March 12, 2019

Are You Maximizing Your Reimbursements? Talking Billing And Financial Policies with Kevin Cappel, PT

PTO 42 | Financial Policy


Puff Daddy’s iconic song goes “It’s all about the Benjamins!” That is why if you're going to work hard, be sure that you're getting paid for it because you have value. Unfortunately, not all PTs realize this. They do not like dealing with the numbers and billing headaches. This is where Kevin Cappel of Jet PT Billing comes in. Moving from PT ownership to consulting to starting his own PT billing company, Kevin definitely knows his way around the ins and outs of PT. Sharing his knowledge and expertise, he talks about the best billing and financial policy practices for the small practice owner. He also shares some of the expectations he has of his billers and what PT owners need to do to maximize their reimbursements.


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Are You Maximizing Your Reimbursements? Talking Billing And Financial Policies with Kevin Cappel, PT

This episode is going to be more about billing and financial policies and procedures. In order to do that, I brought on Kevin Cappel, a physical therapist, who owns Jet PT Billing and have over 25 clients across the United States. He's been doing billing for several years now. I thought it would be a great time to talk to him about some of his expectations for billing KPIs, financial policies and procedures that are expected at the front desk because so much can happen between when a patient comes in the door and collecting that money. It's important that we review our financial policies and procedures and really groove those in so that the patient doesn't become disgruntled because of the financial part of it and can focus on the treatment that they receive. Allowing you to do the same. That puts a great onus on the front desk personnel and making sure they're clear on the financial policies, but also that they're explaining those same financial policies to the patients. Kevin shares a ton of great information in a short amount of time.


I've got Kevin Cappel of Jet PT Billing with me. I'm excited to bring him on because I haven't had someone who's experienced in billing yet on the show. First of all, thanks for coming on, Kevin. I appreciate it.

Nathan, thanks for having me. I'm glad to hear I'm the first talking about billing. This is awesome.

If you don't mind sharing with my audience a little bit about your professional story and what got you into PT billing?

I started as an athletic trainer. I ended up going back to physical therapy school. I worked for a large corporate entity. I ended up running a sports medicine office for them. I decided I was getting bored with that and wanted to go into private practice. I and a business partner have started our own practice in little old Winona, Minnesota. After about several years, we have been doing some work with a consulting group. I was asked to help a little bit with that consulting group and I started enjoying the consulting part. I ended up selling my interest in the business practice to my partner.

I went and joined their consulting group for about a year and a half. The biggest part that I was doing when I was helping our clients were dealing with their billing issues. I had been the go-to person in our private practice to handle the billing. It came naturally. Finally, after being in a bunch of offices, dealing with a lot of problems, seeing good things and seeing less than good things, I decided it was time to start up a billing service. I left the consulting world and said, "I'm going to start a billing service." That was in 2009. It's been several years of doing that and I'm enjoying it.

PTO 42 | Financial Policy
Financial Policy: You can't compare one practice to another if all you're going to use is that single index because there are too many variables.


I don't know how many of them are out there, but you're a PT that started a billing company. You don't see a lot of that. You see PTs going into consulting or some other aspect of administration. Guys who start billing companies are pretty rare I'd assume, but that also it’s a strength for you.

It is probably rare. I'm not familiar with another situation like that. Compound that with the experience of having been in private practice. It's like, “I've been there and done that.” I know exactly what the owner is looking for and wants and that's what we're trying to provide.

I'm assuming that you haven't got that consulting blood out of you. You do a little bit of consulting with your clients as well as doing the billing services. Are there certain KPIs that you're focused on and looking at when you're bringing on a client or looking at an existing client?

There are and you're exactly right about the consulting. I enjoy being able to sit down with one of our clients one-on-one and help them grow their practice. That has not left my blood. Certainly, one of the largest KPIs that we look at is collection ratio. I like to get an idea of how well they are collecting. I also like to look at the average total days of AR to see how fast are they turning that over? If it’s 35, 40, 50 days or longer, it's like, “They need some help on that.” Those are a couple of big ones and then to look at the AR buckets and see what is current and what's sitting there 60 to 90, 90 and older. That tells a big picture about the practice and how well they're collecting.

I had a goal in my private practice to keep that 90-plus days AR below 10%. I think when you've got a good biller, that's possible. If you don't have one, someone that's settled into their groove as a biller and knows what they're doing, that might be difficult. What do you think about that number?

I agree with that totally. We used that as a benchmark. We break it down even a little bit further. We try to have 5% as the goal for insurance, AR. That leaves a little margin for a patient balances sitting there also on. As a billing service, you want to try to separate the insurance stuff versus the patient responsibility because we don't have as much control over the patient balances as the client does because they're sitting there facing them right up front. That's where having good policy and somebody that's a bulldog at the front desk to collect those copays makes a big difference. We send statements out and we try to follow up on that. As time has gone on, relying on statements to bring that money in is becoming less and less effective.

I like your idea of keeping the insurance AR at around 5% or below because not only do patient balances start getting out of whack, but when you start throwing in liens or worker's comp claims, then inevitably that number is going to get pushed up.

As per Puff Daddy, 'It's all about the Benjamins!', and he's not wrong. As a PT owner, you need to and deserve to, maximize payment for the value you provide. Kevin Cappel, PT of Jet PT Billing shares what it takes to do that @ptownersclub Click To Tweet

When you mentioned liens and the whole attorney thing, that throws a whole another wrench into it because you lose total control over those. There's nothing you can do when it starts getting into litigation. Those numbers need to be factored out because you can't control that. For those practices that have a high volume of litigation stuff, they’re a whole different breed and are going to have a different series of statistics that you may want to look at to make comparisons on.

When you say a percentage of collections, that number can be skewed quite a bit. I'm sure with your clients you have a pretty standard fee schedule, so you should know what your percentage of collections are?

You are 100% correct. That number can be all over the dartboard because there's a lot of variables. The different regions of the country have different allowable that they follow. Even Medicare varies depending on where you are geographical. The other big variable is that practices fee schedule. If somebody has a low fee schedule relative to another practice, it's going to throw that whole comparison out. When you're looking at collection ratios, you can't compare one practice to another if all you're going to use is that single index because there are too many variables.

If someone is going to throw out a fee schedule that's two times Medicare and another practice is going to throw out a three times Medicare or one and a half times Medicare, then there's no comparison to be made. In our practice for the sake of those who it might help, we tended to have our fee schedule around two times Medicare. We were always shooting for collections around 50%. That worked out pretty well for us. Once you have the standard from years past and it's easy to work off that standard going forward and gear your expectations accordingly.

That's a pretty safe standard to assume. That's fairly normal to look at two times Medicare or somewhere in that neighborhood.

Speaking of some of the consulting that you do, what are some of the things that you're coming up against your clients or other PTs that you talk with nowadays at this time of the year?

At this time of the year, it's deductible season. It's that crazy time of year one when there's an awful lot of stress put on the front desk to make sure that money is collected there because it's not going to be coming or at least not as much of it is going to be coming from the insurance companies. Hopefully now, we're getting on the back end of a lot of that. As time goes on, nearly everybody's deductible is going up. It takes longer to fulfill that, which means there has to be good policy in place and people that know how to enforce it to be able to collect that money.

Do you help and train some of your owners or the front desk personnel on how to collect up at the front desk for copays, co-insurance, and deductibles so that doesn't linger and sit out there?

We provide that to whatever degree our clients want assistance with that. We certainly have had some clients where we have met online with their front desk and talked about some strategies. The basis has to start with a strong financial policy that is presented to the patient when they come in for that initial visit. They sit down and read it over and agreed to it. If there are no teeth put into that policy, then it becomes difficult to back things up later on down the road and try to collect what they owe.

We're getting into a couple of things. One is that you need to have a strong financial policy. A lot of us, maybe we pull something off the internet or if LegalZoom has something like that, we'll pull something down and insert our company names into it, not knowing exactly what our financial policy is and what teeth it has. Another part of it is what instruction do you recommend we give or training do we give to the front desk as they hand over the financial policy? If I'm thinking in my practice, it was simply part of the paperwork and the front desk handed it over. They filled it out and turned it in without the front desk saying anything about the financial policy. Do you recommend that they do some training in verbalizing what the financial policy is?

Whenever there's an issue and we have a disgruntled patient, it's a disagreement. When you look at that word, it means there was a lack of agreement. It's a simple process. We've all been there. We've gone into a doctor's office and they give you the clipboard and all of the paper on it. Stick a pen in your face. Tell you to go sit down in the far corner, read it over, sign it and bring it back. They have no clue if you read it. They probably don't care. We've all been in that situation. It lends itself to not caring if that patient reads it or understands it and then we wonder why there are disagreements down the road. The best practices to take that patient into a back room that allows them the security of being able to ask questions, sitting there with them and making sure that they read it. That they don't go pass something they don't understand. They get it all in. Even initialing in different areas to make sure that they read that paragraph because that one might be more important to understand that some of the others. It's making sure they agreed to it. Not just that they sign up, but they understand it. That can go a long way because then they know what's expected.

As you train on this, do you recommend that person that takes them into the back room is the front desk person, an office manager or the PT themselves?

It's not the PT. Having been a PT, we all know that we want to separate the whole money part of it from the treatment. We want to put our attention on treating the patient and let somebody else deal with the whole money thing. I wouldn't recommend that. That's my personal take on it. It should be somebody that deals in the financial area. We can't afford to have our front desk person leave the front desk because we need them there. If there's a billing manager or if it is the biller, depending on the size of the practice, take fifteen minutes with each new patient and make sure that they get this so that we eliminate issues down the road.

If the financial policies aren't strong enough, if they don't have the teeth and clarity to begin with, then they can be useless. Click To Tweet

I can see the value in this simply because if the patient understands what they're financially committing to, then it's going to resolve disagreements down the road. It allows them to simply focus on the treatment that they're receiving as well. There's a huge benefit in that. Also, it minimizes the discomfort at the front desk of collecting those copays, those coinsurances and the deductibles at the front desk. That person needs to have a mindset and a personality in which it's simply a matter of following the policy that the patient already signed and not be hesitant in asking for that money.

It's easy to ask for that money when that front desk person knows that patient has been told this is what's going to happen. You should expect that you're going to have to pay your $25 copay or whatever it is at each visit. It becomes easy then.

Do you find that the best front desk people that are able to collect the copays, insurances, deductibles at the front desk also have a little bit of salesmanship in them? I'm assuming some of the patient concerns are going to be more PT-related than financial-related.

Typically, you think of having somebody at the front desk as an entry person or an entry position into the practice and it needs to be a whole lot more than that. Being able to wear a sales hat and not understanding from the business end of it but having a little sense of understanding of what goes on back there behind the doors in the treatment area. Having a little empathy for what that patient is going through and has gone through and then we got to pull some money out of them at the same time. It is a pretty complex set of skills that one needs to have at that position to do it well.

That position is so strong. You get what you pay for. I know in our clinic we were typically paying them about $10 an hour and we're having some turnover and difficulty in training them. When we bumped that pay rate up to $13, $14 and above, you’ve got a different caliber of the person at the front desk. They stayed longer. They were more professional. They understood what was needed to keep the practice up and going and didn't need a significant amount of handholding and excessive training. I'm trying to say that as an aside simply because a lot of times you think you can pull somebody off of Craigslist, pay them a little bit over minimum wage and think your practice is going to run great. Those guys, they're handling your money, they're handling the number of patients that you see. That's a valuable position in the clinic that sometimes we overlook.

I couldn't agree with you more. The other component that you expect of them is that they make sure everybody arrives on time for every appointment. That's a whole another thing. When you factor the value of having every patient arrive on time and get to every appointment that they are scheduled plus collect the copays, deductibles and all that stuff over the counter, that's huge. Putting a couple of extra dollars an hour on top of that is awesome and will generate a higher skilled or higher qualified applicant. Another piece of it is certainly there are plenty of practices that bonus or incent their front desk based on the percentage of copays they collect and the percentage of patients that arrive on time for their visits. When you start dangling those carrots in front of personnel like that, it becomes a little bit easier to collect that money.

PTO 42 | Financial Policy
Financial Policy: Separate the whole money part from the treatment. Put the attention on treating the patient.


Maybe you remember a ratio but I remember a few years ago, someone talking about the amount of money you collect per dollar owed significantly goes down if you don't collect it up front. If you have to turn around and send out a bill, essentially you can expect you're going to collect $0.65 on $1 that's owed because you'll have to write off stuff. I might be throwing a number out there that I don't recall. Does that sound familiar?

It is. In fact, I would say it may even be less than $0.65 on the dollar at this point. It's getting more difficult to collect based on statements all the time. It's a decaying percentage.

If you can collect it up front at the time of service, you automatically get $0.50 on the dollar right there. Tell me a little bit then about the financial policies that you see and your clients have and people that come to you. As we're training, we want to make sure that our front desk knows these financial policies and can articulate them clearly. If the policies aren't strong enough, if they don't have the teeth and clarity to begin with, then they can be useless.

Probably the tendency is that most practice owners are afraid to put too much in it because it may scare people away. I'm going to tell you that's not the case. I have never heard of that being the case. In fact, we have some clients that have added policy footnotes and so forth that they require their new patients to provide them with a credit card. They've got that on the account so that if the patient isn't making their payments or when they're finished with therapy and hasn't made their payments, they run the card. One, in particular, joined us not too long ago with this policy. He was afraid to put that in because he thought he was going to lose a lot of patients. He had had two patients that decided not to seek treatment there because of that policy. His comment was "Those were probably patients that weren't going to pay me anyway."

You might think, “That's too bad, I lost two patients.” Two patients compared to the 100 or so that he might have gotten in that month, it's a small percentage. Considering the inability to collect, when you have to send out billing statements, then it's probably not worth the time and effort of the physical therapy involved to not collect on that.

I would say probably the one thing is that the more you can put into your financial policy, the better you are. It doesn't mean that you have to enforce everything that's in it. If it isn't there, you can't do anything about it. The more the merrier and put it out there so that at least that's in.

Is that something that you can help people with? You do billing for PT clinics. If someone wanted the one-off send, "Can I send you my financial policy for you to review and give you recommendations?" Is that something that you provide?

The more you can put into your financial policy, the better you are. Click To Tweet

I would be happy to. I'm all about trying to improve the condition of private practice physical therapy. If we can make a small thing like a financial policy stronger for somebody that's going to better their clinic and improve their ability to help their staff and more patients, I'm more than happy to help with that.

If you can give us an anecdote, what are some policies that you see that aren't in there that should be in there or that are in there that shouldn't be in there? You shared with us a little bit about keeping their credit card on file and make that standard policy. Is there anything you've seen that’s a solid financial policy procedures that might be missing?

Certainly, the piece about that we are going to collect the copay. Just a simple little statement that we have a contract with the insurance companies as well and if we violate that contract, we will lose our right to be able to work with them. If you let the patient know that, you have to do this.

It's not negotiable.

This is part of our contract. We don't want to lose our ability to deal with these payers as well. We have to do this. A simple little sentence along that line can go up a long way. You typically don't think of this and in the medical world an awful lot but finance charges. If somebody isn't paying on time, why wouldn't we assess them a 12% or 1% a month finance charge that's going to incent them to pay that bill sooner? If that's not in your financial policy, if they haven't been made aware of that, you can't do that so include stuff like that in it.

For some reason, I was always under the impression that it was illegal to add in interest to a healthcare bill across the board, but that's not true. That's maybe a false idea I have.

It is not illegal to do that. Different states have different stipulations on how high that percentage rate can be. I certainly would advise anybody to check with their state's statutes on that. I can't imagine there's a state that would not allow it to go at least to 12%, which is way lower than most credit cards are.

We're essentially becoming a bank at that point. We covered a ton of stuff and thank you for sharing. Reimbursements are going to go lower. There are more value-based payments coming down the line. What's the direction you see in the PT market for reimbursement?

You're right that the insurance companies certainly are trying to decrease the reimbursement. We're tending to see a trend toward more practices trying to go out of network so they can try to capture more reimbursement with that. I ran across a situation where Aetna has now decided in a few states that they are going to require pre-certifications for all physical therapy, occupational therapy and in some cases some chiropractic for particular states that are out of network. They're again trying to strengthen their leverage to be able to better control those practices that are deciding that their in-network reimbursement is too low. Let's get out of network, but now we're going to further try to hamstring you even when you're out of network.

Do you see some of the practices that you're working with? You work with how many practices across the country?

We have 25 clients currently from all across the country.

Do you see a number of them starting to go out of network here and there with maybe some of the insurances that are a little harder to work with?

I don't know that I would say I'm seeing a trend of our clients going out of network. I'm seeing a trend of new startup practices that are not trying to get in-network because of that and are certainly trying to supplement the traditional private practice with as much cash-based reimbursement as possible.

Open up as many different types of revenue sources as possible. Click To Tweet

Do you see a problem with that going down the road or is that something you might recommend people consider?

I don't see that a problem. It would be a problem for me as a billing service. I don't see that as a problem for practice. In fact, I would certainly encourage to try to open up as many different types of revenue sources as possible. Anything that you can do that is cash-based, it totally makes sense to do that.

I can see why guys are doing it that way to minimize the headache and maximize your profits.

The more cash basis your practice is, the fewer staff you have to hire. You don't need somebody to do the billing. You don't need to contract with a billing service to do that. I'm talking to kids in my own business. It totally makes sense because that whole process of playing the game of trying to get paid from a third party is what other business practice does that in the world other than healthcare.

Kevin, you shared a ton of great stuff with us in a short amount of time. Is there anything else you want to share?

As we've been talking about the whole frontend and financial policy and so forth, I would certainly encourage practice owners to sit down on an annual basis and look at your financial policy and see what w what ways can we strengthen it. Evaluate that compared to what problems you may be having with your reimbursement area of your practice. See if there's a way that you can leverage your financial policy to improve that especially at this time of year with deductibles and all of that stuff.

PTO 42 | Financial Policy
Financial Policy: The more cash basis your practice is, the fewer staff you have to hire.


It's a good time to look at stuff on an annual basis for sure. You provide some help and support to your clients. I know if anyone out there hasn't heard my episode with Dee Bills. She does specific training for front desk personnel. That kind of training can go a long way. You can get a great return on your investment there. If you can get that front desk to manage the clinic from the helm, you can see the significant difference in your collections, in your arrival rates and the cancellation rates. You name it. I liked that you brought up that even those KPIs should be incentivized for that post.

We underemphasize the value that the front desk can bring to our practice all too frequently. We touched on that earlier certainly. The more attention that can be given to that area and helping them, shore them up with practice drilling on giving them scenarios of hard to deal with patients so that when it comes to that, they've got it. They've done it before. They know exactly what they're going to say and how to say it and able to get the product that they need and want.

Are you recommending roleplay?


We always hate it. That is some of the best training you can do.

We've all done something new. When you do it and don't do it as well as you wanted to and take a step back and reflect on what you did it, you always say, "I wish I would have said that or next time around I would do it this way." That's what roleplay does and that kind of drilling allows you to work the kinks out so that you know how you're going to do it the next time.

I'm a big proponent of that. If people wanted to reach out regarding the billing services that you provide or even some of the consulting on financial policies that they currently have in place, how would they get in touch with you, Kevin?

We underemphasize the value that the front desk can bring to our practice all too frequently. Click To Tweet

The best way to reach me is by email and that's

You provided a ton of great information in a short amount of time. I appreciate you taking the time.

Thanks, Nathan. It was fun talking to you. I enjoyed it very much.

We might have you on again sometime to talk about something else billing-related.

I would welcome that opportunity anytime.

Thank you, Kevin.

Thank you, Nathan. Have a good one.

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About Kevin Cappel

PTO 42 | Financial Policy

Kevin Cappel began his professional career as an ATC at a D2 university in MN. He went back to PT school and then worked for a large hospital-owned sports med center and became an office manager. In 2001 he opened a private practice with another partner and grew that. In 2007 he sold his interest to his partner and joined a consulting group and worked there for 1.5 years. During his time there he helped many practices, and in particular with the billing area of their practices. He realized that he was pretty good at sorting out those problems and so decided to create his own billing service and that is how Jet PT Billing came to be in 2009. Jet PT Billing currently has 25 clients from all across the US.


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