Unwarranted Variations in Billing and Collections

By Kevin Hulsey, PT, DPT

Most physical therapists (PTs) are familiar with the concept of “unwarranted variation” when it is applied to the practice of treating patients. However, many PTs are not as aware of the “unwarranted variation” of billing and collections processes that exist.

My reference to “unwarranted variation” of billing and collections is not necessarily intended to reference the vast array of federal, regional, and local payers that frustrate us with myriad payment contracts and regulations—nor am I referring to the equally frustrating variations in payment across practice setting. I wanted to address the “unwarranted variation” of billing and collections processes practiced by those of us in physical therapist-owned outpatient clinics.

During the past 15 years, my service in the American Physical Therapy Association (APTA) and my work history have led me to many wonderful interactions with many physical therapy business owners from across the country. Discussions between these owners almost always result in discussions of payment. A superficial discussion of payment is always interesting, “I get $50 per visit,” “We are paid $75 per visit,” or even the rare “We get $191 per visit!” The superficial conversations are always fascinating, yet, without a deeper dive into the data and the processes, making comparisons between the stated payments may not be helpful in benchmarking your success or lack thereof when trying to assess your billing and collections success.

“Unwarranted variation” occurs with the physical therapy business owner’s decision to house billing and collections or to outsource the processes. An even greater variation occurs in the skill level and ability of your in-house staff or the company you have elected to outsource with. Success and horror stories abound regardless of the decision.

“Unwarranted variation” occurs when the physical therapist initiates charges for services. Most PTs are unfortunately genetically wired to underbill for services (as much a violation of our standards of practice as overbilling, and possibly more harmful). We have PTs in our company who routinely underbill and support their actions with comments like, “It is so expensive,” “They cannot afford it,” and “Their insurance is terrible.” It is easy to sympathize, yet it leads to great variation in payment when many of us are unwilling to compromise payment for our services and many PTs are happy to bill less and seemingly support patients financially as well as therapeutically. Additionally, most PTs are so busy treating patients that ensuring proper International Classification of Diseases, tenth edition (ICD-10) and Current Procedural Terminology (CPT) coding is not a high priority, and most companies cannot or do not invest in certified coders.

“Unwarranted variation” occurs when PTs vary in their aggressiveness toward the collection of deductibles and copayments. Even when the collection of deductibles and copayments is contractually obligated, many PTs tolerate not collecting or late collecting of such patient payments.

“Unwarranted variation” continues to exist in varying degrees depending on one’s appetite for regulation, for learning to play the game, and for actually playing the game to win. Many colleagues are very willing to accept what is easy to collect, and not willing to go after appropriate and earned payment. Contractual agreements for payment and agreement to fee schedules do not necessarily mean that the third party payer will happily pay your claims. Do not be afraid to fight for payment you have contractually agreed on. “Unwarranted variation” is fascinating with respect to a PT’s willingness to accept contracts that pay below the cost to provide the service. Southern Nevada has a payer that will pay a maximum of $35 per treatment. They are not seeking providers; in fact, they are considering limiting the panel of providers as they have an excessive amount of providers and from their perspective, the volume of PTs creates an administrative burden.

Fear may be a great driver of “unwarranted variation.” No one wants to be formally audited particularly if that audit should reveal an overpayment that must be repaid, possibly with penalty. So the tendency to bill cautiously and conservatively is the trend of the PT. If you are billing and collecting according to the rules, an audit should breed confidence—not anxiety.

My hope is that we all work to reduce if not eliminate the “unwarranted variation” of physical therapy billing and collection practice. Whether you outsource or keep the billing and collection process in house, do not abdicate oversight of the processes and outcomes. We must all bill appropriately for the services we provide and aggressively collect the money due for those services. We have all chosen this profession, and while we fight the good fight to reduce regulatory burden, we need to learn the game and play the game aggressively when it comes to billing and collecting. Do not fear an audit; if you are billing appropriately and collecting aggressively, you will thrive in an audit.

We must all work to reduce the “unwarranted variation” in our billing and collections practices as we continue to fight for appropriate payment and reduced regulatory burden.

Happy collecting!


Kevin Hulsey , PT, DPT, is a PPS director and the founder and chief executive officer of RehabAuthority, LLC. He can be reached at kevin@rehabauthority.com.

Copyright © 2018, Private Practice Section of the American Physical Therapy Association. All Rights Reserved.

Are you a PPS Member?
Please sign in to access site.
Enter Site!