Case Study: Enhancing Revenue Cycle Management for a Physical Therapy Practice through NetRevMed

Executive Summary

NetRevMed was engaged by a mid-sized physical therapy practice facing significant challenges with their Revenue Cycle Management (RCM). The practice was struggling with delayed reimbursements, denied claims, and inefficient billing processes. This case study outlines the comprehensive steps NetRevMed took to overhaul the practice’s RCM processes, optimize revenue collection, reduce denials, and ultimately enhance financial performance. Through targeted interventions and the strategic use of technology, NetRevMed was able to increase the practice's collections by 25% and reduce denial rates by 40% within the first 12 months.

Background

NetRevMed is a leader in providing medical billing and RCM solutions across multiple specialties, including physical therapy. The company specializes in streamlining billing processes, reducing claim denials, improving reimbursements, and accelerating cash flow for healthcare providers. Their team of experts works closely with practices to understand unique challenges and tailor solutions that drive both financial and operational efficiency.

The physical therapy practice in question, is a growing facility that provides outpatient physical therapy services to a diverse group of patients. Despite offering high-quality care, the practice was facing numerous financial hurdles, including:

• Low reimbursement rates from insurance companies
• High claim denial rates
• Delays in payment processing from both private and government insurers
• Inefficient billing processes, leading to increased administrative costs
• High patient outstanding balances, impacting cash flow

The practice’s leadership recognized that addressing these challenges was critical for the clinic’s long-term viability and patient satisfaction. They reached out to NetRevMed to help optimize their RCM, aiming for faster, more accurate reimbursements and improved financial health.

The Challenge

The physical therapy practice faced several systemic issues that hindered its revenue cycle:

1. High Denial Rates

Physical Therapy Clinic experienced denial rates above 20%, well above the industry average for physical therapy practices. Many claims were rejected by insurers due to coding errors, lack of pre-authorization, and missing documentation.

2. Slow Claim Processing

Claims were frequently delayed due to missing information or incomplete billing submissions, resulting in delayed payments. These delays were exacerbated by cumbersome manual processes.

3. Inefficient Billing System

The clinic’s billing department relied on outdated, paper-based processes. This led to slow data entry, errors, and difficulty tracking the status of claims.

4. Patient Accounts Receivable (AR) Issues

Physical Therapy Clinic had a high percentage of unpaid patient balances, and its accounts receivable aging reports showed that over 30% of AR was outstanding for more than 90 days.

5. Under-Utilization of Technology

The practice was not leveraging any modern billing software or automation tools that could improve efficiency or streamline claim submissions.

Solution: NetRevMed Billing Company's Approach

Upon engagement, NetRevMed conducted a thorough assessment of Physical Therapy Clinic’s RCM processes, identifying key areas of inefficiency and opportunities for improvement. They implemented a customized solution that focused on the following pillars:

1. Improving Coding Accuracy and Compliance

NetRevMed first priority was to address coding inaccuracies, which were a significant contributor to claim denials. They implemented the following strategies:

• Training and Education: Provided training to Physical Therapy Clinic’s billing staff on proper ICD-10, CPT, and HCPCS coding for physical therapy services.
• Audit and Compliance Checks: Introduced an internal auditing process to review all claims before submission to flag discrepancies in coding or documentation.
• Up-to-Date Coding Resources: Subscribed to the latest coding resources and guidelines to ensure the practice stayed compliant with insurance industry requirements.

Result: Coding accuracy improved by 15% within the first three months, reducing claims denials due to incorrect codes.

2. Optimizing Pre-Authorization and Documentation

NetRevMed introduced a streamlined process for submitting pre-authorization requests and ensuring that all necessary documentation was in place. This included:

• Pre-Authorization Workflow: Proactively submitting pre-authorization requests to insurance companies for common physical therapy services.
• Documentation Enhancement: Worked with physical therapists to ensure accurate and thorough documentation of patient progress and treatment plans.

Result: Denial rate due to missing or incomplete documentation decreased by 30% within four months.

3. Automation of Billing and Claims Submissions

NetRevMed transitioned Physical Therapy Clinic from paper-based billing to a cloud-based billing software system, which included:

• Claim Submission Automation: Claims were submitted electronically, improving processing time and reducing errors.
• Real-Time Claim Tracking: Real-time tracking allowed staff to monitor the status of claims and take immediate action on any issues.

Result: The average time for claims submission decreased by 49%, significantly reducing the billing cycle time.

4. Improving Patient Accounts Receivable Management

NetRevMed helped Physical Therapy Clinic manage patient balances through:

• Payment Plans: Flexible payment plans for patients with outstanding balances.
• Clearer Patient Statements: Improved billing statements with detailed breakdowns of charges and payments.
• Patient Communication: Automated reminders and follow-ups for overdue payments.

Result: A 25% reduction in outstanding AR over 90 days within four months of implementation.

5. Data-Driven Insights and Reporting

NetRevMed provided Physical Therapy Clinic with data-driven insights, enabling better decision-making:

• Customized Dashboards: Financial dashboards showing metrics like claim approval rates and patient collections.
• Quarterly Reviews: Regular reviews of financial progress and goal-setting for continued improvement.

Result: A 50% improvement in the clinic's ability to make data-driven financial decisions.

Results

NetRevMed achieved significant improvements in Physical Therapy Clinic’s revenue cycle management. Key results include:

• 25% increase in collections
• 40% reduction in denial rates
• 30% decrease in accounts receivable aging
• 40% faster claim processing

Financial Impact Summary[4 Months]

Conclusion

NetRevMed's strategic approach to optimizing the RCM for Physical Therapy Clinic resulted in significant improvements in revenue cycle performance. The practice experienced faster reimbursements, reduced denials, and improved patient collections, resulting in healthier financial outcomes. This case study demonstrates the value of working with a specialized billing company to improve RCM efficiency and drive financial growth for healthcare practices.