Maximizing Cash Flow, Increasing Profits, And Eliminating Patient Balances With Kristi Plunk, DPT

Listen up! In this episode of the Physical Therapy Owners Club podcast, Nathan Shields engages in an invigorating discussion with Kristi Plunk, from Beyond Physical Therapy and Wellness. Discover the game-changing strategy that has put her clinic on the map in Fort Worth, Texas. This transformational technique is highly effective and has proven to be a massive success. Don’t miss out on this incredible conversation!​

Hear about a game-changing policy that transformed Kristi’s clinic, significantly boosting collections and revenue. Kristi’s approach tackled challenges such as a surge in cancellation rates and a dramatic loss in revenue due to SEO changes. This led to a remarkable financial turnaround that will leave you in awe. Her journey is a true testament to the power of resilience, smart policy implementation, and the crucial role of clear communication with patients. In this episode, you’ll discover how Kristi tackled misconceptions about medical bill payments and navigated the nuances of legal and ethical considerations. Get ready to reshape the way you run your physical therapy clinic with these valuable insights.

Want to talk about how we can help you with your PT business, or have a question you want to ask? Book a call with Nathan – Calendly.com/PTOClub/discoverycall

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I’ve got my friend and coaching client, Kristi Plunk, from Beyond Physical Therapy and Wellness .

Our IRS name is Beyond Therapy and Wellness, but our logo has cut it down to Beyond Physical Therapy.

She is out of Fort Worth, Texas. Kristi, thanks for joining me. I appreciate it.

I’m happy to be here.

I wanted to highlight Kristi because she does something that a minority of physical therapy clinics do not do. I wanted to highlight it because it’s something that every physical therapy clinic should be doing on a regular basis. That is collecting the copays, co-insurances, and deductibles at the time of service, no matter what all the time. Secondly, having a credit card on file to do.

She does it on a regular basis. Collections have been significantly better. I’m assuming revenue has also increased because of it. I wanted to highlight simply that practice and get into it. What was the impetus for you to decide, “I’m not going to collect after the fact anymore or have any more of those awkward conversations at the front desk when I’m trying to charge a cancellation fee?” What was the impetus?

It has been an evolution of the current policy that we’re at that started at the end of 2021, but we had a great year that year, better than we had ever done, even though COVID was still prominent in impacting how people went out about their lives. I had an interesting conversation with a patient who was a physical therapy manager at another clinic. Towards the end of 2021, we had a significant spike in the percentage of cancellations. I’m several years into it. I had this crazy cancellation rate that I’d never seen before. I assessed, “What are we doing differently? What’s playing a role in this?”

I had this conversation with this other PT manager. Our growth and cancellation rates were almost identical that year. I never met her before. We specialize in pelvic health and lymphedema. They are an outpatient ortho clinic. Having that conversation with her made me start thinking. The psyche of people is different now. The way that people think about going out, the way people think about other people’s responsibility for things that they’d signed up for, commitment to health, and getting out of the house. All of those things play into the psyche changes that happened with COVID.

That was my first inkling that our brains are different now. We’ve been through this traumatic event, and it has had an impact on our business. One of the things was a significant number of cancellations not related to illness because we’d been experiencing COVID for a year and a half already. That was the start of it. That next year, I started losing money. In 2022, I had lost more money than I’d ever lost. I lost more money than it took me to open up my clinic in the first place.

It’s still related to the cancellation rates.

I don’t think it was related to the cancellation rates. That was part of it. Another significant factor that I think was the primary player was that Google’s algorithm changed. We’re pelvic floor, and there are not many pelvic floor providers. We’re in the Dallas, Fort Worth metroplex. There are millions of people here. We’re in the center of the metroplex. We would get people from traveling in to see us.

Our SEO was fabulous. Everything was going great. Most of our referrals were self-referrals, not necessarily physician referrals. Google changed its algorithm. If you were not in a location that was a certain distance from your clinic, Google wasn’t pulling up those options when you were looking. Our SEO tank it. I didn’t necessarily know this was happening. It took me a couple of months to figure out what was going on, but there’s a significant drop in referrals.

At that point, I decided, “I have to do things differently. This is not sustainable.” There’s been many things that I’ve done since that time. One of them is working with you and Adam, which I kicked myself. I didn’t start coaching sooner in my career as a business owner. I also started working with practice promotions. They now manage my SEO. They stay up with any algorithm changes to protect us from that in the future because that’s not my area of expertise. I have to hire the experts for that.

I realized we had to do something different with collections. I’m not unique in that if we don’t collect everything upfront, there’s a bill at the end of the month. When people pay that bill, we’re excited because those people don’t pay their medical bills. People believe that they don’t necessarily have to pay their medical bills. They don’t believe that it goes on their credit. There’s an incorrect thought process there. As a side note, we don’t send anything to collections. I’ve personally never felt great about doing that. People do have some thoughts in their minds that they don’t necessarily have to pay their medical bills.

It shows up in the statistics. I saw a study by McKinsey, which is a prominent accounting firm. For every dollar that’s not collected at the time of service, you’ll lose up to $0.50 to $0.60 on that dollar trying to collect it afterward. That goes to your point. If they’re not in front of you, you’re not going to get as much money as you can at that time of service. That’s why it’s imperative, especially when you lay out that anywhere from 10%, 15%, or 20% of your entire revenue is patient copays, insurances, and deductibles. To lose $0.50 on that dollar means a lot of profit to be lost in a given year.

Close to 30% is collected from patients. In our total revenue, 30% comes from patient payments and deductibles.

You have to be on top of that, or your profit margin will be hit huge. What made you decide to take a stand and say the hard-line, “We’re going to collect at the time of service every time you’re going to have a credit card on file.” What was that final tipping point?

I’ve always had a good collection at the front desk, but everybody is human. If somebody walks away from the front desk or there are two people waiting, somebody leaves, and they didn’t get to hand on their card, you are going to miss some, even if patients have the best intentions and your front desk is on top of everything. We had our systems down well, but there’s still that element that you’re always going to have some mist in terms of collecting.

I’ve had a cancellation policy where we charge $40 for same-day cancellations if it’s not made up in the same week. I’ve had that in place for years, but collecting and having that conversation is difficult. They come in the next time, and you’re like, “I’ve got to charge you for your cancellation that you missed last time.” You have this confrontation with your front desk person and the patient. Everybody is uncomfortable. Your front desk doesn’t want to do that.

Everybody is human.
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You’re like, “Give me your credit card so I can charge you the cancellation fee, please.” They’re like, “I don’t want to give you my credit card if that’s the case.”

Every human being is going to want to have a conversation about this charge that they’re getting for no service. I felt like we had to change the process. My dermatologist makes us have a credit card on file. It’s a $50 cancellation fee if you cancel the same day, but they won’t even see you the first time as a new patient without a card on file.

We’re not breaking new ground here. This has been done. It’s normal.

The massage therapists and the hairdressers are doing it. My hairdresser charges more than $40 if I cancel the same day, which I’ve had to do before.

They’re like, “Don’t worry about it. I’m going to charge your card.”

That’s how it should be. You don’t want that confrontation. I decided we had to do something different. We decided to store the credit cards. I started with Square because we didn’t have it integrated into our EMR. Square does have a higher percentage credit card fee, and I would charge half of that. I would charge 2.5% when we use Square, which was a different battle. Most people understand it, but you do get more of a conversation with people.

It’s tangential, but I have no problems with it. It’s okay in most states, if not all, for you to charge the merchant services fee. If you are collecting a deductible of $150 or $250, even if it’s a 3% merchant services fee, that’s significant. You say, “We’re going to charge it, but if we’re going to charge it, we’re going to have to charge you the merchant services fee.” if you’re going to do that, you have it posted there that you’re charging the services fee for any credit card transactions.

It can be done. I would recommend that it be posted. Patients know about it, and that’s not a surprise. Having that there and available is helpful. Otherwise, you’re taking a 3% hit on everything you collect. That’s taking money out of your pocket and the possibilities you can do to invest back in your company.

We didn’t have many people have an issue with that. You have a conversation about it and have it in your paperwork. We started doing that and implementing that we were charging any balances at the end of the month automatically on that card that we had on file. We’re not just having the card on file for copays, deductibles at the time of service, and same-day cancellations, but we’re also going to charge any balance that’s due at the end of the month. We have this paperwork.

That’s a cool nuance because I highly promote that if you have a cancellation fee, have your credit cards on file, but charge the cancellation fee and make sure you’re collecting out the time of service. You took it a step further. If there is a patient balance remaining that hasn’t already been sent to, and if it’s still in the works going through insurance, that’s not going to be charged to them. If there’s a balance to the patient after it’s been through insurance, you have it in the financial paperwork that you’re going to charge that at the end of each month.

Surprisingly, we haven’t had an issue with this with patients. We let them know it’s all in our paperwork. We will notify them a week before what their balances are. They have time to call and have any conversations that they want to about it. We let them know the date that their card will be charged for that balance.

I did play around a little bit with the text message that goes out that week before to give it a more positive light. We’re like, “We’re thankful for your business.” I’ve got the right verbiage because we don’t have any issues with it. We’re on top of it. Before we started that, there were people who had balances from six months ago or more. They’re getting these messages. They’re like, “This is a long time ago.” We’re communicating this and collecting within 30 to 45 days of when their visit was. People understand, and it’s worked well.

As people get some distance from the care that they provide, they’re going to discount the services that you provided if it’s a year later. They’re like, “What did you guys do for me again? I don’t even remember that.” You’re coming at them with a bill of $600. They’re like, “Why am I paying this $600 again? I don’t understand.” If along the way you’re month to month, you’re saying, “This month, we’re collecting $85 towards your balance for physical therapy. We appreciate your services. Thank you so much.”

Do that for a number of months over time while your services are fresh in their mind. Either they’re still receiving services, or we’ve gotten them better through a full plan of care, so that’s much easier for the patients to swallow. It’s also easier for you to collect the money. That’s a huge game-changer. As you created the paperwork for that, is that something that you sent past a compliance agent or a lawyer? How did you draft the paperwork?

I did a lot of research.

If you stole it from somebody, that’s fine.

I don’t know exactly where I came up with it, but I got to a point where I figured out, “That’s what has to be on there for this to legally take place.” You have to have the last four digits, their card code, billing zip, a signature on it, and their name.

What’s your EMR? Does that store it for you now? Are you still using a separate third vendor?

It’s a wonderful progression for WebPT. They do have a merchant services vendor that integrates with the EMR. On that same screen, you can store the credit card and charge their card every time when you check in the patient. They have it set up where you can’t miss a payment if you’ve checked somebody in as long as you’ve put in their payment what they owe at the start of their setup.

Did WebPT have some paperwork for you to recommend for them to fill out and sign off on? Did you get a template from WebPT at all?

No, I did not. They use a third party. It’s Worldpay. It would make sense for them to provide some guidance on paperwork for storing the credit card.

If you ask their customer service, they direct you in the right way. They either direct you toward Worldpay or something on their website. I’m sure they’d have something. As owners who are reading, they’re thinking, “How do I set up that paperwork? What does that look like? What does it say so that I can do that legally?”

You did some research, and you found some stuff. Google is a massive treasure trove of opportunities to steal from other people. If you’re still feeling uncomfortable about it as an owner, talk to a local lawyer, spend $300 to $500 for them to review the paper, and say, “Yeah, this is legit. You can do this in our state.” Do it, but don’t use the lack of the paperwork, or I don’t have that paperwork, to not move forward on this because you’re losing a ton of money the longer you don’t keep that credit card on file.

The hesitation is also not wanting to have those conversations with patients like, “How do I say I’m going to charge you automatically?” A copay is easy to say, “We have your card on file.” If we’re talking about charging at the end of the month or the cancellation fees, I could see where there might be more avoidance of those conversations.

What we do and what has worked well for us is that it’s all in our initial paperwork. They don’t know us yet. This is the paperwork to get started with us. There’s nothing personal going on here. Lining it up at the beginning like that has been smooth for us. I do have it on two different forms. I have a credit card form where it says when we’re going to charge your card.

Regarding our policies and patient consent form, I have it on there also and have them initialed. They’re signing off in two different places. There’s no way people could miss this. That’s not something people say, “I didn’t know that was going to happen.” Yeah, you did because you had to hand us your credit card on the first visit. Even if people don’t owe anything, we still have that explanation that we have their credit card on file for same-day cancellations.

I’ll add one more thing that I’ve figured out with charging the same-day cancellations that have made it smoother is that I have started charging those on Friday or Monday for the entire week. What I found was that my front desk was hearing all of the things on the phone. They’re providing sympathy to the patient about whatever is going on or whatever reason it is that they can’t make it the same day. They still weren’t charging for same-day cancellations.

They were doing everything they could to move the appointment, but they weren’t charging for same-day cancellations because of that merciful heart, which is great. Healthcare is in a different climate now. Reimbursement is not what it used to be. Everything is more expensive. Unfortunately, I felt like this was an area where we had to take some emotion out of it and do what had to be done.

Healthcare is a very different climate now. Reimbursement is not what it used to be.
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I ended up taking that back on my plate, looking through anybody who had a cancel on that same day. This sounds harsh, but I charge the fee no matter what. If they call back and complain about the fee, I’ve advised my billing manager to refund it. You don’t have to argue about it. Refund it. It’s not worth a big back-and-forth. Go ahead and refund it.

What I find is that whenever we charge that fee, it is less emotional. They can process it and say, “That was their fee. That was their policy.” We rarely get a call about it. We don’t even have to have a conversation about it, which is ideal because the front desk person is having a conversation on the phone, “If you don’t come in now, I am going to charge your card.”

That’s going to escalate emotions right there.

It doesn’t necessarily get them to come in. Everybody knows that the policy is there. If they ask, “Am I going to be charged for not coming in now?” The answer is yes. We’re not provoking a conversation. We’re trying to minimize emotions on this. This isn’t personal. It’s about us being able to maintain a financially responsible business.

You have to have that. I’m assuming your ideal front desk person is unemotional about the financial conversations. This is what it is. There’s going to be maybe some pushback on people handing over their credit cards. Here in Alaska, there are a lot of conspiracy theorists. They’re like, “I don’t want anyone to have any of my information ever. I don’t want you to know where I live because I’m going to get tracked by the deep state.”

That front desk person has to be unemotional about it and say, “This is how we do things. We keep it on file. If you don’t owe anything, we’re not going to charge anything. That’s simply our policy, and we try to be good about it.” I’m assuming in this situation, your front desk person is rather mature, is not afraid of financial conversations, and is not afraid to take people’s money because it is the copay that they’ve signed up for with their insurance that they have. They’re in that place or at least have that personality.

She does a great job with those financial conversations upfront. The cancellations are tricky because anybody can be sick. That’s why I say it can’t be personal. We saved this time for you. We’re not even going to say that. We’re not going to get into why we collected necessarily.

You don’t say anything. You say, “That’s our policy. If you want to learn more, I can show you my financials and how I have to pay my physical therapists. Whether you show up or not, I still have to pay them something.”

She’s still getting that. She has to be somewhat sympathetic, but she has to be kind to individuals on the phone who are calling, “I’ve got an emergency.” She has to play that role.

You start off with your story about looking at your clinic from a different lens because the cancellation rates were poor. You were losing money at the beginning of 2022. Do you feel like implementing this particular process was significantly helpful in turning things around?

Yeah.

Do you think you helped the cancellation rate?

We do have a lower cancellation rate on average.

It made it more tolerable. You could swallow the cancellation rate better if you’re collecting something.

If somebody has to move an appointment, we do get people calling a couple of days early. We say 48 hours on our paperwork, but we charge at 24 hours. We do have people calling earlier. That gives us time to get somebody off the waitlist. We get more notice now.

It sounds like a number of factors helped you turn things around financially. It wasn’t the implementation of this particular credit card on file payment at the time of service collecting balances at the end of the month. That was all helpful in getting your numbers back, but it wasn’t the only factor.

My mindset changed quite a bit when I started to work with you guys and how I was leading the clinic. My expectations for the staff and what the clinic was doing changed significantly in the past year working with you guys. I did get a renegotiated rate with UnitedHealthcare. I’m going to ask for another increase again. We’ll see what happens. Multiple factors have turned the clinic around. I had my best year next to my worst year after realizing that some dramatic things had to happen.

You improved yourself as a leader. You found a way to hold your team more accountable to production, but you also implemented systems in place so that you are collecting at the time of service and not letting that extra cash potentially fall through the cracks. I imagine that your AR aging report, like the 120 plus, is next to nothing. There aren’t any patient balances sitting out there.

To improve yourself as a leader, find a way to hold your team more accountable.
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Our aging report looks good. I’ve got somebody who does an amazing job with our billing. It has downplayed how all the different insurance companies work. The only issue was the collections.

It’s collections from insurance companies at that point. If you have the credit card on file and you are collecting it at the time of service and collecting their balances at the end of the month, there’s nothing more to collect. Am I missing something?

No, that’s right.

You’re on top of that. For patient balances, you guys are crushing it. I can’t say that for a lot of PT clinics out there. There are a lot of patient balances that are sitting on the books. Half the time is not going to get collected based on the statistics. It’s a great formula that you’ve put in place to get things set up.

You shared some of your cancellation policies and how you charge credit cards with me in emails. I question whether or not I’m willing to share that with owners simply because I don’t want to say that we’re promoting some legal advice. I would recommend that people consider talking to compliance officers if they have to, maybe with BCMS, about keeping cards on file, what paperwork they might need to have, and checking with their EMRs.

Talk to an attorney if they have to once they have some paperwork and things together. See what’s online and what other people are doing for their clinics. Getting started can make a huge difference. One of my last questions is, as you implemented this initially, did you get some pushback? Did you find that patients were understanding?

It’s scary initially implementing it. What I told my staff was, “If someone will not put their card on file, we won’t see them.” I felt like I needed to not have any gray area there because if somebody wants to have a conversation about it, the front desk is in this back and forth with them. They’re like, “This person didn’t want to do it. We didn’t.” Starting out, I had to make it a hard black and white. Either you have it and you can start treatment, or we don’t have it and you can’t start treatment.

I didn’t know how it was going to go. I didn’t know how many people we were going to have turned away and not do therapy with us because of this. It turns out few. It’s less than 1%. The vast majority of the time, people don’t blink an eye because it is more common now. Massage therapists, hairstylists, and some doctor’s offices are doing it.

More doctors’ offices should, especially physical therapists. As often as we see patients, it’s different compared to a doctor who you might see once every so often. If I’m going to see you 1, 2, to 3 times a week on a regular basis and have to collect that copay over and over again, let’s keep the credit card on file and make it easy, especially when it comes to children. I don’t know if you see a lot of children, but it’s left to the children to bring in the credit card from their parents. They’re like, “My mom forgot to give me my credit card. I can’t pay the copay.” Good luck collecting on that later on.

I had a boss before I opened my own clinic. I can’t remember the conversation, but what he said to me was, “Physical therapist, you all have this Peace Corps gene. You all want to give away services for free.” He’s completely right. I don’t know what it is about our profession. We’re drawn to physical therapy, and we have that as a nature initially, or if our schools do it to us.

That’s part of it.

That’s a mistake on our part. We have to understand our value and not feel bad about collecting for services.

Our profession shows that. The way our profession interacts with other professions is we’re willing to be subservient. We want to be liked and play nice with everybody instead of taking a stand and saying, “No, we want to be viable and survive.” There’s nothing wrong with that. We want to be profitable.” There’s nothing wrong with that and taking the stand.

I love how you took that challenge or the problem that you faced in 2021 and 2022. You turn that into a great turning point in your clinics. You can look back on that and see the significant difference that’s made from your clinic in 2020 to 2024. 2020 might not be a good one to measure off of, but you know what I’m talking about.

Your clinic is completely different than it was before financially, culturally, and production-wise. It’s a different clinic. It’s because you went through some of those hard times. Congratulations. Thanks so much for sharing your experience. I wanted to highlight that because a minority of PT owners are doing it, and more of them need to be if not all of them need to be. Thank you so much for sharing your experience. I appreciate it.

Thanks for having me. It’s been great.

Are you willing to share how people can get in touch with you, whether through your social media or email?

Email would be the best. It’s Kristi@BeyondTherapyAndWellness.com.

Thank you so much. I appreciate it.

Thank you.

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