How a 12-Location Physical Therapy Group Reduced Patient A/R Over 90 Days by 64% and Cut Denials to 8%
Client Profile
A rapidly expanding outpatient physical therapy provider with 12 locations offers rehabilitation services across a range of multiple specialities, including post-surgical therapy, orthopedic rehabilitation, and chronic mobility programs.
As the company grew, the leaders worked with Lapiz to improve the front-end revenue cycle operations and the financial workflows for patients. The main goal was to deal with the growing number of patient accounts receivable, the frequent miscalculations of benefits, and the increasing number of denials that could have been avoided. These problems were slowing down cash flow and putting more pressure on clinic staff.
Despite favourable clinical outcomes and high patient satisfaction, the revenue cycle team faced challenges with disjointed eligibility verification, erratic tracking of therapy benefits, and insufficient insight into the underlying reasons for denials. Lapiz was engaged to create and implement a scalable revenue optimisation framework that would work well in a physical therapy setting with multiple locations.
The Challenge
The physical therapy group was having trouble with both its clinics finances and operations:
- 28% of patient accounts receivable were more than 90 days old, mostly because the calculations of patient responsibility were wrong or took too long.
- An overall denial rate of 19% was making it take longer to get paid and making staff less productive.
- High volumes of CO-45 (charge exceeds fee schedule) and CO-97 (invalid or missing authorization) denials.
- Frequent errors in therapy caps led to incorrect billing and patient balances.
- Front-desk teams burnt out quickly because they kept making mistakes when checking eligibility and benefits.
- It was difficult to determine which corrective actions to implement first, as there was insufficient data on the reasons for payer-specific denials.
Leadership needed a centralized, standardized approach that could be used consistently at all 12 locations.
Our Approach
Lapiz worked closely with the organization’s revenue cycle leaders, clinic managers, and front-desk teams to put in place a proactive, patient-centered model for optimising revenue.
48-Hour Pre-Visit Eligibility and Benefits Verification
A centralised verification workflow checks insurance coverage, authorisation requirements, visit limits, and payer-specific benefit rules 48 hours before the scheduled visit. This makes sure that everything is ready before the patient gets there.
Tracking Therapy Caps by Payer
A structured therapy cap-tracking system keeps track of annual and episode-based limits by payer. This helps keep costs down and billing correct.
Small-Balance Accounts Receivable Acceleration Workflow
A dedicated small-balance recovery workflow puts low-dollar, high-volume patient balances first and makes follow-up tasks easier to speed up collections.
CO-Denial Root Cause Analytics Dashboard
A real-time analytics dashboard identifies trends behind CO-45 and CO-97 denials and highlights payer-specific and location-specific root causes.
Patient Responsibility Estimation Model
A patient responsibility estimation model figures out how much money a patient will have to pay out of pocket before their appointment. This makes it easier to talk about money and collect payments at the point of service.
Results
- The percentage of patients with A/R for over 90 days decreased from 28% to 10%.
- Collections at the point of service went up by 32%.
- The overall denial rate went down from 19% to 8%.
- Small-balance recovery sped up by 41%.
- Overall, the number of A/R days went down from 61 to 38.
Business Impact
With Lapiz’s operational and analytics support, the physical therapy group transitioned from fragmented front-end processes to a standardized, data-driven revenue optimization model across all 12 locations.
The organization improved cash flow predictability, cut down on denials that could have been avoided, and made the front desk’s job much easier by adding Lapiz’s eligibility verification, therapy cap tracking, denial analytics, and patient responsibility estimation to the daily clinic workflows.
Key business results included
- Improved patient payment transparency across all clinic locations
- Faster recovery of outstanding patient balances
- Less work for the front desk and less staff burnout because of mistakes with eligibility and billing
- Set up a standardized and scalable revenue cycle foundation with Lapiz support to help the clinic keep growing.
