(Updated March, 2024)
Depending on which state you’re practicing in, you could face some real challenges when trying to get the insurance contracts you need in order to service the members within your community.
Whether we like it or not, the overwhelming majority of our patients are paying a handsome sum for their insurance coverage. As a result, most of your community will continue to seek providers who are “in-network” with their insurance carriers.
The more you know about how to team up with insurance companies by employing strategies that have worked successfully for other PT owners, the better your chances are for getting “in-network” and leveraging this market-share as a business.
Let’s look at some ways that our clients often find success. To start, try expanding your services to include a covered service that you investigated and know is not being provided within a 5-mile radius of your location. This may include adding pediatric care to your practice or speech therapy and then contract that type of provider so you have the service available.
Another quick win strategy has been to gather at least 10 letters from patients of whichever carrier is shutting you out, along with 5 or more doctor letters supporting what makes you different and why there is a need for a provider like you in the community.
To learn more ways to improve your physical therapy business model, contact MEG today!
Strategies to Circumvent Reduced Rates by Insurance Companies
If you have an insurance company that is not reimbursing at a reasonable rate, it is absolutely appropriate to request a rate of adjustment. These are a few tactics we often employ:
The first step is to run a calculation to determine what the bottom dollar per visit is that you are willing to accept based on your breakeven amount plus $15. If you were to look into the staffing industry you would find that typically they are never willing to staff a therapist for anything less than $15 over cost, so know your costs.
Similarly, it’s reasonable to consider ending contracts with insurance carriers who don’t pay because you’re losing money regardless of how many patients they promise you. The greater patient volume you get won’t fix it – if it’s nonviable at 50 visits/month, it will be even less viable at 100 visits/month.
Next, chat with your patients and friends within your community to discover if other practices are ending similar contracts with the same insurance carrier. Chances are those carriers will come back to you after their patients start complaining there is no where to go for care. Insurance carriers need to be able to provide covered services listed within their members plans, otherwise call the state insurance commissionaires office and report them for denying access to covered services due to closed panels. Your insurance commissioner and your local state APTA should both be able to offer suggestions to help you as well.
When you’re ready to meet with an insurance carrier to negotiate, it’s imperative that you have all the data. Lay it out in a presentation style format (ex. PowerPoint) so it’s graphical, easily digestible and communicates exactly what you want it to.
If you present in a non-confrontational manner, and make the case based on math, not emotion, that their current rates are non-viable for any provider trying to deliver high quality care, then hopefully you can gain their agreement that rate adjustments are needed.
Another important point to make can be done by asking them when was the last time their rates were adjusted, and by how much? It’s a tough position for them to take that you are not at least “entitled” to a cost of living adjustment.
However you approach the negotiation, you must know your numbers going into the discussions such as per unit, per patient, per visit, PT total compensation costs, etc. and most of all, your total per visit costs. If that insurance carrier is still unwilling to set you up with a viable contract, then discuss it with the insurance commissioner and drop them if you have no luck.
3 Tips to Negotiate with Insurance Companies
1. Know the Laws
After you open your new office or expand into your second clinic location, you need to understand how and when to engage with your insurance carrier so that contracting of the office and credentialing of the clinical staff are done with enough time in order for them to be ready to treat when open.
Understand that you can call Medicare and/or pull from the website of the intermediary for your region to learn about the lead time they suggest for you when applying. Physical Therapy owners often blunder the application process and this can create unwanted delays or early arrivals from inspectors when you have not yet received your certificate of occupancy and the approval process then gets delayed.
2. Report Wrongdoings
If you come across wrongdoings by an insurance carrier, do not hesitate to report them to your state APTA chapter or insurance commissioner. If you are not a member of the APTA, you should strongly consider it as there are a number of benefits spanning free consulting services, marketing help and reimbursement guidance.
3. Don’t Hesitate to Call Your Representative
Whether it’s a credentialing challenge or red tape with Medicare, don’t hesitate to call your state or federal representatives. Your congressman and senator are there working for you as a small business owner operating within their state, and your success is vital to them.
If you’re having challenges, nothing will change if you don’t take action or ask for help. Not only will you be acting as your own best advocate, you will also be advocating on behalf of our profession.
Bonus Tip: Leave the Legwork to the Experts
Consider outsourcing your physical therapy credentialing services to the experts so you can stay focused on your business. This investment will save you in the long run in terms of time, stress, confusion and delays. To that end, we find that clients experience the most success when their physical therapy billing services and practice accounting services get outsourced right from the start.
Learn More About Practice Management Services
Want to learn 7 operations to outsource at any stage of your business? How to structure your practice for growth? Which marketing strategies to implement?
We cover all this and more in our latest Outsourcing Guide! Download it today:
