Partnerships And Immediately Improving Cash Flow, Feat. Nathan Shields, Co-Owner Of The Private Practice Owners Club, On The Financial Beast Podcast

[00:00:00] I would assume that most owners would want to increase their revenues 10% without doing much more, without having to see more patients, frankly. And you can do that if you just clean up your systems a little bit, just a little bit. And I'm serious, it's not a lot of work. Welcome to The Private Practice Owners Club. Your hosts and coaches, Nathan Shields, scaled his practice and exited for millions,

[00:00:24] while Adam Robin went from working 60 hours a week in one clinic to scaling to multiple clinics while working less than four hours per week remotely. This podcast is meant to share with you exactly how they did it and how you can build a business that supports the lifestyle that you truly desire. And don't forget to join The Private Practice Owners Club community on Facebook, where we are obsessed with providing even more resources that help owners, just like you, win the game of private practice.

[00:00:56] Hello, Private Practice Owners Club listeners. Today's podcast is actually Eric Miller's podcast, which is The Financial Beast. You can find his podcast out in the podcastosphere, whatever you call it, where I was a guest on his podcast. And we had the opportunity to talk about a couple of things, partnerships and how to increase cash flow immediately.

[00:01:19] I broke down the four phases that I discuss in my online course about how to improve cash flow and different aspects of your business without seeing any new patients. So you might want to check this out because we talked about two pretty significant things and it takes a lot of time to break down, frankly, but my experience with partnerships and how to create the most successful partnerships. And then after that, we lead into how to increase cash flow.

[00:01:45] So I hope you enjoy it. Check out previous podcasts that I've done with Eric Miller because he shares a ton of great insight on The Private Practice Owners Club, but he also has this podcast, The Financial Beast, in which I was a guest. And I'm happy to share it with you guys here. Let's check it out. All right, everybody. Welcome back to The Financial Beast podcast. I am your BFF, your host, Eric Miller, co-owner, chief advisor at Conalogics Financial Advisors. We are definitely on a quest to help as many healthcare owners achieve financial stability by giving premier financial advice.

[00:02:13] Please check us out at Conalogics Financial Advisors dot com. And if you're brand new to the channel, you know the drill. Like, share, subscribe so we can have awesome guests on like we have right now. Mr. Nathan Shields. Let's go. Owner, co-owner of multiple businesses. Private Practice Owners Club. Private Practice Owners Club.

[00:02:35] We have like one of the larger physical therapy groups, I've got to assume, in the industry right now you guys put together there. Well, you know, we've got an awesome Facebook group that's got almost 1,500 members on there. We have our own coaching clients, of course, and that's cool. And been doing the podcast for six years now. So there's a little bit of history in the audience for sure. Yeah, you're definitely in the game, man.

[00:03:00] We were talking earlier about, because you have a partner in the Private Practice Owners Club and Adam Robyn. Robyn, just like Robyn. Robyn. I don't know why I always want to put a D in there for some reason. That's right. And we're just kind of talking about partnerships in general because we've seen it be an issue. And we're going to talk a little bit more about partnerships and how to improve your cash flow. But I do want to just touch on partnerships because it is something that, but when they're good, they're good.

[00:03:26] And when they're bad, oh my God, it is terrible. So you've had two partners, right? I've had two now. Serious business partners. Yeah. Not just like people that share financial interest in a common real estate project or something like that. No, these are legit. We're in the weeds together. Yeah. For what I can tell, two pretty successful partnerships. Yeah. Listening to you, I count myself lucky. It sounds like 90% of the people that have partners that you're dealing with, they're having issues.

[00:03:55] I've never really had issues before. Like I've found amazing people that I can trust and we have open and honest conversation and we have pretty clear expectations. And I can't complain. I don't get anxiety over getting on a call with them. Like I look forward to talking to my partners and I'm sure plenty of people out there have a partner and they're like, oh, I have to deal with this guy. Yeah. You didn't have a net, but when you decided to go into business with these two, did you have a process or is it just like?

[00:04:25] Like, no, I like these guys. We're on the same purpose lines. I can get along with them pretty well. And that was pretty much the extent of the decision at that point. My process of partnering with Adam, which is just in the last year, was completely different than my process. Partnering with Will, which was 10 plus years ago, 12 years ago, because 12 years ago, I didn't know anything. We just like, hey, you want to partner? Okay, let's do it. And it was like, and that was it. Right.

[00:04:51] So the reason why I believe my partnership with Will worked so well was, yeah, we came from some very shared values. We met each other at church. Yeah. So you can't get more fundamental than that. No, no. You had a basic bedrock of things you guys agreed upon, especially from just like you said, a value system. I mean, that means a lot right there. Yeah, right there. That told me a lot about him simply because we had the same experience through church and life experiences because we shared the same religion.

[00:05:20] So we talked. We part initially with Will, though, also we worked together. So he was a clinic director of mine in the clinic, and I gave him a ton of autonomy to the point where I actually kind of abdicated leadership because I didn't know what I was supposed to be doing as an owner overseeing a second location. But we worked together still in spite of all my flaws. Will looked past them, thankfully, and was grateful for the opportunity to be a clinic director and had some profit sharing. And he loved it.

[00:05:50] Of course, financially, it worked out for him, worked out for me, too, to the point where he eventually bought that clinic from me. And then we went and opened a clinic together and still nothing written in stone. A lot of shared values, a lot of communication. Hey, I'm having issues. What do you think? Or me, I'm having issues. What do you think? We'd talk about it. Did get to the point, though, where we did merge all of the clinics that we had together. So there were four clinics out there that were his, hers, and ours kind of thing.

[00:06:18] Well, sorry, his, his, and ours. Yeah, I get it. And that's when we got a lawyer involved. And they actually took us through, like, these are the things that you need to consider. Let's, like, figure out worst-case scenarios and how are we going to decide if there's an impasse between the two of you. So you didn't do it right away, but you guys eventually did get all the agreements. Eventually, at least. So you had a very long honeymoon before we retired the knot, essentially. And so to compare and contrast with my partnership with Adam, yeah, we worked together for about a year.

[00:06:48] And that was my thinking the entire time that we were eventually going to get to that lawyer situation. And we talked about this initially. We did two things that I think were important. If I think of more, give me some leeway. I don't know if you know about Dan Sullivan's coaching program. He's a pretty popular coach out there. But one of the forms that he uses for any project is called the one-page worksheet. It's for the ideal scene, essentially. And you write down what your ideal scene is.

[00:07:17] So I did that for the coaching business, looking forward if I'm going to work with Adam. And then I had him do the same thing. Like, what does he want out of the coaching business? What is his ideal scene working with me? And in that, I got really frank. I was like, I do not want to do X, Y, and Z. And I expect X, Y, and Z. He spelled out his expectations, right? His ideal scene.

[00:07:43] And we figured out we were both cool with each other's ideal scene. So I remember the conversation. It's something I stole from someone else, frankly. But I just said, hey, let's just like... Those great ideas are still anyway, so what does that matter? And I said, let's just hit some singles. And what I mean by that is like, let's try working together and see if some sparks start flying, if we're able to have some success together, if we work together, if we like talking to each other, meeting with each other, and we share some similar ideas, and we're able

[00:08:12] to gain some traction with this thing, let's just hit some singles, to use a baseball analogy, before we try to hit a home run. And we frankly did that for about a year. I will add one more thing there. I wanted to be very clear in what the payments were for work. So I told him up front, there is no sweat equity in this. I don't want to have this conversation two years down the road, and you say, I did X, Y, and Z, and I never got paid for it.

[00:08:40] So I expect to get X, Y, and Z now. Was up front, I said, I don't want to hear any of that. If you don't feel like you're getting paid what you should get paid, then let's have a conversation about it and get you paid what you think you should get paid, if the company is making money, right? So I said, for the technical work, oh, there was a book that helped me with this, and I can't remember what it was. Something about pie. Anyways, sharing the pie, right? Yeah. Yeah. And so for the technical work, if you're going to coach, let's figure out now, what is your hourly rate for coaching?

[00:09:10] And let's negotiate that. And if it's cool with me, it's cool with you, then we'll put that kind of stuff in writing. Like, you're going to get paid this amount of money for coaching. You're going to get this amount of commission for a sale that you generate because he was going to be over sales. You're going to get paid this much per hour or whatever if you needed to do some computer work. And then you're going to get paid every two weeks or every month. There's not going to be this we're going to put in together.

[00:09:37] Well, if we did do that, then let's spell it out somehow. This is what we landed on. It could have been any other way. But that book kind of helped me figure that out. So like I said, to compare and contrast, I had years of a honeymoon period with Will before we actually got to the lawyer. I had a year of that situation with Adam with that initial conversation about how you're going to get paid and all that stuff before we finally sat down with a lawyer and he had equity in the business, all that kind of stuff.

[00:10:05] And we still have revisited the technical working rates and stuff like that. And that's where we're at now. And I will say Adam doesn't share my faith system. You know, he's not part of my church, but I knew from, and I have to admit, he was my first coaching client like five years ago. So I also had a very good idea who I was getting into business with based on what I saw in his work as a coaching client. And so that helped a ton.

[00:10:32] But I think that really helped with our relationship that we didn't jump into it really quickly. We've shared our ideal scenes and knew what each other expect out of each other. And we were very clear about those conversations regarding money, because that seems to be one of the biggest hiccups is how we're going to spend money and who's going to get paid for what. And I tried to nod those out of the way before we even agreed to work together. Yeah. Usually it's like, what is the direction of the company, the money issue, and then the time and effort put in.

[00:11:02] Usually it's frustration over one partner that's not putting the time or effort in and other ones having to do all the work. It's just the inequities of that. Well, I was very clear about that. Like, hey, Adam came to me and said, hey, I want to build something. I want to build a coaching business. And I know you have a brand and I'd love to leverage your brand. Let's work together. And I said, listen, I really don't want to do a lot. Frankly, I don't want to do coaching. I don't want to coach.

[00:11:29] And I do coach here and there, but it's on my time and the people that I want to coach, but I don't want to be the guy that is doing the coaching for 10 people each 20 calls a month or whatever. And I was very clear about that. Like you said, I wanted to be clear about it because yeah, I wanted to say there is going to be an inequity here. I'm not going to work as much as you, frankly, but I want you also to get paid for the work that you do.

[00:11:54] Not thinking that it's in, if you get paid your hourly rates and you'll get any distributions just like I will, I'll get paid hourly rates, which are nothing because I'm not doing anything, but I'm also going to get a distribution and you need to be cool with that. Those were the conversations that we had initially. And he was cool with that. You work great. And it worked because you guys expanded that thing. I remember what you had, maybe like three or 400 members right now. And now you're up to, what'd you say? 1500 or something like that. Yeah. I mean, it's crazy. It's growing all the time.

[00:12:24] And same thing with our client load. And, you know, I came into maybe one or two clients and we're over 30 now. And so it's worked out really well for us and he's putting a ton of work into it, but he's also getting paid very well. Yeah. And I don't get paid a lot unless we get a distribution. And I purposely set that up to recognize the inequity in the work that we're doing. You know, that you're going to get compensated more for it. And that's fine with me. Yeah. Because you're not having to do most of the work at this point in time.

[00:12:55] Right. Right. Frankly, I'm taking on a little bit more now as we're growing. Yeah. But it's in a situation where he's kind of turned over his virtual assistant to me, who already knows how to do all this stuff. So I just have to oversee the virtual assistant. Still doesn't take a lot of work. Simple. Yeah. Yeah. Good, man. Well, let's turn to cash flow because I think that's another one that we always like to talk about here. And a lot of people don't. I don't know why, but they don't want to talk about cash flow. Nope. They hate it.

[00:13:22] Most owners, they, I mean, it is kind of interesting to get the viewpoints when it comes to money and finances and talking about all that. But you have to know. That's where the dreams. It really is. It really is. You have to know it. It's like, how can you manage something where the money coming into the organization, if you don't know how to manage it, it's going to either cause the expansion or cause the destruction. You have to know how that works, how the inner pipes work of this.

[00:13:50] But you know, money is an interesting thing, but I know there was part of what you wanted to talk about was the four methods. Was it more four methods to improve cash flow? The four phases of your business that you need to address in order to maximize cash flow. Yeah. I like, yeah. Yeah. So it started a few years ago. I was working with a client and as we're getting off the call, he's like, Nathan, I need to know how to increase my average reimbursement per visit. And I'm like, well, we're at the end of the call. It's like, we can spend another two hours talking about this.

[00:14:20] So I put things down on paper and it came to mind pretty easily, like how this needs to come together. And I thought, you know, I need to get this out more. I made an online course, ptcourses.com. I think, I don't know. I forget. I need to do better at promoting it and marketing it. But I also presented it at our conference in September. We had our first annual Private Practice Owners Club conference in September, 2024 in Clearwater, which you attended.

[00:14:49] I absolutely did. Looking forward to the next one, which October 2nd through 4th in Destin, Florida. Nice. October 2nd through 4th, Destin, Florida. If you are a physical therapist, make sure you are there. Well, if you're any type of a private practice owner. Really? It doesn't have to be physical therapists. Oh yeah, we're coaching speech therapists now. We're coaching pediatrics. Boom. All right. Yeah. There you go. We got OTs on board. Yeah. So we don't have a landing page yet.

[00:15:15] So I would say this, make sure you join the Facebook group, Private Practice Owners Club. Just look for that on Facebook. You'll see all the notifications that we post on there. We'll probably be putting out the landing page in another month or so, depending on when this releases. But that should be the first part of May. And then you can also find LinkedIn. And if you go to the podcast, we're going to have ads in there as well. It's the Private Practice Owners Club podcast. There's over 300 episodes. Yours truly hosts it. My BFF here.

[00:15:45] BFFF? That would have been on a lot of them. That's for sure. Yeah. He's been on a ton. So you'll see a lot of good content there if you're a practice owner. And we'll post it there. Anyways, I did the course and I presented this at the conference. And then we just did a workshop in New York City this last week and presented the same material because I think it's super valuable. I mean, I would assume that most owners would want to increase their revenues 10% without doing much more, without having to see more patients, frankly. And you can do that if you just clean up your systems a little bit, just a little.

[00:16:15] And I'm serious. It's not a lot of work. And hopefully that translates or comes across during the course of this conversation. But there's four phases to consider. And by cleaning up these four phases, I can promise you you're going to increase your revenue and thus should increase your profit because expenses thing the same, right? Increase your profit by even more. This is like take home cash in your pocket by addressing these internal systems and cleaning them up, right?

[00:16:40] And so they're not that difficult, but I put them in sequence from easiest to implement to hardest to implement and quickest return on cash flow to longer return on cash. But there's four phases. Those four phases are just knowing your financial numbers. So there's knowing your financials, getting that dialed in, being really good at over-the-counter collections. And I will explain what really good means. Properly holding your billing collections team accountable, which is a super weak spot

[00:17:10] for a lot of them. They just don't know how, right? And the fourth part is maximizing your billing and coding, like getting your provider, you or your providers to maximally bill for all the services you provide every visit, right? And so starting with the first one, knowing your financial numbers. I'm sure you've brought it up many times with Eric on the podcast and maybe you discussed it a little bit, but would you say that most private practice owners that you come across

[00:17:38] aren't very volatile regarding their financial metrics? Well, they all usually have a wrong number when it comes to their, you know, what they think they need to bring in. So when you say know your numbers, it's like, make sure that they're correct. And assuming you're talking about like, I know what needs to bring in, come into the organization for me to be able to operate, expand and be solved. Yeah. I mean, there's a lot of KPIs. There's a lot of stats that you could be aware of.

[00:18:07] But what you're talking about is what's commonly known as the breakeven number, right? What's your breakeven covering all your expenses plus 10% profit, right? What is that number either in terms of cashflow or visits per week, right? Right. Probably need to know both numbers, frankly. Yeah. What's your baseline, right? Knowing that everyone's going to guess on their average reimbursement per visit, which is a key KPI, yet they're probably not tracking it like month to month.

[00:18:36] They're probably just kind of guessing and not knowing the specifics. More importantly, they don't know what their cost per visit is. And if they don't know their cost per visit, they don't have a good idea whether or not that low paying insurance contract is making them money or not, right? Right. And then you're also looking at when you're also talking about financial metrics, you're talking about what's your profit margin? Is it in the single digits? And if it is, then what could you be doing better?

[00:19:05] Because owning a company and getting single digit profit returns isn't worth your while, wouldn't you say? Oh, it sucks. Yeah. Told us that. That's not why you got business. God, no. And so these are some of the basic KPIs, the financial statistics you need to know. And I recommend that you're talking to your CPA or bookkeeper, whoever's reconciling your accounts every month. Because if there's one thing that they didn't teach us in physical therapy or occupational

[00:19:35] therapy, speech therapy schools is how to run your business, know your financial metrics. Like for me, I had to tell my CPA at one point, like, listen, you and I were going to sit down for a month or once a month. You're going to talk to me for an hour and explain to me what profit loss statement and a balance sheet is and how to read my financials. He's like, cool. And so you pay the tuition and you meet with those people so they can show you exactly what's going on. And you look at the monthly financials and you do the month over month comparisons and

[00:20:05] the month over year compare or that year versus previous year comparisons. And you look at your balance sheet and you look at outlying expenses that are $2,000 more this month than they were last month. And why? Was it just an itemization problem or was someone really going crazy with your credit card? You look at that stuff and that the underlying principle is that which gets measured improves. And if you are looking over your financials purposefully and intentionally to improve the

[00:20:33] financial health of your company, then your financial health will improve. Knowing the data forces kind of forces your hand. I mean, you can still be lazy about it. It does tell you what to do. Right. Yeah. It's a great starting point. You have to have the awareness of that. Just being aware. Yeah. Yeah. And so to go further on that guiding principle, which is that which gets measured improves, that which gets measured and reported improves exponentially. Which leads me into the second phase.

[00:21:02] And that is over the counter collections. If you want to quickly, like I'm talking like this week, improve your collections, then implement a system of daily accountability for over the counter collections. So when we're talking over the counter collections, that's every copay, right? That's straightforward. It's usually determined by the insurance company. And they tell you collect $20, $30 a visit, whatever. Co-insurances, that's a little bit more nebulous. Just like deductibles.

[00:21:30] If it's early in the year, you're not quite, your front desk person might not be too sure what to collect. Right. So at that point, the people who are doing really well with over the counter collections and don't have a lot of outstanding patient balances later on are the people that are saying, well, we're going to take a really good guess as to how much you need to pay this visit. And we're not going to just leave it for the insurance to figure out and come after you later. We're going to collect it. And if we have to cut you a check, we'll do that.

[00:21:58] But I wouldn't much rather cut a check than chase you down for 150 bucks. Yeah. Right. That takes more energy from my team. Let's get the 150 bucks over the course of these next two visits or today and save the time and energy, right? Getting that money now is significantly better than trying to get it later. I think it was a McKinsey study. I have a hard time finding, but I know it's out there that said anything that's not collected at the time of service.

[00:22:26] You're losing 50 to 60% of that dollar if it's not paid at that time. So if your outstanding patient balance is $20,000 right now on your aging AR, you can maybe collect 10,000 of that, but you could have collected $20,000 if you collected at the time of service. Yeah. And for those people who are saying, well, people aren't going to pay at the time of service. Well, okay. Then maybe you could be collecting $15,000 at the time of service instead of the money. You know, it works out in your favor.

[00:22:56] Don't be the bank. You're not a bank. You're providing a service and you should expect to get paid. The question sometimes becomes, well, how much do I expect them to pay if they haven't met their deductible or coinsurance? And I say, it's really easy. If you really don't want to go through the process of figuring out which insurance is going to pay how much, and it's going to be different for every payer and every patient. If your average reimbursement rate, you can expect to be a hundred dollars a visit and they haven't met the deductible, collect a hundred dollars of it.

[00:23:24] If you overshot it, send them a check. So much time. It's a lot easier to handle. And if their coinsurance is 40% and you get a hundred dollars a visit, then you're collecting $40 every visit, no matter what. Right. And that right there would make a huge drastic difference, but it still doesn't come back to the guiding principle, which is that which gets measured improves. That which gets measured and reported improves exponentially.

[00:23:52] So the missing piece is, that's the one expectation is that we're going to collect everything at the town service. So broke that down as to why. The next step though, is to get your front desk person who's collecting these to report those collections every day. At the end of every day. So I tell everybody, this was our process. If today's a Monday, tonight, they would fill out a sheet and some EMRs can do this. Some of them can't. Back in the day, we have to do it manually. So we had this Excel spreadsheet.

[00:24:21] And if you want a sample of that, just email me, Nathan, ppoquod.com. I'll give you a sample spreadsheet for your front desk to write out. But on that spreadsheet, on the very left-hand side, they're going to list all the patients that are coming tomorrow on Tuesday. And in the next column, it's going to say, how much are you expected to collect on their copay tomorrow? Right? And goes down exactly how we talked about, whether it's copay, coinsurance, or deductible, you write down each one. And then that's the sheet. They prepare that tonight.

[00:24:50] And then tomorrow, whoever's right on the front desk follows that sheet. Hey, so-and-so, John Smith, you got a $20 copay. How are you going to pay that? And you go through the day like that. And then at the end of the day, you have all your notes, you have your spreadsheet, and you're able to reconcile your credit cards, your checks, and your cash. And you say, okay, we were supposed to collect $1,000 today. How much did we collect? Well, $990. Cool. That's a 99% collections rate.

[00:25:19] That's where it should be. But if it's like 500 out of 1,000, you have issues. Because I'm expecting, frankly, I expect 98%, 99% collections every day. And so that way, they have a scorecard, and you know every day how well they're doing. They know how well they're doing. You know how well they're doing. And they turn that spreadsheet, all the credit card batch receipt, the checks, the cash,

[00:25:44] put it in the envelope, put it in the safe box, wherever that is in your office. And send off the spreadsheet to the billing collections company and the clinic director so they know how collections went and what happened. So that kind of reporting system made huge dividends for us. It was great. All of a sudden, we were collecting a lot more every day. Cash flow seemed better. A lot less on the patient balances remaining.

[00:26:09] But then the third thing in regards to that, to the front desk, and this has changed since I own my practices, but now most EMRs give you the capacity. And if EMR doesn't do it, there are third parties that do it. You have to have credit cards on file for every patient, no matter what. No matter what. People always bring up the excuses. Well, my patients don't want to put credit cards on file. I don't accept that excuse. I think they put it out there as a self-limiting belief.

[00:26:38] But those same patients that might tell you that they don't want to share their credit card information, I promise you they have an Amazon account. They have a Netflix account. They have a number of other online services that have their credit card information. And nowadays, that's just not a proper excuse. Hey there, practice owners. Are you ready to elevate your practice to new heights?

[00:27:06] Join us at the Elevate and Expand, a scaling conference from October 2nd to 4th at the beautiful Hilton Sandestin Beach Golf Resort and Spa in Miramar Beach, Florida. Learn how to scale your income, time freedom, and impact in today's economy. Pre-register now to enjoy your early access, exclusive updates, discounts, and special bonuses. Don't miss this chance to transform your practice and your life.

[00:27:36] Go to the show notes now to find the pre-registration link. Mark your calendars for October 2nd to 4th and get ready to scale this year. You're going to have a really strong front desk person to run this too, don't you? I mean, you need a good person. I mean, you have to have someone who is not afraid to ask for money. That's right. They have to be like a bulldog on when it comes to asking for money. Yeah, that's a different conversation.

[00:28:02] I've had that conversation on a podcast with G-Bills before about what it takes to collect money at the front desk. You can't have someone who's like, your copay says $20, but how are you possibly going to pay that today? That's not. No, you need someone who says, hey, it's your insurance. It's not mine. And we're providing the services and you're not going to leave us hanging high and dry. I need $20 today if you want to go back then. Yeah. That kind of attitude. You're not going to use those words, but that kind of attitude and be very forward about

[00:28:31] it and say, and you also have to back them up and say, if you're not willing to put a credit card on file, we can't see you. Yes. You do have to get to that point if you're going to be serious about it. Yeah. Like you're asking us without having a credit card on file. You can pay another way when you come in. If you want to pay with cash, that's fine. We won't run your credit card. You can pay with a check. Fine. You won't run your credit card. But if you're saying, I want my services and I want you guys to be on the hook for all of it. Yeah.

[00:28:58] Good luck catching me for my balance later or just trust me. No, we're not going to do that anymore. I mean, we have HIPAA compliant credit card retention capabilities, and we're going to bill it when you come in each time, which is a convenience to you. And frankly, a majority of the patients, when you send them that text at the end of the month and says, Hey, all of your claims have been processed through your insurance company. There's a $148 balance remaining. We're going to charge your credit card in five days. If you have any problems, give us a call.

[00:29:28] I mean, that would be so much easier than sending out three letters of reminders and sending collections. Patients would be like, yeah, thank you. I don't have to cut a check and send it back in the mail and make sure I get to the post office and yada, yada, yada, yada. Yeah. Just please pay my charge my credit card. So I think I'm spending a lot of time on it simply because if you want to do one thing now that can increase your cashflow, that's it.

[00:29:55] It'll completely change the complexion of your cashflow and your collections. Because now imagine all those patient balances are getting collected up front. You should have little to no money in your AR aging that are patient balances because you have it all paid on credit card or that you charge the credit cards. And at the end of every month, you're saying, Hey, the insurance has done their thing. Now we're just going to charge your card. You don't have to worry about that stuff anymore. That's a really good one. Yeah. Okay.

[00:30:24] That was the second one. Third one. Like I said, really weak spot for owners is managing their billing collections team simply because we don't know, I mean, like financials, we've never learned what the billing collections process is like, really. We don't know how to manage them. And the dynamic going into that relationship and probably is not for many owners is they almost feel like a servant to the billing collections team. The billing collections team is kind of telling them what to do over and over again and maybe

[00:30:52] sending them an email of the billing reports that you don't know how to read. And so you're like, okay, I guess things are going well. When I finally had a builder that I could trust and someone who was very serious about collections and had that dogged mentality that you're talking about, she's going to get every dollar no matter what, a godsend. I finally got into a rhythm and this is 12 years into ownership. Finally got into a rhythm on how to manage my billing collections team. She kind of told me, she was like, this is what this report means.

[00:31:22] This is what this report means. This is what we're doing on this. And so essentially sitting down with your billing collections team is back to the guiding principle that which gets measured, it improves, that which gets measured and reported improves exponentially. I set up a monthly meeting with them. What was it like the second Thursday or the 13th of every month or whatever time they need to get their reports together and stuff for the previous month. Then we'd get together on that day, same time, same day, every month.

[00:31:51] This is when we're meeting and this is the agenda we're going to follow. So we typically do what's called a one word open just to see, Hey, how are you feeling today? One word. Boom, boom. We talk about our purpose and values just a little bit to make sure we're on the same page. And this is in-house or outsourced. It doesn't matter. It's a genuine fault. And then we go over the reports. And so I want to see what's the ARA aging look like. I also want to see. So we got into the habit of projecting.

[00:32:17] So if we're looking at, say, we're looking at January numbers for collections, we collected so much money. Well, we knew how many visits we had in December and we'd take the December visits times the average reimbursement rate and say, this is your goal. This is your target for collections in January, right? I know there's a lot of factors in there, but it usually works out. So we had a hundred visits in December and we have a hundred dollars average reimbursement per visit. We're expecting you to collect $10,000 in the month of January.

[00:32:45] And so in February, first part of February, we're looking at January collections. Did you hit the $10,000 or not? And if you did, why? And if you didn't, why not? And we also projected forward at that time. Okay. Now we saw 150 visits in January this month in February that we're sitting right now, you're going to collect $15,000, 15 or 150 times a hundred. You're going to collect $15,000. And she's like, yeah, yeah. You're going to collect $15,000. And we'd play that out each month.

[00:33:13] So the projected revenues, the AR aging reports, we'd look at patient balances, especially we'd look at AR aging reports, especially by payer. So you can look at it as a whole, right? But you can also look at it like, okay, Blue Cross and Blue Shield has $8,900 in 90 plus aging AR. Okay. Tell me why and what are you doing about it? And what did you do about it last week? Don't just tell me why, but tell me what you're doing about it and who you talked to and when.

[00:33:41] Like I wanted all the notes for those outstanding balances. Same thing with patient balances. Remember that. And then I forgot to mention in the AR aging, we had some cardinal rules or some benchmarks we expected. So zero to 60 days, if you're taking any notes, this is the time to take notes because you're going to forget these numbers. Zero to 60 days, AR aging. That should be 80% of your AR, right? So if you have $100,000 in accounts receivable money that's out there that you need to collect,

[00:34:11] 80,000 of it should be serviced within the first zero to 60 days, right? The 60 to 90 day AR aging should be 5% of that, $100,000, 90 to 120, another 5%, and then 120 plus 10%, right? So if your billing collections team is doing really, really well, they have that dialed in. They are at 80, 5, 5, 10, 80 for zero to 60, five for 60 to 90, five for 90 to 120, and 10% for 120 and above. They have that really dialed in.

[00:34:41] And you hold them accountable to it. You're like, okay, what do we need to do to get back within these benchmarks or expectations, right? And so we looked at a lot of details. Like if there was a patient balance over $1,000, we talked about that person, what we're doing about it. And if there was something that was really lingering, of course, that usually happened with like the lawyer cases, the personal injury, or I know these times calls it no fault, but we talked about those cases one by one each month, what's happening, what's the status.

[00:35:09] But I need to go back to the dynamic. In that situation, they are then reporting to you. Like it's not your job to sit through the AR reports and find issues and ask questions. They should be coming to you and say, here is the report. Here are the problems in the report. And this is what we're doing. Or here's our AR aging. It's not 85, 510. And this is why. And this is what we're doing. Yeah. Or, hey, I know our projected collections was supposed to be $10,000 in January. We didn't hit it because X, Y, Z.

[00:35:39] And this is what we're doing about it. And this is what we can expect. You see how that power dynamics completely different. Yeah, because too many owners are like, all right, give me, are just more than happy to take the problems that the juniors are going to give them and then try to sit there and solve it for them as opposed to just like you said, having them come to you with the solution. Yeah. So what I see is usually when I say, are you guys communicating with your billing collections team? They're like, yeah, day. But it's usually about some kind of problem or something copay that wasn't hit.

[00:36:08] I mean, we didn't even talk about denials. We talked about everything we talked about. They bring forward the denials and they tell me what they're doing about it. Right. And so maybe they're talking about denials in between meetings and that's fine. And you continue to have those daily, weekly conversations. But at some point, they need to report to you their work and what they're doing about their stuff and let them be the experts and let them own their issues. That's a dynamic that isn't there in many cases.

[00:36:37] In many cases, I've seen that the billing companies will just send over the billing reports that we're talking about without any communication. They just send over a packet of billing reports in the email. That's the worst possible billing situation you could be in. I expect my billing collections team to communicate with me regularly and to report to me regularly and know what I'm looking for. So it's not like you can say, this is what I expect and it's going to change completely, do a 180 in one month.

[00:37:06] You have to train your billing collections company or person up there in-house over the course of time. This is what I expect to see. So yeah. With each report, it's like, this is what I want to see in this. Can you be ready with that next time? Like, yeah. Okay. Good. The fourth one was maximizing billing and coding procedures. Okay. That's where, or for providers. So in the physical therapy space, it was very common practice for us to build three therapeutic exercises in one manual therapy unit for a traditional one hour visit.

[00:37:34] And guess what the worst paying codes are in physical therapy? They're TheraVax and manual therapy. Yeah. And so if you're old school like me and your team is still doing that, then I'm just saying there are significantly better, more effective ways to get reimbursed for services ethically. You just have to do a little bit of work and train yourself. There are plenty of online sources to learn more about how to get reimbursed greater by coding better.

[00:38:04] It is a little bit state dependent, but if you want to look at Medicare guidelines specifically, strata, P-T-S-T-R-A-T-A-P-T.com has a Medicare fee calculator online. You can put in your state and you can put in the codes that you use, whether you're PT or PTA and it'll tell you what Medicare will pay you for that, for those combination services. And so you should do that. You should know these things as the owner, right? Where you can get paid for your services.

[00:38:32] And across the board, therapeutic activities is going to pay you the most, followed by neuromuscular reeducation, followed by self-care slash home care, home management, self-care management, and then therapeutic exercises and then manual therapy outside of evals and re-evaluations. So knowing those and using the proper codes, and then the difference between a therapeutic exercise code and therapeutic activity code, you don't know this, Eric, but it's just a matter of documentation.

[00:38:58] You could be doing the same exercise and you justify it differently, frankly, like doing a squat. Instead of saying you did a squat to improve strength, well, I'm doing a squat because they have difficulty getting out of a chair. I'm trying to improve their sit-to-stand abilities, right? Right. And that in and of itself, more than likely, now don't hold me to it, but more than likely would be justify therapeutic activity code. Oh, it's so stupid.

[00:39:27] But the worst thing you can do is do like three theracs and one manual. Probably the best thing you could do is one of each of those, therapeutic activity, neuromuscular reeducation, therapeutic manual therapy. Therapy that will pay you better. What will pay you the best is four therapeutic activities. But I know in some states, if you use therapeutic activity code a lot, you get red flagged. The New York City guys were telling me that like, if you use therapeutic activity code, you're probably going to get out of it.

[00:39:55] They don't like to see it, but I think one therapeutic activity code here should, but if you're using multiple, that can be a problem in New York. So that's New York. I know in Arizona, you can do four therapeutic activities. It's usually no problem. You need to learn the system and you still need to start navigating. Well, some insurances don't like it, but some insurances don't care. So now you need to know as the owner and train your team, XYZ insurance, we're going to build

[00:40:22] this code all the time because it maximizes care and we're going to justify it accordingly with our documentation so that we can ethically bill for it and show our reasoning behind it. But this XYZ insurance isn't going to let us do that. So we know we have to bill the TheraXs and the manuals. Maybe that one allows you to do a re-evaluation code that you couldn't do with the other one. And that's how you maximize the problem. And so you have to know these things. And it's work that you do with your billing team.

[00:40:49] When they get a denial, then they tell you this code isn't working in combination with that code or we do better if you build these codes together instead of those codes. And that's where you really start manipulating the system, frankly, because that's what the insurance companies are doing to you. And if you really want to get paid the most for your services, you have to know how to navigate some of these differences between insurances and between codes.

[00:41:14] It's a giant quagmire, but you have to try to understand the quagmire as best as you can. Yeah, there are some billing companies that are doing better or maybe even some AI services. Like, Othellis was a sponsor of a conference and they have an AI billing program platform that handles, frankly, can handle some of that stuff. Like, when a denial comes in, they don't have to wait for someone to handle it manually.

[00:41:39] Like, the AI program already knows what to do with that denial and kicks it back out real time with the changes that need to be made. So some of that stuff is coming down the pipe or actually is here. Like, Othellis has that. There will be more. But the AI component is going to be helpful because insurance companies are using AI already. To deny you, so you better fight fire. You're going to need to fight fire with fire. Yeah, we're behind the A-ball currently because they're already doing it. And we need to do the same.

[00:42:08] So there's knowing the billing collections game, not only just managing them, but how to maximize your reimbursement rates, visit to visit. It's huge and it can't state it enough that those owners then have to train their providers because coming out of physical therapy school, in our cases, they're going to teach you Medicare billing guidelines. And if you use Medicare billing guidelines across all the commercial payers, you are losing money.

[00:42:37] AMA billing guidelines, which are a lot of the commercial payers. Well, you can actually see a patient for a less amount of time and bill the same amount of units. And that's just the game as well. And so you have to train that out of your providers because they're coming out of school like that. In doing that, and I think you understand this concept pretty well, Eric, is that the owner can't be doing that training because they're thinking, oh, you're just telling us how to manipulate the system so you can make more money.

[00:43:05] I think that might be a default thought process. But not only that, your team members tend to accept the training, people who are more of their peers or that they see as experts and not the owner. So if you use a Goenda, if you do some trainings through MedBridge billing and coding and stuff like that, or who else is out there that does it? I'm not sure. But those are the two that come to mind. Goenda, MedBridge.

[00:43:33] You let them do the training, right? That way it's a third party. And if there are any kickback, if there's any kickback, then you can go back to the third party and say, well, what does it say we can do? Well, let's use that. Can we just agree that he's the expert and we'll just do what they say? Yeah. Instead of fighting with you as the owner, right? But the owner has to have the knowledge first, and then they can implement those changes.

[00:43:59] So you can see back to what I was talking about, I laid those four situations out from easiest to hardest because it's going to be really easy. It should be easy to get your members. Pretty easy to make some over-the-counter collections changes today if you really want to. And then managing the billing collections team and then getting the provider team to change their billing and coding practices can take a little bit more work. But if you spend the next three to four months on this, we're talking an increase in revenues

[00:44:27] of like 15%, 20%, which is enormous. It's huge. It doesn't sound like a lot. You change your average reimbursement rate by $5 a visit, which is, that's closer to like five or 6% change. You get your average reimbursement rate up five to $6 a visit, translate that over 10,000 visits, all cash money. I mean, it's all profit. Yep. You're not increasing your expenses. You're just improving your internal systems. It's good stuff to my friend. That was granular, man. I didn't expect that. You went deep.

[00:44:57] I hope I didn't go too long on it. For me, you know, I hear about some of this stuff and my mind, so this is me. And the reason why I got deep into it was like, if I were listening, be like, okay, so how do I do that? Like, I need to know the granular because that's where I got hung up. And if I don't know how to, if someone doesn't tell me how to do it, then I'm kind of stuck like, well, I don't know where to go next. So hopefully I didn't take up too much time. No, that was good. I think. I know I was just kind of going off. But it was needed.

[00:45:23] Help me in the industry just because there are parts of that I wouldn't have even thought about that. You definitely went from the easiest gradient down to the most difficult. But I think all those things combined together, is it worth all the time and effort to increase your revenues by 10, 15 percent? Oh my God. Yes. Like imagine how different your life is going to be if you increase that amount. So I've taken people through my course.

[00:45:49] They spend probably four hours on average, three to five hours a week on this stuff. And upon doing that, do that for about three to four months and it makes significant change. So not to, this isn't a 40 hour per week effort. This is just improve your systems with a little bit of effort every week. And then just, and then maintaining them afterwards is significant. It's just an hour a week maybe. Yeah.

[00:46:14] That will 100 percent improve your bottom line and make life a lot easier because of that. Yeah. And we need to. We're an industry. You need to. Yeah. That is. We're getting thin margins already. Yeah. And that leads to it. I mean, the next conversation, the next course, frankly, is how to negotiate insurance contracts or drop them altogether. But I would tell people, even if I had that course, if I built, when I built it out, like,

[00:46:40] I don't really want to take you through this course, that course, that negotiating, dropping insurance contracts course until you have your internal systems. You know, it's like your, that's all your rudiments are in first before you could do that. Yeah. Cause you really can't tell if your reimbursement's better and you're still suck at the other things. It's not going to, you know, it's not going to improve you that much. Yeah. Yeah. You're still going to lose money. Yeah. You need, well, you need to have a handle on your financials. I mean, you need to be on top of your cashflow.

[00:47:11] Yeah. And, and I'm talking from experience. Like I didn't start doing this stuff until 10 years into ownership. I can't imagine how many tens of thousands, if not a hundred thousand dollars I lost by not having systems like this. So learn from the village idiot, if you will. I mean, let me teach you how to make more money. Let him teach you. That's good brother. I think you gave your email out, but how do you want people to reach you? The easiest way to do that? Nathan at ppoclub.com.

[00:47:39] If you have questions, especially about some of these financial things, I'd love to talk to you. No obligation. I'm happy to talk to you. On the group side, if you want to be part of a bigger group that is having these conversations and want to know about what we're doing in the future, that's Private Practice Owners Club.

[00:47:54] In the Facebook group, we have a website, ppoclub.com, where you can learn a little bit I think we've got one of the better, if not the best, private practice podcast focused on business that's out there. Yeah.

[00:48:22] And there's a ton of valuable content on there. Financials is a small part of it. We're talking about everything from recruiting to mindset to time management to a lot of small business stuff in general. But it's great. You ought to check out the podcast and binge listen on that. 100%. I highly recommend that. All right, buddy. I appreciate it. Thanks so much. Yeah, no problem. That's great. Thanks for listening to the Private Practice Owners Club.

[00:48:49] If you enjoyed this episode, would you mind doing us a huge favor and leaving a review? This helps us get the podcast out to more clinic owners to help them create greater freedom and profits so they can own their future. And visit our website, ppoclub.com, to find more resources and connect with us. Bye. Bye. Bye. Bye.