The most expensive Medicare physical therapy patient in America received $114,799 in services in 2004.
By 2006, the most expensive Medicare physical therapy patient in America only cost $37,543.
The difference in 2006 vs. 2004 was the implementation of the 'per beneficiary caps' on outpatient rehabilitative services.
The chart header below reads 'Annual Per Beneficiary Payment Threshold Change Per Percentile' and it shows the amount of physical therapy received, in dollars, broken down by percentile.
The next chart is the same data set, with the 100th percentile removed.
Notice how the chart scale shifts and the differences between 2006 vs. 2004 are made apparent.
These two charts are taken from data provided by the Outpatient Therapy Alternative Payment Study 2 (OTAPS 2)
The data for these charts is available in the OTAPS 2 report as Table 3.
I extracted and re-formatted the data as two separate charts to illustrate the impact of the 100th percentile cost outliers.
If these charts are too hard to read I have put them as PDF files at www.BulletproofPT.com.
Note how costs for physical therapy have fallen across the board.
The exceptions to falling costs are those patients whose costs are below the 50th percentile (median).
Their costs are rising.
At the 50% percentile costs increased at about the same rate of growth as the overall Medicare population (3.5%).
At the 25% percentile costs increased at double the rate of growth of the overall Medicare population.
At $227 per beneficiary per year Medicare can afford lots and and lots of physical therapy for these people.
At $37,543 per beneficiary per year Medicare can't afford much physical therapy.
The problem is this:
How can Medicare get physical therapy to those patients who need it most while preventing egregious cost outliers like in the first chart?
What to do?
Current legislation has the caps (and their exceptions process) in place until December 31st, 2009.
An alternative payment system is expected to replace the Medicare therapy cap within the next five years.
A pilot study will get underway in May 2009.
Current patients are facing hardships when their $1,810 physical therapy dollar limit is met.
Many physical therapists are uncomfortable appending the -kx modifier if they believe it raises the risk of a Medicare audit (it does).
Do the right thing
If your patient needs therapy and you can show they get better in a timely manner, do it.
If you are unsure or scared about how to document your findings then check out some of the free resources at www.BulletproofPT.com, your source for outpatient Medicare documentation and compliance knowledge.