I recently attended the American Physical Therapy Association’s Private Practice Section conference. It was great to reconnect with friends and industry colleagues. I appreciated hearing from leading experts about the trends in physical rehabilitation.
One trend is here to stay for the foreseeable future. Physical rehabilitation and much of healthcare is a low margin business. Since 2011, physical rehabilitation providers have seen their reimbursementdecline 37.0%[1] At the same time reimbursement has steeply declined, expenses have risen sharply. Therapist and staff wages along with their benefits are at all-time highs. Compounding the expense side challenges, inflation is still running above historical averages.
Given this trend, it is more important than ever for healthcare providers to maximize their reimbursement. When was the last time you talked with your insurance companies about increasing your fee schedule? Are you leaving money on the table?
While physical rehabilitation provider margins continue to decline, healthcare insurance companies are making record profits. Here are some of the 2023 Q3 financial results for the major healthcare insurance companies[2]:
- United Healthcare brought in revenue of $92.4 Billion (14% Year-Over-Year growth) and $5.8 billion in profit.
- CVS/Aetna total revenues increased to $89.8 billion, for the quarter and $264 billion for the year, up 10.6% compared to the prior year. The healthcare benefits segment, which includes Aetna, posted $2.3 billion in profit.
- Cigna reported total revenues of $49 billion, up from $45.3 billion in Q3 2022.
Now is the time to put together a coordinated strategy to approach your insurance companies for fee schedule increases. Many insurance companies are already having these fee schedule increase conversations.
You need to have the right data when approaching insurance companies. In addition, you need to understand how insurance companies think and what matters to them. In putting together this coordinate strategy, you will need to the following data on your organization. This list is not an exhaustive one:
- Patient Clinical Outcomes
- Patient Satisfaction Results
- Practice Differentiators
- Practice Cost/Visit
- Practice Billing Patterns
- Patient Success Stories
Many healthcare organizations give up if they don’t receive a fee schedule increase on the first attempt. The key is persistence and having a solid coordinated strategy.
I can help your organization put together a coordinated strategy to seek fee schedule increases. Over time, this strategy will yield results. Please contact me at kd@kennedyhawkins.com or 503.881.0746 to set up a free initial consultation.
[1] Kelly Cooney, President, National Association of Rehabilitation Agencies Spring Conference 2023.
[2] Robert Hall, JD/MPAff, Senior Payment Consultant, American Physical Therapy Association Private Practice Section Conference 2023.
