Payers & PTs…Listen Up: Let’s Make Reimbursement Real Easy….

There has been a lot of recent chatter regarding the Alternative Payment System (APS) proposed by the APTA for the reimbursement of Outpatient Services.   This model of reimbursement would supposedly move payment for outpatient therapy services from the current fee-for-service, procedural-based payment system to a per-session system.  This mode would account for the severity of a patient’s condition and intensity of therapist services required in a session.  While this proposal sounds idealistic, there has most definitely been some opposition from some key players in the game.

In addition to the APS, the Centers for Medicare and Medicare Services (CMS) has proposed a Value-Based Payment model for the 2016 Home Health Prospective Payment System.   I have provided an outline the “simple” adjustments as analyzed by the APTA here:

Payment Policy. Taking into account all the policy changes, CMS estimates that overall Medicare payments to home health agencies will be reduced by $350 million or 1.8% in 2016 compared with 2015. This decrease reflects a 2.9% market-basket update and 0.6 percentage point cut for productivity, which is mandated by the Affordable Care Act. The rule also includes a 1.72% cut in each of 2016 and 2017 to account for estimated case mix growth 2012-2014, which the agency believes is unrelated to patient acuity, and a scheduled -2.5% rebasing adjustment, the third of a 4-year phase-in. In addition, the proposed 2016 national, standardized 60-day episode payment rate would be $2,938.37. If a home health agency (HHA) does not submit the required quality data, that rate would drop by 2% to $2,880.92.

Home Health Quality Reporting Program. CMS will add 1 standardized cross-setting measure to the Home Health Quality Reporting Program for 2015, as required by the IMPACT Act of 2014. The law requires HHAs, skilled nursing facilities, inpatient rehabilitation facilities, and long-term care hospitals to submit standardized patient assessment data and standardized data on quality measures and recourse use. The proposed new measure, the National Quality Forum (NQF)-endorsed measure: Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678), addresses changes in skin integrity. Also new for 2016, all HHAs will need to submit both admission and discharge OASIS assessments for at least 70% of all patients whose episodes of care occurred during the reporting period starting July 1, 2015. The threshold will increase by 10% in each of 2016 and 2017 to reach 90%.

So I pose a question to you: “How the *%^& have we allowed our model of reimbursement to become so complex and confusing?”   Seriously.   We need to diligently work towards a model that simplifies, well, everything. I do not believe procedural-based reimbursement encourages the best practice.  I personally think it’s absurd and leads to an over-utilization of services due to ridiculous productivity standards set by some employers.

So whats the solution?

Here’s my proposal—it’s a start (payers #cms #highmark #cigna #unitedhealthcare #UPMC—and PTs—let’s start talking…to each other):

1.  PT Evaluation – Flat Rate Reimbursement.  Let’s say: $150 (account for regional differences)

2. PT Visits/Reassessments/Discharges – Flat Rate Reimbursement.  Let’s say: $100  (account for regional differences)

3.  Number of Visits – This tends to be where things get more complicated.  I would recommend a flat rate of visits per patient per year (many payers already do this).  Let’s say 20 visits per calendar year.   To incentivize a patient to stick with a health plan, the payer would allow these visits to carry over year-over-year until a visit limit is met.

 While models of risk stratification exist, and many propose these for determining length of care, research is limited on this.  By limiting the number of visits per year, the payer can risk adjust,  the patient can be involved in decisions on utilization of services and the provider can maintains a level of ease knowing an industry standard.  

So I ask the readers…why can’t something as simple as above be utilized?  Let’s talk…


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12 replies »

  1. I have no problems with determining a flat/visit. I do take issue with limiting every patient to say 20 visits. Each diagnosis that someone comes in with requires varying amts of time. An elderly person with multiple comorbidities, weakness & balance issues with a fall history is definitely need more than 20 visits. We treat them all the time. Your attempt at a simple solution does not work in a world in which people’s problems are not so simple.

    • Understood. I am curious if most patients truly need “skilled services” for > 20 visits? Should we be utilizing extenders and alternative programs (wellness, etc) following a set number of visits? We have very little research on prognosis or how to calculate visit frequency/duration and most simply use arbitrary numbers because they have become standard.

      Let’s consider some of the research that has been done on the STaRT LBP tool. There is some evidence, that a risk category of individuals with LBP, may only need 1 session from us — I’m not confident many actually follow this (unless dictated by the payer). In this case, if we followed one of the best risk stratification tools we have, many PTs should receive only one session for a low risk subgroup. This is a more complex strategy of calculating care duration/strategy and I’m not sure many practitioners are ready for this. So where does this leave us?

  2. Imagine what employers would want instead of productivity. They would want you to see patients for 15 minutes each for 20 visits. PTs would master the art of the HEP though.

  3. I like the proposal of a set dollar amount calculated based on the condition, chronicity, age, and other factors. They’re doing an okay job collecting data on this, but we’re still far away. This dollar amount would be the same whether you improved the patient in 8 visits or 16 visits. It would then incentivize companies to improve the patient’s status as fast as possible. If you don’t improve functional status and are discharging early, that could count as a “knock” against you to the third party payer. Enough knocks, and they recognize your practice as one that doesn’t have good outcomes and doesn’t cover Tx there.

  4. The issue is not the rate of payment, it’s that payment has not increased year to year. As expenses, salaries increase then payment needs to adjust with it or its a losing proposition….Right now, it’s not adjusting. That is the real issue.

  5. I would welcome a flat rate pay system similar to the one explained above with open arms. Procedural-based intervention does not encourage best practice. I’m unfortunately beginning to notice that if you’re a good therapist and are able to help people with minimum units in short amounts of time, there undoubtedly will be a bunch of BS to deal with.

    Regarding number of visits per year, I think this gets a bit more tricky. I strongly believe that the majority of patients that walk into an outpatient therapy clinic should be able to complete care well within 20 visits. It’s hard for me to envision patient’s coming in for longer than that and still receiving skilled therapy services (by that point it’s mostly filler exercises that should be done at home). There are obviously exceptions to this rule such as major traumas.

    With these changes our prognosis is going to be more important than ever. It’s going to become crucial to have a clear cut/accurate prognosis backed by research based measures (i.e. sTarT tool). This way the therapist can more properly support seeing those “complicated” patients for longer periods of time, and defend themselves to Medicare if Medicare questions why it took so many visits to see small improvements.

    • To say that only “good therapist treat in shorter duration”;to me implies that if you are a therapist that is willing to see patients through to completion you are not a good therapist. Physical Therapist that treat the patients that standard physical therapy was not able to fully resolve their deficits are being viewed in your post as bad therapist. The model you present works for the in shape sports medicine patient. It does not work for the neurologic, autoimmune, cardiopulmonary, and complex chronic pain patient that has many years of deficits that need to be resolved. Physical therapy works for these individuals as well. We are short changing our profession lumping each patient in a box and not seeing them through to the end. By walking along side and guiding these patients they achieve quality of life and participation in their jobs and community again;which overall reduces healthcare dollars in the long run. It really boils down to am I going to treat the symptom or the problem. Our clinic has seen these patients for years and have received the same reimbursement as the independent exercising sports medicine patient. I can see that reimbursing for the complex patient that involves one on one care and at times use of more than one therapist(neurological patients) can be beneficial to clinics such as mine.

      Thank you everyone for the discussion. You are right that we need to discuss this and look at it from all aspects that our great profession serves.

  6. It looks like, with the recent favorable ruling on the ACA, we’re going to be looking at a fee-for-service/procedural reimbursement system for the near future. I’m gonna provide the link to an employment report by a large medical recruiting firm, which shows the trends in physician hiring over the last several years. In the Medscape interview that accompanied the report, an executive at the recruiting firm stated, “It’s still a fee for service world.” And he suggested that the ACA would tend to encourage the status quo rather than promote any significant change in reimbursement structure. The reason is pretty straight forward: the movement of our health care system to a more socialized one, with re-distribution of wealth from richer Americans to poorer ones will ensure a larger “pie” of money- at least in the near term (barring some financial collapse- which is certainly possible). However, it won’t do anything to address the quality issues in the system. It will pretend to, but we won’t see any significant shifts towards value based on outcomes anytime soon. It’s in the nature of Americans to at least think they’re getting what they pay for, so procedural reimbursement satisfies that penchant for seeing a list of things that were done.

    Welcome to socialized medicine, folks.

  7. I like your ideas, Joe. I think a system would need to be in place for people genuinely needing > 20 visits per year (for example, someone who undergoes staged bilateral TKA within the same benefit period) to get additional visits if the documentation is sound.

    I’d be concerned that the unethical minority would take advantage of a per-visit flat rate and do extremely short or passive treatments — so there should be some penalty for providing crappy non-evidence-based care.

    • Hi Ally,

      I’m not sure on some of the details. But I think the penalty for providing crappy non-evidence based care would like in the outcomes. I.E. if Medicare reimburses for a plan of care, and evidenced based outcomes don’t show improvement that was expected based off prognosis, then Medicare could ask for their money back. I’m sure it’s not that simple, but I think that’s the idea. Therefore the therapists providing these crappy treatments would be taking the risk of not being reimbursed for the entire POC.

      • Ya’ll are dreamin’ if you think a central authority can impose the kind of discipline that is necessary to ensure quality outcomes based on value through an episode of care. Only the market can do that *efficiently*. It hasn’t happened in 7 decades since Medicare started, and it’s not going to magically happen now. As I stated in my previous post, the green light given to the ACA by 5 SCOTUS judges, who may have law degrees but have likely never owned or run a business and have generally rudimentary understanding of economics, means that the status quo will remain in place likely beyond the most recent insolvency date for Medicare, which I think was around 2025. The wealthy are getting squeezed for more taxes and both the wealthy and the middle class are paying much higher premiums, co-pays and deductibles in order to subsidize care for lower income people. It’s all about maintaining power and wealth with the politicians in Washington. Unless there is a significant financial collapse that strongly impacts the healthcare sector, ACA will cause the current fee-for-service/procedural reimbursement system to remain dominant for the foreseeable future. The executive from the Medical recruiting firm whom I cited confirms this, and I have no reason to doubt his knowledge in this area. The Federal government CANNOT impose effective and efficient discipline in the healthcare system- or any other market, for that matter- to ensure quality. They’ve had their chance for 70 freakin’ years! and they’ve failed miserably- quality is mediocre and costs are through the roof.

        APTA is just like all the other professional healthcare professional associations- preservation bodies that serve two purposes: 1) lobbying Congress to at least maintain the same size slice of the zero-sum pie for PTs (APTA is not doing a very good job of this mostly because PTs are so damned apathetic) and 2) educate their members how to game the system without committing fraud or some other illegal act that reflects poorly on the profession (APTA does a pretty good job of this, as is reflected in the continued, albeit slow, growth in PT income despite reductions in reimbursement. Gaming the system is the rule, and it’s done in many creative, if not ingenious, ways by both providers and 3rd party payers.)

        Nothing is going to change substantially with respect to how PTs are reimbursed in the foreseeable future unless a radical shift away from government control of healthcare occurs. I don’t see that happening anytime soon; so, just get used to your CPT codes, modifiers, cumbersome and senseless documentation rules, and meager cost of living adjustments in salary.

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