A year ago, Vector Rehabilitation in Eureka, Calif., was facing big problems: $70,000 in past-due payables and nearly $200,000 in receivables aging. “We were heading into a financial hole,” says CEO Bill Ruff. He and his colleagues on the board of Vector, a nonprofit community benefit organization, were considering bankruptcy protection or selling the organization’s assets and closing it down. “We decided to make a radical shift in our approach to cash flow instead,” said Ruff. “We realized that outsourcing billing was central to our financial problems. The billing agency wasn’t geared to PT and couldn’t (or wouldn’t) do the kind of follow-up that was necessary to resolve complex reimbursement problems with our dual-eligible (Medicare and MediCal) patients,” he says. We needed to find a way to improve cash flow, quickly.”
The Solution: Get Billing Under Control with a System that Can Grow with the Practice
Vector Rehabilitation moved quickly to bring billing in house with Compulink’s Physical Therapy AdvantageTM. “It was a leap of faith to spend money to fix our financial problems, but we saw that Compulink offered the tools we needed to get billing and cash flow under control. And it was a system that could grow with us when we were ready,” Ruff says. Vector started with scheduling and billing, and later added patient Web registration. Very soon, they will transition to electronic health records (EHR). “We appreciated from the beginning how customizable this system is,” says Ruff. “Compulink was able to help us customize our appointments scheduling to make it easy for non computer-savvy therapists to do their own scheduling. We can already see that when we start using EHR, it will really fit the way we work,” he says.
Ruff was also impressed with Compulink’s extensive training program and how he was able to get his staff up to speed quickly. “It was very comprehensive, hands-on, and tailored to our needs,” he says.
The Result: Accounts Receivable Aging Cut from $200,000 to $9,000
Within a year, Ruff was able to decrease the practice’s accounts receivable aging over 90 days from nearly $200,000 to just $9,000. Accounts payable now average just $3,000, and Vector is no longer facing bankruptcy or closure. “Compulink helps me manage cash flow so much more effectively than ever before,” he says. The practice’s electronic claims go out cleaner, and reimbursements are received promptly.
Ruff says that bringing billing in-house allowed him to manage outgoing payments, too. “I can access our Medicare and MediCal claims status at any time to better forecast when large sums are coming in, so I can properly schedule payments. Once you have the ability to manage cash flow like that, you can really start to think about growth,” he says.
Pearls for Success
“Most physical therapy clinics are run by clinicians, but if you want to maintain a healthy practice, you have to make decisions based on sound business principles,” says Ruff. “If you aren’t good at that, find people who are or implement the tools that can make it easier for you.” A core part of Ruff’s strategy is understanding his cash flow picture over the coming 60-120 days, and being able to query major payers to find out what’s on the payment floor. “That’s pretty hard to do if you are running the practice manually or if you’ve outsourced critical business functions like billing,” he says.