Just back from a great experience with private practice brothers and sisters at the APTA’s Private Practice Section’s annual meeting which was in Orlando. Something about getting a bunch of depressed pessimistic people together then come out of it jacked up and more optimistic about our livelihood-a rather interesting phenomenon!
One item that has been highly publicized is the 2009 OIG work plan and identifying outpatient physical therapy services provided by Independent Therapists and the fact that these services will be reviewed to determine if they are in compliance with Medicare reimbursement regulations.
I say bring it on!
The fact of the matter is that if you have been following pretty standard compliance rules relative to treating patients that are “reasonable and necessary for the diagnosis and treatment of illness or injury or to improve the functioning of a malformed body member” than you have nothing to worry about. The work plan specifically mentions that they have identified claims for therapy services provided by independent physical therapists that were “not reasonable, medically necessary, or properly documented”. It is my humble opinion that this does occur in a minority of practices that generally ignore all compliance rules and that this sets up a clear dichotomy in the private practice world putting those that comply at a competitive disadvantage as all of these rules have hidden economic costs. In addition, a significant number of problems exist in nursing home medicare part B and that the OIG work plan will actually further differentiate between the two in future policy (ok, a reach) can only benefit us.
What has not been highly publicized in the PT world is the OIG’s work plan on two areas that are significant problems for the private practice world-provider based reimbursement and MD’s employed by hospitals.
Provider based status is a significant “growth” industry for hospitals whereby they claim this status for clinics and services that are separate from a hospital, both on and off campus. They receive much higher reimbursement as provider based and this can also increase co-insurance cost to medicare beneficiaries (probably the reason it is on the work plan). In physical therapy for example, let’s suppose a clinic that is a private practice is located 5 miles from a hospital and is an independent therapist-owned clinic. Let’s then suppose that it is acquired by a hospital. Miraculously the reimbursement will go up dramatically overnight! Apply that same thinking to MD practices and you see why hospitals are in the game of buying docs. A doc goes from one set of reimbursement (e.g. fee schedule) to quite another (provider based) thru the change of a federal ID number (oh and they have to make sure the name of the hospital is now on the building and there are some other very minor changes that they have to comply). The bottom line is that hospitals have seen this golden opportunity and the ability to apply for provider based status as a strategic move to add tons of money to their coffers and unfortunately patients pay more thru co-insurance. This same strategy is incorporated when these hospitals now “employ” specialists including orthopedic surgeons. The irony is that some years back the dramatically different fee schedules for medicare reimbursement were level set regardless of practice location. Unfortunately, this also opened the door to gain reimbursement thru the private insurance payors whose fees can be as much as 250% difference between medical fee schedule and provider based.
Alas! Per page 4 of the OIG work book, they are going to be reviewing both provider status rules and hospital ownership of physician practices. Maybe they will be on the same playing field as private practice one day. Let’s see if they can withstand the same scrutiny that we will get from their review of outpatient physical therapy claims.
Thoughts?
