Breaking the Cycle: How PTs Can Take Control of Their Financial Future
If physical therapists want to build a stronger financial future for the profession, they have to start within the walls of their own practice.
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As physical therapists, we dedicate our careers to helping others move better, feel stronger, and regain their independence. But when it comes to our own financial well-being, many of us feel stuck—trapped in a cycle of student debt, stagnant wages, and limited financial literacy. The question is: How do we break free?
The answer starts with awareness of the business side of physical therapy. As a profession, we must acknowledge that financial health is just as critical as clinical expertise. If we don’t take control of our industry’s financial future, we risk burnout, entrepreneurship limitation, and premature exits from a field we love. We owe it to our patients to make sure that our practices can continue to grow and thrive; the need for MSK care is only going to continue expanding with our aging population, and we need a financially healthy profession if we’re going to keep our doors open—and attract and retain the next generation of talent. So, what can we do?
Start reading every contract—and saying no to the bad ones.
We are not doing ourselves any favors when we sign insurance contracts that financially don’t meet the needs of your practice. As Rick Gawenda and Kennedy Hawkins highlighted in their session at CSM, you can start to break the cycle of bad contracts by first understanding what you’re signing. Read the entire contract, not just the fee schedule; understand if and when you can renegotiate, whether there’s any allowance for increases to keep up with inflation, and whether you can get out of the contract if necessary. When contemplating contract re-negotiation, know your key metrics, like the cost per visit relative to your payment per visit, along with outcomes data and patient satisfaction scores. A thorough contract review done annually as part of your budget process is a must for proper preparation in strategic planning.
You may also have to walk away from contracts that are costing your business instead of serving your business. Losing some patient volume due to opting out of a specific network or carrier is the downside risk of saying “no” to low reimbursement, but when planned correctly—including proper patient notification and education—patient attrition can be minimized while accepting out-of-network reimbursement or cash for services rendered.
Educating your staff and new hires on benefits.
It’s not just about the financial well-being of practices; we need clinicians who are well-compensated for their skill, and who understand their own financial health as well.
Understand total compensation, not just salary.
Physical therapy is a highly skilled profession, yet sometimes compensation doesn’t reflect our education level, expertise, and impact. It’s essential to recognize that compensation isn’t just about salary—it includes benefits such as health insurance, retirement contributions, paid time off, continuing education stipends, and student loan repayment assistance. Flexible options in your benefit package are now becoming more important than base salary. Educating employees and new grads about the value of the total compensation package is critical in today’s competitive recruiting landscape.
Tailor the benefits package to the individual, and get smart about student debt.
The weight of student loans is one of the biggest financial barriers PTs face. Recent data indicates that the average student loan debt for Doctor of Physical Therapy (DPT) graduates varies based on the type of institution attended:
- Public Institutions: Graduates accumulate an average debt of approximately $103,482.
- Private Institutions: Graduates face higher debt levels, averaging around $138,361.
- Overall Impact: Over 33% of DPT graduates leave school with more than $100,000 in student loan debt.
Options for refinancing, loan forgiveness programs, and strategic repayment plans can lighten the load. But financial education is key—many PTs don’t know all their options. Offering financial wellness options including expert advice can make a huge difference as an added benefit perk. We spend years mastering human movement, but how much time do we spend learning about budgeting, investing, or retirement planning?
Financial literacy isn’t just for accountants—it’s essential for any professional who wants long-term stability. Providing financial planning as continuing education like automating savings, contributing to a retirement fund early, and diversifying income streams can put your team on the path to financial independence. At WebPT, we have partnered with our 401K provider and a local financial planner to provide quarterly financial wellness webinars for anyone in the company who might be interested in learning more. The feedback we receive is always positive, and our staff appreciates having access to a trusted advisor.
Get better at collecting what you’re owed.
The real low-hanging fruit for improving your practice's profitability is improving your processes for collecting money for services you’ve provided. Claims processing can be challenging, and it takes a knowledgeable and diligent staff to ensure claims are paid on time, and payments are maximized. The path to profitability is not often achieved by simply increasing patient volumes.
When seeking to streamline and enhance practice revenue and profitability, you have to review the entire claims process, starting with the selection of CPT codes to payment collection and all of the steps in between. And even if you are outsourcing your billing to a revenue cycle management (RCM) company, correct coding and documentation are a must to maximize the accuracy, timeliness, and amount collected on your behalf. For example, instead of thinking about how your billing staff can spend more hours working your A/R, why not prevent that A/R from piling up in the first place by minimizing coding and claims adjustments/corrections needed? Here are a few things you can do to get ahead of the curve with your RCM workflows.
Claim denials start at the front desk.
Everything starts with the intake and patient registration process. The classic saying of garbage in, garbage out applies here. If a patient name is spelled incorrectly or an insurance card number has the digits out of order, all claims submitted with that information will be denied and subsequently, must be corrected and resubmitted. The same goes for eligibility checks and prior authorization; capturing accurate information on the initial visit is crucial to eliminating rework and slowing down the payment processes.
Collecting deductibles, copays, and/or coinsurance from patients at the time of service is an absolute must. Having completed the eligibility check capturing copay/co-insurance as well as deductible amounts prior to the first visit allows for accurate collection and patient education on the first visit. Part of your patient intake process should include an explanation of a patient’s financial responsibilities and set the expectation for when and how they should pay during each visit.
Correct coding by clinicians.
Today’s documentation requirements may be excessive, but clinicians should have a very good understanding of the evaluation and top 10 most utilized PT codes for PTs in order to document and bill correctly for services rendered. Having regular inservices on correct coding, like the difference between neuromuscular reeducation, therapeutic activity, and therapeutic exercise, can help with maximizing payment to reflect the actual services that were provided by the therapist.
If documented correctly, technology and AI can also be helpful in suggesting the correct codes to match the visit documentation, including time spent on the treatment approaches during a patient visit. Inservices should also include clinical educational awareness as the specific coding and documentation rules for the top payers seen in the practice, as well as any state-specific guidelines that may be in place. Payers are constantly changing their rules and requirements, and while it’s a lot to keep up on, staying current on the latest changes helps to avoid denials. Software can again be utilized to keep up with the latest payer updates, so you don't have to worry about it.
Track your problem areas.
Clinics can’t survive without revenue which is why billing and collections must be a priority for any practice to be successful. And just like clinicians set goals for patients to achieve, tracking practice’s key billing metrics such as: denial rates, DSO (Days Sales Outstanding), first pass acceptance rate, collection vs billed rate ratio, net collection per visit, aging amounts and bad debt, as well as documentation requests and what payers are saying in their electronic remittance advice (ERA). A lot can go wrong in the claims processing and payment process and insurance companies seem to thrive on making the process to get paid harder and harder each year. So staying up to date on your metrics, prioritizing continuous improvement and ongoing education for the staff is critical to maximizing the clinic revenue and profitability.
Embrace advocacy in the push for higher insurance reimbursement.
Solving our payment problem starts with advocacy and education. “Now” is always the time to press legislators to reverse Medicare payment cuts and to rein in the prior authorization and documentation requirements. Now is also the time to push private payers on their skyrocketing unnecessary denials rates. PTs must continue to advocate for better payment as well as seeking out alternative income streams by:
- Educating Legislators. Lawmakers influence healthcare policy. By reaching out, sharing patient success stories, and explaining how under-reimbursement affects access to care, PTs can work in partnership with professional groups like the APTA and APTQI and push for legislative changes that benefit the profession.
- Encouraging Direct Access Awareness. Most states and payors allow patients to see PTs without a physician referral, yet lack of insurance coverage can be a barrier. Allowing for cash-based services fee schedule and over-the-counter collection allows patients to receive timely, cost-effective care while strengthening the profession’s financial viability.
- Documenting and Sharing Data. The more PTs collect and share data on positive patient outcomes and cost savings, the stronger the case for higher reimbursement rates. Research-backed advocacy is a powerful tool for change especially in today’s climate of cost savings as a priority.
At the end of the day, taking control of our financial future isn’t just about money—it’s about freedom. It’s about having the ability to pursue opportunities, avoid burnout, and build a career that is both personally and financially fulfilling. By prioritizing financial health, we empower not only ourselves but the future of our profession. Let’s start now.
And while you’re at it, be sure to sign up for our RCM webinar later this month to learn more about how you can get on top of the billing side of your financial health.
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