🇺🇸United States

Suboptimal service mix and pricing decisions from poor visibility into CPT-level margins

1 verified sources

Definition

Because many PT, OT and SLP services share overlapping code options with different reimbursement rates (e.g., 97110 vs. 97530, various SLP evaluation vs. treatment codes), incomplete analytics on code-level reimbursement patterns lead clinics to emphasize services that are less profitable or to underuse appropriately reimbursed codes. Coding education materials explicitly note that misunderstanding the definitions and relative reimbursement of therapy codes leads to under-reimbursement.

Key Findings

  • Financial Impact: $10,000–$50,000 per year in unrealized margin per clinic due to skewed case-mix and coding choices.
  • Frequency: Ongoing
  • Root Cause: Lack of CPT-level profitability reporting and reliance on habit or legacy protocols for choosing codes; guidance underscores that using 97110 instead of 97530 for functional activities is under-reimbursed, a pattern that extrapolates to broader service-mix misalignment.[1]

Why This Matters

This pain point represents a significant opportunity for B2B solutions targeting Physical, Occupational and Speech Therapists.

Affected Stakeholders

Clinic owners, Therapy directors, Financial analysts in health systems, Frontline therapists choosing codes

Deep Analysis (Premium)

Financial Impact

$10,000-$25,000 annually per practice due to Medicaid claim denials and rework • $10,000-$25,000 annually per practice due to WC claim denials and rework • $10,000-$25,000 annually per SNF practice due to unbilled services and rework

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Current Workarounds

Administrators track school contract terms and any CPT mapping in separate spreadsheets; assistants are given simplified paper or PDF treatment grids without visibility into which services are underpriced relative to therapist time and travel. • Assistants rely on memory of past habits, informal rules from supervising therapists, scattered paper cheat sheets, and ad hoc Excel tables or EHR exports that roughly list allowed codes but not true per-unit margins by payer or assistant modifiers. • Billing specialist contacts clinician for correction or modifies code on claim submission (potentially creating compliance risk); rework occurs; claim delayed

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Underbilling from mis-coded therapeutic activities vs. exercise in PT/OT

$5,000–$25,000 per year per mid-sized outpatient rehab clinic (estimate based on typical 10–20% differential in allowed amounts between 97110 and 97530 applied to hundreds of visits per month).

Lost revenue from incorrect use of timed vs. untimed CPT codes in SLP and rehab

$10,000–$50,000 per year per multi-discipline practice (conservative estimate where 5–10% of timed services are underbilled by 1–2 units).

Denied or unpaid services from exceeding payer-specific therapy unit limits

$1,000–$10,000 per year per clinic, depending on how often sessions are delivered beyond allowed caps without approved extensions.

Delayed payment from incorrect or missing SLP and therapy modifiers

$50,000–$200,000 temporarily tied up in Accounts Receivable for a medium-sized practice when batches of claims are pended or denied until corrected and rebilled.

Clinical time lost to manual CPT code selection and rework

$20,000–$80,000 per year in lost clinical capacity per clinic (e.g., 15–30 minutes per clinician per day diverted from patient care to coding and rework).

Risk of recoupments and penalties from billing outside payer therapy coding policies

$10,000–$100,000 per audit cycle in recouped payments and non-payments for out-of-policy codes for a multi-location practice.

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