PTO 72 | Billing In-House Or Outsourcing

 

It's an age-old question for PT owners - should I have my own billing department or outsource it? It's a dilemma that each PT will go through at some point. Let's get the answers from billing veteran Amy Sparks. Amy has 20+ years of medical and PT-specific billing experience and has a firm grasp of what it takes for an in-house billing department to run smoothly. IF you have the right people and IF you can monitor and manage them regularly (weekly and monthly meetings), then in-house billing may be right for you. But IF you outsource your billing, you still need to monitor, manage, and demand regular reporting. Make your decision to go in-house or outsource but never abdicate your responsibility to stay on top of your cash flow.

---

Listen to the podcast here:

Bringing Billing In-House Or Outsourcing: The Pros And Cons With Amy Sparks

I get to talk with Amy Sparks. She is the Billing Account Manager out of Star Physical Therapy clinics in New Orleans. We're discussing whether or not to bring your billing in-house or to outsource your billing. After my discussion with Amy and based on my personal experience, I personally believe that in-house billing is the best way to go, but only if you have a couple of things in place, only if you have these two things. Number one, you've got to have the right person with the right personality type. The best billers that I've had seen billing and collections as a reflection of them personally. They take it personally if people don't pay, whether it's $5 or $500, they're in the pursuit of that money. They're willing to confront anybody that's not willing to pay, whether it's insurance companies or patients. They've got to be able to hold those conversations and demand payment when it's appropriate. The second thing is you've got to be able to have the time and the bandwidth to monitor and review and check up on the reports of the billing department that they provide you.

You've got to step out of treatment. Take the time on a weekly and a monthly basis to review billing reports with the billing supervisor, whether that's in house or outsourced to track your money. Whatever time you take away from patient care to review billing will come back in spades both immediately and in the future. That's your money, that's your cashflow, that's the lifeblood of your clinic and you've got to stay on top of it or else it will leak out. We talked about some of the reports, some of the KPIs that you'll want to review on a weekly, a monthly basis. Ultimately, the billing department did what's best for me when I demanded the most out of it. When I found the right person, I would talk to them about my expectations for the KPIs and they went along with it. I also talked about the reports that I wanted to see and they went along with it and created those reports and even added some statistics on top of it to show their performance and help them track the performance of people that they managed.

When you work in synergy like that and demand more out of the billing and collections, your billing and collections will improve. Your cashflow will improve. Those clinics that are growing have a heavy, solid, strong billing department. Those companies that are floundering typically also have a floundering billing department. We talk a lot about the ins and outs and the pros and cons of in-house versus outsource billing, some of the questions that you should ask if you are going to bring your collections in-house and some of the expectations you should have if you are going to outsource your billing. Let's get to that interview.

---

I've got Amy Sparks. She is the Billing and Account Manager out of Star PT Clinics based out of New Orleans. They have eight locations. I came upon Amy because she wrote an article in Impact Magazine regarding in-house billing versus outsource the billing, what you should do and how to determine what if you should do either one. I'm excited to do this because it's a common question for all PT practice owners. First of all, Amy, thank you for coming on to the podcast. I appreciate it.

No problem. Thank you for having me.

Tell us a little bit about you, the experience that you have with physical therapy and billing in particular. How did you get to the point where you are now?

I was raised in New Orleans. I actually got involved in billing by accident about many years ago and I can't believe it's been that long. I started in billing for outpatient dialysis. From there, I ended up working at health insurance. I got to take those phone calls all day. I got involved as the biller for an OB-GYN doctor. About a few years ago, I got a job at an outpatient physical therapy clinic. That was my first experience in billing for physical therapy. I've been here at Star for two years.

Did you notice this significant difference in the billing between those other medical professionals and physical therapy?

If you billed for any sort of health care facility before, you can bill for physical therapy. Click To Tweet

Other than the coding, no. The codes are different, but pretty much the rules in the game are exactly the same.

I asked that because a lot of PT owners might be looking for that billing person. I never knew, is it important that they have physical therapy-specific experience? Any healthcare experience is beneficial and there's not much difference, but you're telling us it’s not that different. 

The CPT codes vary, but the rules of the game stayed the same. If you billed for any healthcare facility before you can build physical therapy.

I liked how you talked about the typical storyline that physical therapy owners go through in the article. You talked about a story that I'm very familiar with and a lot of other physical therapy owners are familiar with. Did you start with maybe a dedicated staff member or someone like that who is a rockstar? Maybe they want to do things on their own or maybe they start with an outsource billing company. What's the path that you typically see that you mentioned in the article?

Typically, what I usually see is when someone with a physical therapy clinic is starting out, they will hire somebody they think is a rockstar or even a family member or something, thinking, “Our patient load isn't that crazy right now. This person can handle this.” What ends up happening is they end up growing. Once they grow, they realize either they’re not so much of a rock star or this person was great when we were seeing twenty patients a week, but now that we're seeing 100 patients a week, it's too much for them. They'll end up either outsourcing to a billing company or trying to hire someone they think is better equipped for the job.

That usually goes a long way and based on your experience, I can share my experience as well, but outsourcing to a billing company, what are some of the pitfalls with that?

Some of the pitfalls with that is if it's a larger billing company, I don't think they can devote as much time as they should basically to your AR and your claims and stuff like that. If I have 200 other customers, they don't devote that amount of time and they're trying to get to that basic level, "We said we would get you 80%. That's where you're at." We're not going to go for the extra, even though it would be easy to. This is the same thing for in-house. You're at the mercy of who you hire in a way. People can look great on paper. They can interview like a rock star. When you get them actually to put their money where their mouth is, so to speak, they don't know half of what you thought they did.

You see that no matter whether you're doing it in-house or outsourcing your billing, you're never quite sure who you're playing with. When it's in-house, you do have some control there or more control at least because you can hire according to your values and hire someone that's aligned with you. You also can hone in on the customer service aspect of it that you don't have a lot of control over when you're outsourcing. One of the issues we had with outsourcing was that we had someone who was a jerk on the phone to these people and they were like, “That's not us. That's not our values. We could control that a little bit more when it was in-house.

I was going to say too because the person's right there, you can see how they spend their day. If you wanted to check in on them, you can hear how they talk to your customers, how they talk to insurance companies. That way you have more control of, “Is this what kind of person we want doing this for us? Are they giving us a bad reputation and we don't even know about it?”

PTO 72 | Billing In-House Or Outsourcing
Billing In-House Or Outsourcing: One of the pitfalls of a larger billing company is that they can’t devote as much time as they should to your AR and your claims because they have 250 other clients.

 

Unfortunately, that can be the last impression that they have of your clinic. They're no longer being seen in physical therapy and you don't have any contact with them. If they're doing something 3, 4, 6 months later that could be negative, that impacts you in a bad way.

Absolutely, it does. I always say the clinician and the billing department are basically in a relationship of a good cop, bad cop. The clinicians are the good cop, the people in billing are the bad cops always. We're good with that. We're fine with that. We're the ones who are going to take the bullets from your patients and stuff like that as far as getting of claims paid and such. We got that going on, but at the same time you have to keep a level of professionalism. You have to be mindful of what the owners want and what their values are. You can't overstep that and can go rogue with that as far as dealing with patients because you get problems with that. With in-house, you have more control over that because you get to see that more on a day to day plus you're right there. Your patients are right there. If they had a bad experience, trust me, the clinicians are going to be the first one to know about it.

It's also important to note that as you're managing the billing department from an owner's perspective, it's so important to manage the reports. When you have someone in-house, you can generate those reports and create them in a way that you want to see those important numbers, the KPIs and whatnot, getting them from an outsource billing company. Sometimes I've had a difficult time getting those reports. I have a hard time meeting up with them to talk to them about the reports or individual cases.

We're leading down the road towards the benefits of an in-house billing department. Some of the cons for an outsource billing department and we'll get to that because there are some benefits to an outsource billing department and not everyone's ready for an in-house billing department. As you manage your cashflow and as you manage your money when it is in-house, you have greater control. You can manage it appropriately. You can dig down on individual cases very readily. You can set up meeting times at appropriate times for both parties to work it out well. There is a huge benefit to that. That is difficult when you're outsourcing.

You don't have the freedom of meeting convenient times for you. You're at their mercy. If you have questions, you might be waiting a minute to get your answers because you don't have the person right there readily available to answer the questions for you. It depends. If you're starting out and you want to focus on growing your business and if you have the patient traffic coming through your doors already then maybe you do want it in-house because you want to focus on this. There are pros and cons to both. It depends on really where you're at. Honestly, the patient flow has a lot to do with it as well. If you have the patient numbers and where you're at in your business and what you're looking for. It depends.

It's almost like a seesaw. I like how you explained the cycle that some clinics go through, they'll outsource and they're not happy with the collections rate or how they're being representative of patients so they bring it in-house thinking they have a solid person who can do that and "save them money." Maybe the billing isn't as good as it should be because they don't have the experience and the knowhow. Maybe they have to consider, “We need to find another EMR as better billing software.” It's the seesaw battle. What I liked about how you broke it down is how to determine if you're ready for in house billing to ask the questions. If it's truly right for me at this time to have an in-house billing department, these are the questions I need to ask and answer. Let's go over those a little bit.

If you're considering doing in-house billing, we definitely want to have dedicated staff members who have a good work ethic, who know how billing works, who understand coding, who basically looks at your denials and say, "I need to fix this.” Also, they have the ability to find the right people to staff your billing department as well because that is a huge area. Hire somebody and you might think they're great and might take you 3 to 6 months to realize that this person's not great at all. The good thing about the billing is probably the only job that will always tell on you.

The numbers don't lie. 

The numbers don't lie and you can't hide that you don't know what you're doing or you're not doing your job in billing. You might be able to pull it off for a month or so, but eventually it's going to tell on you.

People can look great on paper. They can interview like a rockstar. When you get them to put their money where their mouth is, they don't know half of what you thought they did. Click To Tweet

You're saying you have to have someone who's not only educated but dedicated to billing. Maybe they're not full-time if your numbers don't match up. They need to have separated segregated time to do billing, only billing, focus on that and then also be capable of being a manager. As you grow, that billing department is also going to grow. That person is going to move from being the biller to the billing manager and maybe not touching everything but having to oversee somebody else.

As you grow, as a building manager, you have to know how to delegate. If you don't delegate, you will live swamped, constantly feeling like you can't your head above water. You have to find people around you that you can trust. That you can tell to do something. They're going to do it how you want it done and let you know when it's done, that you can rely on. To me a very strong work ethic is as important as the knowledge you bring.

It's a certain personality type that succeeds in billing. I'm sure you've seen this and what I've seen is the people that are successful, they are going to get every penny and it's almost a personal assault. They take it personally when people don't pay. They have to be able to confront. If you're very passive and laid back and trying to be a nice guy, you're not going to do well in the billing department. You have to find someone who is able to confront these patients who have a balance and talk about money because it can be a sensitive subject. 

 I've always told clinicians even though it's one patient, we are dealing with two completely different personalities because you're getting the nice, "Help me please," and very friendly. I'm getting a different person because I'm trying to get money out of them. He might be the sweetest person in the world in clinic, we'll get him over here and they'll start yelling. It's the nature of the beast. You definitely have to have a person who is thick-skinned, someone who doesn't take things personally. We need somebody who has a great attention to detail. A lot of times you'll find things are denied because one digit is off. I need you to find that or somebody has to have a very strong attention to detail. When you're talking to a rep on the phone and insurance rep particularly when they try to tell your reason for denial, I'd say a good 50% of the time, that's not what it is. You're looking at it like, "No, that's how it is." "What you're telling me is wrong, I see that I've done that part." “I see this down here is not right.” If I could look at that and say, "Look at coding," and say, "This needs to be modified or this code needs to be changed." things like that. They have to have very good attention to detail, definitely.

Tell us a little bit about the reports system, the ability to meet, review reports and where your clinic is in that regard. How important that is to determine if you can do in-house billing? 

For example, I meet with the owner once a week and then we meet again at the end of the month after we close out that month. What he will do for example, is he'll do an analysis. He'll randomly pull ten patients and check to make sure that the follow-up on them is done according to our procedures. That pretty much everything he pulls randomly has been touched. It goes to figure if he's pulling ten patients and I see that three of them have not been touched in several months, then it's safe to say that you probably have a pattern there going throughout your clinic. We'll meet on that. We make sure everything balances out, paychecks, denials, adjustments and refunds. We go over all these reports at the end of the month to verify that nothing was written off.

It shouldn't have been that insurance reversed the payment, but it was a legitimate reversal. It wasn't, "We want to take our money back on this," things like that. It's like the check and balances system. Meanwhile, throughout the month I'll randomly pull an AR report, go through it and spot check it basically to see. I’ll make sure everything looks good, the girls are following up working denials and things like that as they should be. He spot-checks me. It's a system of checks and balances that we have in place. We will meet once a week. We email, "Can you meet at this time?" We set up a time. It's very convenient because like I said, I'm here in-house.

Especially if you're going to do the in-house billing, then it's necessary to recognize that you need to set aside the time to meet weekly and monthly to review weekly and monthly reports. You know what you're looking at as the owner. There are certain statistics that I'm sure he's going to review or certain categories that he wants to check out. Also, take the time to do some spot checking and follow up on it themselves. I think that's a great word of advice, but tell us a little bit about some of the key statistics that you're looking at maybe that you and your owner are looking at as you review some of the weekly or monthly reports. What are some of the top 3 or 4 statistics that you guys are reviewing?

One thing we look at is called the Accounts Receivable Conversion ratio. It’s called an ARC ratio. It's basically our total AR divided by the number of average number that we have built out per month. We'll take an average of the last three months, not including things like auto, attorney or people who are in collections obviously. We basically divide the AR by the average bill. We'd like that number to be less than 1.3. Basically saying that it takes us 1.3 months or less than 1.3 months to collect. That's basically what that tells us. We are much less than that actually. That's always a good thing as long as we stay below that number.

PTO 72 | Billing In-House Or Outsourcing
Billing In-House Or Outsourcing: If you're considering doing in-house billing, you need dedicated staff members who have good work ethic, know how billing works, understand coding, and have the ability to find the right people to staff your billing department.

 

It's great because we all know that the longer you let that money sit out there, the less likely you're going to receive it. You get pennies on the dollar the longer it stays out there. To keep that average within or 45 days is huge.

It also helps you as far as if there's a problem somewhere. For example, we monitor it every single month. If that number were to skyrocket from one month, the next we'd be like, "We have a problem here somewhere." Either an insurance began processing our claims wrong or we're not receiving payments somewhere or something's not right. It's also great with a monitor that everything should be steadily going down with that number. It's a good way to monitor and make sure I catch it early if there are any issues happening that maybe you're not aware of.

That's a monthly statistic that you follow and that's huge. What are some of the others that you follow?

Another one we follow, we call it the 90-plus. Basically what we do with that is we will take the AR 90-plus.

The AR aging report and whatever's in the 90 plus day range and above.

We'll divide that by the total AR and that gives this a percentage of basically AR that is over 90 days old. You want that to be less than 10% of your total AR.

When you come into a clinic that's bad or a clinic that’s in a bad situation, when it comes to collections, you'll see that statistic specifically be bad. To take it from there to under 10%, in my experience can take anywhere probably about six months at least to get down to a good range. That's where you're going to find some extra cash, but you're also going to lose a lot of money as that number gets larger. We used to actually bonus our biller based on her ability to keep that under 10%. Once she did that, then she essentially got a raise to continue to keep that under 10%.

Once you get it down there, it should be very easy to maintain, but I'm glad you brought that up because I think a lot of clinic owners, whether it be in PT or other areas of healthcare don't realize that if your AR looks bad, it's not going to get fixed overnight. It is going to take time for it to come down because it takes an insurance 30 days to process a claim and that's if it looks good. You have to keep in mind that it's not going to be an overnight thing. It will take a couple of months to get it down. Six months is probably very good timeline think about. If you're not seeing anything drastically improving in a month, don't freak out. It will be a slow and steady drop it took and you didn't get this bad AR overnight it's going to take at a time to come down. It's going to be a lot of fighting with the insurance because that is definitely something that has changed since I've started back in the day. It used to be a lot easier. You file a claim, the member ID is right and the birthday is right, they’ll get paid. Now, no.

Not so much.

The clinician and the billing department is a relationship of a good cop, bad cop. The clinicians are the good cops and the people in billing are the bad cops. Click To Tweet

There are two players I'm thinking of in particular that are good at the game. You've probably seen this yourself. For example, therapeutic activities. You build therapeutic activities with any other therapy exercises. There are two payers in particular that they will automatically always deny therapeutic activities even though it was built correctly. They'll deny it and that they want you to send in all this documentation and medical records. If they find your documentation is sufficient, then they'll pay it things like that, which is very time-consuming. You're left with this $50, $60 balance on your claim. They'll sit there for a few months because they will take their time with that. The frustrating part is that there was never anything wrong with it. We could have paid it from the get-go. It ends up on your AR longer than it should.

They know that if they simply deny it, then they'll save money. Most people won't take the time to appeal it. Especially in some of those cases where the outsource billing won't go after the extra $50. 

They'll say, “We're going to write this off,” and it can be a problem like that because those charges do add up. They don't want to devote the time. I can tell you from our standpoint, we've gotten to the point with that where we've had to basically create a letter of medical necessity template. We tailor that for each patient and it seems to be working. Prior to that, you'd go through sending in flow sheets, sending in medical records and waiting for those to tell you, "No, that's not enough." That is a team effort because we have to get the clinicians on-board like, “I need you to tell me exactly what you did every single minute.”

That can be difficult.

They're not crazy about it either obviously, because they know what they're doing.

What are some of the things people should look for if they are considering a billing company? What guidelines do you recommend? 

If you are looking for a billing company, you should look first at all your costs. I would say you should not pay any more than 6% to 9% of your collections. Also they should provide you with consistent reports to show you their performance like, "Here, look what we've done." They should also provide you with their policies regarding their workflow because like you said earlier, their policies, their way of doing things might not match up with your values. You need to have a clear idea of what their policies are regarding their workflow, how they handle things.

They should also be very transparent regarding how much time do I actually put into a claim as you ask. If I have one code that denies from $50, are you even going to try and fight for it? Are you going to suggest that we write it off and move on? That will give you an idea of how much time they're going to put into chasing, not just that claim but all of your claims. The insurance is hoping that you're going to give up. They think that if they hold you out for six months, you’ll be like, “I'm tired of this. Let's go. I'm going to write it off.”

One thing that also always brings up the red flag for me when it comes to dealing not just with billing companies but with any vendors is their willingness and ability to communicate. If I have to constantly search and ask for reports or feedback, that's a lot of wasted time and energy. I would like for them to take the initiative to provide those reports on a monthly basis. I've had to do that with billing companies in the past. I said, "At the beginning of each month, I want to see these reports come to me without me asking for them. Can you do that for me? If you're going to ever write off a balance, that needs to be cleared through me first.”

I don't even write off balances without getting the owner's approval first. I do think this is true for anybody, your support staff starts at the very front, your receptionist. I know a lot of people think that, "She just answers phones, schedules and appointments, whatever." She needs to have a great attention to detail because she's doing the data entry of this patient's information usually and not to mention she's your first point of contact for your patients. She's basically the face of your company when they walk in the door. It's important to understand that one wrong digit on a birthday or a member ID number will delay your claims payment for at least another 30 days. You have to have a strong person at the front. At least double-check what she put in, make sure the numbers are right. You need to have somebody very strong upfront as well. It's a whole group effort between the receptionist, the billing department and the clinicians.

PTO 72 | Billing In-House Or Outsourcing
Billing In-House Or Outsourcing: A lot of clinic owners, whether it be in PT or other areas of healthcare, don't realize that if your AR looks bad, it's not going to get fixed overnight.

 

One thing also to figure out with when you're considering outsourcing is how closely are they going to work with you on improving collection or billing performance. One benefit of having in-house billing is to say, "We're constantly getting denied for such and such code," like you're talking about, "We're constantly getting denied for therapeutic activities. Should we consider modifying our documentation so it’s built under therapeutic exercise and we don't have to go through all of this?" Of course you don't want to tell them how to treat, but you need to raise the awareness like, "We're spending a lot of time and effort on a code that's getting denied." If you have someone in-house, you can have that conversation. If you're going to outsource this, you need to make sure that you're having those same conversations and you need to make sure you're setting up time and the awareness that's expected. 

I agree and something you had mentioned was saying how you've had to chase down some of them out when you outsource to get your reports and stuff. An important thing to remember is not to sell yourself short with that because if that was happening in-house, you wouldn't tolerate that. You wouldn't tolerate having to chase down an employee to get a report. You would expect them to bring it to you. It’s the same thing with the outsourcing. You have what you expect and you shouldn't settle. If you're not getting what you need from this outsource billing company, I would say definitely you need to make a change, but you really shouldn't have to chase people down because you're paying them. They're not paying you. They work for you, so they're like any other employee.

If I have a question, I need you to answer it in a timely manner and you need to expect constant communication. There are many times that they need information from you or they're expecting information from you and you need either back to them. Because of that, sometimes I think we feel like we're working for them instead of the other way around. You need to remember that you're the owner, you can always change this person out. You can always fire your outsource billing companies. If they're not doing what you need them to do in terms of reports, meetings, communications, customer service on your behalf, you can always fire them and you need to find someone better.

There are too many companies out there. There are too many people out there with billing experience. There are companies that do outdoors that you shouldn't have to settle, if you're not getting what you want.

To give some of the owners a heads up, what is your experience when you do switch out of an outsource billing company to in-house? If you're moving from an in-house biller to another in-house biller because one got let go or whatnot. I'd say that to preface this is to say that when I've seen billers change whether going from outsourced to in-house, there can be a real blow to cashflow for about six months or so before you get back on your feet again. I think PT owners need to understand that they expect the transition like that might be good, but you're not going to see the benefits of it for 6 to 12 months and they have to be patient and stay on top of the metrics in the meantime. 

I know it's human nature. You want it now, but you have to keep in mind that the fact that your reason you're changing is that if it wasn't working the way it was going. More or less, you've gotten yourself or billing company has gotten you into a hole, if you will. You're not replacing them because they were doing a great job when your AR is low. You're replacing because they weren't doing what you needed or your AR, your cashflow is going down. It's a mess. Like any mess, it’s going to take time to clean up. As I said, you didn't get in this hole overnight. This took months to happen. It's going to take months to fix it. I know it's very frustrating for owners because they expect to see an improvement within the following month. It doesn't happen that way because keep in mind that insurances on average take 30 days to process a claim in itself. When they're going through cleaning up your AR, they're refiling all these claims, correcting them, refund insurance.

At best, you're looking at 30 days and that's not going to be for everything because at least half of that you're probably going to end up fighting for because the insurance doesn't want to pay. The worker's comp company doesn't want to pay it. They'll deny it for crazy things. Probably one is not timely, even when you send in proof of timely file. For example, you know how it prints on a HIPAA? If today's date would be 10, 18, and 19. I've had a particular insurance company deny saying that date of service was prior to the patient's date of birth. I realized that the patient was born in 54, they are reading the date of service as 1918 or 1919, not 2019. I'm like, "Are you kidding me? My health insurance is in 1919. My health insurance’s dead. What are you talking about?" I couldn't believe it. It blew my mind. This is hands down the worst denial I've ever seen in my life.

I want to talk to you a couple more questions simply because you are a billing manager now. You are working with billing people who work underneath and you oversee them. What are some of the recommendations that you can give the PT owners as they're working with a billing department, not a single person? If they're large enough to where they have two, maybe three people doing billing for them, what are some of the things you are looking for as a billing manager in your management of others? The separate duties, how do you organize your staff? 

I separate my staff. We have a person who bills out claims every day so she'll bill those up. She's also the person I have that works my insurance AR because she knows how to code. She's billing the claims out. She knows what to look for. She's very strong in that. Also, I call her my pit bull because she does not have any issue getting on the phone and fighting. I swear she fights like it is her own money and that's what I look for. That's what I love in a billing person. It's like, "I'm sorry I got mad." "No, don't be sorry, you got mad. I appreciate the fact that you act like that is coming out of your personal pocket, like this is your money."

I love that. I look for that. I look for a good work ethic. You don't want somebody that's constantly calling out because this, that or the other. Somebody who doesn't mind being on the phone, doesn't mind getting into the trenches as far as that goes to the insurance company and sitting there on the phone with them for 30 minutes fighting. Also on the flip side, I have another person, she does all of my patient payments, my attorney's cases and my patient AR. I have her do the patient payments because she's the one calling the patients to about bills. That's how I break it down. As I said, I oversee them, I spot check them and that's my checks and balances for them.

As you grow your business, you’re going to have a billing manager. You have to know how to delegate. If you don't delegate, you will live swamped 24/7. Click To Tweet

I have somebody who does the same thing for me. You need to have systems in place with reports. Checks and balances is a great thing. I do it to them and somebody does it to me. That's how we make sure that we're running officially, policies are being followed, procedures are being followed, everything's being done, how it should be. We have a system in place as far as patient collecting, “You do this and this,” and then you send them to collections if you've got nowhere. We made sure all the steps are being followed and things like that. It works. Prior, I've seen it done other ways. I didn't like it.

I've seen where they would say, "This person is going to handle these five insurances and then this person is going to handle these five insurances." Basically everybody’s got their hands in everything. I prefer to keep it separate. It flows better that way. You only have the same two people accountable for patients. You have the same two people accountable for insurance and that will never cross so there can never be, “He said, she said,” kind of a thing. All communication between the billing department and the receptionist needs to be via email because we have a paper trail that way again, “I told her this." “No one ever told me that.” It cuts out all the, “He said, she said.”

That's a great policy to have because the insurance or the billing department is all about paper documentation of everything they do. You might as well keep that as it pertains to communication with the front desk as well.

Also we have over 100 employees here, otherwise a lot of people are always emailing billing, which is fine. I prefer email because like I said, you have a paper trail and also you're not constantly getting that distraction on the phone. You take this phone call and by the time you're done with that, "What was I doing?" That kind of a thing. This way it's all in writing. You're not getting constantly distracted twenty times an hour or pulled away from what you're doing twenty times an hour to answer phone calls about, what about this? What about that?

We talked a little bit about when you consider an outsource billing company, their charges are typically somewhere between 6% to 9% of your revenues. What is your company's expectation as far as what the cost of your billing department is to the revenues of your company? 

We'd like to keep it between 3% to 5% maybe and it's toward the 3% honestly.

It gets like that when you're a larger company. For a guy that's smaller, if they're thinking that, “Maybe I can save some money, if I bring it in-house, they'd probably need to expect it's going to be closer to the 5%.” Maybe a little bit more and recognize maybe some of the benefits that go with it if it's running well. If it's not running well, then that billing department's going to cost you more. When a billing department is running well, you can expect it to be in a smaller clinic somewhere between 5% to 7% compared to the 6% to 9% that you would pay otherwise. You'd have to consider the benefits and the pros and cons of both.

We've had Star open eighteen years. We've had quite a significant amount of time to grow and expand and work out all the kinks. We're about 3%, but as I said, we're larger though. We've been around for a while, so I could definitely see where to expect that number to go up whether you're smaller or a newer clinic even.

You guys have been around a long time. You've got a ton of experience. If people wanted to reach out to you and maybe ask you questions or get your advice, are you open to that?

Absolutely, we actually love to mentor and advise new PTs, new clinic owners. I actually spoke to someone. I didn't know her but it was through the article and she was a clinician and she was just asking me questions about different things we thought she should do. One of the things I definitely want to preface to her was that as the clinician, you don't want to be involved as far as try to collect patient balances. You're the good guy. You're the helper. You need somebody to keep it that way. You need somebody to bigger fall guy basically and that's what we are. As I said, we're good with that but you definitely don't want to be both because you're on their side.

PTO 72 | Billing In-House Or Outsourcing
Billing In-House Or Outsourcing: If you’re looking for a billing company, you should not pay any more than 6%-9% of all your collections. They should also provide you with consistent reports to show you their performance and policies regarding their workflow.

 

You don't want to taint that in any way by bringing money into it basically. You definitely want to keep those two separate. As a clinician, you want to stay as far away from that as possible. You definitely need people for that. I was going to say that while you're starting out and it's new and you don't think you need this, that or the other because "We're new, we're starting out." That is one thing you would definitely need as a new clinician. You need somebody to handle that for you. Whether it be outsourced or whether it be in-house as a clinician, no matter how small you are you don't want to be that person.

If people had questions like that, how would they get in touch with you? 

They can email me. My email is Amy@StarPTClinics.com. Our owner for example, he's been practicing since ‘93 and he's a member of the editorial APTA board member. He loves to talk to other PTs and business owners like that. He loves to advise them. He loves to help them with any questions they may have or anything they might possibly need. He likes to help other PT clinicians grow and expand their business. That's what he's really trying to get into now. As part of that, something we would also like to do is possibly start billing for other PT clinics. You could go with an outsource you might not know too well or you have solid companies you can go for. You can go for that as my reputation and word of mouth.

You guys obviously have the systems in place, you know how to get things done. You've got a ton of experience behind you. It's one thing to go with an outsource billing company that might do a billing for all kinds of medical professions. Whereas you guys are PT-focused, PT-specific, you've got a couple of decades in the business based on your owner and the experience that you bring with it. You guys can bring a lot of value to those PT clinics that are looking to get things started to maybe outsource until they're ready to bring it in-house. 

We have all the systems in place, the reports, policies, checks and balances, you name it. Obviously it's been successful because Star itself has been open for eighteen years but we're still growing. We opened up our eight clinic and we still have plans to open more. It’s obviously successful. Our owner's been practicing PT since 1993. He loves helping, marketing and helping people grow and expand, showing new owners what to do. He's been through the trenches, he's been through the trial and errors of it all. He has seen it all because he's basically was his own test patient more or less.

What was his name?

His name is Matt Slimming.

We'll have to remember him.

If anybody wants to reach him, you can email me and we'll both be in touch with you.

Thanks again for your time, Amy. I really appreciate you sharing your wisdom.

No problem. If you need anything, give me an email.

Thank you very much.

Important Links:

About Amy Sparks

PTO 72 | Billing In-House Or OutsourcingAmy B. Sparks is the Billing Manager for Star Physical Therapy, the largest independent Physical Therapy group in the greater New Orleans area, with eight clinics and growing. Amy was born and raised in New Orleans. She began working in health insurance billing twenty years ago.

She has experience billing for several different types of healthcare providers and has also worked for Aetna Health Insurance, giving her experience on both sides of the industry.

 

Love the show? Subscribe, rate, review, and share!
Join the Physical Therapy Owners Club today:
© PTO Club 2018 - 2019
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram