Are you 100% confident that you are collecting every dollar your clinic has worked for? Frequent flyer and CEO of In The Black, Will Humphreys, joins Nathan Shields to challenge owners that any answer other than “yes” is a fatal flaw in your business. He then gives out two more fatal flaws often made in billing and collections that keep you from maximizing your profit. Furthermore, Will shares a couple of things you can do to get a better gauge on whether or not your billing department is working effectively or not.
Listen to the podcast here:
The 3 Fatal Flaws PT Owners Make In Billing/Collections With Will Humphreys, PT
I’ve got a frequent flyer, Will Humphreys, on with me again. Will, thanks for coming on.
It’s an honor as always, Nathan. It’s great to see you. This is how we communicate since you’ve gone to Alaska is through the show. This is perfect.
That’s how we stay in touch. It’s our communication time.
These are our catch-up conversations.
You were last on with me for the second anniversary of the show and we reminisced and talked about some things there. In the course of the interview, you shared with the audience what you’re doing nowadays and that is your billing collections company. I figured it’s important for you to come on and join me because you are seeing things amongst the PT owners that you’re consulting and working with that would be valuable to share with the entire audience. Whether they have their billing departments or outsourcing their billing that would significantly improve their gross revenues and net profit margins if they simply stayed on top of them a little bit better. You see some things that if they can focus on those money lines a little bit more, they could generate more cash.
It’s interesting you say that because as a private practice owner, when we were in partnership and we were running our in-house department, and at times when we outsourced, we have a specific experience around that. There was an evolution where we bring someone on. They do your billing. Maybe you try outsourcing it a couple of times. It always feels like it’s more expensive so you bring it back in-house. After a while, you feel that you’ve got grips at it. You feel that you have a handle on it. You get to that point where it’s becoming this thing that you manage but it’s on the side because your main focus is usually on sales, marketing, and care.
Now that I stepped out of that and I stepped into billing full-time from an outsource solution perspective, I’m doing this thing called the profitability breakthrough audit where people who are either in dire straits and they don’t know why they’re in dire straits with their billing. More commonly, people who are comfortable, but not confident in every dollar they should. They’ll reach out to me and we’ll do an audit and it’s mind-blowing what I’m learning about billing and collecting from the same call. It’s one of those blind spots for most private practice owners.
For all of us, essentially as PT owners, we have no training in how to handle insurance companies and the billing collections aspect and any rules or regulations around it. Most of the time, we naively either bring somebody on, expect them to learn it on the job, but if they’ve got some experience, we completely trust them to tell us about our money situation. If we outsource it, it’s the same thing. We completely trust them. They’ve got all the experience to tell us the situation. What’s funny is they didn’t come at us with statistics and reports that could show their work. They simply said, “Things are going well and these people owe us money and I’m reaching out to them.” Even if they did show us reports, we didn’t know what we were looking at.
I remember being at those meetings and looking at an aging AR report and listening to my biller say, “This is what this is and this is good.” Me going, “I’m making payroll and I’m paying myself. I guess things are great because I remember when I couldn’t even do that.”Without proper billing, the money you lose isn't just income; it’s profit. Click To Tweet
“We see our accounts rising and we’re covering our bills. Financially, we’re okay. There are no concerns and no one’s talking to me complaining about their bills. You’ve got it handled.” Can you imagine how much money we lost over the years by taking that perspective?
I got chills when you said that. It makes me sick because the money we lost wasn’t just income, it was profit. It was 100% money that would have gone into our pocket. I was barely braggy about how well we were doing in those days. It’s scary.
That’s money that goes to your household, your retirement and funds your kids’ colleges. It could have been another vacation, not necessarily from a self-centered perspective. You could have done more for your business and handing out more bonuses. You could have done more culturally relevant things to enhance the culture of your company, promote people, hire someone on, and do those things. That’s all money that went down the toilet because we trusted other people blindly. As you’ve gone through that audit, can you confidently say that people are losing X amount of dollars or X percentage of their revenues because they’re not focused on tracking their money lines?
Yes. We haven’t done hundreds of these. We’ve done twenty of these profitability breakthrough audits. In every single case, even when people were confident that they were collecting every dollar, the least I’ve seen is $20,000 of profit that was in their company right at the moment that was easy to get. It was right there, “We’re doing great.” That’s the difference they might be doing good. This is this message and I’m hoping everyone will hear this who has any relationship to the billing department, whether it’s outsourced or in-house, is that the difference between good billing and great billing is tens of thousands of dollars in most cases of pure profit. It’s not any extra work. The purpose of what I want to share is to help people be successful where they are. I believe that PTs can learn the 20% that they need to in order to comfortably navigate and manage 100% of their billing and collecting. At least know what’s going on because accountability will automatically result in greater collections.
Can you break it down for us? You’ve got the three fatal flaws that affect owners and their billing.
As the name of this show, we’re are right into it, three fatal flaws. These are things that I’ve lived. I want to say we’ve lived because I don’t want to throw you on the bus, but we’ve lived them. We have gotten them as business owners, but ultimately these are things that have become crystal clear to me as I’ve stepped into this new role of trying to disrupt billing and that’s what I want to do. The whole reason I’m in billing as a physical therapist is to disrupt it because next to seeing our patients and our company’s progress, collecting our money should be the best part of our day. It’s the worst in some cases because even when we get it, we’re like, “Is that all? Is that it? Should I be expecting more?” I want to make billing fun and easy. That’s it. The more I’ve done this, the more I’ve learned it’s possible.
The first flaw that I’ve seen, both that you and I have lived, and what I’ve seen with other clients is that people are thinking and not knowing that their billing company is doing an adequate job. There are people who are in dire straits, but over here where most people are, they’re like, “No, I’m doing good with billing. Things are going great. I loved my in-house team. I love my outsource solution.” When I ask, “How confident are you that you’re collecting 100% of every dollar owed to you?” They look at it and that shifts it from being confident. They’re more comfortable. Being comfortable is where that blind trust that you spoke of comes into place because it’s a matter of like, “I’m meeting my bills. Maybe I’m even running above the 8% profit margin, which is what our industry’s running these days. We are either 10% or 15%.” They’re thinking, “I’m crushing it,” and there is still $20,000 or more that could be in their pocket or in their house.
That reminds me of the first sentence in Good to Great is, “Good is the enemy of great.” If things are going well, “My bank accounts, okay. I’m comfortable paid my house payment, my car payments, my kids, wife, and husband’s happy. We’re good.” That’s the enemy.
Ultimately, that’s the first flaw that is totally about mindset. The other two are more specific. I’m excited to share these with your readers because these are tools that I want them to go back and immediately can be more successful. The first thing is the mindset because there’s this curtain between PT owners and their money that I didn’t see as clearly until I was on the other side of the curtain. I am super incentivized, Nathan, to not show all my cards all the time to my clients, because it makes it easier for me to navigate this crazy thing called insurance reimbursement, which has its own blend of absolute chaos. Insurance companies greatly impact how things come in and if you don’t know every little detail and trust that the outcome is okay, why would I provide you with excessive data on that? I am motivated not to do that, which is not what we do. That curtain is there for a reason. People are on one side not trained to run it and on the other side, incentivized not to pull it back for you.
I love the fact that you’re willing to share and talk to them about it because there are things that PT owners need to know and do in order to make sure they’re tracking all of their money. It doesn’t take a ton of effort. It takes intentional effort set aside specifically with the biller at minimum once a month with some follow-ups in between 2 or 3 times. We got to the point where we were meeting with Katie.
I want to throw that out there. The reason things shifted for you and me was Katie Archibald. She is one of your greatest hires. You’ve made many great hires but one of your major contributions was her. She came in and she challenged the notion. She saw things differently than the average in-house biller. She would sit down with us and say, “I don’t think you are getting this. You should expect me to do this.” She challenged all of our preconceived notions of production. She was like, “When it comes to this metric, you should expect this, and this metric should be that. If I’m not meeting it, this is what you do.” That started the journey of that and that’s why I partnered with her in my company.
It was also a matter of, I knew I had the right person because Katie is an honest person and I was able to say, “If you wanted to screw me over and take my money, where would you do it?” We talked about that with the help of Howe, who was our bookkeeper and managing a lot of our financial reports. We started generating reports that would show where every dollar was on every day that was collected across the front desk and coming from the insurance companies because a lot of money is missed there at the front desk. You can all lose some money from the insurance companies but we got to a point where and a tracking system where things all reconciled. We were able to track every single dollar with the reports that they were able to start putting together over time.
It was weird how little it took for us to get there. What Katie did, this is what I’m hoping to challenge in terms of your reader’s notions about billing and collecting. There’s truth to this. That’s why this is confusing is that we weren’t trained for billing and collecting. We went to school for something else. We should hand that over to an in-house or outsource solution and let them deal with it. There’s truth in that but the problem is that if we are neglecting our accountability to it and we aren’t learning the 20% that allows us to govern the process cleanly, then we are beholden of something else.
What I love about Katie is she’s incredibly patriotic. She should be comfortable with me sharing this. Her family on the 4th of July, they did a Declaration of Independence in the American History quiz with each other. She’s inspiring to be around. She tells me, she goes, “I see what we do as freedom fighting.” PTs and PT owners and medical professionals are beholden to what they don’t know. The billing companies are like, “Don’t worry. We have a proprietary process. It’s a secret algorithm.” No, it’s not. It’s something that you can learn.
Those are the mindset, let’s get into the weeds. What are the other two things?
The first flaw is feeling comfortable, but not confident that you’re collecting every dollar of your schtick. The second flaw is not forecasting your income. This one blows my mind a little bit because any other industry when there’s finance, it’s like, “If I’m hiring you to go and get my money or I’m doing anything to help an in-house solution, go get my money.” Anywhere else, you’re going to expect them to set targets for what they do the following month.
If there’s an invoice and you’re expecting to collect $50,000 and only $40,000 comes in, then you know there’s an issue, but we don’t do that with physical therapy. We might bill out $50,000 and a lot of times, we don’t even know how much we’re billing out per month. We’re completely incapable of figuring out how much we should expect the next month.
Ultimately, what I mean by forecasting is it is simple math. To take what you’ve done the previous month and then you multiply that by the average collection per visit. Your billing team should be accountable for that amount the following month. What I recommend is that PT owners, in particular, we at least do a monthly deep-dive where they review the previous month’s target and how they did and why they exceeded or didn’t exceed that number? They establish a new goal for the next month because the number one metric we don’t measure is the percentage of collections of forecasted collections. That’s one of the simplest numbers. This does an easy gift to the audience is that most billing and collecting that we do in terms of review is retroactive. It’s in arrears. It’s already happened. It’s a postmortem. It’s too late to do anything about it and meanwhile, by the time we get caught up, those monies are subject to timely filing claims and all these different rejections that ultimately will permanently take our money away.In finance, the empowerment comes through forecasting. Click To Tweet
I did it with my mastermind group and it’s surprising how simple it is to the point where some clinic owners are like, “Is that it?” All it is, “What were your total visits in the month of July multiply that by the average reimbursement rate per visit.” That’s something that you might not inherently know, but you can look in your past months and billing software and simply take your gross revenues divided by your total visits. Do that for a year and then average it and you have your average reimbursement per visit.
Take the month of July. Let’s say 400 visits in the month of July, average reimbursement is $100 per visit. You should expect your biller the following month to collect about $40,000. It’s that straightforward and that’s your pass or fail. That’s your measure. That’s your litmus test. I did 400 visits and I know I collect a $100 a visit historically. You should be able to collect $40,000 next month. It’s simple and PT owners, aren’t doing that on a regular basis because we know reimbursement timing is going to be somewhere between 3 to 6 weeks. It works out over time. It’s an easy bar to hold your billers to whether they be in-house or outsourced.
It’s easy and it reflects that mindset shift. The first mindset shift is that “This isn’t something I can handle or something I can manage that I have to feel beholden.” In finance, empowerment comes through forecasting and often because of the complexities of an AR complex, I’m not saying that getting your money isn’t hard because it is but the only way we manage things traditionally is retroactively instead of proactively. As we prepare for growth, as we look for future potholes to step over, being proactive with our finances, by simply forecasting, our income empowers us to know where we’re going and hold our teams accountable. It’s an easy thing to do when things were a little bit off in our company. We would do weekly fifteen-minute billing meetings that were all about, “This is how much we were forecasting for the month. You broke it down by week and this is how much we collected.” You can get in real time, super easy. That discussion alone raises accountability to that team, to where that low-hanging fruit isn’t the only thing that they’re going for.
Imagine how powerful that makes an owner simply by knowing that statistic. If you know that statistic, I should be collecting $40,000 next month. Hopefully, readers to my blog also know where their break-even point is financially speaking, and know that, “If I’m collecting $40,000 and I know my break-even is $42,000, I’ve got to get $42,000 to meet all my expenses. I’m going to be at $2,000 loss this next month.” Be prepared for it but at that point, as the leader or captain of the ship, you can start making decisions, “I’m going to have to cut back hours a little bit to make up for this negative that’s coming here this next month. I’m going to have to look back at expenses that I can pare down. Maybe I don’t buy that piece of equipment this month until we get some positive cashflow in the upcoming months.” You can make a cascade of decisions based on that one metric if you use it so and make you more powerful looking forward, instead of looking back.
It’s something that we do organically within our company. It’s fun because most of our PT clients that we work with, they’re not used to it and half of them don’t get it. They’re like, “You’re telling me how much you should be collecting next month.” Initially, they’re like, “That’s nice.” They don’t know any difference, but those who’ve been through the wringer, they look at that and go, “That is helpful to know where my money’s at.” I would say quickly the one variable in that equation is your average collection per visit, because there are some that go into that from your payer mix to various other factors.
The skilled units per visit that you’re doing on the regular and that stuff.
In that case, there are some additional items that influenced this or directly outside of the billing domain but I would say that those are things that can be learned, and the easiest way to overcome that is through networking. This is more of a direction to what you offer in terms of coaching and also with the show is. There’s a lot of information out there. It’s not hard to get. Information we’re sharing here is a lot less commonly known. That other data it’s well-known and in your area, what I always recommend is developing relationships with other private practice PT owners in your area as synergistic so that they’re not competitors.
You get comfortable if you start sharing this data and although there are still variations on what they collect per visit, having that information, challenges, these preconceived notions we have of what we should be collecting for a visit and maybe it’s more. Maybe we’re the best in our network, in which case we’re sharing with them, what we do that’s special on the charges but either way, there’s ways to figure out that average collection per visit. Even if it’s not where it should be, when you start forecasting, at least, you know what you can expect down the road. That leads us to number three. I felt like that’s all I have to say about that.
I usually want to add on, but I’m like, “That’s about it.”
The third fatal flaw is that people practice owners and PTs are either reviewing the wrong stats as the primary stat or not looking at the right stats at all.
Tell me about that.
The second flaw is the beginning of that, not forecasting and looking at that metric, but in our industry, what’s interesting is the easiest statistics to understand are the ones we typically use. Back in the day, the main ones that I would review would be collection per visit, my total collections, and my percentage of collections versus my charges. Those are good metrics. We navigated well before Katie in that. The problem with those is that all three of statistics, and just to go over them in case that wasn’t clear, looking at how much we collect per visit on average, what our total collections were and then the percentage of our collection versus bill charges is that they’re retroactive and they’re not proactive.
By the time we measure those things, we find ourselves in a position where what needs to have already been corrected in some cases can’t be corrected. What is the way to go apart from forecasting the right stats for always within the aging accounts receivable? In a weekly process, if that’s a brand new term. My biggest concern in doing this show was using any of these terms because none of us have typically been trained on them. If I say aging accounts receivable, there might be a percentage of your audience who glazes over. They heard of it, but they’ve never had that explained. Maybe they’re not even using those other three stats, which are still important.
It’s the AR aging report. If you don’t know the name of the report, you might’ve seen it before because your biller or your software is going to show you what 0 to 60 days, 60 to 90 days or 0 to 30, 30 to 60, 60 to 90, 90 to 120 above. You’ll usually have five columns of where your money is sitting. You said something important. I want to add to it and that is, there are many times that you can’t go back and collect those monies. That’s true that it’s hard to collect money after the fact sometimes but the other thing to think of is as your money sits out there, it’s been shown that you tend to collect less and less of that dollar owed.
If you build for a dollar and you’re expecting a dollar, if you get it at the time of visit, you’re certain to get that dollar. As soon as they leave the office, the likelihood of you collecting the full dollar changes. The rates come down to you. As a whole, you start collecting $0.86 on the dollar if it’s 0 to 30 days. If it gets out to 90 days and 120 days, we’re talking $0.30 to $0.40 on the dollar that was owed to you at that time. If you have a $10,000, 120-day AR, you can expect maybe to get $2,000, $3,000, $4,000. That’s the national industry average. A lot of times, waiting to collect that money means you’re losing pennies on the dollar.
Collecting money is a lot like recruiting. It’s all about speed. It’s about efficiencies and speed. I look at money like you’re trying to recruit somebody. You don’t wait a week to respond to their email. You get back right away. When it comes to billing and collecting by virtue of letting it sit out there, it starts to go down, which is why when I look at most of those stats, the first three I do use in a monthly post-mortem like, “This is what happened. This is what you did.” In real-time when we do weekly meetings or when we’re projecting future income as well. I live with my clients around the projected, forecasted collections, as well as the aging accounts receivable. It’s that report that has it broken down by time periods. It can be done differently, but I’d like to quickly review some common breakdowns and what those expected percentages should be.
I have guys in my mastermind and my coaching clients ask this all the time like, “What should be an acceptable 90 days and above or 120 days and above.” I’d love to hear what you have to say.
This is going to challenge some people legitimately because the first time I sat down with Katie on one of these statistics that I’ll start with the back. I’ll go from the end backward. Greater than 120 is typically a category on this report. I used to tell her, I’m like, “Twenty percent is the lowest I’ve seen it.” She’s like, “No, Will. You should expect that to be below 10%.” That’s what I loved about her is she thinks differently. Like, “No, Will. You’ve got to understand that your aging report is greater than 120 days, that total should be less than 10% of the total outstanding money that’s out there.”Waiting to collect money means you’re losing pennies to that dollar. Click To Tweet
When it comes down to 90 to 120 and then 60 to 90, those two categories, you want there to be less than 5% of the total money’s outstanding. From 0 to 60 days, we want them to be greater than 80% of our money outstanding. To your previous comments, we want almost all of our money that’s outstanding to be in the first 60 days. That’s an easy way to understand it. It’s sitting there. We’re collecting on it. The minor inevitable issues that exist are going to be less than 5%, 5% the pool at the end is less than 10%. It’s an easy way to remember it, greater than 80%, less than 5%, less than 5%, less than 10%.
Less than 10% for your 120. Less than 5% for your 90 to 20, 5% and less for 60 to 90. That’s a great way. When I pushed people on that or I share that information with them like, “Over 120 days should be less than 10%.” They’re like, “Wow.” There’s much money for some clinics sitting out there waiting to be collected if they put in the effort, make a few calls, rebill, send it in with the prescription. Whatever they need, do it and then you’ll get your money because inherently, the insurance companies don’t want to send you the money. You have to do the footwork. If your biller is simply sending out the claim and it’s coming back and getting denied, and they’re not willing to put in the effort to do what they’re asking you to do, then the insurance company has won and you’ve lost your money.
The people don’t realize there are good people at insurance companies. There are great concepts being driven but when you’re on this side of it and you’re fighting for people’s reimbursement, you see the corruption, the tyranny. That’s why in our company we don’t call ourselves billers. We call ourselves financial providers. We do financial therapy. We don’t do billing and collecting because we’re rehabilitating a broken system. I tell my billers that they are care providers as they help their clients get their money in order.
We only work with PTs because I do think there are variations outside of PT but the similar connection in terms of our healthcare system is the same. We have one group in particular that we submit and get the same rejection notice every time that we haven’t submitted things appropriately. We’ve done this for years and we know. We are submitting things finally we resend the same document and it gets accepted that the policy on that insurance company’s end to automatically deny the first time, no matter what. It’s interesting to see the game and people’s profits is what they’re gambling with.
Knowing this information and then statistics that you shared the 80%, 5%, 5%, and 10% is powerful for an owner to then go to their biller and say, “This is what I expect out of you.” Many times, we sit at the feet of the billers and tell us, “Please tell me that it’s going to be a good month or that you’re not having any billing issues and I can pay my expenses next month.” Expecting wisdom to come down from them and tell us how things are going, you’re the owner you should know. Having information like this, both the projection stat that you’re talking about and knowing the AR aging expectations, it says, “This is what your responsibility is and this is what I expect out of you. You need to make our AR aging reports look like this.”
That’s a minimum expectation level. There are going to be those outliers that have a ton of lean patients, motor vehicle accident patients, or worker’s comp that trail on forever. Those are possibilities, but the biller needs to be telling the owner, “That’s why our numbers are off and I need to see each line item of the patient case as to why and for someone who came in for a regular visit and had UnitedHealthcare, there’s no reason they should be in the 120. I need to see all of that information.” It puts the power back in the owner’s desk to know the number one thing you talked about, “Am I confident that my biller is doing everything they can and we’re collecting everything we own?”
You and I share a brain because where I was wanting to go with this. What do you ask the readers? What do you do? You’re listening to this on the way into work and then you ask your biller for an aging report. You’re looking at the percentages and they’re nowhere near what we’re talking about. What do you do from there? It’s all in the story and I’m not talking about explanation or excuse. I’m talking about the objective measurable story around it because any biller worth their salt is going to be able to objectively explain to you why those things are off.
You know the difference without having to know every last detail of billing when someone’s making an excuse and dancing versus legitimately concerned because X, Y, and Z are happening. That was what Katie did for us as well. In a perfect world, there is a major variation with that percentage of projected income that forecasted number. It’s an easy number. You’re looking for 100%. There were weeks or months where we’d be at 120%, but there were months where we’re 80% to 90%. Katie would say, “Here are the individual case by case issues we’re having.”
Sometimes it was a global thing with specific insurance. Other times, it was a perfect storm of smaller, independent, relationships, and even client issues that were completely impacting that flow for the moment. What cool about it is that if the story isn’t an excuse, the action is easy to describe. She would say, “This is what’s happening with the insurance. This is what I’ve done to counter that.” Over time, when I started to trust, that’s when we collectively, you and I, knew we were 100% confident that our money was where it needed to be, which was in our pockets. I want to highlight, how do we know this for sure? It goes back to our story when you and I merged with other companies and went to sell our company wasn’t the biggest in terms of volume. We had fewer patient visits to our locations, Nathan, than two other locations, but our company was valuated the highest because of our net profits. A lot of it came from this thing that we’re talking about.
The focus that we put on it only helped make Katie even better. She’s one who appreciated the accountability. She enjoyed putting together the reports and showing her worth and her work. That’s the person you want. Not only do you want someone who’s bulldogged in collecting every dollar, but also someone who’s not wanting to hide and is willing to look objectively at the data and say, “This is what’s happening and this is why.” Be willing to present and it shouldn’t be an emotional conversation, “This is what it is and this is what is expected.”
The thing I want people to realize that most billers and Katie is a diamond in the rough I’ve learned because she was that person who challenged you and me to expect more and so forth. We’ve hired our eighth person. We’ve had eight hires in our company and I could be dingy. For every hire, I’m looking at 300 resumes. What I’ve learned is that most billers who come across have a high degree of ethics. They want to do a good job where they fall short is in our leadership to them. We don’t want to look at it like we’re coming down on them. It’s not an emotional conversation.
We’re freeing them from their environments because most people, given a lack of accountability, aren’t going to show up as powerfully. It’s not personal. If we give them that accountability, they get to rise up and be the best version of themselves, which a lot of billers I’ve learned are their personality trait. They’re detail-oriented. They want to, “Why would they go the extra mile if you don’t know or care?” If you know what the extra mile looks like and you care, you’re going to get a much happier in-house biller or a more satisfied outsource solution. I’m hoping to promote these other solutions that exist because there’s a great need for it.
There’s a certain personality type amongst the best billers that I’ve had and they take it personally when the money’s not coming in. Do you find that? They get mad when they can’t collect on that $7.60 copay that the insurance should have paid. They’re like, “It’s $7.60.” They’re like, “No, they owe that to us. They need to pay it and I’m going to keep going after them until they do.” I’m wasting my money but I love your attitude. We hit on a lot of your topics, but what I love about Katie is also her willingness and insistence to make sure that things were going well at the front desk when it came to over the counter collections too. One of those other statistics was what percentage of the expected copays was collected?
I know a lot of EMRs are set up for that maybe not for that specific statistic, but you can track who should have paid copay and who didn’t. That was something that she was able to then work in collaboration with the front desk and especially the front desk managers to make sure that, “So and so didn’t pay their $20 copay. You need to call them the day after their appointment and collected over the phone because we’re not going to let him walk, wait and hope that he comes in next time and somebody remembers to have him pay $40 next time he comes.” We were dogged about that. We found as we were doing our weekly meetings, that we would also measure that. How much were we collecting over the counter? How much should we have collected over the counter?
Going back to fatal flaw number one, feeling comfortable, “I’m sure that I’m doing well, but not 100% confident.” One way you can tell if you’re collecting solution, whether it’s outsourced is collecting every dollar it should is that there is a positive relationship between the biller, the front desk, and the providers. There’s a natural dichotomy that exists when the person at the front desks errors greatly impacts how its biller performs. It’s common. We’ve seen it 100 times and I had six different solutions in the years. Three of them were outsourced and three of them were in-house. It didn’t matter if it was outsourced or in-house if the relationship was nonexistent.
If they didn’t have a contact that they felt emotionally like a person that they knew on the extreme other side, where people were agitated by each other, constantly the biller by the front desk and the PT, that’s the biggest indicator that you are not collecting everything you should. It takes a team and a village. That’s why I think most PT companies prefer in-house versus outsource without even being conscious of it is that it’s easier organically to create relationships from the front desk, the back office. They end up running a separate business within their own business, without even knowing it because having relationships organically increases the ability for that company to collect.
If there are any disharmony and lack of clarity when we outsource, that was the most common thing it’s like, “I’ve got this contact name, but I don’t know her/him well.” The biller that’s where Katie shines the most is that she comes in or she came in our case everyone loved her and her team because they saw them as people helping them do their job better. It’s a big thing. That’s one of the things we do that’s different in our company is that Katie harnesses that end of it and then I represent the PT side of it. I’ve done everything speaking at a team meeting about effective billing practices because the practice was grossly under billing down to 80 holding seminars. We’ve had those where we’ve gone into people’s clinics and had all the front desks in there either virtually or literally if we can, and describe what’s needed because that little bit of information changes the dichotomy increases the connection to the relationship, which brings in every dollar.
We went through this entire thing and you didn’t even share the name of your company.Collecting money is a lot like recruiting, it's all about efficiency is speed. Click To Tweet
Isn’t that weird? I don’t care nearly as much of trying to disrupt the whole damn thing.
There’s such valuable information. You wish all the PTs would know it and harness it because it’s not hard. They just don’t know and you want to get that info out.
To be specific, I’m particular on who we bring on as clients. I don’t have a vision at this stage in my career of having hundreds of clients. I rather go a mile deep with people who meet my criteria that I can super meet and help them. I love working with you whenever we’ve shared clients. The benefit with your coaching with what I do on the financial piece, it’s unstoppable. I want to help everybody, but I can only serve. I can go that mile deep with a select few. I want to give information to everyone to be better and more successful and have that freedom against the tyranny of their own and what they don’t know. We are looking to take on new clients. Eventually, we’ve stopped taking clients until October, but we project that we’ll do openings in October. My company is in the black. We get you in the black and if they’re already there, then we increase the curve of that.
What’s unique about it is this whole relationship between me in the back office, Katie in the front office, and then a powerhouse billing team that’s 100% American. I’ve got zero judgment for people who outsource overseas. I think that’s a workable model, but Katie is my partner. We are 100% American. As a result of that, my margins are smaller than others and what I would tell you is that we want to see these companies grow over time. We’re looking for long-term relationships and to completely change the dynamic of how people view outsourced physical therapy. We only do PT. We do some OT as well. I will say that but that’s it.
That’s awesome that you’re willing to share because you shared some valuable knowledge so that they can manage their billing department, wherever that is, or their billing person, whoever that is. I know that you’re more than willing to do audits with people and share more insight if they’re willing to reach out to you. If they did want to reach out to you directly, can they do that?
Yeah, most definitely. It’s Will@InTheBlackBilling.com. I also have my YouTube Channel at The Profitable PT. I love doing profitability audits in most cases that help us qualify people as potential clients. I’ve told people no because of whatever reason, but for me, the owner has to be coachable for this model to work. We don’t want customers who want to outsource it and not have a relationship with us. If they want it to outsource and forget about it. There are a lot of good companies that do it. Honestly, I can do a great job. We’re trying to go a mile deep. They can reach out to me. I’d love to do profitability audits. In most cases, that’s how we found that a handful of our existing clients. I’d be happy to do a profitability audit. We have a system that is super easy. You send your data over. We break it down. I show you where your potholes are. It takes an hour. It’s not hard.
Thanks for offering that and that’s cool. I’m sure we’re going to be in touch again here soon. We’d bounce ideas off each other. It might not be more than a couple of weeks before they hear from us again on the show.
I’m honored. Whenever I’m out and about, and people are like, “Do you know Nathan Shields?” I’m like, “Yeah. He was my partner.” I’m not even kidding. It’s cool that your show is doing well.
Thanks for joining us. You’ve made it that much better. Thanks.
Thank you for the opportunity. I appreciate it.
I will talk to you later.
About Will Humphreys
Will is the CLO and co founder of In The Black Billing company and has been a PT for 20 years. He owned a multi-locational outpatient practice for 12 years before starting In the Black Billing with Katie Archibald. He is a father of 4 boys, married for 20 years and a part time comedian. He is passionate about physical therapy, entrepreneurship, and the freedom that is created through profitability.
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