Before you jump into the world of billing insurance for massage services, you really will want to do your homework and figure out if taking insurance will make your massage business more profitable. The way to do that is to figure out your cost per client and then analyze how it will affect your bottom line. Start asking yourself some tough questions.
This is the first chapter in my Book – The Massage Insurance Billing Manual – that explains how.
See also: The full table of contents below.
Chapter One. Should You Start Taking Insurance?
At some time in your career in massage, you will be asked to bill insurance for a long time client or friend who was just in a car accident or hurt at work. You might also think about taking insurance if you need more clients or are looking for ways to supplement your income and sustain you through a changing economy. You may prefer the experience of working in a more clinical environment where you see more injuries and health conditions that massage helps. Billing Insurance for massage therapy services can help supplement your income and give you a steady flow of clients. People who are injured and have other people paying are likely to come more often until they feel better. You can also choose to have a business that does only insurance cases. It requires more time and energy to bill an insurance company and get paid. Some insurance companies will pay what you bill and others will pay less than you bill. You will have to decide for yourself if billing insurance will help make your massage business more profitable. It is a matter of just doing the math as well as making this your own personal business mission. Will billing insurance fit into your vision for your massage business and the type of massage you do?
You will need to ask yourself some questions that may help you decide:
- Will it help your massage business be more profitable?
- Is it the best use of your time? You will to be spending more time doing paperwork, networking with doctors and dealing with insurance companies. Will you be making enough money to cover that extra time?
- Do you need more clients in general? Is your business slow?
- Are others in your area billing insurance successfully?
- Do you want to be involved in having massage be more accepted by the medical community which may mean becoming politically active in your community?
- Are you willing to put time into keeping yourself up to date with the latest rules and procedures required to bill insurance?
- Are you interested in research and learning to use it to promote your massage business and the massage profession?
- Do you know how to work with injuries and conditions or are you willing to learn?
- Are you organized to keep up with paperwork and follow up on billing and payments?
- Do you know how to do assessments on clients conditions and track your sessions in SOAP notes?
- Are you interested in working with Doctors and other health care professionals?
Cost per Client
The first thing to decide is what the potential profits will be from taking insurance clients. You can calculate that by looking at your cost per client using the following formula:
- Compute your office overhead for a month:
Take the last 12 months and divide by 12. If you are just starting out, use what statistics you have.
- Compute the number of patients for the month. You can use a number from last year’s patients divided by 12 or estimate the number for this year.
- Cost per client = Total monthly expenses____ divided by Total monthly client visits ______
Expenses / Number of clients = cost per client
- Evaluate: After you get your cost per client, you can then compare that with the amount you will be making from billing insurance cases and see if the amount is more or less than your cost per client. You will have to find out what insurance companies are paying in your area. You can do that by asking other therapists in your area that are billing or ask the insurance company directly. You can also find fee charts on Workers Compensation/L&I websites and possibly on some health insurance companies’ websites. That will help you decide if billing insurance will help you increase your profits overall.
Cost Per Client Analysis
You will also have to consider some of these things:
- If you are planning on joining a HMO or PPO, what is the expected income per treatment? Is it higher than the cost per patient or less than the cost per patient/client?
- How much will your cost per patient vary when the number of clients increases due to becoming a member?
- Will you have an increased volume of clients that will make the cost per client higher or lower?
- Will you get too many clients and therefore have to hire office support to do the extra paper and telephone work or hire a billing person?
- Will accepting insurance clients be in tune with your personal and business mission statement? (Do you have a mission statement?)
- Do you need clients to fill your schedule?
- Are you willing to learn about how to bill, take chart notes, work with doctors and with clients in their treatments and in figure out how to getting paid?
- Are you willing to stand up in court or legal proceedings and testify or give a deposition for your clients? (You usually get paid to do so but it is time consuming and requires speaking skills.)
The big question is also: Can you bill insurance in your state/city? In most states you can bill for injuries related to a motor vehicle collision and for work related injuries through workers compensation/labor and industries. You will have to find this out for sure by asking others. Start with your local American Massage Therapy Association (AMTA) chapter.
More and more health insurance companies are actually paying for massage in many states. The problem is that you will have to call each one or take each case by case to see if they will pay or not and find out how much they pay. You need to have the amount they will pay so you can figure that into your cost per client figures.
You will need to find out if other massage therapists are billing insurance companies and which companies they are billing. You will need to find out what insurance companies are paying so you can plug the new numbers into the above formula to see if billing would help your business be more profitable. This can be quite tricky to find out though, so ask a few different sources or as many as you can so you can make the best estimate.
You will have to do a little bit of research and find out if you can bill for work related injures (workers compensation) or bill for car accidents. Workers Compensation Boards will have fee schedules that tell you how much you would get paid when you bill. There will also be many rules to follow that are different in each state, so you will have to find that info out on your own. If you can bill for car accidents, they will usually pay your full fee for your massage services. You can take that information and put it into the formula to see if taking insurance would help your business be more profitable.
You may also have to see if the insurance company has any specific rules for being able to bill insurance companies. One common problem is that some insurance companies will only pay for massage when it is done by a chiropractor or physical therapist or under the care of one of those providers. You will need to check to see what is needed for each plan and each client/patient.
Another challenge to take into consideration is the extra time it takes to do all of the paperwork and follow up. You will spend time networking with doctors and talking with lawyers. In working with insurance, you will also be limited to working on specific injury areas and you will have to learn how to write effective chart notes so that you will get paid. Your chart notes will need to show that your sessions are improving the clients’ condition. You will spend time writing progress reports and may even be called to testify at mediation, arbitration or in court.
Working with insurance companies will also challenge your integrity and boundaries at times. I have been told by insurance companies to do things like “Just make up an ICD-9 (diagnosis code)” which is illegal since massage therapists are not allowed to make a diagnosis. Clients will often try to get more massage than is actually needed and they sometimes will embellish their symptoms to get more treatments. They also will try to come for maintenance massage which is usually not covered by most plans or in most situations. (I have only seen a few preventative plans that allow this.) Having an accurate pain and movement tracking system can help you show improvement and avoid doing maintenance massage which is not allowed when billing insurances. Insurance will often not cover a full recovery from an accident or injury, but will only cover people until they return to work and are fully functional – there is a difference. Some people can be functional but will still be in quite a bit of pain. You may also be asked to reduce your rates when it comes time to settle the claim if the money has been used up in other areas by first paying doctors and surgeons.
If you decide that you do want to continue, you must learn everything you can about insurance and billing. It will help you set boundaries and choose what clients you want to work with. As you learn more and work with more cases, you will be able to tell which cases will be most difficult to settle or prove medical necessity. You can choose not to work with any that you find are questionable or will take up too much time and not be worth the extra effort. You can learn to choose easier cases. This is one of the most overlooked keys to building a successful practice. Sacrificing your values and accepting money just to make money when it goes against your values will create stress and increase your risk of burnout. You don’t have to accept every client who calls. You can focus on working on clients who value your work and are compatible with your beliefs.
While you can have a successful massage business without billing insurance companies, knowing how to bill will come in handy when your favorite client gets in a motor vehicle accident (MVA) and wants you to bill the insurance company for him/her. You can also build a practice totally dependent on insurance cases and work with integrity when you know all the rules, regulations and issues. Just be sure you have a backup plan in case one of the sources of income from billing ends unexpectedly. Will you be able to stay in business if the laws change or you are suddenly unable to bill a certain area of insurance like Personal Injury or Worker’s Compensation?
Here in WA when we are contracted providers with insurance companies, we are placed on a list of providers. This can be an easy way to get clients. People will look for a provider in their area and then may look for you online to look at your website to see if you are a good match for their needs. They may also just call you right away. Insurance clients may come to you once a week or even twice a week, depending on the injury and the prescription from the doctor. Having regular clients means having regular income, which is one of the top reasons for taking insurance. People may also visit you more frequently when covered by insurance. Taking insurance can help fill your schedule with clients. Keeping insurance cases balanced out with your regular work can be a great way to create a sustainable practice. Taking cases where you have to wait to be paid can be like putting money in the bank if you are able to manage your budget while you wait.
You don’t have to have your whole practice be insurance cases. You can just take a few cases as they come to supplement your income. You can also network with doctors and lawyers to get referrals from them for insurance cases.
You can also opt not to take insurance even though you may feel the pressure from clients and the profession to jump on the bandwagon. You can successfully create a totally cash based massage business. That will take probably the same amount of energy to market and promote yourself as it does to deal with the insurance companies. It also does not have to be an either/or thing. You can bill for some clients and have an even mixture of cash and insurance billing. Actually, that is what I would recommend you do so you do not put all of your eggs in one basket!
Take the Next Step and Start Standing up for the Profession.
Be a part of making massage part of Health Care
Massage Insurance Billing 101 Manual (PDF )
Table of Contents: Massage Insurance Billing 101
- Chapter One. Should You Start Taking Insurance?
Cost per Client
Cost Per Client Analysis
- Chapter Two. Health Insurance Portability and Accountability Act. HIPAA.
Protected Health Information
The Privacy Rule
The Notice of Privacy Practices Form
Patient Right to Access Records.
The Security Rule
The HITECH Act
HIPAA Final Omnibus Rule
Putting It All Together.
National Provider Number
- Chapter Three. What to Charge for Your Massage Services.
RVU, UCR, CPT Codes
- Chapter Four. Types of Insurance (Overview)
Personal Injury Protection (PIP) or Med-Pay (MP).
Private health insurance
- Chapter Five. Personal Injury : Motor Vehicle Collisions and Other Accidents
Working with lawyers.
Independent Medical Exams (IME’S).
Steps to billing PIP/Med-pay
- Chapter Six. Private Health Insurance: HMO’s, PPO’s, Affinity Plans
Steps to Billing Health Insurance
- Chapter Seven. Worker’s Compensation or Labor and Industries
Steps to Billing Worker’s Compensation/Labor and Industries
- Chapter Eight. CMS – 1500. The Billing Form Explained.
Chapter Nine. CPT® Codes and ICD-9 Codes.Update on ICD 10 Codes here on website
The ICD-9 (International Classification of Disease)
- Chapter Ten. Documentation. SOAP Notes, Progress Reports, Narrative Reports.
Evidence Based Massage
- Chapter Eleven. Getting Referrals From Health Care Professionals and Lawyers.
Sample Networking Letter
- Chapter Twelve. Putting It All Together.
Screening Clients when they call
Calling the insurance company to Verify Benefits and Billing Procedures
Getting Paid and What to do if You Don’t Get Paid.
Appealing Denied Claims.
- Chapter Thirteen. The Challenges of Billing.
- Chapter Fourteen. Healthcare Integration: Getting More Health Insurance to Pay.
Section 2706 of the Affordable Care Act
How WA State was able to bill health insurance – a little history.
- Chapter Fifteen. Glossary.
Cost per client formula:
Insurance Benefits Verification Form
Track communications with the insurance company
Confidential Health Intake Form
Medical History and Information
Confidential Client Intake Form CMS 1500-02/12
Physicians Referral/Prescription for Massage Therapy Services
ICD 9 Codes