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Revenue Improvement Case Study: Outpatient Physical and Occupational Therapy

Blue & Co. reviewed publicly available information on a 120 bed, non-profit, acute-care hospital. The data suggested there was revenue improvement opportunity in their outpatient physical and occupational therapy departments. The department had approximately 27,000 patient visits the previous year. During an assessment, we co-validated a significant set of revenue improvement opportunities: charge capture improvement, referral development, and financial alternatives.

Revenue Improvement Opportunities 

Charge Capture Improvement

The complicated rules for charge capture in the outpatient therapy services sets the stage for charge capture mistakes. Because outpatient therapy is generally paid on either a fee schedule or a per cent of charges, any missed charges is truly missed revenue. We co-validated a 12% charge capture opportunity and immediately began to close the gap on the process, system, and knowledge gaps.

Referral Development

We often find there a number of patients who have an appointment or interaction at one of the many hospital’s locations who are great candidates for outpatient therapy. The opportunity is that, over time, tacit barriers have emerged which blocks the potential referral source from recognizing the candidacy of the patient. Sometimes even if they recognize the patient as a good candidate, the “work” of making the referral is overwhelming. We identified four specific areas where patients were being seen for problems which are often conducive to the need for outpatient therapy and yet they had experienced very few referrals. We were able to help remove the barriers to referral and create processes to identify ideal candidates.

Financial Concerns

Anyone associated with outpatient therapy understands that no-shows and cancellations are a challenge. Common causes include transportation, weather, sickness, etc. Financial concerns play a large role in the reason some patients choose to not continue with the care they need. Some of the causes are outside the control of the provider. But there is one significant cause that providers can influence positive change but often do not.

When the evaluating therapist shares with the patient his/her recommendation for number of treatments and the patient responds with a financial concern related to the co-pay, etc., most therapists do not have a structured response that gives the client choices to receive all the needed care. Instead, most patients get reduced services. We brought some patient financial alternatives to the hospital and helped to integrate one that was consistent with the organization’s practices.

Our Findings

We were able to assist the hospital with all of these challenges, barriers and revenue improvement opportunities. Remember, the process changes require inputs and buy-in from stakeholders outside the therapy department so true change management was required. After one year of tracking, the hospital’s Net Revenue attributable to the implementation was $672,000, over a thirteen to one ROI for the hospital the first year. Certainly, the revenue gains were a positive result.

But let’s not forget that two of these three process changes created improved care access for patients. The hospital will continue with what they learned in the implementation into the future and can expect similar net revenue gains without further cost.

Want to Learn what Opportunities May Exist within Your Organization?

If you have a hospital or health system with outpatient physical and occupational therapy, Blue & Co. can assist you with customizable, high ROI solutions. We can work with you directly to create a detailed plan which will address your outpatient therapy challenges and then help you with the plan implementation so you and your facility will be successful with your program.

Interested in receiving a high level assessment resource to see if growth & revenue improvement opportunities exist within your organization at no cost? Reach out to John Britt receive the resource to see if your organization has any opportunities.

John Britt, Senior Manager

jbritt@blueandco.com | 502-992-2598

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