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Measuring the Success of Physical and Hand Therapy Programs: Ten Factors That Will Make or Break a Practice

 Ancillary Care Strategies

 As healthcare reform and related healthcare delivery changes continue to reshape the landscape, it is becoming even more critical for managers and therapists to actively manage daily operations, continuously looking for opportunities to enhance patient outcomes, reverse declining revenue trends, and ensure profitable growth.

All too often therapy managers measure success according to the number of patients scheduled or the dollar amount billed. However, this is only a small part of a much larger picture. Through execution of a systematic approach that includes the following ten factors, therapy practices can achieve greater levels of success in their Therapy Service Line.

 1. Patient Satisfaction and Measurement Process Measuring patient satisfaction is key to ensuring a successful therapy program and demonstrating the value of the patient experience.   As part of each session, therapists should engage patients in dialog about their therapy progress to help ensure that patients are actively engaged in their care. If the clinic uses standardized surveys to measure satisfaction, it is preferable to employ an unbiased third-party to collect and report the data, as patients will likely feel more comfortable and deliver more honest responses if it is an objective process.   Actively seeking patient feedback throughout the episode of care is one of the most important roles of the team - from the front office - to providers - to back office.  Using this information to understand the issues and set objective performance improvement measures is necessary to continuously improve areas that drive patient satisfaction.  Patient engagement and validation of their perception of the value received in therapy and by the clinic is paramount to a successful program, especially as patients are assuming more and more financial responsibility for their care.

 2. Outcomes – Among the most common reasons that patients discontinue therapy is that they do not feel their therapist has included their personal goals for improvement or clearly articulated the importance of completing their therapy program. Therapists should develop therapy goals with patient input to maximize engagement, which is ever more critical in a value-based environment with increasing patient financial responsibility.  In addition, practices need to track how many patients have achieved their goals vs. those who self-discharge prior to reaching their goals.   The information gathered from outcomes tools should be used to negotiate better payer rates and inform management of the therapy parameters which should be considered when negotiating visit rates, at-risk contracts and bundled payments.

3. Functional Goal Setting – To empower patients and encourage them to take ownership in their care, therapists should always involve patients in setting therapy goals. When patients are active participants throughout the therapy process – from goal setting through ongoing communication of progress toward those goals – they are more likely to continue therapy and achieve positive outcomes. 

4.  Referral Management - The referring physician is integral to patient follow through of the recommended therapy program.  The physician communication is the first step towards clearly conveying the importance and value of therapy to the patient and is a pivotal factor as to whether or not a patient chooses to schedule and complete the initial therapy evaluation and recommended follow-up visits.    Actively managing the referral process, including measuring the number of referrals received, method of receipt (phone, email, fax, EMR), referral source, turnaround time from referral receipt to initial evaluation, and performing patient pre-registration are key indicators for managing the flow of patients into the clinic. Effective referral management by the front office staff is required to capture patients and prevent leakage to other clinics.  Every loss of a new evaluation represents the loss of that evaluation plus an average of 7 to 8 additional visits for that patient.   Beyond the initial referral and evaluation, subsequent patient commitment has more to do with convenience of scheduling, available appointment times, patient perception of value vs. cost, and patient engagement.

5. Staffing Levels and Mix – Physical therapy practices can benefit significantly by carefully evaluating and optimizing their staffing mix.  As the reimbursement environment becomes more challenging, it has become increasingly important to evaluate the use of therapy assistants and extenders to enable therapists to better leverage their time and more effectively manage caseloads.  Further, subspecialties and specialized training is an area that is growing (for example, incontinence, women's health, sports enhancement, etc.).  Evaluating the market demand for these programs as well as referral patterns will inform the skill mix required in these particular settings.  Another contributor to skill mix and staffing mix is the payer mix for the practice.  Certain payers, including Medicare, have requirements regarding supervision of extenders, number of units billed/visit, and number of visits per year that influence the optimum staffing of a particular practice or location.

6.  Scheduling When appropriate, new patient evaluations should be completed within 72 hours of receiving a referral.  The longer a patient has to wait to begin therapy, the more likely the patient is to cancel their initial appointment.  Standard scheduling strategies should be implemented to ensure workload balance (management of evaluation and follow-up slots), appropriate skill mix availability, and timeslots that meet patient needs.  If scheduling practices are patient-friendly and optimize patient access during prime hours, patients will be more likely to complete their course of care.  Patient check-in and co-pay collection functions should be staffed whenever providers are seeing patients. 

7. Documentation - Documentation has four purposes: (1) capture patient plan of care and document progress towards the goal set at the initial evaluation, (2) demonstrate support for skilled care, (3) communicate across providers, and (4) meet regulatory or payer requirements for skilled care.  The challenge to success is working towards high quality documentation in the least-waste, least time-consuming way for providers.  Regardless of whether you are utilizing paper or EMR/EHR for documentation, often documenting is too time-consuming for providers and takes valuable time away from patient care.

8.  Financial Responsibility and Collections – As patients are increasingly responsible for a larger portion of their healthcare expenses, they are sometimes forced to weigh the benefits of therapy against financial constraints.  Therefore, it is essential to check patient Therapy (PT/OT) benefits prior to and throughout their course of care, make financial responsibility clear and transparent, and collect patient fees (co-pays, co-insurance, etc.) at the time of visit.  Also, as patients are often uncomfortable discussing their concerns about the cost of therapy, practices may consider creating standards for determining and communicating financial responsibility and offering financial planning resources or structured payment plans at the onset of the therapy program.

9. Coding, Billing, and Denial Management – To ensure optimal revenue collection, it is crucial that each therapist appropriately code and bill for his or her services.  It is important to understand each payer’s unique rules and guidelines and continuously train the therapists so they know the billing rules.  For example, Medicare considers the application of hot and cold packs as a “bundled service” and does not pay for the services separately. Worker’s compensation, on the other hand, often reimburses for both services. Revenue could be forfeited by not billing the correct CPT code – 97010 in this case – to the appropriate payer.  When it comes to revenue collection, the amount that therapists bill for their services is only part of the picture. The amount the practice collects from all responsible parties (insurer, patient, co-insurance) is what matters most.   In many circumstances practices do not appeal or manage denials effectively, leaving money on the table.  Furthermore, therapy dollar amounts may be low compared to Orthopedic surgeries, but their frequency is much higher.  If a practice prioritizes denial management solely by dollar amount, therapy collection, payment, or denial trends can go unchecked for longer periods of time which may account for more delayed or lost revenue.  We recommend front office and back office therapy-specific subject matter expertise to support effective management of the revenue cycle and to include education and training of the therapists, ensuring errors are corrected and not repeated.

10. Measures and Metrics – While a one-time snapshot of a therapy practice can be useful in the short term, it is rarely a reliable indicator of future success. To ensure continued success, practice managers and therapists need to institute a method to provide ongoing and focused review of operational, financial, and compliance Key Performance Indicators (KPI).  Through the regular measurement and critical evaluation of these KPIs, opportunities for improvement will be identified and active management of the operations will drive the desired outcomes.  If you are measuring adequately and appropriately, the answers to the questions below should be readily available:

  • Are the number of patients growing, sustaining, or declining?
  • Do you have enough evaluations each week/month to support your clinical and non-clinical support staff?
  • What are the “no-show” and cancellation rates?
  • Does documentation reflect each patient’s steady progress toward achieving therapy goals?
  • With the number of visits per referral declining nationally, do you need to make adjustments to your staffing?  Is the clinical/support staff mix optimal?
  • Are appropriate billing and coding practices consistently employed?
  • Can communication between patients and therapists be improved to increase patient satisfaction and reduce cancellation and no-show rates?

These 10 factors are foundational to the Ancillary Care Strategies Operating System (ACSOS), which is our proprietary, proven business management system.  With turn-key tools, standards, and business intelligence, we teach, implement, and utilize ACSOS with our clients to operationalize and drive results across all dimensions of therapy performance:  service quality and delivery, productivity, income, patient satisfaction, clinical outcomes, and growth.