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5 Ways Value-Based Payment will Change the Face of Rehab Therapy

Value-based payment models are quickly becoming the new normal in health care—and they're going to change the face of rehab therapy in big ways.

Erica McDermott
5 min read
February 8, 2017
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As Greek philosopher Heraclitus observed long ago, “Change is the only constant in life.” And there may be no better quote to sum up life in health care. After all, everything is changing—all the time. It can certainly feel that way, at least: ICD-10, new eval codes, CJR, MACRA, MIPS—I could go on naming recent industry changes, but you get the idea. Today, we’re talking specifically about the shift toward value-based payment models. Before we dive into how this new model will change the face of rehab therapy, though, let’s cover some basic groundwork: like, what is value-based care? Well, according to the Centers for Medicare and Medicaid Services (CMS), “value-based programs reward health care providers with incentive payments for the quality of care they give to people with Medicare.” Medicare’s pay-for-performance initiatives are part of the agency’s “larger quality strategy to reform how health care is delivered and paid for.” Furthermore, these initiatives also support the Triple Aim’s objectives of improving care quality, increasing access, and lowering costs.

Now that we’re all one the same page, let’s talk about the top effects that the shift to value-based care will have on rehab therapists:

1. Payments will fluctuate depending on performance.

Whether you’re a veteran practitioner or a fresh DPT graduate, you’re most likely familiar with the traditional fee-for-service payment structure (i.e., you provide a service, bill for said service, and collect money for that service—regardless of the impact the service has on your patient’s well-being). That’s because for as long as most of us can remember, this is the way the healthcare industry has operated, whether you were charging your patient or your patient’s insurance company. Well, that won’t be the case for much longer, because as the US healthcare system continues gravitating toward a value-based healthcare paradigm, providers will receive payments based on how well their services—and their patients—perform. How might you go about demonstrating your performance, you ask? Good question. To do so effectively, you’ll need quality outcomes data, and that brings us right to number two.

2. Data collection requirements will increase.

We’ve been talking about the importance of outcomes data for a while now—specifically, about how the industry will benefit from a united data collection effort. And as WebPT’s Brooke Andrus discussed in this post, the call is only getting stronger, as financial incentives are becoming increasingly linked to performance. In fact, Andrus quotes one participant at this year’s Graham Sessions as saying, “Every Graham Session I’ve been to, we’ve talked about value and outcomes, but we’re still not together on it.” And “together” may very well be the key to the industry’s continued success. That’s why Andrus recommends these action items to “get your outcomes-tracking act together”:

  • Avoid solely using super-specific outcome measurement tools; instead, focus on incorporating a standardized set that can be used and understood by providers across the healthcare continuum. In other words, make sure the data you’re collecting is applicable outside the rehab therapy community.
  • Don’t wait to implement outcomes tracking until you need outcomes data to stay in business; start now, while there’s still time to adjust. Andrus quotes another Graham Sessions attendee as saying, “the providers who will be successful in the new payment environment will be ‘not just those that can adapt, but those who have adapted.’ After all, that attendee continued, therapists ‘can’t just flip the switch when the reimbursement changes.’”


3. Patients will have greater control over their health decisions.

There are several factors contributing to the change in the patient-provider dynamic, including  the rise of high-deductible health plans, which have placed the responsibility for the cost of care directly in patients’ laps. That, combined with the healthcare industry’s shift toward more patient-centered, holistic, value-based care—as well as the fact that healthcare information is so readily available online—means patients are now more invested and involved in their health decisions than ever before. According to Andrus, this has opened up a huge market opportunity for wellness services and technologies that rehab therapists are well-positioned to take advantage of. That being said, Andrus passed along a warning from a Graham Sessions attendee who urged therapists to think twice before diverting from what they do best, namely “restoring function in people with physical movement problems,” because providing services that people with less education can provide—think massage, personal training, or yoga—could devalue the profession.

4. Therapists will be required to work as part of collaborative care teams.

As WebPT President Heidi Jannenga explains in this Founder Letter, the shift toward more value-based care models—and thus, more patient-centric practices—will lead many clinicians to consider bringing on team members with different specialities (e.g., “metabolic specialists, dieticians, psychologists, massage therapists, and medical doctors”) in order to provide the very best all-around care for their patients. Other clinicians will be asked to join existing teams because their skill sets meet a particular patient need—and all of this will be “in the name of collaborative care.” After all, she continued, many collaborative care models are already “showing signs of success and gaining traction. And that’s no surprise because provider teams can approach patient treatment more holistically, thereby minimizing the patient’s chances of experiencing further injuries and conditions that would require future clinical intervention.”

In addition to being great for patients, these models are also extremely fruitful for rehab therapists, because it encourages them to “to take on a more relevant role in the treatment of population health issues such as diabetes, obesity, and heart disease,” Jannenga said. Furthermore, she explained, “it also helps us position ourselves to provide preventive care—as opposed to reactive intervention.” No matter how you look at it, it’s becoming increasingly difficult for providers of any discipline to operate independently. As Andrus suggested in this post, we all need to get off of our islands—and then encourage our peers to do the same. Collaboration—not competition—is the name of the new game.

5. Therapists will have to share financial risk with other providers as bundled payment programs become more common.

If you’re still feeling confused about the whole bundled payment thing, here’s a definition that might help clear things up: according to Andrus—citing this Association of Health Care Journalists (AHCJ) article—“a bundled payment model is one in which ‘an insurer sets a single price for all providers (physicians, hospital, and any post-acute providers) involved in doing a procedure or delivering an episode of care.’” In terms of efficiency, she said, “the idea is that because all of the providers involved in a particular episode of care must work under a single budget, they’re more inclined to work together to eliminate the provision of unnecessary services.” In other words, CMS believes that teamwork makes the dream work, which in this case means improving the quality of care while reducing costs.

Medicare’s Comprehensive Care for Joint Replacement (CJR) program is one of the first bundled payment models that is clearly applicable to rehab therapists—but it most definitely won’t be the last. Under CJR, hospitals are financially responsible for the quality and cost of an entire CJR episode—from admission to 90 days after discharge—including rehabilitation services. In most cases, hospitals may enter into financial agreements with rehab therapists in which the therapist takes on a portion of the hospital’s risk—or reward—depending on whether the hospital goes above or stays below CMS’s target price for each CJR episode.

Want to learn more about how the shift toward value-based payments will impact the profession in 2017? Join WebPT president and co-founder Dr. Heidi Jannenga and WebPT CEO Nancy Ham for a special report on the current and future healthcare trends that will affect your practice most. This free webinar will take place live on Friday, February 10, 2017 at 9:00 AM PST/12:00 PM EST. And if you can’t make it, register anyway; we’ll send you the recorded version within a week of the live event.

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