Ever since the federal government got the ball rolling on healthcare reform legislation—a.k.a. the Affordable Care Act—it’s been a hot topic of conversation among providers and consumers alike. For the last few years, discussions about the effects of the new healthcare law were purely speculative; but now that the ACA go-live date has come and gone, a clearer picture of its impact—particularly in the realm of outpatient physical therapy—is starting to emerge. Here’s a breakdown of how the new healthcare law is affecting therapists:
1. More people than ever are eligible to receive covered therapy services.
As you know, the ACA is an incredibly dense, incredibly complicated piece of legislation. To give you the Reader’s Digest version, the new law resulted in the creation of the Health Insurance Marketplace, which offers multiple coverage options, some with name-brand labels. The markets, which are meant to fill holes in the system that have prevented some Americans from acquiring insurance in the past, are run on either a state or federal level depending on your state of residence. Each plan is different, but all of the plans—even the most basic ones—feature the same set of “essential health benefits.” These benefits include coverage for things like emergency services, hospitalization, maternity and newborn care, and prescription drugs. But the “essential health benefits” umbrella also extends to things like preventative and wellness services, chronic disease management, and rehabilitative and habilitative services and devices—including physical therapy.
2. Many therapists are seeing more patients per day.
As more consumers acquire coverage, the demand for covered services—including physical therapy—will only continue to rise. Furthermore, as this article points out, “The new health reform law takes an aggressive approach to prevention.” As such, physical therapy and other cost-effective preventative and rehabilitative treatment options likely will increase in popularity compared to more expensive options like surgery. But increased demand isn’t the only factor leading therapists to stuff their schedules with more patient appointments than ever before; as this article explains, decreases in payment also are to blame: “In the face of looming cuts in reimbursement, healthcare providers are asking their clinicians to see more patients each day,” which brings us to ACA effect number-three.
3. Rehab therapists are seeing declining reimbursements.
One of the driving forces behind the Affordable Care Act was the rally to expand health coverage to every American. At the same time, lawmakers sought to reduce overall healthcare costs. But to accomplish both of these objectives, something had to give—and in many cases, that something was reimbursements. As Sheree DiBiase, PT, writes in this opinion piece, “These changes have been felt in our physical therapy rehabilitation world already this year. We have seen a reduction in visits allowed for our consumers, a reduction in reimbursement of up to 20-40% per visit, and consolidation of insurance carriers who are controlling the rate of this reimbursement like never before.” This is why, from a clinic management perspective, it is absolutely crucial that providers remain diligent in verifying the details of each patient’s therapy coverage before providing services. Many Marketplace plans do not provide out-of-network benefits, and most have a modified fee schedule with lower reimbursements. In fact, according to WebPT Billing Success Manager Elizabeth Warren, “In our findings, we are seeing reimbursements that were not typical. [CPT code] 97140 allowed as low as $7.83 to $9.16 per unit, with total visit reimbursement at around $55.” As a result, some therapy providers are making up for revenue shortfalls—and thus, keeping the lights on in their clinics—by squeezing even more appointments into their already jam-packed schedules, as discussed in item number-two above.
Patients confused about what their insurance covers? Download the PT Patient’s Guide to Understanding Insurance to help make sure everyone’s on the same page—and you get paid.
4. It’s more expensive for clinic owners to provide health coverage to employees.
Post-ACA hikes in insurance premiums represent a budgetary hurdle that all small business owners—both inside and outside of the private practice therapy sector—must overcome. According to this Albuquerque Journal News article, the ACA includes provisions designed to “remake the small-group market.” In theory, the new law would put an end to wide variances in small group premiums, which often are tied to employers’ past medical claims or the health status of their employees. But the article goes on to suggest that this theory isn’t necessarily panning out for everyone, as some businesses with healthy workforces are still seeing insurance rate increases—some as high as 40%. Steve Alaniz, PT, is the CEO of one such business: Momentum Physical Therapy in San Antonio, Texas. As he writes in this opinion article, “Each year, our company requests bids for our health care insurance to get the best coverage for the lowest cost. This year, despite the fact our group used only 30 cents of health care for every dollar we spent on premiums, the best bid we got back was an 11% increase in premiums for similar coverage.”
5. There are clear—or at least clearer—skies ahead.
If all this talk about exploding insurance premiums and shrinking reimbursements is getting you down, remember that you’re not alone. The entire medical community is going through an adjustment period in the wake of the ACA, and as with any big change, there are bound to be a few bumps in the road. But the long-term outlook is much better—especially for physical therapists. In fact,this article states that PTs could actually see a wealth of new business opportunities, thanks to the ACA’s emphasis on prevention and wellness programs. Furthermore, the article suggests that PTs likely will become increasingly involved in patient care decisions, especially related to post-hospital-stay treatment plans. And that could go a long way toward achieving complete autonomy.
How has the ACA impacted your rehab therapy practice? What advice do you have for other clinic owners and managers? Share your thoughts in the comments section below.