The Centers for Medicare and Medicaid Services (CMS) adjusts the Medicare physician fee schedule every year. The adjustments are designed to facilitate greater access to care and equitable healthcare pricing for Medicare patients.
However, these changes—especially payment reductions—can have a significant impact on U.S. healthcare practices’ bottom lines. The 2022 omnibus ruling included more cuts for 2023, right as many are facing rising costs of supplies, medical equipment, inflation, and staffing issues.
Looking ahead, the downward trend has only continued. In November 2023, CMS issued the CY 2024 Physician Fee Schedule Final Rule, which included a conversion factor cut of 3.4%. Beyond getting involved in advocacy, how can your practice adapt and create financial stability?
Tricia Morgan-Putt is a 35-year veteran of revenue cycle management in the physical therapy and rehab field. She joined the Therapy Matters podcast to chat about surviving Medicare reimbursement cuts. Here are some key insights to help your practice maximize reimbursements, create predictable income, and retain patients.
How Can Practices Survive Medicare Reimbursement Cuts?
In short: To make the most of patients’ insurance reimbursements, you’ve got to play by the rules.
Morgan-Putt says the first thing a practice should do is make sure to verify every patient’s insurance benefits. Not every patient will have coverage for rehabilitation treatments.
Second, she says don’t skip insurance authorizations. Many times, insurance companies will not go back and do a retroactive authorization. If you miss out on authorization, you’re missing out on revenue.
Third, stay within the healthcare insurance parameters that have been set.
“Even if you don’t have to get an authorization, but you have insurance that says you can only treat 12 visits, then treat your 12 visits. Or if you have to treat six visits and send notes, make sure you do that,” says Morgan-Putt. “Make sure you keep up with the insurance regulations that they have by payer.”
The Importance of Verifying Benefits
When verifying benefits, it’s especially important for rehabilitation and physical therapy practices to get it right.
Many times, physical therapy will have different copays, different co-insurance, or different rules than other primary or specialty care clinics. A patient might come to you with medical insurance, and they may have met their deductible, but they still might not have therapy benefits. Verification mistakes equal lost income and frustrated patients.
“You need to really know what those [guidelines] are in order to make sure you maximize your reimbursement,” says Morgan-Putt.
When should the insurance verification process begin? She advises verifying the benefits every time a new patient comes to the clinic. Same goes for returning patients who’ve lapsed in their care. If they come back six or eight months later, it’s important to re-verify them. You never know what might have changed. A patient might be out of therapy benefits, for example, and you’ll need to switch them to a cash-based patient. Patients could also change jobs and, therefore, have different insurance. Prepare for all possibilities, so you don’t lose out!
Collecting Copays at the Time of Service
When should you collect patient payments? And why is it so important in a time of Medicare payment cuts? Morgan-Putt says: Collect copays at the time of service, or else you risk losing them.
Patients will often leave the office and then simply won’t pay their bill when it comes in the mail. Morgan-Putt estimates that practices can lose 50 to 60 percent of their revenue by not collecting copays at the time of service.
“Medical bills are never as important [to patients],” she says, because patients rarely face consequences for late or missed bills. And the precious time required to pursue missing payments can place a burden on staff, as well.
Collecting the copay from the patient at the time of service is simply best practice for many outpatient clinics. This process sets you up to collect the full amount from the patient and from the insurance payer.
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- Collecting Patient Payments: 7 Effective Tips and Tools
- Why Should Therapy Practices Use Patient Portals?
Hiring the Right Front Office Staffers
Another revenue-saving tip is to ensure your front office staffers have the personality and mindset to navigate tough conversations. “Especially in therapy services, where therapists tend to be more lenient and will adjust off a bill,” Morgan-Putt says, it’s important to set clear expectations up-front.
Front desk staff should strive to provide a positive patient experience, but they also can’t be afraid to ask for payment. They need to be able to tell patients, kindly but clearly: “We need complete payments so we can continue to provide services to you and to others.”
So, how do you find the right candidates for your front desk positions?
It should come up during the interview process, says Morgan-Putt. “You’re interviewing for a specific type of person that can do this process. It’s [a] hard [job], because you’re working through payment plans with people, and making sure they make that payment.”
With that in mind, here are some qualities to look for in your front desk staffers:
- Attention to detail
- Compassionate and friendly attitude
- Clear and direct communication
- Conflict resolution skills
Customer Service Can Drive Retention
Another key to keeping profits up, is keeping your patients. And it’s mutually beneficial! In order to turn patients into super fans of your practice, you’ve got to provide an experience worth coming back for.
Once patients are past the front desk, your clinical staff and therapists need to have a good “bedside manner,” too. If they lack people skills or don’t seem to care about patients, Morgan-Putt says it can easily hurt business. She says you can often tell which therapist in a clinic has the most no-shows, based on whether they are personable and caring toward their patients.
“If you track your therapists and see who’s got the most no-shows, who’s got the most cancellations, who’s got the most drop offs on their schedule… They just might need to be trained on customer service,” says Morgan-Putt.
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Preparing for Future CMS Rulings
While reductions to Medicare reimbursement rates for outpatient practices presents significant challenges, that’s not the end of the story.
By adopting a multi-faceted approach, practices can navigate these challenges and continue to provide high-quality care to Medicare beneficiaries and other patients while maintaining financial stability in 2023, 2024, and beyond. In sum, three ways to mitigate the financial strain caused by these reimbursement cuts include:
- Maximizing reimbursements with an airtight approach to insurance verification and authorization.
- Creating predictable income by collecting copays at the start of every visit.
- Retaining patients by providing an excellent experience at the front desk and beyond.
Creating Future-Proof Solutions
Want to take it a step further? The right technology solutions can drive revenue, enhance patient care, delivery and expand your reach. As you look to the future, it’s crucial to set yourself up for success in the face of Medicare pay cuts.
Raintree can help you unlock the potential to thrive in today’s competitive landscape. We provide a powerful platform designed specifically for Therapy and Rehab practices to help you deliver top-quality care while keeping costs low.
Don’t waste another second, or another penny. Request a demo to see how Raintree can boost your RCM efficiency and drive up to 40% more revenue!
