For the typical readers of this blog, please breath a sigh of relief. Physical Therapy to medicare patients delivered in a freestanding PT owned practice, outpatient rehab facility, and even the few CMS reported users still left billing “incident for service”, you are not the source of CMS therapy expenditure problems. While it is easy to get the impression that you are wearing the CMS “bulls eye” due to the overabundance of superimposed rules, regulations, plans of care, caps, and now RAC’s, one only has to look the recently released 2007 CMS rehabilitation data to find the real culprit (fully revealed after some background and data).
The report now by a different contractor than what was in the 2006 data and prior gives us all kinds of “fun facts to know and tell” in case you get stuck at a rehabilitation trivial pursuit party. You get spending breakdowns by setting, sex, age, and state. If you live in AK or ND, you will be glad to know that you are in the top 2 least costly states. What setting bills the highest percent of massage? That would be hospitals. Want to know how many PT providers per 1000 medicare part B enrollees? 5.73 if you live in Maryland and .28 in MN. Impressed yet? How about the big surprise that there are way more females getting PT than males?
Some good, some not so good, and some interesting tidbits about the 2007 report:
-According to medicare trustees report, overall spending increased 5.7% and Part B spending 6.3% from 2006 to 2007. The good news is that Part B PT increased slightly below 6.2% or about $190 Million to $3.2 billion. However, overall therapy costs increased 7.5% with OT and SLP bringing in double digit increases and an overall cost of about $4.2 billion. The change in dollars per user is probably the most useful reference point in that it adjusts of changes in patient volume from year to year. In this regard there were actually less number of PT users in 2007 from 2006 but cost per user increased 6.1% to $836 (well below the cap!). Unfortunately, there is an inflation of overall annual therapy cost per user of 7.9% which is above medicare inflation and is probably raising more than a little red flags to our medicare friends. Keep in mind that in the big picture of things about 2% of medicare outpatient spending is on therapy costs which makes you wonder why in the world they aren’t paying any attention to us in the first place.
-If you look at the CSC data from 2004 and compare it to 2007 RTI data, you will gain the perspective of the impact of various payment policies (e.g. 8 min rule, exclusive provider stuff, caps) and you will see that if the goal was to decrease spending on a per user basis, these rules worked with PT user from $864 in 2004 to $836 in 2007 for a reduction of 3.2% (not factoring inflation which would lower it more). In fact, in aggregate (PT, OT, SLP) per user is essentially unchanged between 2004 and 2007 despite significant increase in number of users and providers.
-The number of providers for physical therapist independent practice (PTPP) increase by about 2,500 from 2006 to 2007 but increased by 11,000 between 2004 and 2007 in all likely accounting for both MD practices billing as PTPP as well as growth in private practice MD’s billing PT “incident to service” went down again in 2007 with an aggregate loss of 21% since 2004. Hospital number of provider went down slightly between “06 and “07 and is down 8.4% since 2004.
-Hospitals market share of outpatient PT continues to erode. Anybody that really thinks being exempt from the cap is a competitive advantage for hospitals is hopefully not teaching any business courses.
While we can spend oodles of time on alternatives to the cap and other medicare nuisances, why not consider going after the obvious culprits of medicare spending? If data demonstrates that one particular setting is grossly over represented with spending amounts on a per user basis, wouldn’t it make sense to focus on that setting?
The obvious place to turn is skilled nursing (SNU). On a per user basis, the average case is double what it is for outpatient PT independent practice!! The per user spending for both therapy costs (and PT only as the data can be modeled) SNU is roughly $1720 per user versus $870 for PTPP! In fact, the reason for spending increases between 2006 and 2007 is clearly the increased use of more than one discipline-guess what setting that occurred most in? Is it reasonable to assume that patients seen for part B outpatient in a long term care facility are twice as severe as all others? The only rational data to support some cost difference is the age of the patient is greater in SNU, however should it be double and on average exceed the cap? While CORF is roughly the same on a per user basis, their overall number of users isn’t significant to factor into the overall analysis and CORF’s are being removed faster than auto clunkers. Why are all medicare outpatient settings suffering due to maldistribution by essentially one setting?
I don’t really believe that SNU cases should be anywhere near twice that of private practice. Are there reasons for this? Does the fact that many contractors most of whom are large players in the busines get paid a % of collections for part B? They aggressively contract against their competitors for part A SNU on a per minute basis. Do they expect to get it back on Part B thru co-treatment and overutilization? Do they have sophisticate systems for maximizing part B patients? Isn’t % of collections contracts in all other settings considered a conflict of interest?
If CMS is really serious about decreasing therapy costs, they would implement separate rules and alternatives to the cap with SNU than everybody else. Why isn’t this being discussed and debated at a greater level on a national basis? Is the long term care lobby, namely NASL that powerful politically?
Thoughts?