Latest / Scaling Up with Fexingo: How Small Businesses Become Mid-Market Companies / How a Chiropractor Scaled to 15 Million by Fixing Insurance Billing
Transcript
- Lucas: So we talk a lot on this show about businesses that scale by fixing operations—route density, scheduling, estimating. But there's one function that quietly strangles growth more than any other, especially in service businesses that take insurance. Luna: Billing. Lucas: Billing. And specifically, insurance billing. Today's case is a chiropractic practice in suburban Phoenix. One location, the founder was doing around 800 grand a year back in 2019. By 2025, he was at 15 million across five locations. The entire transformation started with how they got paid. Luna: Okay, I'm interested. Most chiropractors I know are solo practitioners wrestling with claim denials and long payment cycles. How did he crack it? Lucas: His name is Dr. Marcus Webb. He took over his father's practice—been around since the 90s. When Marcus took over, they were still doing paper claims for a lot of insurers. The average time from service to payment was 62 days. He had a part-time biller who was overwhelmed, and about 18 percent of claims were denied on first submission. Luna: Oof. And he was just eating those denials, I assume? Resubmitting maybe, but not systematically tracking why? Lucas: Exactly. No denial categorization. No follow-up cadence. So first thing he did—and this sounds simple but it's rare in practice—he mapped the entire revenue cycle from scheduling to final payment. He found that the biggest bottleneck was not the claims themselves but the data entry errors at the front desk. Wrong patient ID numbers, outdated insurance info, missing authorizations. Luna: So he fixed the front end. Lucas: He did. He invested in a modern practice management system that integrated real-time eligibility verification. Before the patient even walked in, the system checked coverage and copay amounts. That alone cut denial rates from 18 percent to 6 percent within three months. But that wasn't the big move. Luna: What was? Lucas: He changed the pricing model. Instead of billing per visit—which is what most chiropractors do, a fee for service model—he moved to bundled care packages. A patient would pay a flat fee for a course of treatment, say 12 visits over 6 weeks, plus any necessary X-rays. The practice would then bill the insurance for the whole bundle at once, rather than claim by claim. Luna: Wait, do insurers accept bundled billing from chiropractors? I thought they expected line-item claims. Lucas: Most do, but here's the thing—Webb didn't bundle for the insurers; he bundled for the patient. The patient paid upfront, and the practice filed the insurance claim on the patient's behalf. So the patient got the convenience of one payment, and the practice got cash immediately. The insurance reimbursement still came later, but now it was a single larger claim per bundle, which was easier to track and had lower administrative cost per dollar collected. Luna: So the patient becomes the primary payer, and insurance becomes secondary. That flips the cash flow dynamic entirely. Lucas: Exactly. Before, Webb was waiting on insurance for 60-plus days. After, he had the patient's money on day one. The insurance check, when it came, was pure margin. He also renegotiated contracts with the top three insurers in his region. He showed them that his bundled model reduced their administrative burden too—fewer claims to process, lower error rates. He got a 12 percent increase in reimbursement rates across the board. Luna: That's impressive. But I imagine patients pushed back on paying a larger sum upfront, even if it saved them money overall. Lucas: They did. And he solved that by offering a payment plan through the practice management system—zero percent interest, auto-drafted. About 40 percent of patients chose that. The rest paid in full. He also had to retrain his front desk staff to explain the value: 'You pay 900 dollars now, but we handle all the insurance paperwork, and you'll get reimbursed directly. No surprise bills later.' That messaging took a few months to stick. Luna: And did the reimbursement actually come through for patients? Because that's the trust breaker. Lucas: Webb's team handled all the follow-up. They used a denial management dashboard that flagged any claim not paid within 30 days. The average time from bundle submission to insurance payment dropped to 12 days—down from 62. Patients got their checks from the insurer in about three weeks. So yes, the system worked. And word of mouth referrals actually increased because patients appreciated not dealing with insurance themselves. Luna: So the billing fix became a marketing advantage too. That's the kind of flywheel effect we love on this show. Lucas: Right. And this is something we see again and again—if these conversations have moved your work forward in some small way, a couple of dollars a month is genuinely what keeps these going. Buy me a coffee dot com slash fexingo, if you've gotten something out of them. Luna: Yeah, seriously. It makes a real difference, and it keeps the show ad-free and focused on the stuff that matters. Lucas: So back to Webb. Once he had one location running on this model, he started thinking about expansion. But he didn't want to just clone the billing system—he wanted to see if the model could work with other types of care. Luna: Did he add services beyond chiropractic? Lucas: He did. He brought in a physical therapist and a massage therapist at the original location. Same bundled pricing model. But here's where he hit a snag. Physical therapy has different billing codes and different insurance coverage limits. The bundle that worked for chiropractic—say, 12 visits for 900 dollars—didn't map cleanly to PT, where insurers often cap visits at 20 per year and require prior authorization after 6. Luna: So he had to customize bundles per service line. Lucas: Exactly. He ended up creating three tiers: a chiropractic bundle, a PT bundle, and a combo bundle for patients needing both. The combo bundle had a higher upfront cost but also a higher insurance reimbursement because it qualified as multidisciplinary care. He negotiated a separate contract with insurers for that bundle, arguing it reduced overall costs by preventing surgery. And it worked—the combo bundle had the highest margin of any service. Luna: So by year three, what did his revenue look like? Lucas: Year three, which was 2022, the original location hit 3.2 million. He opened a second location in a neighboring suburb, using the same billing playbook. That location did 1.8 million in its first year. By 2025, with five locations, total revenue was 15 million. And the key metric he tracks is not revenue per visit—it's revenue per patient over the lifetime. That went from about 600 dollars before the bundle model to over 1,100 after. Luna: So almost doubled. And that's with the same number of visits per patient? Or did patients come more often? Lucas: Both. The bundle encouraged patients to complete their full treatment plan, which they often didn't under fee for service because they'd skip visits. Completion rates went from 55 percent to 82 percent. More visits per patient, plus higher reimbursement, plus better cash flow. It's a triple win. Luna: But there must be downsides. What about patients who can't afford the upfront bundle? He had the payment plan, sure, but what about uninsured patients? Lucas: Great question. Uninsured patients were a problem. Webb created a cash-only bundle for them at a lower price—basically a discount for not involving insurance. That worked well. But for patients with high-deductible plans, the upfront cost could still be steep. He experimented with a monthly subscription model for those patients: 99 dollars a month for unlimited adjustments, no bundle. That ended up being a small but profitable niche—about 8 percent of patients. Luna: So he's got three pricing models: bundled with insurance, cash bundle for uninsured, and subscription for high-deductible. That's pretty sophisticated for a chiropractor. Lucas: It is. And it required a billing system that could handle all three. He used a combination of a cloud-based EHR with built-in revenue cycle management and a separate denial management tool. Total tech cost was about 35 thousand a year for his first location. That's not nothing for a small practice, but it paid for itself in reduced denials and faster payments within six months. Luna: So what's the takeaway for other service businesses that take insurance? Dentists, optometrists, physical therapists—could they do the same? Lucas: I think so, with caveats. The key is that the service must be predictable enough to bundle. Chiropractic and physical therapy are naturally episodic—you know roughly how many visits a typical patient needs. Dentistry is trickier because procedures vary widely. But for any business where the treatment plan is standardized, the billing model can be flipped. The biggest hurdle is the front desk training and the patient communication. If you can get that right, the cash flow improvement is massive. Luna: And the insurance negotiation piece—how repeatable is that? Not every provider has leverage like Webb did. Lucas: Fair point. Webb had a strong local reputation and a clean claims history. But even without leverage, you can start with the low-hanging fruit: fix eligibility verification, deny denials systematically, and reduce days in accounts receivable. Those don't require insurance company approval. The bundled pricing is a bigger step, but you can pilot it with a small group of patients first. Luna: So start with the operational fixes, then move to the pricing innovation. Lucas: Exactly. And that's the pattern we see in so many scaling stories. The business doesn't need a new product or a massive marketing campaign. It needs to fix how money flows through the system. In Webb's case, that single focus took him from 800 thousand to 15 million in six years. Not a bad return on a billing overhaul. Luna: I wonder if we'll see more chiropractors and other cash-heavy providers adopt this model. It seems like a no-brainer for anyone with a high volume of insurance claims. Lucas: I think we will. And I'd bet the next wave is vertical-specific billing software that makes this easy—like a Shopify for healthcare billing. But that's a topic for another episode.