better analyze the composition of care.
How this KPI relates to each of our businesses will vary greatly. Yet here are the real-world questions we should be asking are similar:
- Are our total billable units trending upward or downward?
- Is the majority of our billed care mostly modality-based care or hands-on care?
- Are we utilizing more group therapy, concurrent therapy, or one-on-one treatment?
Start by analyzing the trends in total billable units and how those trends relate to your composition of care. Net Health’s therapy solutions for private practices and hospitals can help by providing detailed reports, powerful business analytics, and the resources you need to better analyze this KPI.
#5 Completed visits per episode of care
An important KPI ratio that takes the total number of completed visits a step further is completed visits per episode of care. The ratio looks at how many times we see an individual patient during their episode of care. Where the total number of visits helps us to see bigger trends across all patient types, this metric allows us to better analyze the data by specific patient type or service provided.
If we notice that our number of completed visits for a particular patient type is much lower than the industry average, it can be a helpful signal to investigate further.
- Are we having higher cancellation rates or self-discharging from certain types of patients?
- Do we need to diversify and analyze our patient mix further into smaller subgroups?
As mentioned, FOTO outcomes management system is an incredible asset that can help us drill down to the smallest level and benchmark across the industry. It’s impossible to know how you’re performing relative to the industry without this kind of access to data.
#6 PT billing units per visit
Not only can you look at billable units across the board, but breaking them down on a per-visit basis can further help. This KPI allows us to drill down into our utilization of time, proper coding, and other revenue factors as it paints a clearer picture of the time invested with each patient. While there are a lot of factors at play, if we benchmark our total billable units against our peers and see a major discrepancy, it should raise questions.
Those questions are:
- Do we have issues with under or over coding?
- Are there training deficits that need to be addressed?
Often, the best way to identify areas of strength and areas that need improvement is by breaking down a process to the smallest level. Start by breaking down your total PT billing units as a whole, and then look to break it down further by patient-type, referral source, type of payment plan, and any other category that may reveal helpful information.
This can empower your team to make better decisions about how you’re utilizing your time with your patients, which ultimately results in a stronger bottom line and improved quality of care.