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.
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.
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.
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.