“Price is what you pay. Value is what you get.” – Warren Buffett
Every PT private practice owner knows the challenges of getting paid by a third-party. You treat a patient, submit a claim and wait 30-90 days, sometimes more. Then you get paid the same amount as a provider down the street who has provided half the quality, delivered half the value. In New York, reimbursement is essentially based on a Fee-For-Service model. The more patients you see and the more services you provide, the more you get paid. The Value-Based Care model of reimbursement is coming and it’s about to change all of that.
The more you bill, the more you get paid, right? Not exactly. Any ethical practitioner is going to provide each patient with the least care necessary to have the greatest effect, even if more care/units/services could lead to greater reimbursement. The same goes for the daily caseload of patients. With every patient over a certain threshold for each PT, the quality of care diminishes, patients get frustrated and PTs burn out. Such a pattern can destroy a PT practice due to reputation with patients, frustration of staff and dissatisfaction of referral sources. We’ve all found our sweet spot and that’s how we’re here today.
Value-Based Care is what we’ve always considered to be ethical care and good business practice. Studies show that care improves and patient satisfaction increases with the amount of direct time a PT spends with a patient.1,2 As care improves, outcomes improve, referrals increase and profits rise. The top PT practices know this and have always functioned in this way. Now there are potential financial rewards for doing what we’ve always done.
Value = Quality/Cost3. In any business, the top performers are those who can master this equation. If an auto mechanic can fix your car the first time and he can do it less expensively than the competition, you’re going to keep going back to him. If your local diner has the best burger in the neighborhood and they can afford to sell it at the same price as the other burger joints, that’s going to be your spot. Third party healthcare payers are starting to utilize the same economics. Providers who achieve the best outcomes at the lowest cost will be rewarded with better contracts.
Alternate Payment Models (APMs) are payment models that offer incentive payments for providing high-quality, cost-efficient care. APMs can apply to a specific clinical condition, a care episode, or a population.4 Bundled care models are an APM that are catching on and have been successful in other parts of the country. For PTs, our role in a bundled care model will usually be a downstream partner in an episode of care. For example, when a surgeon performs a TKR, they will be paid a flat fee for the entire episode. That fee will then be split amongst all the caregivers involved in the patient’s recovery. Opportunities for increased payment result naturally from achieving excellent results without utilizing excessive resources. In addition, some models pay added bonuses for superior outcomes and patient satisfaction.
PT is considered to be high-value care (low cost-high efficacy) for back pain and other musculoskeletal conditions so payers are exploring efforts to encourage PT over costly imaging and addictive opioids. In a pilot study, Geisinger Health Plan (GHP) of Pennsylvania offered a value-based insurance design (VBID) version of the PT benefit package, referred to as the “PT bundle.” Under the PT bundle, a member who has a documented diagnosis of back pain is eligible to receive up to five PT sessions for a single copay, which is comparable to the typical copay amount for a single PT session.5 The results of the study suggest that the PT bundle, which follows the main principle of VBID by lowering financial barriers to PT, may have altered the course of treatment for back pain in such a way it is more consistent with the well-established treatment guidelines for back pain.5
Last week I spoke with a practice owner with 42 sites in Colorado, where 70% of musculoskeletal care is value-based. His group has adopted a software platform to utilize telemedicine, patient monitoring, and artificial intelligence (AI) in their plan of care to increase engagement and improve outcomes. They don’t even get paid for the telemed visits, it’s a value-add that improves their engagement, outcomes and leverage with payers. They’ve standardized care and proven their value to payers so effectively that they’ve been able to negotiate significantly higher reimbursements and exemption from the utilization process. Can you imagine life without OrthoNet? The PTs in his group have accepted accountability for case management and both sides benefit. This isn’t our reality yet but it’s not far off.
Going into effect January 1, 2019, Merit-based Incentive Payment System (MIPS) is Medicare’s version of VBID. Not everyone will be required to participate in MIPS but eventually we’ll all be faced with with challenges of value-based reimbursement. How do you plan on thriving in the new value-based landscape. Here are a few options I’ve surmised:
- Cash business – Stay out of the third-party payer system. This is always a good option if it works with your patient population.
- Assure that your EMR includes outcomes and patient satisfaction data collection. Most PT EMRs are on top of this and have strategies to help you improve these results.
- Upgrade the value you provide at a reasonable cost. Encourage PTs to hit those coned courses; asses processes and patient flow in your office; upgrade equipment. Most importantly, engage your patients. Inevitably, patients who attend PT and comply with their program have better outcomes and are more satisfied than those that don’t.
The landscape of our healthcare system is always changing. There’s about to be some significant changes we haven’t experienced before in PT. Be prepared and you will thrive.
Resources:
1. https://academic.oup.com/ptj/article/82/6/557/2836972
2. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2527215/
3. http://www.apta.org/Blogs/PTTransforms/2018/4/10/VBC/
4. http://www.apta.org/Payment/Medicare/AlternativeModels/
5. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5459966/