Struggling with Claim Denial at your physical therapy clinic?

Is your Physical Therapy Clinic facing the challenges of claim denial? Your EMR could be to blame…

Physical therapists work hard to facilitate recovery from injuries, surgeries, or chronic conditions for patients. But they shouldn’t have to work even harder to get reimbursed for their services. In this article, we look at how the cost of claim denials affects physical therapy clinics and how having an integrated EMR and billing system can ensure clean claims for their success.

Calculating the exact cost of denied claims depends on various factors, such as number of denied claims, the average reimbursement amount per claim, and the provider’s specific circumstances. The following formula can be used to calculate the probable cost of denied claims at your physical therapy clinic.

(Total Number of Claims * Denial Rate) * Average Reimbursement Amount = Cost of Denied Claims

• Total Number of Claims: The total number of claims submitted by the provider in a given period.
• Denial Rate: The percentage of claims that are denied by the insurance company, expressed as a decimal (If you submit 100 claims per month and 20 are denied your denial rate is 20%
• Average Reimbursement Amount: The average amount of reimbursement received per claim.

Example:

A provider submits 1,000 claims, and their denial rate is 20% (0.20). The average reimbursement amount per claim is $100.

Using the formula: (1,000 * 0.20) * $100 = $20,000 LOSS

Denied insurance claims have significant financial implications for healthcare providers. As providers are not reimbursed for the services rendered to patients, the lost revenue will quickly impact clinic cash flow and create financial strain, particularly for smaller practices.

The managing of denied claims always incurs additional administrative expenses and diverts staff focus from important tasks, leading to increased workload and reduced efficiency. Providers may need to allocate more resources and potentially hire additional employees. The appeal process for denied claims often involves even more additional costs, such as external consultants or legal assistance.

Patients are also directly affected by claim denial as they are forced to pay out-of-pocket for treatment they desperately need. This can cause strain on their budget and potentially limit their access to continued care. Your patients may seek care elsewhere, or even worse, stop their treatment completely.

Over time, this delayed or reduced cash flow can disrupt financial planning, hinder your ability to cover operational expenses, and prevent you from investing in the practice. Eventually, you may begin to struggle to cover basic overhead and fixed costs, leaving your clinic with financial instability that could lead to practice closure.

Don’t worry – there is a solution…

Systems4PT Revenue Cycle Management PREVENTS DENIED CLAIMS, gets you PAID FASTER, gets you PAID MORE, and for LESS COST!

Our EMR and billing solutions are fully integrated and in constant communication. Your front desk verifies coverage before the patient’s first visit. Our Scheduling platform displays patient financial responsibility at the time of treatment. We always inform your staff anytime a patient account is at risk of losing eligibility.

Systems4PT EMR and Billing have built-in compliance monitors that reduce the risk of denials by minimizing errors, such as incorrect coding, missing documentation, or incomplete information. Your claims are completed correctly the first time and any issues are handled through communications with our dedicated in-house billing department.

To mitigate the financial impact of denied insurance claims, physical therapists can invest in an EMR and Billing technology that focuses on clean documentation practices, coding accuracy, and navigating the specific reimbursement policies of the insurance companies they work with. All of this, and more, can be expected with Systems4PT. Our EMR with integrated billing functionality and service streamlines your scheduling, documentation, and claims processes to reduce errors that result in denials.

Call us today for a free personalized business consultation or request a free demo by filling out the form at the bottom of this page!

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