In-House Therapy Program vs Contract Therapy

In-house therapy serves as an attractive option for many facilities, but what you may not realize is that your therapy program may be costing you hundreds of thousands of dollars per year in revenue.

One major piece we notice is that in-house programs have more of a hard time managing efficiency. TMC’s full-service partnership operates, on average, at a higher efficiency rate than most in-house programs – at around 90%. This means the gap between billable minutes and worked minutes is significantly smaller, and thus allows us to offer our customers a high-level quality of care for less.

Let’s take a step back from looking at the therapy invoice. Sometimes we’re all caught up in seeing how much it costs and not looking at how much it saves – or in this case generates!

One of the most challenging areas for many facilities is MDS Coding. While some companies use “MDS Scrubbers,” or computer programs, to help an MDS nurse accurately code for services rendered, we have a dedicated team to work with your facility’s MDS staff. Having real people, trained nurses, reviewing documentation in conjunction with your team significantly reduces coding errors. In fact, facilities following TMC’s Premier Coding recommendation see an average increase of more than $30 per patient day. They’re not just scanning for errors; they are educating and making recommendations for best practices that significantly impact the revenue generated by treatment that is already being provided.

Census development is also an area where TMC’s full-service model makes a significant financial impact. Facilities that utilize our Post-Acute Care (PAC) Partnership see more than a 10% increase in new short-stay admissions. That could end up being an increase of about $1,100 per day in additional revenue.

Not to mention our Denials team success rate of 95%. Most in-house therapy programs have about $40,000 or more per year in denials liabilities. With our team’s success rate, a majority of that $40,000 is recovered. And let’s not forget saving our customers the time and money processing each individual appeal – about $1,500.

Now, comparing an in-house program invoice to that of a contract therapy provider isn’t exactly apples to apples, so let’s take a look at a hypothetical facility: Hometown Health and Rehabilitation.

A typical skilled nursing facility; “Hometown” is a five-star facility with 100 beds, 20 of which are typically dedicated to short-stay rehab patients. Their census typically averages around 90% capacity. 
Hometown’s therapy staff expenditures total just over $63,000 per month. That’s more than $750,000 per year. Beyond salaries and benefits, Hometown spends another $18,000 per year on additional therapy costs such as software and other incidental needs. When all expenses are considered, Hometown Health and Rehabilitation spends over $775,000 dollars per year on its therapy program. 

Hometown’s therapy program operates at around 70% efficiency, and since TMC operates around 90%, we can save Hometown around $16,000 per month. 

We can assume that Hometown would have close to the average amount in liabilities, $40,000 each year. With the help of TMC’s Denial team, we can recover at least $35,000 of that, not including the time saved with our team gathering the necessary documentation. 

Then let’s factor in an increase of patients with TMC’s PAC Partnership Program. If Hometown is a 100-bed facility operating at 90% capacity, a 10% increase would be about 2 patients. That’s $1,100 per patient per day. Over the course of one year, that adds up to over $400,000! 

And we haven’t even talked about coding – For a facility like Hometown, which has 22 short-term patients, that’s an increase of more than $660 per day, with an annual impact of around $240,000. 

If we start to calculate our savings and revenue increases:

  • Saves $192,000 annually on therapy costs 
  • Recovers more than $35,000 per year in denied claims 
  • Adds around $400,000 per year via increased census 
  • And sees an additional $240,000 per year via more accurate coding

Altogether, the financial impact for Hometown Health and Rehabilitation totals more than $867,000 per year. So, not only did the facility SAVE money by switching to TMC, but they recovered and increased revenue as well.

If you’re interested in learning more about the differences between in-house therapy and contract therapy, or if you would like to learn more about TMC’s revenue enhancement opportunities, simply fill out the form below!


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