How to Set a Cancellation Policy for Your Physical Therapy Practice

Time is one of the most valuable commodities of any type of medical practice. Your therapists only have a certain number of hours available to serve patients. If a patient fails to show up for an appointment or cancels shortly prior, that time is wasted and someone else is prevented from receiving care. Having a cancellation policy for your physical therapy practice ensures that you’re able to provide quality care to the largest number of people possible — a benefit to the community as well as to your practice. 

Additionally, there are financial implications to consider for no-shows or late cancellations. If you’re unable to use all of your billable time to provide billable services, your practice may struggle to be sustainable. For the health of your patients and the health of your practice, a cancellation policy is a must. In this post, we’re sharing tips on how to reduce your no-show rate and how to develop a physical therapy cancellation policy that works for you and your patients. 

What Causes Cancellations and No-Shows?

Understanding the causes of your cancellations and no-shows will help you eliminate as many contributing factors as you can and develop a policy that effectively reduces them. 

Start by tracking your cancellations and no-shows. Write down the patient name, insurer, day of the week, time of the day, and the situation that caused the cancellation or no-show (if the patient shared this information). After you’ve collected a few weeks of data, look for patterns. Are many happening at a certain time of day? This could indicate traffic issues. Are they occurring with patients covered by Medicaid? Lower-income patients may not have reliable transportation. Are patients simply forgetting they had an appointment? Maybe they aren’t receiving your reminders. 

Some factors are relatively easy to fix, such as offering different appointment times. Others, like lack of reliable transportation, aren’t something you can change on your own, but understanding difficult circumstances will give you a fresh perspective.

Next, highlight the factors that are within your ability to address. The best way to reduce no-shows and late cancellations is to eliminate the underlying causes. Here are a few ideas. 

How to Develop a Cancellation Policy

Now that you’ve addressed the low-hanging fruit to reduce no-shows and late cancellations, it’s time to develop a physical therapy cancellation policy. 

1. Decide What’s Optimal

Start by identifying what you would like patients to do in the event that they can’t make an appointment. Would you like a 12-hour notice? 24 hours? 48 hours? Remember that your policy will need to work for your patients as well as for your practice. 48 hours may be too stringent for many patients, but most people could accommodate 24 hours, for example.

2. Determine How to Handle Unusual Circumstances

Sometimes, regardless of your patients’ best intentions, life happens. A child will fall and need to be taken to an urgent care center. A snowstorm will make travel dangerous. A mother or father will receive a cancer diagnosis and need immediate support. In these truly unusual circumstances, you want to show compassion, and enforcing a cancellation policy at these times will have a significant negative impact on the patient-provider relationship. Decide what constitutes unusual circumstances and when you’ll make exceptions to your policy.

3. Set Consequences and Decide How to Enforce Them

If a patient no-shows or late-cancels and isn’t experiencing unusual circumstances, what will the consequences be? Will you charge the full cost of the appointment? Half the cost? And how will you enforce the policy? There are pros and cons to both requiring a deposit and to preauthorizing a credit card for payment. 

Pros and Cons of Requiring a Deposit — A deposit or full pre-payment is a guaranteed way to receive payment for no-shows. But to do this, you must know what each patient will be required to pay (co-pay or allowable amount). Additionally, requiring prepayment could set a negative tone to the patient-provider relationship. 

Pros and Cons of Credit Card Preauthorization — Preauthorizing the patient’s credit card is another option, although it’s more complex. You can’t simply keep a patient’s credit card details on file and then charge the card manually since this is typically illegal without a preauthorization agreement. Going through the trouble of setting up preauthorization can be well worth it, however, especially if your no-show rate remains high.

A Balance

Ultimately, your cancellation policy should strike a balance between what works for your practice and what works for your patients. And only you will know what that balance is. Starting with the mindset of wanting to provide the best care to the largest number of patients possible will help ensure that your focus is in the right place — and will lead you to the best policy for your practice.

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