February 21, 2024 | Doug Cundiff, MPT, MPH

3 Minute Read

Grow Your Outpatient Rehab Therapy Revenue When New Patient Volumes Are Flat

How to Increase Outpatient Revenue

By Doug Cundiff, MPT, MPH 
VP Hospital Therapy Solutions, Net Health 

In all my years of working in healthcare, I have yet to encounter a practice owner or clinic manager providing outpatient services whose operational goals didn’t include rehab therapy revenue growth. This is a universal goal in all businesses, but a couple of factors have exacerbated the challenge of outpatient revenue( or inpatient revenue) growth throughout outpatient services providers in rehab therapy. 

The first is staffing shortages in rehab therapy. With nearly 14,000 new job openings for physical therapists projected each year for the next decade,1 competition is fierce for both new and experienced rehab therapists in outpatient care settings. This has left some clinics offering outpatient services continually short-handed, which can severely limit the number of outpatient visits the clinic sees and how often they see them. While this is a problem for health systems at larger, patient complaints and decreases in patient billing in outpatient care can be detrimental for healthcare providers and outpatient revenue streams in outpatient care and smaller private practices providing outpatient services.

The second factor operators are contending with that combats outpatient revenue growth these days is lower reimbursements.

This year, for example, the final 2024 Medicare Physician Fee Schedule rule introduced a 3.4% reduction in the conversion factor that determines final payment for various specialties, including physical therapy.2 This means rehab therapy clinics providing outpatient care to Medicare patients are likely to earn less money from the outpatient services they provide. 

So, what options are there for healthcare providers and outpatient care rehab therapy clinic operators to improve revenue growth in the face of these challenges? How can outpatient care clinics with full daily schedules improve their bottom lines when new patient volumes remain relatively flat? 

All of this threatening cash flow while you’re also focused on patient experience and a positive patient journey. Overlooking this can lead to patient complaints, which is yet another potentially critical imposition to outpatient revenue.

The first step is to look for key performance indicators (KPIs) that can help point you and your outpatient facility management and clinical teams in the right direction, leading to outpatient growth and an increase in revenue.

Let KPIs Guide You Toward Rehab Therapy Revenue Growth

Operating in the healthcare system and not paying close attention to metrics makes it harder to increase revenue. Whether hospital revenues or outpatient revenue, data is our friend and allows us to take on more financial responsibility while focusing on outpatient growth and a positive patient experience.

Track the following KPIs in rehab therapy to determine when you might increase outpatient revenue growth potential within your outpatient rehab therapy practice or department: 

Wait Time for New Patient Evaluations 

When a new patient calls in to schedule their first appointment — typically a new patient evaluation — how long does it take to get them to the clinic to see a rehab therapist? Patient experience should be top of mind for every outpatient facility. The goal should be within 24 to 48 hours, otherwise, the patient is likely to seek the services of a competitor who can get them in sooner.  

Visits Per Episodes of Care 

If following your evaluation, you recommend the patient’s episode of care includes 10 visits, how often are patients reaching this number of visits? And, are episodes of care shorter because patients self-discharge or because your clinic is shortening the episodes of care due to staffing or scheduling issues? If it’s the latter, it may be time to consider extending hours or increasing staff. While this may cause a hit to cash flow in revenue streams, ignoring it will be even more costly and lead to lost revenue. It may take a revenue cycle or more to see this come to fruition.

Cancelation/No-Show Rates 

Is your clinic’s cancelation rate well above the 10% to 12% average? Is the rate growing? Do you know why the number’s growing, and is your practice able to identify and plan for patients at high risk of canceling? It is difficult to increase outpatient revenue (or increase revenue at any care setting, hospital or otherwise) if patients don’t show up for a procedure.

Number of Units Per Visit 

Depending on the typical length of patient visits at your clinic, clinicians should average between three (45 minutes) and four (60 minutes) units per visit. If this number is lower, then clinicians are leaving money on the table. 

4 Pillars for Optimizing Rehab Therapy Revenue Potential 

In addition to reviewing the above KPIs to help determine where potential rehab therapy revenue opportunities exist, I also recommend owners and directors review four pillars within their clinic operations that, when enhanced, can help optimize revenue potential. 

These pillars include creating built-in efficiencies, improving patient engagement, harnessing smarter scheduling, and investing in new digital technologies. Continue reading to learn more about how implementing these cost cutting strategies can help raise your bottom line.

1. Create Built-In Efficiencies 

Often, the ability to operate most efficiently in rehab therapy comes down to the electronic health record (EHR) solution you use. So when choosing an EHR, consider efficiency in communications, workflows, documentation, billing, and coding. 

By freeing up just a few minutes a day of patient documentation, for example, a clinician can potentially bill an additional unit or two each day — an effort that can really add up over a year. Smarter charge capture and billing using machine learning and artificial intelligence (AI) technologies can also help maximize reimbursements while reducing claim denials, which cost time and money to rework. 

In hospital outpatient physical therapy settings, simply utilizing workflows that align with the way rehab therapists work is a big win for efficiency, especially when this system integrates with the larger hospital system. 

2. Improve Patient Engagement 

There seems to be no shortage of studies and surveys that show how patient engagement efforts affect patient behavior, improve patient outcomes, and heighten patient satisfaction. It does this by keeping patients active and informed, which improves the likelihood they will complete their full plan of care. 

This means fewer self-discharges, which directly impacts rehab therapy revenue growth. 

So, how does a clinic improve patient engagement? Ultimately, it comes down to better communication and keeping the patient informed about the value of rehab therapy. This can include using outcomes management tools to set and track patient progress and goals. 

Engagement efforts may also include automated appointment reminders, secure direct messaging, home exercise tracking, and the use of patient portals. 

3. Harness Smarter Scheduling 

Intelligently managing your clinic’s schedule is also key to maintaining a high level of productivity. As mentioned above, one of the keys to this is to make sure all new patient evaluations are scheduled within 24 to 48 hours of the time they connect with the clinic. This keeps patients from seeking out quicker service from a competitor, which helps reduce no-shows. 

It’s also prudent that front-office staff offer appointment reminders to all patients. Calling them directly or setting up an automated reminder not only keeps patients from forgetting about their appointments, it also increases the chances that they will reschedule if plans have changed. 

Also helpful in reducing schedule gaps are tools that utilize AI to predict when certain patients, based on demographics and habits, are at higher risk of not showing up to their next appointments. This enables schedulers to take proactive steps such as double-booking or creating a list of on-call patients to fill gaps. 

Finally, if it begins to feel like there are not enough hours in the day, consider extending your clinic hours to better reflect the needs of your patients. 

4. Invest in New Technologies to Increase Outpatient Revenue

Post-COVID has been an exciting time for rehab therapy as more owners, operators, and clinicians are beginning to realize the impact digital tools and services can have on patient satisfaction and outcomes. Solutions like telehealth, direct messaging, remote therapeutic monitoring (RTM), and so on have truly expanded growth opportunities available in outpatient rehab therapy. 

These services, known collectively as digital musculoskeletal (MSK) solutions, make it possible for clinicians to customize treatment programs and schedules for their patients that meet the needs and limitations of their lives. This leads to greater patient buy-in, higher engagement, improved home exercise compliance, and greater patient outcomes. 

This is a big topic, but one certainly worth looking into. I encourage you to visit Net Health’s in-depth digital MSK e-book “How Do I Get the Most Out of Digital MSK?” for more information. 

As a physical therapist who has treated patients in multiple settings, I understand that achieving rehab therapy revenue growth can sometimes feel like squeezing water from a rock. However, with the right data and some deep professional insight, you are likely to find areas where your clinic is leaving money on the table. 

To learn more about where to look for insights in how to increase outpatient revenue, feel free to contact me. I will be happy to answer your questions and help you determine how you can grow your revenue even while patient volumes are flat. 

About Author Doug Cundiff 

As the Vice President of Hospital Therapy Solutions at Net Health, Doug Cundiff’s responsibilities include partnering with sales to make sure hospital therapy clients have the necessary features and functionality within the Net Health Therapy solution, enabling them to obtain their clinical and operational goals. By adopting this solution, hospital acute care and outpatient clinics become the clear choice for rehab therapy to their consumers, payers, and referral sources. Prior to joining Net Health, Doug spent the past 14 years with an orthopedic service line development company conducting strategic assessments and implementing best practice programs. Doug also has a clinical background as a physical therapist functioning in the acute, home care, and outpatient settings of a large academic tertiary care hospital system. 

1 Bureau of Labor Statistics, “Physical Therapists: Occupational Outlook Handbook,” Dec. 11, 2023
2 American Physical Therapy Association, “Final 2024 Physician Fee Schedule Reflects System’s Flaws; Includes Some Wins,” Nov. 3, 2023

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