How can we cut costs and improve outcomes in physical therapy?

Since cost-cutting in healthcare is in the news recently I wanted to offer the physical therapist in private practice (PTPP) perspective - each cost-cutting measure is accompanied by a 'plus' (yes) or a 'slash' (no) according to whether or not I expect it to achieve its intended effect:


Health Information Technology (HIT)/Electronic Medical Records (EMR)

Most physical therapists will see a short run cost increase - don't be fooled by the price tag! Most of your costs will come in the form of time (if you are a small private practice) or altered workflows (everybody).

My experience with my EMR (which I am happy with) is a 3-4 month ramp-up time to build templates, change workflows, train workers and buy the accessory technology required.

Note that I am the primary physical therapist (with 2 PTAs) in a small (3,200 sq. ft.) office with three other employees. My face-time with the computer (not the patient) has increased with the EMR.

Nevertheless, the long run benefit of HIT is irrefutable. We all recognize the promise of computerization. Improved efficiencies, access to patient information and reduced provider burden (paperwork).

My EMR is a client-server model - I own the computer and I license the software for an annual maintenance fee. I paid $4,800 last year and I've done away with $300 in monthly dictation costs. Unfortunately, my dictation time went from 4 minutes to over 10 minutes. The accessory technology (server, PC-to-Fax, voice recognition software, etc) was another $7-8,000. Annual costs are probably less than $2,000 for maintenance and upgrades.

Unfortunately, there is no promise for improved outcomes for physical therapists since we don't prescribe medications and don't routinely read diagnostic imaging tests.

The APTA's position statement on HIT takes the prosaic view that we just need to 'hang in there' until physical therapists realize the benefits of improved technology but for now, the short run, computers and electronic records are just one more cost on your expense sheet.



Evidence Based Medicine (EBM)

EBM promises to improve patient centered outcomes, similar to improvements in acute pneumonia in community settings and acute chest pain in hospital ER's.

Pneumonia and acute chest pain were subjected to Clinical Decision Rules and Critical Pathways in the 1990s that mandated certain decisions at certain points based on certain criteria.

These high-cost, common conditions are amenable to 'quality improvements' by identifying the 'low-risk' patients that can be better managed at home or in outpatient centers. This allocates the system resources to better care for the high risk patients.

We don't have the studies yet to say that EBM lowers costs in physical therapy but several derivation studies have improved individual clinicians' decision making.

As with pneumonia and acute chest pain, several Treatment Based Classification (TBC) rules can identify patients who will NOT respond to physical therapy interventions and whose care is better managed with other techniques.

EBM may improve PT service volume if primary care doctors follow clinical prediction rules designed to identify low risk patients and order fewer expensive imaging tests.



Malpractice Reform

Physical therapists' malpractice costs are already already low (~$1,250 yearly for three providers in one 3200 sq. ft. office) - little promise for any improvements in PT practice expense.

Again, fewer primary care physicians ordering unecessary defensive diagnostic imaging tests may drive up volume for independent physical therapy practices. Better access to X-ray, MRI and CAT scans seems to drive up the rate of back surgery. A recent study in the journal Health Affairs shows that first time back pain patients get more surgeries in areas of above average MRI concentration.

The more important reform in medical malpractice reform might be the ability to renew a quality focus on 'systems errors' - the type that kill 100,000 patient annually - rather than on individual error.

This 2006 study from the New England Journal of Medicine found that 54% of the costs in malpractice settlements went to lawyers and administrative fees.

Few of these errors are the result of a single 'bad doctor' but on a fragmented system that is better at tracking procedure codes than individual patient outcomes.



Bundled Episode of Care Payments

Bundled payments are already saving costs and improving outcomes in a Medicare pilot project in five states. Lower infection rates and reduced hospital readmissions are the key outcomes measures in this project.

Many private practices feel that since the acute care hospital is the 'banker' the private practices may get the shaft.

The October 27th USA Today featured a story on the Medicare pilot program where one orthopedic surgeon was optimistic on it's success.

The surgeon named, Dr. Yogesh Mittal, received a 25% bonus for referring more patients to the hospital, which turned around and generated a 'slight profit' on 120 orthopedic knee and hip patients and 295 cardiac patients in 2009.

The physical therapy clinic named, Redbud Physical Therapy, does not participate in bundled episode of care payments since the program is only open to inpatient hospitals in 2009.

Redbud PT participates in the standard Medicare Fee for Service payment structure that is the mainstay of physician and therapy practices around the nation.

Jeff Jankowski, PT, ATC, Clinical Director & President of the Oklahoma Physical Therapy Association expressed some concern with bundled episode of care payments regarding the private practice PT clinic,

"I just don't think there's enough information yet", he said.

Jeff, I think you're right.

The International Classification of Functioning, Disability and Health (ICF)


The new ICF alters the way providers think about rehabilitation and disability. The ICF takes physical therapists away from the (dysfunctional) medical model and casts health in a framework centered on the person and what they can do and what they are able to do.

The ICF is not revolutionary - it's evolutionary.

The ICF was adopted in May 2001 by the World Health Organization (WHO) and the APTA in June 2008 as a framework for measuring health and disability at both individual and population levels.

The ICF shifts the focus away from the pathology and puts our attention on the person.

"By shifting the focus from cause to impact it places all health conditions on an equal footing allowing them to be compared using a common metric – the ruler of health and disability.

Furthermore ICF takes into account the social aspects of disability and does not see disability only as a 'medical' or 'biological' dysfunction."

Placing physical therapists into the role of the primary rehabilitative decision maker is an added responsibility but also an opportunity.

This new emphasis may encourage physical therapists to make decisions like doctors.

Developing Outpatient Therapy Payment Alternatives

The new Medicare 17-page PT evaluation form with 8 pages on 'Provider Information' that contains nary a validated test or evidence-based predictor rule puts the lie to the assertion that any new alternative payment system will cut costs or improve outcomes - at least in a way that is obvious to those of us outside of Research Triangle International's Technical Expert Panel (TEP).

Outcomes from another 17-page PT evaluation form are already being collected by the home health physical therapy Outcome and Assessment Information Set (OASIS) in the form of 'per cent improved'. The outcomes are ranked by state .

Any alternative outpatient PT payment system will likely be a case rate (eg: $800 for 12 visits) with extra dollars for 'risk adjusted cases' that show up as outliers (eg: 20 visits instead of 12). How physical therapists identify these outliers initially will be important.

Probable risk factors for therapy outliers include:

• age,
• psychosocial variables (fear, anxiety, depression)
• prior surgeries,
• disability scores, etc

Measuring these risk factors could be a sustainable competitive advantage for therapists competing against other providers like physicians and athletic trainers. The problem with the new Medicare PT eval form is that it doesn't seem to emphasize these factors.

The promise of the alternative payment system will be to cut long run Medicare costs and improve outcomes by moving away from a Fee-for-Service based payment system.

Unfortunately, a 17-page PT eval is going to feel time a short-run time cost to most of us.

Can Evidence Based Medicine Save Physical Therapy From 'Skilled Therapy'?

Can powerful new tools used by physical therapists prevent a Medicare audit?

If you write in your note tests that predict the outcome of treatment could that note be exempt from a "partial denial of a therapy claim" that requires oodles of handwritten narrative "trumpeting clinicians' concerns"?


Rather than trumpeting your concern in writing wouldn't you prefer to spend time thinking about how to get your patient better?

What new ways could you think of to provide 'value' to America's struggling healthcare marketplace?

Sources of Value in Physical Therapy
Old	New
Osteokinematics	Manipulation predictor variables
Gait analysis	Gait Velocity measurements
Narrative descriptors of "assistance"	Self-report scales (eg: ABC test)
Falls history for predicting future falls risk	Testing specified populations with known pre-test probabilities of falling down using tests with known likelihood ratios
Pathology model	Biopsychosocial model
Physicians' diagnosis	Physical Therapy Diagnosis

Much as physicians inflate health care costs with defensive medicine so to are physical therapists forced to waste precious time, money and energy with defensive documentation. Most would agree that documentation doesn't add 'value' to healthcare.

Even if you get your patient better in a reasonable time frame using evidence based physical therapy Medicare can come in and retroactively snatch away your payment dollars if you haven't trumpeted your concern in your notes and charts that each and every intervention is 'skilled' - nevermind that no uniform definition of 'skilled therapy' exists.

Defensive Documentation and Defensive Medicine

The American Medical Association as gone on record saying it will support legislation aiming to shave costs on defensive medicine by providing immunity from lawsuits for physicians who practice evidence based medicine. Health and Human Services Department economists estimate America could save $60-108 billion per year with malpractice reform.

The Health Care OverUse Reform Today Act (HealthCOURT Act - H.R. 3372) contains language that provides immunity from lawsuits to physicians who practice evidence-based medicine. It's purpose is to

"...establish an affirmative defense in medical malpractice actions based on compliance with best practices guidelines"

The HealthCOURT Act may not make it out of committee but Democrats seem willing to trade some aspect of malpractice reform for passage of a larger health care reform package.

The Medical Group Management Association (MGMA) sent this letter to Congress in May 2009 outlining their position on the use of evidence based guidelines and malpractice reform:

"Allow use of evidence-based guidelines to provide mitigating protection in professional liability cases.

In some circumstances allow these guideless to offer immunity."

How does Defensive Medicine relate to "Skilled Therapy"?

Why did Medicare chose to use a 'skilled therapy' criteria to evaluate your notes and charts? Because they had no alternative source of value!

Today, in 2009, physical therapists create value by assigning patients to classification treatment groups based on the presence or absence of statistically determined predictor variables. Physical therapy evidence is much better today than it was 15-20 years ago when Medicare auditors first began scrutinizing PT charts and notes, en masse.

One of my blog readers asked me not long ago...

"If a physical therapist is performing the therapy then isn't it, by definition, skilled therapy?"

I wasn't sure whether I should cry or laugh at the innocence, the naiveté displayed by this statement.

Over 40% of PT charges are reported to lack documentation supporting 'skilled therapy' - the result is 'maintenance therapy' unbillable to Medicare or most third party payers.

Skilled therapy has been in the Medicare Manuals since at least 1988, according to my research. The enforcement of skilled therapy, however, by the self-appointed police of documentation, those ghosts of past PT professors professing to know, from your notes, the level of your intent, skill, intelligence, care and effort that went into getting your patient better has only emerged since the early part of the 21st century.

Skilled therapy emerged from skilled nursing facilities where many people went following an acute hospitalization. Medicare began in 1965 as a program for treating acute, short-term medical problems for which a cure could be expected. For those persons, with 2-5 chronic conditions like...

• congestive heart failure
• obstructive pulmonary disease
• diabetes
• hypertension
• mental disorders

...the costs are many times higher than average and the expected improvement is less than average.

Often, there is no 'cure' for these conditions so Medicare mandated 'skilled therapy' as a way to ensure that certified professionals provided services and that patient safety was maintained.

Skilled Therapy and 'Progress'

Progress, the "improvement standard" so often unattainable in skilled nursing, is required in outpatient physical therapy. Getting and keeping people living independently keeps them in the lowest cost healthcare setting in America, their homes.

Nevertheless, local contractors have been criticized for applying an "improvement standard" as a way to deny needed care and save money...

"...for certain services, such as outpatient therapy services, Medicare's policies impose improvement standards that are inconsistent with the statute.

The Medicare statute does not demand a showing of improvement to find services medically necessary or to cover treatment of an illness or an injury.

The statutory criterion for treatment of an illness or injury applies regardless of where the covered service is provided, be it in a skilled nursing facility, at home, or as an outpatient."

An improvement standard in outpatient therapy clinics is less problematic today than it was when those words were written (2003). Today, about 48% of physical therapists use outcome measures - most of those are probably self-report measures like the...

• OPTIMAL scale
• Oswestry scale
• Fear-Avoidance Beliefs scale
• Lower Extremity Functional scale
• Shoulder Pain and Disability scale

Self report measures are the the main component in computerized patient assessments designed to replace Medicare fee-for-service within the next five years. One of their benefits is their ability to show need (medical necessity) and progress (improvement).

But, skilled therapy remains problematic.

Today, the search for 'skilled therapy' in PT notes and charts is an arbitrary scavenger hunt - paying off for auditors in daily notes when the PT is tired, busy, brief or vague.

Why not use specific evidence-based criteria: numbers, valid tests & measures, standardized outcomes and daily measurements centered on patient function?

I recommend physical therapists trade our allegiance to our 'old' practice patterns, based on observation and experience, for 'new' evidence based predictive models in exchange for immunity from the scourge of skilled therapy denials in Medicare audits.