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The Dirty Truth About Insurance Plans and PT

Rehab therapists view insurance payers as one of the top barriers to patient care. But, are they really the enemy? Learn more here.

Kylie McKee
5 min read
August 14, 2018
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“I love insurance payers!” If you were to compile a list of phrases that physical therapists are least likely to say, I’m betting that one would be somewhere near the top. And this sentiment certainly isn’t unwarranted. After all, payers—both commercial and federal—are notoriously difficult to work with.

On top of that, they often make it especially difficult for beneficiaries to access rehab therapy services. In fact, when we conducted our recent State of Rehab Therapy industry survey, we found that across all disciplines, rehab therapy professionals cited insurance requirements as the top barrier to patients accessing care on a direct access basis—and it remained the top barrier regardless of the level of direct access available in any particular state. Survey respondents also reported that government and other third-party (i.e., insurance) regulations—along with higher patient deductibles and patient financial responsibility—were the first- and second-biggest barriers to providing effective patient care.

Creating a Costly Conundrum

Of course, rehab therapy providers have been dealing with dwindling payer reimbursements for years, but the recent shift in patient financial burden is making it even tougher for therapy clinics to stay afloat—especially those that rely heavily on third-party reimbursements. According to the National Conference of State Legislatures, “annual premiums reached $18,764 for 2017, up 3 percent from 2015 for an average family coverage with workers on average paying $5,714 towards the cost of their coverage.” And that’s just employees with employer-based health insurance. For those purchasing private-market insurance in 2018, “the average increase with subsidies was $201.” To add insult to injury (sometimes literally), those rate hikes have largely happened without commensurate expansions in coverage—specifically for rehab therapy services. So, many plans end up discouraging patients from seeking rehab therapy care due to the high out-of-pocket cost. As a result, this makes it harder for patients with neuromusculoskeletal conditions to achieve optimal care outcomes—which ultimately leads to poorer overall health.

Finding Common Ground

With all of that said, it’s no wonder healthcare providers and consumers often point to insurance companies as the “big evil” clogging up the entire healthcare system. But here’s the great irony in that stereotype: insurance payers exist to provide beneficiaries with access to safe, quality care. (We know this because of the often arduous credentialing processes that help ensure payers contract with providers who meet their standards.) And that means ultimately, payers and providers want the same thing: to help patients achieve optimal health outcomes and avoid dangerous, costly treatment that could result in further complications down the road. And while it’s easy to dismiss this all as a cash grab on the payer end, the reality is there are a lot of complicated contributing factors to the skyrocketing cost of health care. So, here’s the real question: why aren't insurance payers making therapy services more accessible—despite the overwhelming evidence that physical therapy is both clinically effective and cost-efficient?

Hanging in Specialist Limbo

Part of the problem is the manner in which insurance payers categorize physical therapists. As WebPT’s Brooke Andrus explains in this post, “Physical therapists typically fall into the specialist category, and on the surface, that designation makes sense. After all, PTs specialize in the treatment of musculoskeletal conditions. The problem is that insurance plans often require beneficiaries to contribute higher copayments for specialized care.” Unfortunately, that problem has only gotten worse.

That’s because—in an effort to keep patient insurance premiums low—insurance companies have shifted a greater portion of the treatment cost to the patient. As a result, copays have steadily increased. As physical therapist Jill Murphy explains in this article, “In some cases, the consumer actually pays more than what the therapy provider is actually reimbursed, paying in excess of 100 percent of the cost of care.”

PTs aren’t typical specialists.

Generally speaking, patients see specialists under a very specific set of circumstances—often only a few times a year, which makes it easier for those patients to justify the financial burden of a large copay. Physical therapy patients, however, typically attend multiple sessions a week for an extended period of time, making that expenditure a lot harder to swallow. On top of that, PT is a specialty in which patients typically must pay a copay for every visit, whereas many other specialties require a single hefty copay at the start of care that covers the cost for all subsequent visits.

As Matt Hyland, PT, PhD, MPA, CSCS, points out in this article for PT in Motion, “You'd be referred to an orthopedist by your general practitioners—maybe you needed surgery or maybe you didn't—and you'd pay the higher copay. All of your follow-up visits were covered under that single copay. Well, with physical therapy they not only charge the higher copay, they also do it every single time you come in.”

Lacking Data

Of course, the other roadblock is an overall lack of data. Numerous existing studies speak to the effectiveness of physical therapy in treating everything from chronic pain to cardiovascular diseases. Furthermore, compared to traditional care routes like surgery and prescription meds, PT is a considerably more cost-effective (and safer) option for managing these conditions. So, logic would suggest that insurance payers would be hopping aboard the PT train in droves.

And yet, that’s still not happening. A big part of the reason why could be that—despite the research—the only proprietary data that payers have access to is information on service utilization and cost. In other words, there isn’t much in the way of outcomes data collection on the payer end. But, that’s not entirely for lack of trying: Medicare (along with a few commercial payers) have used functional limitation reporting as a way to collect data on the effectiveness of therapy services—and inform reimbursement changes. However, as WebPT’s Brooke Andrus reported here, CMS recently proposed to end the FLR program in 2019, as the agency “‘reviewed and analyzed the [FLR] data internally but did not find them particularly useful in considering how to reform payment for therapy services as an alternative to the therapy caps.’”

Clearly, there is still a great need for payer visibility into therapy provider outcomes, and as Heidi Jannenga, PT, DPT, ATC, WebPT’s president and co-founder, wrote here, therapists must “take matters into our own hands” by “adding the same data-tracking to-do to our individual lists.” In other words, it’s up to therapy providers to deliver the data that shows the entire healthcare world—payers and patients alike—just how valuable they are.

Taking the Next Steps

So, where do we go from here? How can rehab therapists advocate for themselves when it comes to payment reform? Are insurance companies really the enemy? After all, as I mentioned above, providers and payers appear to want the same thing. So, how can they find that common ground? To start, you, as a therapy provider or advocate, can:

  • Be part of the APTA’s efforts to limit copays (and get involved with the APTA Action Center); and
  • Call or write to the legislative powers that be and give them your perspective as someone who is actually in the trenches.

As overwhelming as advocacy seems, efforts to limit copay amounts and/or remove rehab therapists from the specialist designation have met with success in several states, including:

  • Kentucky,
  • Arkansas,
  • Connecticut,
  • Missouri, and
  • South Dakota.

You can also begin tracking your own outcomes data and using it as leverage during payer contract negotiations and renegotiations. If you can present data proving the effectiveness of your care, it’ll become one of your biggest bargaining chips to obtain a better payment rates. Furthermore, these provider-level interactions represent the therapy industry’s first step toward fostering a positive partnership with insurance payers—instead of continuing to be at odds.

The fact is, insurance companies have a pretty negative rep on both the patient and provider ends. That’s certainly not without just cause. After all, they’re the ones who control the cost and reimbursement rates, right? But, there are definitely things providers can start doing right now to change payer perceptions of PT. All it takes is a little cooperation.


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