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  • 2014-09-September

Will Private Practice Survive?

By bringing innovative programs to your community, your business will continue to thrive.

By Lynn Steffes, PT, DPT

As I travel the country and have the honor of working with private practices nationwide, I hear what I refer to as “the six million dollar question:” In this ever-changing health care climate will private practices survive? I respond with a resounding “Yes!” But not without a few caveats: Private practices must:

  1. Exercise the agility that is inherent to being a small business.
  2. Be lean and study their expenses, while controlling their overhead.
  3. Build and leverage relationships they have in their communities and with their patients.
  4. Explore opportunities to collaborate with each other to create economies of scale.
  5. Celebrate the cost effectiveness of their setting in a cost-conscious personal and health care economy.
  6. Innovate new programs to bring highly valued services to our patients, our communities, and our health care system!

The first five solutions are often already on the “radar screen of private practice owners.

So how do practices begin to embrace and meet the challenges of number 6?

We must identify the emerging trends and greatest burning needs for our population and build cost-effective (see 4) services through our practices to serve the needs of our patients and our communities (see 3). Perhaps the most burning need in health care is brain fitness!

The enhancement of cognitive health through fitness and wellness may be one of our nation’s most important priorities in the next decade. Age is the greatest risk factor for cognitive impairment and as the Baby Boomer generation passes age 65, the number of people living with cognitive impairment is expected to jump dramatically. In fact, more than 10,000 Baby Boomers are turning 65 each day. After 65, the risk of being struck by the disease doubles every five years, so almost half of people suffer from this disease by 85. What this single disease may do in the next few decades boggles the mind, resulting in nearly 10 million Baby Boomers who will die with or from Alzheimer’s and Dementia (AD). “The National Institute of Health’s research funding for AD research already low in comparison to other major diseases, some have called this one of the biggest predictable humanitarian catastrophes in the history of America.”

Cognitive impairment is a very costly disease, for patients, families and the U.S. government who anticipates spending billions on care. “The projected rise in Alzheimer’s incidence will become an enormous balloon payment for the nation—a payment that will exceed $1 trillion dollars by 2050,” warns Robert Egge, vice president for public policy for the Alzheimer’s Association. “It is clear our government must make a smart commitment in order make these costs unnecessary.”

Since research has demonstrated that prescribed exercise has the single greatest opportunity to make a difference, I believe that this is an obvious calling for our profession. Both education and exercise are key components of building an effective cognitive fitness program. As physical therapists, we know that these skills are cornerstones of our skill set. Physical therapists are highly engaged with the primary target for this service: the Silver Generation. Individuals—ages 50 to 70—whose top concerns include their future cognition as it pertains to the aging process. Strong evidence exists that the current boomer generation is concerned about cognitive health and fears Alzheimer’s disease.

“Nigel Smith, director of strategy at AARP, framed the conversation by sharing that 80 percent of the 38,000 adults over 50 surveyed in the 2010 AARP Member Opinion Survey indicated “Staying Mentally Sharp” as their top ranked interest and concern—above other important concerns such as Social Security and Medicare.” In addition, these Baby Boomers also happen to have the highest disposable income for cash based programs. They are known as “….the wealthiest generation in history…”.

I strongly believe that this prevention and wellness strategy belongs in the physical therapy market space. This is where people can come for confidential assessment, exercise planning, and education based on the latest research available. A clinic-based program enables physical therapy clinics to implement a cost-effective and holistic approach.

I initiated development on a program named BrainyEX to honor both of my parents and my family members who have been on the difficult journey of Alzheimer’s disease and vascular dementia for over a decade; a journey that had little hopeful guidance and is both heart wrenching and frightening to travel.

The first BrainyEx pilot was highly successful in empowering participants to not only feel capable of impacting their cognitive health but showing significant changes in their lifestyle including exercise, dietary changes, sleep & stress management. The initial results were measured by Lumosity and in-clinic cognitive testing—all improved.

PT Plus in Elm Grove, Wisconsin, was our small pilot sight. Amy Snyder, MPT, DPT, and owner PT Plus, Milwaukee says, “Our practice has hosted a focus group and the pilot cognitive fitness program. Our client’s interest and enthusiasm to learn more about cognitive fitness has astounded me. I believe that brain health and wellness has been under served by the health care system. No one asks the questions or provides interventions until a problem occurs. As physical therapists we have a wonderful opportunity to reach out to or communities and empower them to make health choices that will keep both their body and mind well for years to come.”

We hope your clinic will explore brain fitness too. It is definitely a key part of answer to the six million dollar question!

lynn-steffes Lynn Steffes, PT, DPT, is president and consultant of Steffes & Associates, a national rehabilitation consulting group focused on marketing and program development for private practices nationwide. She is an instructor in five physical therapy programs and has actively presented, consulted, and taught in 40 states. She can be reached at steffbiz@gmail.com.

How to Get 120 New Patients

By Paul Martin, PT, MPT, CBI, M&AMI

I have a strategy that will bring you more than 120 new patients in the upcoming year if you commit to doing it. This strategy builds “real” relationships with physicians. So often, we as physical therapists believe that we can build a relationship with physicians simply by stopping by their office or bringing them lunch. Been there, done that—those strategies are getting old. If you really want to build relationships with physicians you need to create social situations where physicians actually let their guard down and have a little fun.

Commit to a discipline of one social outing with a physician every month over the next 12 months. Take the physician to his or her favorite sporting event, concert, show, golfing, fishing, or to his or her favorite restaurant—anywhere that you can create a relaxing atmosphere and the physician will actually have fun! Consider taking your spouse and inviting the physician’s spouse. Or better yet, take one of your therapists and request that the physician bring a guest. A small group will stimulate interesting conversation. And no, do not talk about how great you are as a physical therapist. Find things in common to give you a reason to get together again, or at the very least stay in contact due to a common interest. This is true relationship building and you will get at least 10 more referrals a month from each physician. That equals 120!!


Paul Martin, PT, MPT, CBI, M&AMI president of Martin Healthcare Advisors, is a nationally recognized expert on health care business development and succession planning. As a consultant, mentor, and speaker, Paul assists business owners with building value in their companies. He has authored “The Ultimate Success Guide,” numerous industry articles and weekly Friday Morning Moments. He can be reached at pmartin@martinhealthcareadvisors.com.

Please Participate

By Tom DiAngelis, PT, DPT

At this time of year, I would be remiss if I did not mention the two most important events that the section gears up for and ask you to participate. I am referring to the PPS Annual Conference and the elections for PPS office this November.

Attendees of the PPS Conference know it has been the place for private practioners to gather and share ideas for decades. The conference has grown significantly over the years—the quality of programming has steadily improved, and PPS has been able to provide more and more for members. While the expense has risen drastically, we have been able to maintain the cost at the same rate. This is in part due to improved attendance, excellent management by our outside conference-planning group, Let’s Meet, our staff, and the increasing number of exhibitors who want to attend. Let’s Meet and the PPS staff have created great demand for the exhibit hall so that we now have waiting lists for exhibit hall space—which helps keep attendance price reasonable. I encourage you to visit the PPS website (www.ppsapta.org) to read about the great lineup of conference speakers this year. The Program Work Group has done an excellent job of providing topics that are relevant to our practices today, as well as help us plan for the future. The annual conference is where the best networking opportunities are for private practice. Do not miss this opportunity that could significantly impact your practice for years to come. If you are attending, download the conference app (PPS 2014) to your smart phone so you can have it all at your fingertips.

The most important event at this year’s conference will be electing new members for the Board of Directors. This is a big election year for the Board as we elect a new president and vice president, as well as one director. We must commend the Nominating Committee—that also has a position on which we are voting—for providing us with a great slate of candidates from which to choose. Their candidate statements were in the last edition of Impact and are available online. I urge you to respect those who are running for office by reading their statements and voting. If you have questions for them, send them an email or call them directly—your vote is important. It is disheartening as a candidate when you work so hard and see so few of our members participating in such an important event for the section, so please cast your vote. Remember, you do not have to attend the conference to vote as absentee voting is available. You can also find information for absentee voting on the website.

This is your opportunity to participate in the two biggest events of the year for PPS and for you as a member. Thank you for your membership and your participation.


Affordable Care Act’s Second Open Enrollment


Small business options are limited.

By Jerome Connolly, PT, CAE
September 9, 2014

In a final rule1 on health insurance market standards issued May 16, the Centers for Medicare and Medicaid Services (CMS) adopted a wide range of provisions affecting insurance coverage under the Affordable Care Act (ACA), including small business plans, standards for navigators who help consumers find coverage under the ACA, drug coverage determinations, insurer quality rating information, and efforts to stabilize premiums. The rule took effect in July and will be in place when the second round of ACA open enrollment commences November 15.

According to a CMS fact sheet2, the rule standardizes notices health insurers are required to provide to consumers when they make coverage changes when policies are renewed or discontinued. In the area of drug coverage, the rule also requires health plans to make coverage determinations within 24 hours on medications that are not covered for enrollees with conditions that jeopardize their life, health, or ability to regain maximum function, or when enrollees undergo treatment with drugs not covered by the plan.

CMS said the rule aligns the start of annual employer election periods in federally facilitated Small Business Health Options Program (SHOP) Marketplaces for plan years beginning in 2015, with the start of open enrollment in the individual market exchange for the 2015 benefit year. The rule also lists the conditions under which a SHOP would be permitted to not implement “employee choice” in plans, if their state’s insurance commissioner believes it is in the best interest of consumers in that state. Employee choice provides the choice of multiple insurers in a small business marketplace.

Insurance commissioners in 18 states (Alabama, Alaska, Arizona, Delaware, Illinois, Kansas, Louisiana, Maine, Michigan, Montana, New Hampshire, New Jersey, North Carolina, Oklahoma, Pennsylvania, South Carolina, South Dakota, and West Virginia) have made that determination, claiming that the number of people in the small group market opting for coverage through the ACA is so small that allowing employees to choose from a variety of plans will lead to rate spikes because risk will be too uneven.3

The National Federation of Independent Business (NFIB), which opposed the ACA, criticized the delay of the “employee choice” option in the law. “The SHOPs should offer even more arrangements than employee choice and basic employer choice (the only option currently available), including defined contribution health plans,” says NFIB.4

Even the Small Business Majority which supports the law, expressed disappointment in that provision saying, “The finalization of a rule today that would allow states to potentially delay a critical requirement that the small business health insurance marketplaces allow employees to choose among multiple insurance carriers is incredibly disappointing for small business owners and their workers.”

NFIB also urged CMS to publish actual 2015 rates as early as possible prior to open enrollment so small business owners can plan for the upcoming year.

The final rule also specifies a list of state requirements that would conflict with federal standards for navigators and assisters who help people get enrolled under the ACA. It also requires insurers to submit data to calculate quality ratings, which marketplaces must display starting in 2016.

The regulation includes provisions beneficial to insurance plans, such as changes to the risk corridors program intended to mitigate uncertainty associated with enrollee risk profile, and adjustments to the medical loss ratio (MLR) calculation for policy issuers that provided “transitional” continuation of plans that do not comply with the ACA. Under the MLR requirement in the statute, insurers must spend at least 80 percent of premiums on claims or quality improvements, or refund the difference to consumers. The change will generally result in a reduction in rebate payments for those issuers who would have owed rebates in the absence of the adjustment. (Total consumer benefits from the first two years of the MLR provision amounted to more than $3 billion, according to a Commonwealth Fund report released May 12.5)

A spokesperson for America’s Health Insurance Plans (AHIP) applauded the rule, saying these temporary risk mitigation programs will help ensure market stability and affordability for consumers.6 In its comments on the proposed rule earlier in the year, AHIP had asked for more relief than was included in the final rule.

In addition to the final rule, the CMS also posted answers to Frequently Asked Questions7 May 16 regarding a range of other ACA requirements, including “essential health benefits” that insurers must cover, the actuarial value of plans, mental health parity, guaranteed availability, minimum essential coverage, and transitional policy extensions of plans that do not comply with the ACA for employers with 51–100 employees and for individuals.

This FAQ document emphasizes that health plans must provide coverage of the essential health benefit package, and it is a violation of the law if the plan’s benefit design—or the implementation of its benefit design—discriminates based on an individual’s age, expected length of life, present or predicted disability, degree of medical dependency, quality of life, or other health condition.

Moreover, insurers may not impose benefit-specific waiting periods, except in covering pediatric orthodontia, in which case any waiting periods must be reasonable. This clarification refers to a waiting period that is applied uniformly to a specific benefit within the plan design and not reasonable medical management.8

The FAQ also states that insurers may file plans that they only market through the Exchange to qualified individuals or the SHOP Marketplace, provided the marketing does not violate applicable discrimination standards, and otherwise complies with applicable federal and state laws and regulations. However, such plans would be considered to be offered in the individual or group market, respectively, in the state. If, despite the fact that the policy issuer has not advertised the plan other than through the Marketplace, an individual or employer (as applicable) seeks to enroll in the plan directly with the insurer, the health plan may instruct the individual or employer to complete enrollment through the Marketplace. But if the individual or employer wishes to enroll directly with the plan, the insurer must accept every individual or employer in the state that applies for such coverage.

While small businesses with fewer than 50 employees are not mandated to buy health insurance in 2015, the SHOP exchange is designed and available for employers with up to 50 employees to offer group health coverage. However, some features of the federal and state SHOPs were delayed late last year as officials shifted focus to the bungled individual marketplace rollout.9

Small employers with generally up to 50 full-time equivalent employees (FTEs) have access to the SHOP Marketplace, which is open for enrollment year-round. It is estimated that small businesses pay on average 18 percent more than larger businesses for health insurance. SHOP is intended to offer small employers increased purchasing power to obtain a better choice of high-quality coverage at a lower cost by pooling their risk. To purchase coverage in SHOP, eligible employers must have at least one common law employee, offer SHOP coverage to all of their full-time employees (FTEs), and meet minimum participation rates.10

A tax credit is available to help small employers afford the cost of providing health care coverage for their employees but it is specifically targeted for those employers with low- and moderate-income workers. Employers with fewer than 25 FTEs, paying average annual wages below $50,000, and that contribute 50 percent or more toward employees’ self-only premiums may qualify for a small-business tax credit of up to 50 percent to help offset the costs of insurance. In 2014, this tax credit became available to qualified small employers that participate in the SHOP Marketplace. The 50 percent tax credit will continue through 2015, after which the program is scheduled to end. On a per-employee basis, the amount must be under $50,000. In fact, if it is under $25,000, the full credit is awarded—but then it phases out until the average reaches $50,000. If the credit exceeds the tax liability for the year, it can be carried back one year or forward for 20 years.11

Beginning this year, the ACA increased the incentives that can be offered to employees, from 20 percent to 30 percent of the total cost of coverage for participation in “health-contingent” wellness programs that require participation in a physical activity, for example, or meeting certain health standards, such as a desired cholesterol or blood sugar level or body mass. To incentivize smoking cessation, smokers can be charged premiums up to 50 percent higher than those for nonsmokers, and federal grants are available to help small businesses start a wellness program.12

A variety of factors, including those described above, has depressed small business enrollment in the first year, and it is likely to remain suppressed for the near term. The Obama administration has allowed small business employers to renew their existing plans through 2016 even if they do not meet ACA coverage standards, and many will do so because of uncertainty with the exchanges. Moreover, as mentioned earlier, the tax credit for businesses with fewer than 25 employees has a limited reach and has been difficult to navigate.

Employee benefits brokers in the 18 states declining to implement the employee choice option will have just one plan to present to employees of small business clients through the ACA’s small business Exchanges, thus leaving in place a distorted, non-uniform system. This will likely extend the time for determining whether the commercial exchanges are making rates more affordable for small businesses.

Once the delays are ended, the renewals run out, and every state is offering employee choice in an online exchange, it is likely enrollment will steadily improve. But without the employee choice feature, there’s little reason at present for a small business to go through the Exchange instead of the brokers whom they have traditionally used.13


Jerome Connolly, PT, CAE, is a registered federal lobbyist whose firm Connolly Strategies & Initiatives has been retained by PPS. A physical therapist by training, he is a former private practitioner who throughout his career has served in leadership roles of PPS and APTA. Connolly also served as APTA’s Senior Vice President for Health Policy from 1995 – 2001.




1. ACA Exchange and Insurance Market Standards for 2015 and Beyond, Final Rule, Centers for Medicare and Medicaid Services, Department of HHS, http://op.bna.com/hl.nsf/id/bbrk-9k6sfm/$File/finalexchMay2014.pdf. Accessed July 2014.

2. Exchange and Insurance Market Standards for 2015 and Beyond, Center for Consumer Information & Insurance Oversight, www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/marketstandards-5-16-2014.html. Accessed July 1, 2014.

3.4. Kardish C, Small Business Participation in Health Exchanges Likely to Remain Weak, Governing. Posted July 1, 2014. Website www.governing.com/topics/health-human-services/gov-small-business-health-exchanges-enrollment.html. Accessed July 2014.

5. The Federal Medical Loss Ratio Rule: Implications for Consumers in Year 2, The Commonwealth Fund, May 12, 2014.

6. Hansard S, CMS Releases Final 2015 Health Insurance Exchange Rule, BNA’s Health Insurance Report, May 21, 2014.

7. Frequently Asked Questions on Health Insurance Market Reforms and Marketplace Standards, Center for Consumer Information & Insurance Oversight, www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/downloads/Final-Master-FAQs-5-16-14.pdf, posted May 16, 2014. Accessed July 2014.

8. Hansard S, CMS Releases Final 2015 Health Insurance Exchange Rule, BNA’s Health Insurance Report, May 21, 2014.

9. Klein K, Answers to More Small Businesses Questions About Obamacare, Bloomberg Businessweek, June 30, 2014.

10. Key Provisions Under the Affordable Care Act for Employers with Fewer Than 25 Employees, Small Business Administration. Website: www.sba.gov/content/employers-with-fewer-25-employees. Accessed July 18, 2014.

11. Taulli T, Small Business Tax Credits For Obamacare?, Forbes, March 8, 2014.

12. Bluestein A, Your Obamacare To Do List: Launch a Wellness Program, Inc. Magazine. Website: www.inc.com/magazine/201312/adam-bluestein/obamacare-to-do-list-create-a-wellness-plan.html. Accessed July 18, 2014.

13. Bronson C, Obamacare Exchanges to Offer Just One Plan for Many Small Employers, Insurance Business America, June 12, 2014.

Leadership and Culture as Keys to Successful Acquisition

By Michael Durand, MBA, ATC

Growth through acquisition can prove to be a successful strategy. However, it is not without its challenges. In the growth of our organization, which has 13 locations, nearly half of our clinics were acquisitions and the rest were de novo. The success of our acquisitions is tied closely to the transition of leadership and culture. Highlighted below are acquisition scenarios that we experienced in our company’s growth. In each scenario, we had different leadership strategies in place to transfer our organization’s culture to the new acquisition.

“Acquisition A” was early in our history. The acquired clinic was a single owner and practitioner who had plans post-acquisition to focus on a related business outside of traditional physical therapy. The geography, patient demographics, physician referral base, and other considered factors all fit with our existing practice. A newly hired physical therapy manager replaced the former owner without overlap or transition. We failed to consider the leadership transition, which we could have implemented with the exiting owner. Also, the newly hired physical therapy manager was not fully ingrained in the culture of our organization. Because of these two factors, the acquisition was destined to fail, and we were forced us to close our doors within a few years.


Following the difficult lesson in acquisition A, we implemented a new strategy for acquisition B. A strong internal leader who was ingrained in the culture of our organization took over for the exiting owner who was bound to continue at the clinic for six months post-transition. Though we felt we were more prepared in this venture, we did not anticipate the impact and value of the exiting owner through the transition. The exiting owner did not fully support our organization’s culture with the remaining staff. The result was an “old guard versus new guard” clash, and, subsequently, many of the acquired clinic staff opted to move on. In the short term this was a challenge. Thankfully with strong leadership, a firm sense of the organization culture, and “new blood,” acquisition B has survived and thrived.

We ventured into a third acquisition—acquisition C—with experience. Throughout discussions with the current owner, we spoke frequently about the culture of our organization and our goals of incorporating our culture into their clinic during the transition. We were able to impart our organizational values and show the value of creating a unified leadership for the existing staff. For this acquisition, we not only had new leadership ingrained in our culture, but we also had a previous owner that “bought in” to the direction we were taking the clinic. Throughout the transition, both leaders were consistent in the message they delivered to staff. This consistency led to a successful transition, desired staff retention, and positioned the clinic for immediate growth.

Although there are several factors to consider when incorporating a growth strategy through acquisition, few are as critical to the success of these ventures as the leadership and culture transition.

Three valuable lessons we have learned through our acquisitions have been:

  1. A leader from within your organization must transfer your organization’s culture to the acquired location.
  2. Cooperative leadership between the acquiring organization and exiting ownership will lead to a smoother transition.
  3. Understanding and capitalizing on the value of the exiting owner, in combination with the energy and drive of the new leadership, will jumpstart the growth of the practice and create a successful acquisition.

Michael Durand, MBA, ATC, is director of business development at Physical Therapy & Sports Medicine Centers and managing partner of Strategic Therapy Partners. He can be reached at mike.durand@ptsmc.com.

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