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The Most Expensive Problem in Physical Therapy

By April 25, 2019May 3rd, 2022Operations

Physical Therapy Software – A $10.7 billion problem

Did you know that in the physical therapy industry, $10.7 billion of revenue was either spent or not collected due to bad software and operational practices? Yes that is right. $10.7 billion a year is lost or spent due to bad software in the physical therapy industry.

Issues in Physical Therapy Billing and Documentation

Let us start with billing. Bad billing and documentation practices lead to 15-25% of potential revenue going uncollected, or roughly $5.4 billion a year in lost revenue. What is in this category?

Documentation Issues

First, bad, indefensible documentation leads to claims being denied for medical necessity. Prompt Therapy Solutions billing experts estimate that 60-70% of denied claims in physical therapy are due to an inability to prove medical necessity. “The industry has a major problem,” a biller said. “60-70% of denied claims are due to lack of proof of medical necessity, which is a problem created by bad documentation software that doesn’t guide a therapist towards documenting what matters to get paid.”

Our billing expert goes further, talking about the issues in the space as a whole and how software can fix this problem. “Therapists in school are trained on how to treat patients, not get paid for those visits,” she said. “Good software can structure a therapist in their documentation and get them documenting proof of medical necessity without having to think twice about it. Unfortunately, I have yet to find a software solution that does that.”

As a therapist with years of experience, Dr. Lawrence Kim of Edge Physical Therapy & Sports Medicine talks about how bad software effects documentation times and revenue cycles. “Bad software prevents me from completing notes during a patient visit or immediately after. Often, I can’t start my documentation until I am home and on my laptop, and this leads to major delays in sending my notes to our biller to start the revenue collection process.”

Operational Issues

The second major issue that leads to this $5.4 billion issue is the lack of integrated software, causing major delays in note completion and claim submission. The majority of clinics in the United States operate with an EMR platform that is separate from their billing system. This causes many issues for those handling the claim submission process.

“For me to access my clients notes, I must access their EMR and transfer the files in a HIPAA compliant way to my billing software,” a biller said. “It is inefficient and time consuming for myself and my staff and a solution that could handle documentation and billing all-in-one would be instrumental for both the billers and the therapists alike.”

As an owner of a practice, Dr. Lawrence Kim highlighted other issues the lack of an integrated solution causes.

“As an owner, I run my operational reports to track visits on one platform, but my billing and revenue reports on another,” he said. “Not having the two processes handled on one platform leads to wasted time and no true snapshot understanding of how my practice’s success.”

Patient Visibility to Medical Records

$3.2 billion a year are lost in the physical therapy industry due to patient-related issues such as patient no-shows, lack of patient engagement, and inability to send and track home exercise programs.

No-Shows and Patient Engagement

First, a 14.1% industry no-show rate leads to lost revenue of $2.1 billion. Second, an inability to prove to patients the need for continued therapy costs clinics $1.1 billion a year. A Prompt Therapy Solutions survey of physical therapy patients demonstrated that only 3 out of 10 patients completed their entire course of care. Building off that survey, 59.7% of those patients said they would continue therapy if they had a clear understanding of their improvement.

Dr. Lawrence Kim, owner of Edge Physical Therapy and Sports Medicine, discussed this problem with Prompt.

“With the existing software on the market, I have no way to demonstrate to my patients their improvement and need for continued therapy,” Dr. Kim said. “This leads to a high rate of no-shows and patients dropping out of therapy when they have visits remaining and require more treatment.”

Home Exercise Program (HEP) Issues

Additional issues surrounding patient visibility include the inability to assign patients home exercise programs and track their completion within the EMR. Rick Daigle, the owner of Too Far North Fitness, estimates that a patients consistent compliance with their HEP can knock 2-4 weeks off their recovery.

“Unfortunately, patients don’t see the value or need to complete their HEP and as a therapist, I have no way to demonstrate this need or track patient’s HEP compliance,” Daigle said. “I tell my patients that doing their HEP will improve their recovery by 2-4 weeks, but without software to track their compliance and send them updated programs, I have no way to engage with them in an effective and meaningful way.”

Spend on Physical Therapy EMR and Billing Software

Finally, $2.1 billion a year are spent on EMR and billing software and services in the physical therapy industry. With most clinics having to run 2-5 pieces of software due to lackluster solutions and no fully-integrated platform, this spend is a waste and makes clinics more inefficient.

“We spend thousands of dollars a year on software and to be honest, it hurts our practice more than it helps,” Dr. Lawrence Kim said. “We have one software for documentation and scheduling, another for billing, another for HEPs and a separate one to track patient payments. The whole industry has this issue and it causes confusion for my patients and staff.”

The problem is not just for clinic owners. It stretches to billing companies as well.

“With my existing workflow, each of my clients operates on separate software from myself,” a biller said. “I have to train my staff on dozens of pieces of EMR software as well as my practice management software, and none of it does a good job of providing the functionality I need.”

Prompt EMR & Practice Management – A Fully-Integrated, Physical Therapy Software Platform

All of these issues provide the backdrop for how Prompt EMR entered the industry. Prompt EMR and Practice Management provides a fully-integrated, easy-to-use, mobile-friendly platform to manage the entire physical therapy clinic.  The system provides documentation, scheduling, billing, patient engagement, reporting and more.

Want to learn more about Prompt EMR and Practice Management Software? Fill out the form to your right to schedule a Demo today!

Prompt Staff

Prompt Therapy Solutions builds practice management software for physical therapy clinics ranging from single provider practices and startups, to large enterprise organizations.