How a Fast-growing Group of PT Clinics Bolstered its Financial Backbone Even Faster

Since its founding by Tony Klapish in October 2011, Renue Physical Therapy has been committed to providing exceptional personalized care to every patient that comes through its doors. The success of that commitment is evident in the organization’s remarkable growth. What began as three employees in a single clinic in Saginaw now numbers more than 100 employees at 17 clinics across mid-Michigan.

That’s not to say opening 17 clinics in 14 years was an easy road. In 2013, during Renue’s biggest expansion to date — when the two-year-old organization, then three clinics, tripled in size, to nine clinics — an unexpected external challenge arose: For 13 months after opening, those six clinics were unable to collect reimbursement from Medicare or private insurance providers for the service Renue’s therapists had provided, essentially putting a chokehold on each clinic’s revenue. 

Healthcare Reimbursement and Revenue Woes

The fault was not Renue’s. Due to changes in laws governing healthcare, the time it took Medicare to complete its credentialing processes — essentially, vetting healthcare facilities and healthcare providers to ensure they can provide quality, Medicare-compliant care — suddenly and drastically increased.  

“When we opened our first three clinics, the credentialing process was a two-month process from when you opened the clinic and started seeing patients to when you started getting your reimbursements.”

Renue’s financial model for the six new clinics, which had been built on the financials of those previous three, took into account the usual two-month lag. 

“Then, all of a sudden, that model goes out the window,” says Klapish. “And so we’ve got [nine] clinics at full capacity. We’re running at full expenses, and the revenue is just not there.” 

Over the 13 months credentialing took to complete, Renue was unable to collect on nearly $1.3 million in reimbursements, says Klapish. Only Medicare, whose patients comprise only one-third of Renue’s patient mix, paid retroactively.  

Despite the massive revenue loss, Klapish and his investors pushed ahead, expanding Renue’s footprint even further across the region.

Pressing on with Positive Patient Satisfaction & Outcomes

“If it was a case where everybody hated our services, [our clinics] were getting poor outcomes, or the doctors weren’t referring to us, that would have been an issue,” he explains. “But if you looked at the growth rates — of referrals, of visits, the number of referring physicians — I mean, all the factors outside of a credentialing issue were extremely positive. So that’s what gave us the confidence to continue and go forward.” 

Nevertheless, that 13-month interruption in reimbursements and subsequent revenue losses were hardly a mere hiccup. They caused multiple downstream issues that, coupled with the rapid clip of Renue’s expansion and the inherent complexities of financial reporting and management in any healthcare environment, prompted Klapish in 2018 to reach out to Rehmann.  

The Solution: A Bit of Outsourced Back-Office Operation Support  

Klapish says Don McAnelly, a CPA and Rehmann principal who serves on Rehmann’s Finance and Accounting Solutions team and specializes in helping healthcare practices, proved himself a crucial ally. He stepped in to develop personalized solutions to streamline financial and accounting processes for each of Renue’s LLCs.

He says Rehmann consolidated and improved each clinic’s financial and tax reporting, migrated them from QuickBooks to Intacct cloud-based accounting software, and ultimately helped them — and Renue at large — generate financials that are robust, transparent, and timely. 

Clear, accurate, and near real-time financials, important for banks and outside investors, of course, proved game-changing for company leadership, says Klapish. It enabled them to make truly informed, strategic decisions, big and small, for the company’s future, while better positioning the organization to weather any other unexpected changes in the ever-changing healthcare environment that might lie ahead.

He says Rehmann helped remove a lot of complexity by looking at each clinic as a separate operating entity — assessing how each is performing, showing what its balance sheet looks like, what its cash flow looks like — to develop a true, timely, and clear picture of the whole.

Renue, which has an in-house controller, essentially utilizes Rehmann as its fractional CFO to support its controller, says Klapish.

“[Company] officers, we can talk about specific transactions of how we want to structure this or that … but getting a timely response back from [Rehmann] saying this is how we recommend that you do it adds an additional level of expertise. It helps us and our controller make strategic decisions or changes more quickly and with peace of mind.”  

The Power of Partnership

With Rehmann as its partner, Renue has not only made its business as whole run better but also made its partnership model stronger. Many of its therapists are minority equity partners in the business, Klapish says. Renue supports each clinic with back-office services — marketing, IT, HR, accounting, etc. — for one vital reason: “So our clinics don’t have to worry about those things. They can focus on providing great outcomes and patient satisfaction,” he says. “They trust us to do what we do here, and we trust them to provide ethical, great patient care.” 

In turn, Renue’s leadership and controller put their trust in Rehmann’s accounting and financial management expertise, so they don’t have to worry either. Instead, they can focus on what they do best, too: supporting their clinics and clinicians in the pursuit of exceptional patient care.