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National Provider of Rehabilitation Services Prepares to file for Chapter 11

National provider of rehabilitation services, Physiotherapy Associates Inc., appears to be preparing to file for Chapter 11 bankruptcy protection.   According to Dow Jones and Company, Physiotherapy Associates, who carries around $325 million in debt, has begun the process of soliciting votes from creditors in a reorganization plan.

As a therapist, do you suspect this is the ominous beginning of the effects of healthcare reform or is this simply poor strategic management and projections from a corporate therapy giant?  Would love to hear your thoughts in the comments….

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7 replies »

  1. By all accounts Obamacare should produce greater demand for our services. Hands-on healthcare provider job growth, Physical Therapist Assistant to be specific, among other healthcare occupations, expected to be of magnitude of 38-42% growth over next 7 years according to US BLS. Soooo……….is it management, reimbursement, productivity, disproportionate administrative operating costs, billing, denials ?

    • Interesting comments. Based on that perception, do you see PTA’a taking on the role that many PT have? Moreover Should a PT worry about this? If I were a new grad with close to 100K in debt I certainly would be worried.

  2. It is clearly mismanagement and most likely taking on too much debt and not collecting on their claims. I’ve experienced this first hand twice and there is no desire for a PT to be in a corporate environment when everything is based on “number” of patents seen vs “quality” of care.

  3. I believe this is an individual situation, but based on the corporatization of healthcare along with everything else in America. Short term benefit at all costs to please shareholders with profiteering by Wall St. This leads to long term issue. And as Joe said above quantity vs quality wokrs in commodities but not always in healthcare.

  4. Obamacare will create greater demand for PT services by whom? People who didn’t go the “trouble” of purchasing health insurance? That sounds to me like the kind of people who make new appointments, but never show up, which is very much like the Medicaid population, where first time no-show rates in my clinic and at the University HospitaI range between 35 and 40%. I see a proliferation of higher 1st-time no-show rates in the future. How will this impact revenue?

    As far as Physiotherapy Associates financial woes, I’ve been hearing about these problems for a long time. When I was in Indiana in 2009 or so, they closed several clinics just a few years after purchasing them from HealthSouth. They seem to have some bean-counting problems. My understanding is that they have made a shift towards better quality and less volume-driven care. Perhaps this has disrupted profits in the clinics that couldn’t balance quality with volume.

  5. This is maybe NOT the “corporatization” of health care but maybe reimbursement IS an accounting nightmare. For those of you PTs who are not accountants, think about figuring out how to write a receipt for a service in 15 minute increments when the increments reimburse different amounts. you use the same identifying code, eg. 97110 for the first 15 minutes of therapeutic exercise and get reimbursed one amount and then the second time you use the code you get reimbursed a different amount! If you use another code first you get reimbursed a reduced amount for the code identified in exactly the same way. It is an accounting nightmare. And, insurance companies have jumped on this bandwagon as well. It is an accounting nightmare for corporations. Also, physical therapy was hit with the multiple payment reductions which I tried to describe above and then on top of that hit with reductions because of sequestration. In this case I can understand Physiotherapy Associates complaints. There is no way to keep up with you accounts receivables in health care. It has become an accounting nightmare and we need our political representatives to realize what they are doing.

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