WSJ recently completed a series of articles (available for 7 days) on employer’s use of middlemen in their dealings with intermediaries to make sure they get the best bargain. The article points out both the advantage (potential cost savings) and disadvantages (middlemen making huge profits at the expense of their employer customer which in part makes up for the huge increases in health care premium).
One of the surest signs that the benefit of outpatient physical therapy is administered inconsistently, suffers from oversaturation, and is viewed by payors as a commodity is the rise in use of PT benefit managers by payor and employers (middlemen’s middleman-MM) and this is reeking havoc on rates for physical therapy centers.
Traditionally, benefit managers are used when services truly are a commodity (pharmacy, DME, lab). If you have ever gotten a letter stating that you are now being paid on a per visit or case rate, you are most likely in the hands of a MM. ACN is one such but there are others including Network Synergy (heavy in work comp) and Orthonet. Purely based on feedback from providers, they appear to me to be almost universally hated. The sad reality is that I believe the use of MM in PT will grow. They will be successful as long as PT’s are willing to take rates at below their costs (taking advantage of oversaturation), be compliant with overly meddlesome pre-certification requirements (MM make their money off of lopping off visits and love it when these burdensome pre-certs aren’t performed), and take case rates without regard to the patient’s individual diagnoses but rather have it “wrapped” within some larger diagnostic category. To my knowledge, none of the MM in PT actually have engaged EBP as a standard.
One of the motivations of EIM, MyPhysicalTherapySpace.com, and this blog is to promote the use of the Internet to help create transparency in the PT world. As the article points out, disintermediation has occurred in most industries but it has not in medicine (by way of example, pharma benefit manager’s made 1.9 billion in profits last year). Although middlemen serve a role in some industries (e.g. banking), the only thing it will do in PT is reduce our rates. This is indeed scary.
A future post will deal with some potential solutions to this but in the meantime, please post your experience and thoughts on this very timely topic.
Larry
