Thank you, Chuck, for presenting such detailed information on the Multiple Procedure Payment Reduction (MPPR) changes. My biggest takeaway from Chuck’s post is that, now more than ever, clinic owners must focus on practice management and truly pay attention to their business. Understanding the metrics of your practice is crucial in this age of declining reimbursements and frequent regulatory changes. There are three crucial metrics that I think come into play when assessing MPPR’s impact on your clinic:
1. Clinic cost per visit: This is your cost of doing business. What does it cost you per patient visit to run your clinic (with all expenses divided by the number of patients you see per day)? If you then add in whatever profit margin you would like your practice to make, your total will equal the minimum revenue per patient visit that your practice can sustain. If you accept insurance payments that are less than this amount, you will essentially lose money on each visit or cut into your profit margin.
2. Net revenue per visit: This is the average dollar amount per patient visit that you receive in reimbursement from each insurance. The clinic average is the average dollar amount per patient visit that you receive across all of your insurances. Make sure that your net revenue per visit for each insurance that you accept is above the clinic cost per visit. Essentially, you want to bring in more money than you spend. Consider your average Medicare visit reimbursement with MPPR: is it higher than your cost per visit? If not, then you’ll need to make adjustments to bring your cost per visit down. If yes, then MPPR may have only minimal impact on your overall business (pending the next factor).
3. Payer Mix: This refers to the percentage breakdown of all of your business’s revenue streams. As Chuck stated in his blog post, you must consider “the percentage of Medicare patients in your practice.” To determine your Medicare payer mix percentage, divide your clinic’s monthly Medicare income by its total monthly income. The result will help you determine the degree of MPPR’s impact on your clinic and how you should respond.
Once you’ve established your clinic’s percentage of Medicare patients, calculate your net revenue per Medicare visit and compare this number to your clinic’s average net revenue per visit. Is Medicare one of your highest payers? Using an MPPR calculator—which will be available within WebPT soon—calculate what your average net loss per visit will be if you continue to treat as you do today. Let’s say that based on your calculations, you’re going to take a $9 hit per hour visit for Medicare patients. If Medicare is one of your highest payers and taking that hit still allows you to make a profit, then perhaps a $9 hit per visit is manageable. But if that hit brings your revenue per visit below your cost per visit, then you should start thinking critically about how to manage the loss in revenue.
How can you make the decrease in payment more manageable?
1.) Diversify your payer mix and referring physician list.
- Don’t put all your eggs in one basket. With regulatory changes and reduced fee schedules, if you rely on only on one insurance or physician for the bulk of your revenue, you’re putting yourself at risk.
- Beef up your marketing efforts to attract different demographics.
2.) Explore adding a PTA to your practice (if you treat a large Medicare population).
- As a therapist, use your one-on-one time with patients wisely—and as efficiently as possible. Then, allow a PTA to handle the rest of the time with a patient. This can reduce your cost per Medicare visit and allow you to see more patients.
3.) Modify your current average patient visit duration.
- Per Chuck’s advice, try the 30-minute model and apply the group therapy code. This is a good idea, especially if you’re going to the PT/PTA model. With MPPR, the more units you bill, the less you’ll receive on every CPT code beyond the first two. The group therapy code (97150) is an untimed, low-paying code. Thus, you can use it effectively during a PTA’s supervised time with patients. Just double check your region regarding use of 97150.
4.) Spend time educating your patients about these changes and the effects that they have on your business. Motivate them to be advocates of physical therapy.
- Provide pre-written letters addressed to the congressional representatives in your area that patients can sign and mail.
- Voice your opinion and story in social media so the public can see the damage that these changes are causing in rehab therapy practices across the nation.
5.) Cut your expenses.
- You don’t always have to go straight to salary or benefit cuts. Perhaps you can reduce office supply purchases or usage or change clinical product suppliers.
The ultimate point of my above advice is that yes, MPPR stinks, and we don’t deserve the cuts, but all of us can and must manage these MPPR changes to survive. Don’t just look at these changes, get nervous, and decide instinctively to turn away Medicare patients. Look at your business; assess the numbers. Then, develop a feasible plan—emphasis on feasible—because over the next 17 years, 10,000 baby boomers a day will turn 65. Can you really afford to miss out on this business opportunity? Should your business really turn away Medicare altogether? In the grand scheme of things, a decrease of a few dollars per visit is far more manageable than no revenue at all. Even more importantly, though, don’t turn your back on so many patients in need of quality care. Your competition certainly won’t.
Harness your frustration and get more involved in your state and local APTA chapters. Take to your local and online communities and get the word out about the value of physical therapy (PT), occupational therapy (OT), and speech-language pathology (SLP). In the meantime, keep your heads held high, put in the effort, and manage your practices in ways that best minimize the effects of these changes. After all, these changes are here. Let’s face them head-on.