While out in the world of PT-mostly private practice, I am seeing opposite trends that on the surface of things have entirely opposite outcomes. I thought I would devote a few blog posts to them.
Trend/Counter trend #1:
Not Taking contracts below fee schedule for private insurance and taking contracts below fee schedule in worker’s comp
I have been around private practice to know the predictably irrational, genetically coded peace corps gene coupled with an unhealthy inability to say “no” has been the ruin of many PT practices. Many PT clinics simply accept any contract offering based on the kneejerk emotional reaction that it is saying “no” to patients that need it and that physicians will get mad if we don’t take all insurances. Others simply won’t say no, because of the “promise” of higher volume by the payor or network. Fortunately, we have enough time at this to know that both are faulty premises the PT practice. Physicians and ultimately patients know the long-term repercussions from seeing patients below your cost (see bankrupt airlines, internet companies, and Circuit City by way of examples).
The more sophisticated and thriving PT practices/clinics/companies are seeing their resolve pay off in this regard. They are trading volume for value and gaining better reputations, profitability, and quality by saying “no”. In fact, in some markets in the US, so many practices have said no to the $50 per visit gun to their heads that the payors have had to increase their reimbursement-imagine that!
Unfortunately, an opposite trend is occurring in worker’s comp. I call it the “Florida effect”. While undergoing massive changes in the last several years, Florida has a state work comp fee schedule that based on review is not unreasonable for private practices coming in above medicare. Except there’s already a market based on “limbo PT pricing” (how low can you go?). If you want to play in work comp, you have already been accustomed to taking huge discounts and allowing the Medrisk’s and Network Synergy Group’s of the world profit by your discount supplying an illusion to carriers that PT is being managed effectively. Erstwhile, MD practices who have PT are strong arming greater than fee schedule reimbursement in the same markets-because they can! While concerning under any reimbursement, in worker’s comp, a patient is much more likely to access PT and they have an entirely different benefit structure than non comp. PT has strong cost/benefit for return to work, prevention of further recordable injuries, and overall medical savings compared to the often counterparts of imaging, drugs, and surgery.
While I wouldn’t mind the Florida weather moving North often, I am seeing this reimbursement “effect” metastasizing into multiple states where the arbitragers of PT (those like the aforementioned who make money from the middle) are gaining market share. They start out with variations to the following scenario:
“We represent the retired Lumberjack’s Union and want to contract you to see our patients. We know you only supply the best PT and you can continue to see our patients if you would gladly accept our contracted rate at 30% below state fee schedule. Please fill out the standard form and if you fill it out within 72 hours we will even waive the $350 network enrollment fee. Thank you and have a nice day.”
Unfortunately, many are signing those agreements which can only cause havoc in the marketplace and begin the limbo dance. They claim to sign them because the rate is still “good”, “above medicare”, or “will get us all their patients”. Yes, we have heard this before. if you want to see the results of this, look at the number of PT clinics going out of business in Florida.
Just say “NO!”-the state fee schedules are there for a reason.
