Blog Post

Why PTs Must Stop Obsessing Over Reimbursement Rates

If you're more obsessed with payment than patients, it starts to show. Here's why obsessing over reimbursement rates can be detrimental.

Kylie McKee
5 min read
January 31, 2019
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They say the best things in life are free, but let’s not kid ourselves: if you want to keep a roof over your head and food on your table, money is pretty darn important. However, when your concern about a fair reimbursement rate crosses into obsession, your patients will perceive that, and it can seriously impact the way they view you—and physical therapists in general. If that weren’t reason enough to avoid obsessing over reimbursements, here’s some additional food for thought:

It’s hard to increase reimbursement rates.

Now, I’m not saying you shouldn’t do something just because it’s hard. But the fact is, you’ll rarely get the rates you want when you negotiate your payer contracts, so pouring all your efforts into increasing those rates may not be the most effective use of your time and brainpower. It’s exhausting, and it’s all too often for naught.

So, what’s a therapist—or therapy practice owner—to do? After all, to stay profitable, you have to pull in enough revenue. And if that’s simply not happening, you might need to think outside the box.

Alternative business models can be highly profitable.

Speaking of thinking outside the box, there’s more than one way to model your business. In fact, many PTs have ditched the standard practice model—which relies heavily on payer reimbursements for therapy services—and gotten creative with their offerings. Here are a few alternative business models PTs should consider:

Multidisciplinary Health and Wellness Teams

By design, this model in which PTs partner with physicians and/or non-physician health and wellness providers can improve the patient experience, increase satisfaction, and mitigate healthcare costs by keeping members of the patient’s care team all under one roof.

Concierge or Subscription Services

With concierge care, patients pay their PT a monthly or annual fee in exchange for immediate access to all service offerings. Not only is this a highly tailored mode of care, but it also helps patients avoid long wait times and costly copays. Plus, it provides reliable income for providers.

Gym Partnerships

Partnering with and operating out of a local gym is a popular alternative model—and for good reason. Not only is it financially smart to split the rent with a roommate—er, another tenant—but it’s also a great way for PTs to take advantage of direct access by attracting new patients without a physician’s referral.

Direct-to-Employer Arrangements

PTs know better than anyone the toll a desk job can take on a person’s physical well being. Fortunately, many progressive and forward-thinking employers are aware of this issue, too, and have taken steps to improve employees’ health by partnering with PTs. In this model, PTs are employed by (and often practice within) the business itself, and they are readily available to evaluate and treat employees—thus proactively improving health organization-wide and potentially keeping overall healthcare spending down.

Cash-Based Models

On the WebPT Blog, we beat the cash-based practice drum often. And while going entirely out of network may not be the right choice for your practice, the majority of PT clinics can benefit from offering cash-based wellness services to supplement payer reimbursements.

Fee-for-service payment systems are fading away.

Back in 2015, the US Department of Health and Human Services (HHS) announced its goal to:

  • Base 30% of all Medicare fee-for-service (FFS) on alternative payment models by the end of 2016; and
  • Increase that proportion to 50% by 2018.

This plan has been successful, with 34% of all Medicare claims in 2017 tied to alternative payment models and 25% of claims based on fee-for-service with a quality reporting element. CMS has yet to publicize its 2018 data, but one thing is for certain: alternative payment models are on the rise. And while change is scary, this could ultimately be a good thing for both your patients and your pocketbook, as your revenue potential may be less dependent on incremental rate increases.

Focusing on outcomes data can mitigate opioid use while increasing profitability.

This past October, President Trump signed the SUPPORT for Patients and Communities Act into law—a move the administration hopes will reduce opioid use by as much as a third. Many private sector businesses—including some of the largest insurance players in the game—have signed on to make their own contributions to battling this epidemic.

So, what does this have to do with reimbursement rates? Well, PTs have always known their treatment approach is an effective alternative to prescription opioids, but in light of recent research conducted by Boston University (which stated patients who sought PT first were 75% to 90% less likely to be exposed to opioids), payers are now aware of it, too. The outcome: One of the biggest payers in the insurance biz (UnitedHealthcare) is now creating PT-first pathways for pain patients, thus lowering healthcare spending and increasing awareness about PT as an alternative to opioid use.

Of course, that’s just one payer, and to really see sweeping changes, this data needs to be shared across the spectrum. And while reimbursement rates areimportant, renegotiating contracts and asking for more money isn’t the only way to see bigger payouts. Instead, PTs must leverage outcomes data and the urgency of the opioid epidemic to advocate for PT-first care paths—which could in turn increase the number of patients who access their services as well as boost the value of PT from the patient perspective.

So, money can’t buy you love, but it can buy you financial stability. If you’re constantly obsessing about reimbursement, though, your patients will sense that you’re more concerned with your bottom line than you are about them. Of course, that’s certainly not the case: your patients are the reason you do what you do, and it’s crucial that they never forget that. And if you pour all of your concern into your care delivery, they never will.


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