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Office Memo regarding MedPAC Report

Who:  MedPAC':

The Medicare Payment Advisory Commission (MedPAC) is an independent Congressional agency established by the Balanced Budget Act of 1997 (P.L. 105-33) to advise the U.S. Congress on issues affecting the Medicare program. The Commission's statutory mandate is quite broad: In addition to advising the Congress on payments to private health plans participating in Medicare and providers in Medicare's traditional fee-for-service program, MedPAC is also tasked with analyzing access to care, quality of care, and other issues affecting Medicare.

When:  June 2010

What:  Report to Congress:  Aligning Incentives in Medicare



10 Top Quotes

1. "Moreover, there is evidence that some diagnostic imaging and physical therapy services ordered by physicians are not clinically appropriate."

2.  "there is evidence that physician investment in ancillary services leads to higher volume through greater overall capacity and financial incentives for physicians to order additional services. In addition, there are concerns that physician ownership could skew clinical decisions."

 

3.  "we report that outpatient therapy (such as physical and occupational therapy) is rarely provided on the same day as a related office visit. In addition, half or fewer than half of imaging, clinical laboratory, and pathology services are performed on the same day as an office visit. The finding that many ancillary services are not usually provided during a patient’s office visit raises questions about one of the key rationales for the IOAS exception—that it enables physicians to provide ancillary services during a patient’s visit."

4.  "The Commission does not make any recommendations in Chapter 8, but it does explore several options in more detail:

• excluding therapeutic services such as physical therapy and radiation therapy from the IOAS exception,"

 

5. "On the other hand, physician investment in ancillary services could lead to higher volume through greater overall capacity and financial incentives for physicians to order additional services. A study by Baker and colleagues estimated that each additional MRI scanner in a market is associated with 733 additional MRI scans among Medicare beneficiaries, and each additional computed tomography (CT) machine is associated with 2,224 additional CT scans (Baker et al. 2008). It is unclear whether the growth in scans is driven by changes in demand for medically necessary care or changes in the supply of machines. Several studies—including recent research conducted by the Commission—have found that physicians who furnish imaging services in their offices refer patients for more imaging than other for MRI or computed tomography (CT) scans engaged in a block lease or similar arrangement (Mitchell 2007)."

 

6.  "Researchers also found that physicians with a financial interest in physical therapy initiated therapy for patients with musculoskeletal injuries more frequently than other physicians and that physical therapy clinics with physician ownership provided more visits per patient than non-physician-owned clinics (Mitchell and Sass 1995, Swedlow et al. 1992)."

 

7.  "Questions have also been raised about the medical necessity of physical therapy services (Medicare Payment Advisory Commission 2006a). An Office of Inspector General (OIG) investigation estimated that 26 percent of physical therapy services billed by physicians that were provided during the first half of 2002 were not medically necessary (Office of Inspector General 2006).

8.  Outpatient therapy services are not generally associated with a related office visit. In 2008, only 3 percent of outpatient therapy services were provided on the same day as an office visit, 9 percent within 7 days after a visit, and 14 percent within 14 days after a visit (Figure 8-2). These results are not surprising; under Medicare’s coverage rules, a beneficiary does not need to receive an office visit with each outpatient therapy service. Instead, a physician must certify the initial plan of care within 30 days of the initial therapy service and must recertify the plan of care every 90 days (Centers for Medicare & Medicaid Services 2007b). In addition, patients tend to receive multiple sessions of therapy within an episode of care (Ciolek and Hwang 2004).

 

9.  Physician investment in therapeutic services may differ from investment in diagnostic services because of its potential to skew clinical decisions about the treatment of patients. For example, some have suggested that financial incentives may influence how cancer patients are treated. One study found that physicians who were paid more generously than the national average for chemotherapy drugs prescribed more costly chemotherapy regimens for certain types of cancer patients (Jacobson et al. 2006). In addition, therapeutic services are not typically ancillary to a patient’s office visit. Outpatient therapy and radiation therapy generally involve multiple sessions and are rarely initiated on the same day as an office visit.14

 

10. Concerns about excluding outpatient therapy and radiation therapy from the in-office ancillary services exception There may be concern that excluding outpatient therapy and radiation therapy from the IOAS exception would inconvenience patients by forcing them to receive care at hospitals. However, physical and occupational therapists can deliver therapy in private practices that are separate from physician groups. Patients can also receive therapy in ORFs, CORFs, and SNFs.

Why:  Overall, spending for outpatient therapy services paid under the physician fee schedule grew from $1.4 billion to $2.2 billion between 2003 and 2008. These figures exclude outpatient therapy provided in hospital outpatient departments, outpatient rehabilitation facilities (ORFs), comprehensive outpatient rehabilitation facilities (CORFs), and skilled nursing facilities (SNFs). The share of spending for therapy services that were provided incident to a physician’s service declined by nearly half between 2003 and 2008, from 30 percent to 16 percent. “Incident to” services are provided by therapists employed by a physician’s practice. Meanwhile, the share of payments for therapy services delivered by physical or occupational TPP, who bill Medicare independently, grew from 70 percent to 84 percent. Several factors help explain the growth of services provided by TPP:

• In 1999, CMS allowed licensed employee therapists to begin billing Medicare independently; previously, owners of therapy practices had to be on site and do all the billing for services furnished by employed therapists.

• Also in 1999, CMS eliminated payment disparities between settings for therapy services; as a result, many therapists changed their practice from an ORF to an independent practice to avoid the survey and certification requirements of institutional settings.

• CMS clarified in 2003 that therapists could be employees of physicians’ practices but still be considered in independent practice, which allowed physicians to employ therapists without being responsible for supervising their work (Medicare Payment Advisory Commission 2006a).

 

Top 5 implications:

1.  PT is not "ancillary".

2.  Physician owned PT/OT clinics can skew clinical decisions about the treatment of patients.

3.  Without POPTS clinics patients will have plenty of access to PT thru a number of channels, including private practice PT's.

4. PT patients referred by POPTS seldom get PT the same day (side note: there is an obvious reason ignored or unknown to MedPAC-most intermediaries won't pay for PT eval on the same day.  This alone supports the contention that it in office PT is purely financial).

5.  Need to track PTPP which is MD versus private practice.

What is needed:

1. End IOAS exception for outpatient physical and occupational therapy

2. Put pressure on OIG to designate physical therapy as a designated health service whereby POPTS docs would be obliged to:

     1.  Disclose to patients that they have a financial interest in the physical therapy clinic that they refer patients.

     2.  Provide alternatives to self referral including names and addresses of physical therapy clinics

     3.  Inform the patient that they are free to seek services elsewhere and if they do they will not be discriminated against.

3.  In the absence of #1 and #2, create an MD Amnesty Day where all POPTS fess up about their self referral interest in physical therapy and permanently use #2's 3 step process.  Fuel the Amnesty Day thru social media, national PR, and marches.

4. More research.  Studies in PT demonstrating overutilization by MD's are 15-18 years old.

Thoughts?

larry@physicaltherapist.com

This blog post is the product of my own conclusion.

 

Contrarian Truth and Best Question to Ask

As we continue with some reposting of this blog's early days, I thought I would bring this one up from Sept 20, 2005.  With the current emphasis on consumer orientation, competition, and the universal belief that not all PT is the same, I believe this question is still the most important of all.

Since we are going to go down the path of the best non-clinical questions to ask patients, I thought I would start this first contrarian truth:  "You cannot exceed a patient's expectations on their first visit"

Great customer service as well as a lot of motto's are around exceeding customer's expectations.  This laudable goal may be good in most retail and service industries but is totally inapplicable in most physical therapy situations.  Why is that?  Quite simply, most patients have no idea what to expect in physical therapy either because they have never accessed PT, never knew they had PT, or had PT at a different location than the one they are now seeking. 

  When it comes to freestanding outpatient centers the chances of patients having their first experience is even greater.  I often tell my co-workers (all private practice PTs) that every private practice could be eliminated tomorrow and most of the population would not know the difference because they never knew it existed in the first place.

  Although I am not a fan of patient satisfaction in PT, two studies Roush SE and Sonstroem RJ (Development of the Physical Therapy Outpatient Satisfaction Survey (PTOPS). Phys Ther. 1999;79:159-170.as well as Linder-Pelz, S. U. (1982). "Toward a theory of patient satisfaction." Soc Sci Med 16(5): 577-82) have expanded on this concept and have listed the reasons that patient's often times do not have an expectation for PT or if they do it is based on a misconception:

Physical therapy intervention is a small and relatively infrequent encounter in the health care arena

Interaction takes longer than their typical physician visit Frequency of PT visits is higher than most other medical courses of treatment

Therapy usually requires the patient’s active participation

Therapy may cause pain and may be perceived as physically threatening

So, the bottom line in PT is that if you want to exceed a patient's expectation-do it on the second visit, it is much easier!  Or, ask two of the best questions that you can on the first encounter:

Have you ever had physical therapy before (if so, tell me about it)? AND

What are your expectations regarding your physical therapy experience at this clinic? 

It is much easier to manage expectations than it is to exceed them.

Thoughts?

Patient Satisfaction-Useless Part II

Part II from Oct 2005. Just as relevant today.

My last post attempted to discredit the patient satisfaction survey process that many physical therapy clinics have in place.  My belief is simply that the incremental gains from the analysis of your surveys will not tell you much more than what we know from the published research (some of which I posted) and the effort does not justify such gains.  I have heard from many of you (mostly by email) similar responses-you are appalled by my suggestion not to do them.  You have cited that many regulatory bodies (e.g. hospital systems, networks, insurance products) force you to collect such data and that you have gotten a lot out of them (of note, I did not get any specific and helpful information that you "got out of them").  For many of you the process is so ingrained that "letting go" would be sacreligious!  Although my next post will present a very different concept of patient measurement, I felt it necessary to bring to light two distinct points.

Patient Satisfaction-Useless part I

Continuing on our July theme of EIM classic posts, this 2 part series came from Oct 2005.  I think it is even more relevant in today's healthcare reform-we shouldn't be focusing on patient satisfaction at all.  

I have expressed my opinion that it is totally a worthless exercise in the administration, collection, and analysis of patient satisfaction surveys.  I will provide a few posts to explain why but this first post will give a few reasons and some reference to some quality work in this arena that is helpful.  Don't misinterpret my approach-I really do believe it is a waste of a clinics time to collect such information and will offer my opinion on information what is helpful in part II. 

There is a whole body of patient satisfaction literature within medicine in general and a fair amount of studies published specifically in physical therapy.  They have all basically told us the same thing-patient satisfaction scores are highly inflated and generally determined by when and where the survey was taken.  Do it in the clinic after the initial visit and the resulting score is most likely overstated, do it two weeks after the patient gets the bill and it most likely is underinflated (side note:  this phenomenon about service in general has been coined by Roger Dawson -the "call girl principle" which states that the value of any service is greatly diminished after the service has been renderred).

In addition to being inflated, they seldom tell us anything about the status of the patient from a health outcome (an earlier post on this blog gave us the most recent study on this relative to LBP.  You can be satisfied but that doesn't mean your physical status has been improved).  There is also no standard measurement instrument desite attempts by outside bodies to change this.

Why are they inflated?  We know in general that patient satisfaction is a multidimensional concept, however, under most circumstances of surveying the notion of a unidimensional construct whereby a dominant dimension-overall satisfaction cannot be differentiated from other dimensions (see:

Goldstein MS, Elliot SD, Guccione AA. The development of an instrument to measure satisfaction with physical therapy. Phys Ther. 2000:, 80:853-863.  side note:  this study was done on our clinics in KY). 

Using Hertzberg's Motivation-Hygiene Theory as the basis for their work, (Roush SE, Sonstroem RJ. Development of the Physical Therapy Outpatient Satisfaction Survey (PTOPS). Phys Ther. 1999;79:159-170.) identified factors (“detractors”) that must be minimally evident and do not increase satisfaction (e.g meeting basic communication needs) yet if lacking lead to poor satisfaction as well as those that can result in increased satisfaction (”enhancers”) such as privacy, respect, and affirmation by the staff.  Location and cost which are common domains in many satisfaction studies across medicine were studied and manifested in their analyses.  Helpful information but no compelling reason to waste effort in doing lots of patient surveys. The most helpful study regarding patients satisfaction in physical therapy is in a since discontinued journal (Burke TE. Measuring patient satisfaction in an outpatient orthopedic setting, Part I: key drivers and results, J Rehab Outcomes. 1997 ;1(1):18-25).  An independent company, the Gallup Organization, assisted in the design, administration, and analysis of surveys conduction on 19,834 patients in 12 states.  This landmark study is often omitted from the annals of PT literature as the journal that it was published existed for two years and is not part of any journal database.  Nonetheless, in my opinion the information from this study is particularly relevant, valid, and useful.  A series of patient focus groups assisted in the design of this phone instrument.  They identified 26 areas representing 5 services dimensions that were used in the survey:  overall satisfaction, therapist interaction, center operations, facility, and billing.  This results clearly showed the significance of the interaction between the therapist and the patient.  It is important for the therapist to know the diagnosis of osteoarthritis of the knee.  However, it is more important to know Mrs. Jones’ knee arthritis.  If a large number of treating clinicians were part of the patient’s case, this drove down patient satisfaction.  Obtaining input from the patient relative to their goals was an enhancer of patient satisfaction.

So, if all this information has been helpful, how can one be against surveying patients for their feedback and assessing their level of patient satisfaction?  Easy.  Patient satisfaction is not the goal in physical therapy.  Satisfied patients means that you have met an acceptable level of service, it was ok.  Satisfied patients won't necessarily return to your clinic for a future need when the doc writes the prescription to attend therapy at their office.  Satisfied patients won't necessarily refer friends and family to you.  Satisfaction is an easy thing to measure but won't really help your practice beyond what the research has told us.  For real answers, let's measure the more difficult construct-patient loyalty.  Stay tuned for part II.

Your thoughts?

Larry

The 60 Minutes Rule-Private Practice PT Special Edition

How would you like a rep from the CBS show to come to your private practice office with the following questions:

1. Tell me about your partnership with the local orthopedist who is 12 miles away?

We have a deal that when they send me a patient, I get a percent of what the doc collects.

2. What the doc collects for you seeing the patient at your location?

Yes, we are a franchise operator for a big time company that says it is fair market value and legal.

3. What if the doc group doesn't collect anything for you seeing their patient?

I don't get a nickel.

4. Even though you had to see the patients and had cost involved?

That is correct. Aren't I lucky to have an exclusive franchise.

5. How is this legal?

Because it is fair market value and my franchise is protected and the group that I bought this franchise from has an attorney that says it is legal.

6. It is fair market value to collect zero dollars?

Well, there are patients that I often see that I don't get anything.

7.  What does the referring physician get out of it?

They get a percent, but since we don't do it with medicare patients it is legal.

8. What do they get a percent for?

It's their patients and they do the billing which saves us about 9% since that is our cost of billing. We pay them more than 10% though but the group that I bought the franchise says that I am paying them fair market rate and that it is legal.

9.  Does the physician have any risk?

Well, no but it stops them from having their own clinic and not sending me any patients.

10. How did you hear about such a great opportunity?

From some marketing that made me very nervous and made it sound like all private practices were partnering with orthopedists so that they can stay in business.  I get an exclusive territory and the contract is between me and the docs and I only have to give the company 5% of what I get.  If I didn't act in response to their email, I probably would be out of business.

11.  Does the company that you bought the franchise from and that gets the 5% have any legal liability on this?

I am a PT in private practice, not a lawyer but they have a lawyer though that says it is legal. The contract is between me and the physicians-isn't that great?  It's a good thing you don't have to be smart to be in private practice PT or else I would have gone out of business years ago.  I am thankful that so many good deals like this have come my way.

Have you heard of a Ponzi scheme or of Bernie Madoff?

larry@physicaltherapist.com

Orthopaedic Surgeons Accused of Medicare Fraud

Interesting article in yesterday's Chicago Tribune about a lawsuit regarding a group of orthopaedic surgeons at Rush University Medical Center who have been named in a lawsuit accusing them of Medicare fraud by overbooking surgery schedules with unsupervised resident labor. Will be interesting to see how this shakes out but apparently a whistleblower case rather than an investigation initiated by Medicare.

John

Interesting PT Comic in the Philadelphia Inquirer

This comic appeared in last week's Philadelphia Inquirer (George, thanks for sending).

Several different angles to this interpretation. What say you?

John

Musings about Clinical Prediction Rules

Taking a mild break from blogging as I try to sift thru and deal with CMS' latest proposals to try and reduce physical therapy payments to about double the current minimum wage.  Am reposting some of our very early posts-this one from 25 April 2005.  

I have been reading with great interest the posts which I believe correctly identify many of the issues we have within our profession from a public policy and research standpoint (e.g. the "commoditization" of PT and problems created by the variability in practice).  It is worth noting the great work that many of this blog's authors have done in clincal prediction rules (CPR) and I believe that we must continue to develop more which would greatly decrease the variability in practice.  CPR's work by directing us to a few directions which lead to the best results.  Counter-intuitively, less information can lead to better conclusions and better interventions.  There is some interesting references to this in some recent non-medical books as well as history.

National Physical Therapy News Month

The last several days there has been several news items impacting physical therapists:

-we had over a drop of 21% in Medicare with claims withheld and then another temporary fix thru Nov which resulted in a 2.2% increase

-Medpac  released a significant report telling us what we already know-physicians overutilize PT services when they are "in office ancillary".

-MD/PT partners in an email style that is a combination of Publisher's Clearinghouse, Ronco, and Shamwow released their response to Medpac data assuring their current and future clientele that regardless of any changes in law that their will be some type of  legal "work around" for private practices to "partner" (share in revenue) with referring physicians (but of course any legal agreements and potential liability, fraud and abuse  are between you and the doc group we only get a percent of what you get plus of course a "franchise" type of fee that protects your territory for this million dollar original idea that we gave you)

-APTA HOD passed the obvious: Physical Therapists shall have control over all clinical decisions relating to physical therapy.PT's in business relationships should be the exclusive decision makers.  While this would imply to me that this extends to the business relationship of "insurance contracts" and thus support the notion that physical therapy is provided by a physical therapist acting within their licensure, RC 15 which was written with this intent in mind was appropriately withdrawn (language inconsistent with intent).  Hopefully next year, we will have real "alignment"-with all APTA positions, etc. etc. supporting PT's as the exclusive provider which would should rid any trend at  promoting of medicare rules as "the way".

-CMS also released some interesting news on upcoming changes:

On June 25, 2010 the Centers for Medicare & Medicaid Services (CMS) issued the proposed physician fee schedule rule that would implement key provisions of the Patient Protection and Affordable Care Act of 2010 and update payment rates under the physician fee schedule for services furnished on or after January 1, 2011 (CY 2011). If this rule becomes effective, physicians, physical therapists and other health care professionals would receive a 6.1% cut to their Medicare payments starting January 1, 2011 in addition to the 21.3% reduction that has been delayed several times already this year due to the flawed Sustainable Growth Rate (SGR) formula. This reduction was replaced with a 2.2% update until November 30, 2010 when the President signed the “Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010” on Friday, June 25^th.

In addition to the projected reductions due to the SGR, CMS also proposes a multiple procedure payment reduction policy (MPPR) that would result in significant reductions in payment for outpatient therapy services. Specifically, CMS proposes to make full payment for the therapy service or unit with the highest practice expense value and payment of 50 percent of the practice expense component for the second and subsequent procedures or units of the service furnished during the same day for the same patient. The work and malpractice components of the therapy service payment would not be reduced. The proposed multiple procedure payment reduction policy would apply to both the services paid under the physician fee schedule (PFS) that are furnished in the office setting and those services paid at the PFS rates that are furnished by outpatient hospitals, home health agencies (Part B), skilled nursing facilities (Part B), comprehensive rehabilitation facilities, and other entities that are paid by Medicare for outpatient therapy services. It is estimated that if the multiple procedure payment reduction policy were implemented, payment for outpatient therapy services would be reduced by approximately 13% in addition to the projected SGR payment cut for CY 2011.



In other words, don't get to slap happy with a temporary 2.2% increase as we are coming down on you in more than one way beginning Jan 2011 including a "cascade" phenomenon-decreasing subsequent CPT codes after the first one which might cause a 13% reduction in addition to a 6.1% (can you say "health care reform") plus the 21.3% SGR.    (side note: another blog post for another time but history has a way of recurring here with the cascade ploy as many states in work comp have successfully fought and won in reversing this illogical attempt to cut fees).

Our history with CMS demonstrates why we need the physical therapist as the exclusive provider.  While on the surface, this would appear obvious-am quite sure physicians don't have a position that says "medicine should only be provided by a doctor, nurse, or midlevel practitioner'" our profession pushed CMS that only PT and PTA's can provide "physical therapy" which resulted in CMS being the only major payor that restricts PT from practicing within their scope of practice.  Ironically, many physical therapy state boards thru unfounded and puritanical nearsightedness have attempted and in some cases succeeded in opening up state practice acts and aligning CMS's explicit list.  LET THIS BE THE CASE STUDY OF WHY YOU SHOULD NEVER DO THIS.

This blog has been saying for years that it is a myth that "medicare is one of our best payors".  You cannot consider payment policy outside of their contractual language and regulations.  CMS has the most nitpick restrictions, enhanced compliance liability, documentation requirements, etc. etc. etc.  Most practices that I know spend significant resources and dollars on yearly training, auditing, and testing on medicare rules and such.  When you add the cost of this plus the cost of not allowing a PT to delegate or direct within their practice act, CMS actually ranks amongst the worst sources in payment.  When you now factor in the imminent reimbursement drop coupled with undoubtedly even more regulatory constraint, I can't imagine an environment where it will be viable to see medicare patients down the road without significant drop in PT salaries (PTA salaries will essentially be the same as PT's under this scenario since they are looked at by CMS as the same).    For those of you who still buy into medicare's rules, how would you like your salary tied to their policy and reimbursement? Unfortunately, the saddest impact will be to the growing roster of medicare patients-longer waiting times, possible "undertreatment", and a growing list of PT's who simply will opt out of seeing them altogether.

While there is debate and divisiveness on aligning APTA's governance in its positions this is something that needs to be done sooner rather than later and we should greatly support such efforts as long as they simplify the message-physical therapy is indeed exclusively provided by a physical therapist within their scope of practice.

 

Larry@physicaltherapist.com

This blog post is a product of my own conclusions-my opinion and does not reflect any associates, friends, or acquaintances of mine!

What is the Difference Between a Physical Therapist and a Physical Therapist Assistant?

Many of the EIM community are thankful the recent PTA RC before the House of Delegates (which was discussed with great fervor and passion here) did not pass. Whew...we can maintain our membership in APTA and have some hope that APTA represents the interests of physical therapists, who presumably are distinct from PTAs, at least depending on who you ask.

Regardless, lest we rest on our laurels, this RC will surely be back next year given the relatively close vote. Adding to my lack of certainty that we will not revisit the same ridiculous RC with even more fervor next year was this disturbing email newsletter that I just received from the Pennsylvania State Board of Physical Therapy, one of the states in which I am licensed as a PT.

The headline article of the newsletter read, "What is the Difference Between a Physical Therapist and a Physical Therapist Assistant?" I promise I am not making this up and have included an image of the newsletter here for proof (happy to email the .pdf of the full article to anyone who wants it).

 

Bear in mind this is a newsletter intended for licensed PTs in Pennsylvania, not the public (where the question remains absurd but at least less so)! We know we have a problem when we're providing ourselves clarifying details and distinctions between the PT and PTA. Just think about the absurdity of sending this sort of information to licensed PTs. Can you imagine the AMA or a state physician licensure board sending an article in a newsletter to its members with the title "What is the Difference Between a Doctor and a Nurse?" Is there any wonder the public and payers (particularly Medicare where care provided by a PTA is reimbursed the same as a PT given the inability to delegate to other care extenders under MC even when state practice acts permit it).

Bottom line, the RC defeat is perhaps a temporary success, but we are far from out of the woods until we first understand who we are. Do you know what profession you belong to and how you're differentiated. Apparently physical therapists in Pennsylvania struggle with it. What say you?

John