Prioritizing Payer Mix

Stacks of coins
By Lynn Steffes, PT, DPT

Have you noticed that despite your patient and visit volume rising, your bottom line is not following suit?

Perhaps it is your payer mix that is the culprit. Payer mix is simply defined as “… a type of financial payment received by a medical practice, including Medicare, Medicaid, indemnity insurance, managed care, and individual payments. It is the percentage of income that a medical facility receives from private and government insurance sources versus self-payments from patients.”1

Your payer mix is a combination of how many patients you have by payer, how many visits they generate, how many units per visit (if they are Fee for Service [FFS]), and the fee schedule for CPT codes.

Looking at trends in your payer mix over the past two to three years will help you understand how your practice and its contracts have impacted your bottom line.

Ultimately, there are a number of other factors that also contribute to the overall payer scheme. I like to do a score card to look at all aspects of contracting with a payer (Figure 1).

figure one

Finally, your goal would be to identify your top payers. Consider contract renegotiation or out of network status as options! But just as important: strategically target your patient retention strategies, marketing, and referral development on those! 


1What is Payer Mix? Published March 27, 2020.

Lynn Steffes

Lynn Steffes, PT, DPT, is president and consultant of Steffes & Associates, a national rehabilitation consulting group focused on marketing and program development for private practices nationwide. She is an instructor in five physical therapy programs and has actively presented, consulted, and taught in 40 states. She can be reached at

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