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Physiotherapy bill format for Personnel

if you want to really understand what is the decision criteria that goes into choosing whether you're going to sign a contract with a third party pair or not in this video i'm going to talk about three of the main questions i always ask before considering the signing of a new contract and i think this is really important especially for you guys as new private practice owners whether you're doing mobile therapy or brick and mortar so let's start with the goal of your business what is the goal of your business what is your profit model what are you trying to achieve you know in a typical third-party payer business model we the business owner are essentially buying wholesale billable units and selling them to the third party payer so if i can hire a therapist who's going to work a 40 hour full-time work schedule i can generally estimate that therapist is going to work about 2 000 hours a year that represents about 8 000 billable units that i'm buying wholesale in the hopes of selling them retail to the third party payer and in that so if i'm buying 8 000 units let's say the therapist wants before expenses and everything are calculated in about a hundred thousand dollars a year uh they're they're probably going to take home about 80 000 of that but that is going to give me a unit price of dollars and fifty cents hundred thousand a year divided by eight thousand units that gives me a unit price of twelve dollars and fifty cents per unit and so if i'm going to sell those units at a twenty five dollar rate i've got a hundred percent markup i've got enough room in there for covering my overhead and other expenses and enough for profit after all of that but if i'm looking at signing a third-party payer contract for 17.50 per unit now my cost is 12.50 there's going to be some breakage in there so it's probably going to be higher than that i can't afford to resell those at 17.50 or even some medicaid plans are paying 12 and 13 dollars a unit there's no chance for you to profit in a business model like that so obviously you have to understand what is the goal your business what are you actually doing are you creating a clinic that allows therapists to treat they the way they want to treat or are you creating an arbitrage that purchases wholesale units from a staff clinician and sells at retail to an insurance third party payer the other question you want to ask is looking at do you have any upsells because maybe i'm not going to profit on the delivery of the physical therapy surface but i'm going to profit on the upsell side so take costco as a classic example costco the company the warehouse food they don't try to make money on selling food they make their money on the memberships that they sell so they can deliver an amazing food product at little to no margin because they're making three plus billion dollars a year in memberships if they don't deliver incredible value on food nobody's gonna buy their membership they don't have a profitable model that would apply to you in the form of saying maybe your break even on the delivery of the one-to-one physical therapy service but your clients are buying memberships to your fitness center to use the equipment before or after the covered service that's being delivered so medicare has a classic example once a patient knows how to set themselves up on say a recumbent bike following a total knee replacement that service is no longer a covered service so that client could purchase access a gym membership to your facility so that they can use the recumbent bike 10 to 15 minutes before they begin skilled covered services reimbursed by medicare the profit comes in the upsell you could also upsell services like manual therapy kinesio taping dry needling cupping there's a whole variety of services that are highly sought after and perceived as highly valuable by the client that the insurance company sees no value in and hence has no reimbursement no coverage for it so that is a great opportunity for anybody who's looking at contracting with a low reimbursing third party payer the final question i would ask is what are the intangible benefits what are the future benefits of signing up with a third party payer so for example maybe you sign up with a low reimbursing third party payer but they are part of a closed network so nobody else can get into that network in your area well that contract has value maybe it doesn't have value for you right now because if you deliver service for a fifty dollar reimbursement and it costs you seventy five dollars to deliver that service you would be losing twenty five dollars but if you can just maintain that contract that doesn't mean that you're required to treat those beneficiaries but if you have the contract as part of your business then when you're packaging your business ready to sell it as part of your exit strategy that third party payer contract brings with it value for somebody else because while you might not be able to leverage economy of scale maybe the person or the company who's going to buy your company has multiple other locations and they can provide profitable services at that third-party payer contract rate so you just you sign the contract you hold the contract you don't use the the benefits of the contract but it's there as a value-add for somebody down the road who's planning on buying your practice in the future so guys i just want you to understand there are deeper levels to making these decisions than the superficial this is not an ego thing this is not about what some third-party payer thinks you're worth it doesn't matter what they're offering to pay it's can you leverage what they're offering ins in a way that makes it profitable or beneficial for you to achieve the goals that you have in mind for your business if you can find the way to leverage that in a positive way go ahead and do it sign that contract if you can't just say no just pass it up it's not that big of a deal but i see too many clinicians who are just thinking too superficial and not really digging deeper into understanding the deeper layers of value and success and where this can all go so if you have more questions about it please consider joining our facebook group medicare billing for mostly cash-based p-t-o-t-s-o-p and check out some of my online courses i'll link some of them down below i'll catch you on the next video