Not Another Denial …
Our last topic of Key Performance Indicators for Therapists in Private Practice is Rates. Rates in the sense of the rate your practice is getting paid. Namely, write off percentage and unpaid rate.
Write off percentage is the percentage of your charges that are “written off” or adjusted each month. If you accept medical insurance, then this will reflect the payer mix of your patient population. Payers that reimburse with a per diem rate or unit maximum will force this number higher. Payers who reimburse based on a fee schedule will decrease this rate. Knowing the details will allow you to tailor your plan of care for each patient accordingly. After all, the therapists who are able to be reimbursed for their care are the same therapists who tend to stay in business longer. If your write off percentage is high, it may be time to dig a bit deeper into the units per visit for each payer and analyze where your time is or isn’t being spent.
The second KPI is unpaid rate. Mainly, the unpaid rate is a percentage of claims that are not paid. The truth is all practices will have “denials.” A denial, however, doesn’t mean the claim is unpaid. The payer may deny on the grounds of medical records where they requested more documentation or it may deny because the claim has an incorrect address. Many denials can be corrected and resubmitted where it’s ultimately paid. A true unpaid claim is one that you as the owner can expect no reimbursement for. Many of such claims fall into a category that involves therapists using the incorrect or inappropriate diagnosis codes. Incorrect diagnosis codes lead to unauthorized visits which will go unpaid. Your patient will get the treatments they need but you will go without the reimbursement.
It is up to the practice owner to install the correct operations and compliance strategies that will make good therapists into great clinicians. Doing so provides a beneficial situation for all, where therapists find their work rewarding, owners find revenue streaming in, and ultimately the patient gets the care they need.
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