MedPAC Report Fails to Sway Congressmen

The Congress prefers not to give up its power over Medicare reimbursement even though its main advisory authority - the Medicare Payment Advisory Commission (MedPAC) - has asked it to 'loosen the reins' a little bit to allow Medicare to save money and provide better care for American citizens.

In a presentation June 23rd, 2010, MedPAC Chairman Glenn M. Hackbarth, J.D. delivered its new report Aligning Incentives in Medicare and asked the Committee on House Energy and the Commerce Subcommittee on Health for additional regulatory authority to make changes.

The changes of great interest to physical therapists focus on limiting the "in-office ancillary services" exception to the Stark II anti-kickback statutes ("the Stark loophole").

MedPAC recommends changes in the short run that limit the ability of physicians to qualify for the "in-office ancillary services" exception. MedPAC also recommends changes in the long run that reduce physicians' financial incentive to order excessive physical therapy services.

Here is part of Chairman Hackbarth's statement (from CQ.com):

"...Therefore, the preferred approach to address self-referral is to develop payment systems that reward providers for constraining volume growth while improving the quality of care.

Because it will take several years to establish new payment models and delivery systems, policymakers may wish to consider interim approaches to address concerns raised by the growth of ancillary services in physicians` offices.

The Commission had not yet made recommendations, but it does explore the pros and cons of several options in more detail:

• excluding therapeutic services such as physical therapy and radiation therapy from the IOAS exception,
• excluding diagnostic tests that are not usually provided during an office visit from the exception,
• limiting the exception to physician practices that are clinically integrated,
• reducing payment rates for diagnostic tests performed under the exception,
• improving payment accuracy and creating bundled payments, and
• adopting a carefully targeted prior authorization program for imaging services."

The House sub-committee, however, doesn't want to cede the Congress' control of Medicare to Health and Human Services (HHS) or to the Centers for Medicare and Medicaid Services (CMS).

Here is the statement of Frank Pallone, Jr., Chairman, U.S. Subcommittee on Health:

"I am not in favor of giving carte blanche to the Secretary of HHS or the CMS Administrator.

I believe that this Committee and the Members who serve on it carry out an important oversight and regulatory role and I am not eager to hand over all of our responsibilities to effectively manage this program to our good friends at HHS."

Can the Congress effect MedPACs recommendations despite the political power of the American Medical Association (AMA)?

The recent failure of Senate Republicans to support HR 4213 (American Jobs and Closing Tax Loopholes Act of 2010) on Friday June 18th lead to enactment of the 22% negative update to the Medicare Physicians' Fee Schedule for the first time in years.

Have Republicans Senators abandoned the AMA? How much political clout do doctors have left?

If the Congress wants to retain its authority to regulate Medicare but doctors are losing their influence over Congress can physical therapists step in and effectively advocate to close the Stark II "loophole"?

Three reasons why POPTs will give way to PTPP in 2010

Just this week three things have happened that lead me to question the survivability of the physician-owned physical therapy (POPT) model in 2010.

By the way, none of this seems to be directly affected by the direction of the health care reform debates - whichever way reform goes the POPT outcome seems destined to happen.

ONE

A Medicare Payment Advisory Commission (MedPAC) meeting October 8th listened to APTA testimony on physician ownership of physical therapy clinics. MedPAC addressed concerns about Medicare PT volume growth and ownership of PT.

Physicians who own services, like PT, to which they refer have a conflict of interests (their interests vs. their patients' best interests).

MedPAC outlined these concerns in a PowerPoint presentation by staffer Ariel Winter whose concerns are the following:

1. Could lead to higher overall volume through greater capacity and financial incentives.
   
   
2. Several studies find that physician self-referral is associated with higher volume.
   
   
3. Unclear whether additional services are appropriate or contribute to improved outcomes.

TWO

Jim Needham, former CEO of a Florida POPT, predicts a sell-off due to difficulty with compliance and transparency requirements especially small physician practices that employ physical therapists.

Jim does suggest that costs (the subject of the current debate) are the primary driver of new physician compliance legislation.

You can sign up to hear Jim's presentation in Palmetto, Florida on November 7th or November 21st at BulletproofPT.com.

THREE

My phone has been ringing off the hook from business brokers and 'principals' (guys and gals with money) who all of a sudden want to invest in outpatient physical therapy practices.

My phone rings because I sold two clinics in two separate transactions in the last two years so I'm on a list somewhere. Lucky me.

Do they know something we don't?

Maybe it's just a thaw in the frozen credit markets but physical therapy business sales are getting hot once more.

The other consideration is that investors perceive increased future expected cash flows to Physical Therapists in Private Practice (PTPP) and they see PTPPs selling for all-time historically low valuations and they want a bargain.

Maybe 2010 will be the year of the PTPP.

My advice to PTPP owners - hang tight, this may be your year.

Can Physical Therapists go over the PT Cap with an X-Ray?

Does an X-ray demonstrate medical necessity for physical therapy?


...or does an axial CT myelogram?


These images are examples that have in common a clear pathology that many patients and physical therapists confuse with medical necessity for physical therapy.

Right now (November 17th 2008) I have several physical therapy patients who have exceeded their $1,810 Medicare benefit and are asking me for continued physical therapy services in my outpatient clinic.

Many of these patients have chronic conditions such as the following:

• degenerative spinal stenosis
  
• massive rotator cuff tears
  
• knee osteoarthritis

These conditions show up well on sophisticated imaging scans such as X-ray, CT scans and MRI.

These conditions often require extended courses of physical therapy or multiple episodes of physical therapy in the course of a calendar year.

In my clinic, the $1,810 Medicare cap is usually reached by 16-18 visits.

It would not be unusual for degenerative spinal stenosis to take 20 visits. I'm pretty sure my experience is typical.

Who needs PT?

For an exception to the Medicare cap the physical therapist would have to show three criteria:

• Need
  
• Progress
  
• Skill

Need is often shown with physical findings.

The above X-ray and CT myelogram show physical findings based on anatomy.

Physical therapists should show physical findings based on function.

Diagnosis: Process or Label?

An epiphany in own my practice has been the use of disablement models: most recently the International Classification of Function (ICF Model) that describes the link between Body Structure and Function and Activity Limitations.

The ICF classification framework is to physical therapists what the ICD-9 diagnostic labels are to physicians.

Note the ICF model describes any health condition - for instance, your patient with degenerative spinal stenosis who has 'run out' of Medicare physical therapy benefits but asks you to append the -KX modifier to continue their care.

What do you do?

Do you ask the doctor for another script?

Perhaps you consider using another diagnosis from the old 'diagnosis list' from 2006.

Don't.

The Therapy Cap

The purpose of the therapy cap is to cut costs without limiting patient access to necessary care.

There is a large POPTs in my town that automatically cuts off therapy to every patient approaching the $1,810 Medicare Cap - regardless of need or progress.

They perceive that, as a POPTs, they are in the Medicare audit crosshairs and they refuse to add 'risk' to their caseload by appending the -KX modifier.

They are limiting care to their patients.

The Caps Work

Data for this table comes from the Outpatient Therapy Alternative Payment Study 2 (OTAPS 2) Task Order - Utilization Report.

Outpatient Physical Therapy
	2004	2006	Per cent change
Mean dollars paid per user	$864	$788.06	-8.8%
Mean dollars paid per episode	$748	$682	-8.9%
Standard deviation paid per episode	$1,047	$782	-25.4%

"The Balanced Budget Act of 1997 enacted financial limitations (therapy caps) on outpatient physical therapy (PT) and speech-language pathology (SLP) combined... In 2006 the Automatic Exceptions Process to the caps began, enacted by the Deficit Reduction Act of 2005." (OTAPS 2)

The result of the caps has been the observed decrease in per user and per episode dollars paid.

Read the full blog entry here.

Note that cost reductions occurred from 2004 to 2006.

There was no cap in 2004. The cap exceptions process began in 2006.

The Caps work - so, work with the Caps

Get better at showing need.

Show that your patients have Activity Limitations using a functional scale.

I recommend the OPTIMAL scale (free) or the AM-PAC (small $$).

Show Progress.

I've designed a neat pen-and-paper graph that easily and quickly shows functional progress over 1, 2 or 3 months.

No more discharges after 20 visits whether the patient is better or not.

Now, patients come back to me because they know I can 'go to bat' for them.

If they are getting better I can prove it.

Get a copy of the Functional Progress Graph here.

Make skilled decisions.

Use the ICF model to link impairments in Body Structure and Function with the measured Activity Limitations.

The link is your Physical Therapist's Diagnosis.

What do YOU need to go to bat for your patients?

Not fancy x-rays or 'alphabet soup' imaging.

Get better at describing your own skills using simple tools.

Get the free tools I've described in this post.

Also, get a free tutorial called Bulletproof PT to learn more.

Physical Therapists use the ABN too much

Are you using the Medicare Advance Beneficiary Notice (ABN) too much?

How much is too much?

Most physical therapists' practices, in my opinion, would need infrequent use of the ABN.

I often use the the -KX but I seldom use the ABN.

How about an example?

I usually hit the physical therapy cap in 16 visits.

But now, in November 2008, I have some patients coming back to see me with multiple conditions.

They need to know if their physical therapy is a Medicare covered benefit.

So, I face the same problem you face.

I think that I might be able to help you.

What should the physical therapist do?

The routine use of the Advance Beneficiary Notice (ABN) with EVERY
patient who has $1,810 in billed charges may be inconsistent with the
design of the ABN.

With the ABN, you are saying to the patient (and Medicare):

"These services are not a Medicare covered benefit".

For example, maintenance exercise is not a Medicare benefit.

However, PT services above the annual cap ARE a Medicare benefit, if
the patient qualifies for the cap (-kx) exception.

You are the only professional in the position to determine if the patient
qualifies for the benefit.

You make your determination based on three criteria:

1) Need

2) Progress

3) Skill

In other words, does the patient need your services, can you get them
better and can you demonstrate your clinical decision-making was
necessary for their care?

Now, in November 2008, I have many patients coming back to me who have
exceeded their cap.

They may have had their rotator cuff done in February and now they
have hip pain in November.

Note: you cannot use the list of diagnoses from 2006 as the sole basis
for an automatic exception.

I usually hit the cap in 16-18 visits so patient with complex
conditions or multiple conditions will often exceed $1,810 over the
full year.

I face the same problem you face - how do I get my patients treated
and comply with Medicare rules?

Medicare doesn't know how much better patients get with PT, how bad
they were to start with or what their outcomes are.

So, I figured out a way to show Medicare.

I also made it simple for clinical physical therapists.

I designed a graph that plots all 2008 OPTIMAL functional scores on
one page. That way, when the patient comes back in October I have
their prior level of function.

I can use the graph to show a decline in function in the absence of
skilled physical therapy - that demonstrates need (medical necessity
for physical therapy).

The graph can also show the improvement from the last session of
therapy in February (expected improvement in a reasonable time frame).

Skilled decision-making is, I believe, self-evident to anyone who can
figure out the PT cap exceptions process. If not, then I have also
designed a note-writing format for my charts that prompts skilled
decisions at each visit.

Every billed charge needs to be skilled, whether you have hit the cap
or not.

Finally, the graph is simple to use, even for those of us who still
use pen and paper charts.

You can get the graph, for free, at www.BulletproofPT.com

Medicare wants you to treat patients who demonstrate need, who get
will get better and who can't do it without your skills.

The ABN is not your answer.

Try the graph and let me know what you think.

Arnie Falls Down a Lot and He Needs Physical Therapy

Arnie falls down a lot and he needs physical therapy.

Arnie is a 74 year old bookkeeper, living with his wife Betty in a trailer in Florida.

He lives on a fixed income - social security and some retirement income. He gets his health care from Medicare.

He has no pension since he lost his good job in the recession of 1990 and he has had to work odd jobs for the past 15 years.

Now, Arnie is weak in the legs and his balance is bad.

He fell down six times in two weeks in August and asked his doctor for a referral to physical therapy.

Physical therapy has a falls prevention program of strengthening, balance, flexibility and falls awareness training that has been shown to help seniors prevent falls and increase mobility.

But then, Arnie fell on a rain-slick driveway at night and landed on his shoulder - he ended up tearing his rotator cuff.

Arnie had used up 12 of his physical therapy visits and Medicare only allowed him about four more visits.

In America today, there are many people like Arnie - denied their Medicare physical therapy even though they clearly need help.

Today is October 25th, 2008 and every Medicare beneficiary in America has about $1,810 in physical therapy benefits for the entire year.

Unfortunately, by now many have used some or all of their benefits and could face a difficult and painful recovery if Medicare wont pay for extra physical therapy.

Fortunately, there is a solution.

Many therapists (and doctors) are unaware (or afraid) to use this solution.

The Exceptions Process

The $1,810 physical therapy Medicare cap has an exceptions process based on need and expected patient progress.

If I can show that Arnie needs extra therapy (he does) and that I can expect to get his shoulder better and prevent future falls, then he can have his extra therapy.

Therein lies the rub.

How to make the case for Arnie?

The need is easy.

Arnie is a train wreck, poor guy.

I measure his strength, flexibility and range-of-motion, as well as activity limitations using standardized test scores.

Future expected benefit is the hard part.

Many physical therapists don't know how to show expected future benefit from physical therapy.

You need to show a positive trend in your standardized test scores.

You should then graph your trend line to provide an easy visual reference for anybody who questions your decision or audits your chart.

Create a graph template that you can fill in with one, two or three months worth of test scores.

When you connect the dots the trend line should be going up - this indicates progress.

Download this free template at www.BulletproofPT.com.



Remember to modify the template to fit the needs of your physical therapy facility.