March is indeed a great month. Spring baseball, NCAA basketball (my UL Cards in final 4 as are my second favorite OSU), and we have a new Springsteen tour. What can possibly be more exciting? While it might be easy month to take our eyes off of healthcare, there just is too much other madness going on.
Medpac Madness: Coming in at over 400 pages, we have the March report to Congress. The MedPAC Commission is an independent congressional agency tasked to advise Congress on issues surrounding Medicare. They issue two reports or recommendations per year-March and June. While the main contents of the report encourage congress to abolish the SGR and replace it with statutory fee-schedules, there is also the recommendation which impacts SNF settings in regards to payments. More interesting from my standpoint, is the issue of making E&M codes equitable between hospital owned physicians and those that are in private practice. This payment discrepancy is one of the few in medicare where this lunacy exists. This of course plays into the bigger issue of provider based reimbursement and the ability of hospital owned physicians to extract greater rates from private insurers than independents. We shall see. While essentially no mention of outpatient physical therapy, there is the disclosure that the Medicare fee for services spent $62 billion under the physician fee schedule (including other clinicians like physical therapists) and this total accounted for 12 percent of total medicare spending. A very educated guess of outpatient PT (based on prior Medicare data) is roughly 4 billion which makes us roughly 15.5% of the fee schedule spending or roughly 1.86% of total medicare spending. I think we all would agree that the rules, regulations, and implementation of reductions like MPPR for 1.86% of spending is indeed maddening.
Margin Madness: On the heels of the two year anniversary of ObamaCare, we have justices debating the merits of the individual mandate provision. While this is certainly worth debating, it further distracts from perhaps the most interesting unintended consequence of the bill itself and that is that the nation’s major health insurers are barreling into the third year of record profits! Weren’t insurance companies fighting this bill? Without question, the move to high deductible plans (erstwhile insurance companies charging double digit increases) and higher copays has impacted utilization all to the benefit of the insurers profits.
Merger Madness: In what should have been more publicized in the private practice physical therapy world is the announced merger between Align Network and Universal SmartComp both of whom sole existence is physical therapy provider network by signing up practices that agree to their severe discounting. The merged company will take the name Align and while there is sure to be substantive overlap be aware that the person that just called your clinic will likely be calling back offering you (or demanding) further discounting (after all Align has the major contract with the US Postal System). There are some philosophical differences between the two that will have to be worked out. One is simply a repricing company (SmartComp) and Align attempts to add value through some efforts in steerage and scheduling of patients. Unfortunately, they define quality as less visits and often pit providers reimbursements against one another by showing how one provider has less visits than another and of course this makes us all mad.
Management Madness: Ran across this article entitled The Overlicensed Society in HBR which specifically gets to the heart of the problem of licensing. It specifically mentions physical therapists and makes the point that adequate and more cost effective healthcare can be performed by extenders. The author encourages businesses to side…… with consumer groups to remove barriers to alternative, cheaper providers in law and other fields where costs for consumers are raised unnecessarily.
Money Madness: I was shown 2 letters recently from private payers to physician offices. As payers position themselves for on-going fights with hospitals creating ACO’s (which are formed to extract higher rates from payers not save costs), they are investing back into the provider business including acquisition of surgical centers, urgent care, and imaging centers. In a bit of a rebranding, they are also investing in consumer oriented services in an effort to make patients believe that they are an advocate for their health. The 2 letters from amongst the largest payers, basically encouraged physicians not to send patients to the more expensive hospital for physical therapy because with high deductible plans, their out of pocket costs would be much greater than if the patient was seen elsewhere. This might be some good news for private practice who will in part need to market their pricing advantage over institutional and in some markets corporate players.
Money Madness II: Several groups including EIM have come together to provide complete funding to the Foundation for Physical Therapy research study on the influence of physical therapy referral characteristics and practices on quality, cost effectiveness, and utilization patterns. Read the press release here.
Thoughts on madness?
@physicaltherapy
