Physical therapy billing is the most important component of running a successful private practice.

Managing a physical therapy private practice is every physical therapist’s dream but the talent alone is not a guarantee for success. Like all other business owners, physical therapists depend on regular and timely cash flow in order to pay on time their rent/lease of space, equipment, insurance and a variety of other expenses that come with running your own business, not to mention to pay yourself to survive and continue to grow. However, it is the regular and timely cash flow that causes the greatest problems to most physical therapists. Let’s see why.

Reasons why many physical therapists fail to get paid for their services regularly and timely vary greatly from one practice to another. One of the main reasons is, however, the fact that running a private physical therapy practice is very different from running any other business. Unlike most businesses, physical therapists typically are not paid by their clients but need to claim payment from the insurance companies or/and Medicare. Each invoice has to go through a highly complicated physical therapy billing system and each invoice is carefully reviewed by the insurance company which denies the claim for every slightest error. You eventually get paid for your services but any unnecessary delays in payment can cause serious cash liquidity problems and even endanger the existence of your practice.

You cannot afford any physical therapy billing errors if you want to assure yourself a consistent cash flow and minimize payment delays.

Doing physical therapy billing on your own, unfortunately, will not assure you regular and timely cash flow. It is important to be aware that the physical therapy billing system is very complicated, while all your invoices are reviewed by people who are hired to look for errors. Medical billing software systems help reduce billing errors, however, they are typically very expensive and need to be consistently upgraded. What is more, doing billing on your own is time-consuming and prevents you from focusing on helping your patients which is what you have studied for and dreamt of doing. Hiring someone to do the billing in-house, on the other hand, is not the best solution either because it requires consistent investment in both billing software program and education of your staff in order to achieve the desired results.

Physical therapists who are aware of the importance of consistent and timely cash flow most often hire external medical billing services. They are not only specialized in medical billing but they also have up-to-date billing software programs and well educated staff both of which are crucial for reducing billing errors which in turn assures timely cash flow. In addition, external medical billing services help reduce the overall billing costs because they are less expensive that permanent employees and do not involve any costs for upgrading software systems nor staff education. However, not all external medical billing services are a good choice. In addition to adhering to  HIPPAA regulations and charging as little as possible, they should have a denial rate below 1% which is typically achieved only by services that are specialized in physical therapy billing.