Physical Therapy Billing: Is Your Billing Company Losing You Money?

Let’s be honest: when was the last time you really looked at your billing reports?

If you’re like most private practice physical therapy owners, the answer is probably: 

“Not recently… or maybe never.”

You opened your clinic to help people return to life - not to comb through accounts receivable spreadsheets or decipher CPT codes. So you did what made sense: you handed off billing to someone else, trusting they’d handle it.

But here’s the hard truth:

If you’re not actively monitoring your physical therapy billing performance, there’s a very real chance your billing company is quietly costing you thousands every month.

Whether it’s unpaid claims, missed follow-ups, or under-billing for the care you’re actually providing - it adds up. And because it often happens behind the scenes, most owners don’t even know it's happening.

In this article, I’ll show you:

• How to spot revenue leaks in your billing
  

• The numbers you should be tracking
  

• The exact questions to ask your billing company today

Why So Many PT Owners Have No Idea They’re Losing Money

Most physical therapists didn’t go to school to become billing experts, and they shouldn’t have to be. You want to treat patients, not argue with insurance companies.

That’s why so many clinic owners hand off billing to an in-house team or third-party company and never look back.

But that’s where the trouble begins.

If you’re not regularly reviewing your physical therapy billing metrics, it’s easy for denials, underpayments, and slow collections to pile up and go unnoticed.

So let’s break down what’s really going on behind the scenes and why it matters more than you think.

The 80/10/10 Rule: How Most Physical Therapy Billing Falls Short

Here’s something I see all the time:

A clinic owner thinks their billing is “doing fine” because money is coming in. But when we dig deeper into the reports, we find a different story.

Here’s what I call the 80/10/10 Rule

• 80% of claims are clean and easy to collect (usually within 0–30 days)
  

• 10% require moderate work like minor corrections or clarifications
  

• 10% need aggressive follow-up, appeals, and multiple resubmissions

Most billing companies focus on the easy 80%.

They might work the next 10%.

But they almost always ignore the final 10% - the part that requires effort.

And that last 10% often contains the highest-value reimbursements - and that’s where your profit gets lost…and lines insurance companies pockets!

What Do Healthy Physical Therapy Billing Numbers Actually Look Like?

One of the fastest ways to tell whether your billing is leaking money is to look at your Accounts Receivable (AR) - something most Physical Therapy clinic owners never even see.

Here’s what healthy AR should look like for a physical therapy clinic:

If more than 20–25% of your AR is sitting in the 60+ day buckets, you’ve got a billing problem. 

The Hidden Impact of Incorrect Physical Therapy Billing Codes

Another quiet killer that’s losing you money is coding errors.

Whether you use a billing company or handle billing in-house with your staff, the same risks apply - especially if your team doesn’t input the appropriate physical therapy codes for billing.

Here’s what can go wrong:

• Undercoding services - billing for fewer units than you’re legally allowed under the 8-minute rule
  

• Misusing CPT codes like 97110 (therapeutic exercise) instead of 97112 (neuromuscular re-education), which may better represent your care—and pay more
  

• Missing required modifiers (like GP, 59, or KX), leading to automatic rejections
  

• Using outdated codes, resulting in denials because payer rules or CPT guidelines have changed

The result?

You provide the care, but you don’t get paid what you’re owed.

And over time, these small mistakes can quietly cost your clinic tens of thousands of dollars in lost revenue - sometimes even more!

Common Revenue Leaks We See in PT Clinics

We’ve audited hundreds of PT billing systems, and here are some of the most frequent red flags:

• Denied claims never resubmitted
  

• Improper coding for the service provided
  

• Low collection rates on patient balances
  

• No regular reporting on AR aging or payer performance
  

• Using generic templates that fail to meet documentation requirements for higher-reimbursing codes

These leaks add up. A few missed claims a week can turn into $50,000–$100,000 in lost revenue annually.

Do You Know Your True Collection Rate?

Let’s say you bill $100,000/month.

Your billing company collects 85%, but your payer mix should allow for 95%.

That’s $10,000/month lost, or $120,000/year.

This could be:

• A new hire

• New equipment

• Your retirement fund

• More take-home pay

I think you’d agree - that’s financially devastating.

5 Questions Every PT Owner Should Ask Their Billing Company

1. What is our current AR distribution by age?
   

2. How many claims are denied and resubmitted monthly?
   

3. What are our top 5 CPT codes by volume and are we maximizing units?
   

4. How do our reimbursement rates compare to averages in our state?
   

5. How much in patient balances is >90 days outstanding?

If your billing company can't clearly answer these, they’re likely part of the problem.

Want to Know If Your Billing Company Is Costing You Money?

Book a Free Strategy Call with Andrew

Let’s take a look at your numbers together with a focused 20–30 minute call to help you:

• Spot billing leaks you didn’t know existed

• Understand your AR and collection rate

• Get simple, actionable advice to protect your revenue

👉 Book your free strategy call here

Because you deserve to get paid for the care you’re already delivering.

Grab the Free Guide: Is Your Billing Company Losing You Money?

What Every Private Practice Owner Needs to Know About Physical Therapy Billing and Reimbursement

This comprehensive guide walks you through:

• How PT billing really works (and where it breaks)

• The most common coding errors that cost you thousands

• What healthy AR and reimbursement actually look like

• A checklist to evaluate your billing team or company

👉 Download the free guide here

It’s everything you wish someone had told you when you opened your clinic.