Only outcomes data will tell.
By Heidi Jannenga, PT, DPT, ATC/L
It is 2016—and we are living in a world where everyone wants to get more for less, even in health care. In fact, our entire country is in the midst of a massive health care reform effort, much of which is focused on delivering higher-quality care at a lower cost—which explains why so many of the recently created health care regulations, programs, and payment models reward value.
So, how does this impact physical therapists? We know our services are valuable, but unfortunately, that value is not widely understood or accepted among payers, patients, or other providers. It is our responsibility to change that—to make sure everyone knows how valuable physical therapists really are. This will ensure we do more than survive this new, value-based health care environment; we will thrive. First, we must actually prove the value of our services, ourselves, and our profession. And we must do so objectively—with outcomes data.
The Triple Aim
You may be wondering why tracking patient outcomes is so important all of a sudden. While it has always been an important aspect of evidence-based practice, the demand for this type of data collection has amplified in the last few months as a result of the Institute for Healthcare Improvement’s Triple Aim,¹ which is the driving force behind US health care reform. As the name suggests, the Triple Aim has three main objectives:
- Achieving better results (i.e., better patient outcomes)
- Decreasing the cost of care
- Increasing patient satisfaction
If you have been practicing for even a short while, you know how common it is for things in the policymaking world to move at a turtle’s pace. However, that is not the case here. In fact, the federal government is not wasting any time in its quest to reduce health care spending. To that end, in 2015, the US Department of Health and Human Services (HHS) announced it will:
- Base 30 percent of all Medicare fee-for-service (FFS) on alternative payment models by the end of 2016.²
- Increase that proportion to 50 percent by 2018.²
- Link 85 percent of FFS payments to outcome measures by the end of 2016.²
- Bump that percentage to 90 percent by the end of 2018.²
This rather aggressive timeline means that providers who do not jump on the outcomes-tracking train may end up feeling the pinch of an even more dire payment situation. Think about it: Medicare payment rates are already a common cause for complaint—and private payers tend to follow Medicare’s policy lead. So, in all likelihood, most—if not all—payments will be linked to value within the next few years.
So, what is outcomes tracking, anyway? In short, it is a way for health care providers to objectively measure patients’ functional progress and success via outcome measurement tools (OMTs). Typically, patients complete these at the onset of care, at the end of care, and at various points between. Of course, you, as the physical therapist, are able to see each patient’s progress, but the only way to draw meaningful conclusions about your patients’ progress overall—as well as your staff’s performance as a group—is to track those outcomes in an objective and scalable way. In other words, in order to demonstrate your value as a physical therapist, you need data—and outcomes tracking is the best, most logical method of obtaining that data.
Now, that being said, there is a big difference between merely recording numbers and generating meaningful, actionable insights, because when you do the latter, you can achieve three really important things:
1. Improve Patient Care
Outcomes data is unique, because it is tied to the efficacy of care. When providers can proactively collect and analyze this information themselves, they gain insight that they can use to improve care, streamline operations, identify best practices, and guide business decisions. The benefit of outcomes data does not stop at the individual provider level: When therapists create a large pool of collective data with the intent to improve patient care, the entire industry benefits, because we gain the ability to prove the effectiveness of physical therapy across the board. When we do that, payer networks will have more of an incentive to make physical therapy widely available and affordable to beneficiaries, which means patients will have better access to our cost-effective, noninvasive treatments.
2. Influence Payment Rates
In the past, many therapists shied away from collecting outcomes data because they were afraid it would negatively impact their contracts and, as a result, their finances; and that fear had some merit. Luckily, though, times are changing, because more of the data we are collecting today actually reflects the value we provide our patients. As an industry, we have the opportunity to demonstrate our ability to improve our patients’ lives and highlight the downstream cost savings we achieve. Once we collect enough data, we can leverage it to negotiate better payment rates, boost referrals, and even advocate for policies that ensure we are taken into consideration for future payment models. The more data points we gather, measure, and transform into meaningful, actionable information, the more influence we will have in creating the future we want.
3. Position Physical Therapists as Key Health Care Players
According to a research study cited by the American Physical Therapy Association (APTA),³ patients who seek therapy early in the course of treatment for low back pain generate significantly lower health care costs than patients who do not. And that is just one study. There are plenty of other musculoskeletal conditions for which this holds true. Unfortunately, it seems we might be the only ones who know this—because the general public does not. And with collaborative care models becoming the new norm, it is time we step in and claim our position as primary care practitioners—and command the recognition we deserve. To do so, we need concrete proof that definitively shows the results we are capable of achieving. In other words, we need outcomes data—and the right kind of outcomes data at that. This means we must:
- use standardized tools to collect outcomes data,
- select measurements recognized outside of the rehab therapy realm, and
- push to make our findings more widely available outside of individual clinics.
The Benefit to Your Practice
By now you know that outcomes data is an important piece of the proving-our-value puzzle—and that it impacts both care quality and payments. You also know that if physical therapists produce outcomes data on a large enough scale, it will help all of us better assert ourselves as neuromuscular experts. But those are longer plays. What about some immediate gratification? Well, as it turns out, outcomes data actually can help you be a better physical therapist and run a better practice—now. That is because you can use the data you collect to:
- Better assess clinical performance through benchmarking.
- Compare your clinic’s data to various data points for clinics in your region/specialty.
- Identify areas of need/competitive deficiencies and create correctional plans.
Sounds good, right? Now, on to the tactical stuff.
We are all clear on why outcomes data is beneficial and important, so let us talk about how to start tracking it. First of all, you can breathe a big sigh of relief, because you’re probably already completing outcomes tools and recording the information as part of your standard documentation, which is great. All that is left, then, is to establish the right processes and implement the right software—because to collect and analyze data in an accurate, timely, and consistent manner, you will need some type of software.
Of course, if you prefer to administer paper tests to your patients, you can still print them out, but it is best to record and store the results in a therapy-specific outcomes tracking software. I suggest doing so in a user-friendly, web-based system—preferably one that integrates with your electronic medical records (EMR). That way, you do not have to waste time—or risk any associated errors⁴—with double data entry. Plus, the system will instantly record the data you collect within the appropriate medical record. This type of software makes it much easier to hold yourself and your staff members accountable for consistently collecting outcomes information. This last step is important, because with any data-tracking endeavor, consistency is key.
Additionally, the right software contains a hand-picked library of evidence-based, industry-accepted tests that are already familiar to—and respected within—the health care community at large (e.g., QuickDASH, LEFS, Oswestry, Neck Disability Index, and Dizziness Handicap Inventory). You also want those tests to be risk adjusted for complicating factors such as age, weight, litigation, diabetes, cancer, and heart diseases, so you can easily and accurately compare different types of patients.
Now, collecting meaningful data will take a little bit of extra work, but think of it less as a burden and more as an opportunity—one that will soon be the norm. Like any worthwhile endeavor, the end result is worth it. Physical therapists have a huge opportunity here to shine in this pay-for-performance era—and to take the driver’s seat for a change. If we execute on this correctly, we will have the power to save our patients money, improve our clinics’ bottom lines, and solidly position ourselves as primary care providers. Now that is a win-win-win.
1. The IHI Triple Aim. Available at www.ihi.org/engage/initiatives/tripleaim/pages/default.aspx. Accessed February 12, 2016.
2. Better, Smarter, Healthier: In historic announcement, HHS sets clear goals and timeline for shifting Medicare reimbursements from volume to value. HHS.gov (2015). Available at www.hhs.gov/about/news/2015/01/26/better-smarter-healthier-in-historic-announcement-hhs-sets-clear-goals-and-timeline-for-shifting-medicare-reimbursements-from-volume-to-value.html. Accessed February 12, 2016.
3. Early Guideline-Based Physical Therapy Results in Health Care Savings for Patients with LBP. Early Guideline-Based Physical Therapy Results in Health Care Savings for Patients With LBP (2015). Available at www.apta.org/ptinmotion/news/2015/4/9/adherentptlbp. Accessed February 12, 2016.
4. Goldberg SI, Niemierko A, Turchin A. Analysis of Data Errors in Clinical Research Databases. AMIA Annual Symposium Proceedings (2008). Available at www.ncbi.nlm.nih.gov/pmc/articles/pmc2656002. Accessed February 12, 2016.
Heidi Jannenga, PT, DPT, ATC/L, is the founder and president of WebPT. She can be reached at firstname.lastname@example.org.
Reflections from past winners of the Private Practice Section’s Student Business Concept Contest
By Dr. Chris Wilson, PT, DPT, CHES
Another great Private Practice Section Annual Conference has come and gone. Last year, I was lucky enough to attend as the 2014 winner of the Student Business Concept Contest. This year I took part as a Private Practice Section member as well as an owner. Serving on the Membership Development Committee, I had the privilege of meeting and interacting with this year’s winners first hand (as well as the fast moving newly-formed SSIG leadership). I was reminded of how much impact the Student Business Concept Contest had on me and thought it was a great time to reach out to other past winners and see if they had similar experiences.
First, let’s talk a little background. Every year since 2006, PPS has sponsored the contest with up to two students winning an all-expenses paid trip to the PPS Annual Conference. Destinations have previously included the Broadmoor in Colorado Springs as well as other resort-type destinations in New Orleans and Orlando. The financial value of the conference is estimated at $2,000 but the real value to the innovative students (who are selected based on their unique and complete business concept proposal) is found in the experiences they have.
In 2008, Travis Orth won. At the time, it was a much different contest—less about a business concept and more an essay contest about the future of private practice physical therapy. While Travis is still working toward a goal of opening a multidisciplinary clinic with superior patient care, he notes specific benefits of winning the contest. In particular, meeting the PPS president at the time, Steven Anderson. Anderson is the president of Therapeutic Associates. Thanks to their connection, Travis landed his first job and had numerous other offers based on connections he made at PPS Annual Conference. His advice to current students: “Talk to as many people as possible, just take in the whole experience!”
In 2009, Jeff Donatelle also won the essay contest by describing his aspirations to be a private practice owner. Jeff was smart to solicit the advice and editing skills of a mentor at the private practice in which he was finishing a clinical rotation. He notes that attending the annual conference as the student winner exposed him to innovators and forward thinkers who dominate the private practice section. It galvanized his resolve to work in a private practice physical therapy setting as well as instilling in him a unique understanding in the value of the PT PAC for which he has lead successful fundraising campaigns. He notes that it was a great experience and actively encourages today’s students to submit nominations.
In 2010, Mike Giunta was the first winner of the Student Business Concept Contest in its current format. His unique model revolved around incorporating community events such as food and clothing drives with wellness and fitness initiatives. Mike was also one of the first to bridge his idea into a real product that his clinic sponsors regularly. Like Jeff, he notes a primary benefit of winning the contest was the value derived in a unique networking opportunity. And, like Jeff, he also secured his first job outside of physical therapy school through connections made at Annual Conference. However, one unique value proposition he notes is that simply taking the effort to apply is a great exercise in thinking outside the box. He notes that developing a mindset of young professionals who think outside the box is critical to the future of the profession.
In 2012, Justin Lee was selected as one of the winners for his concept RevoPT. It was a unique way to create custom home exercise programs with smartphone technologies. Justin and his partner Michael Wehrhahn were further along than most in winning the concept having won some other awards and investors along the way. They approached the Annual Conference as an opportunity to sell their product and, in hindsight, view that as a mistake. Like the other winners, Justin noted the real value is likely the connections made and he was unable to make as many connections because of his focus on selling his product. However, he did gain a better appreciation for the business mindset and business considerations of private practice owners as a result of his participation. His big takeaway: You need to understand your value proposition and be able to articulate it in a way that is meaningful to your target audience.
In summary, there are a great deal of benefits from both submitting and winning the contest. In addition to an all-expenses paid trip to fantastic destinations, you are also developing an outside the box mentality, establishing a unique network of mentors, gaining a unique understanding of the business side of PT and possibly securing a great position after you graduate. Applications are due July 2015, so start developing your concept now and submit at http://www.ppsapta.org/c/StudentContest.cfm.
Are we a “neck down” or “neck up” profession?
By Jamey Schrier, PT, DPT, OCS
I attended the Graham Sessions this past January where I heard this question: Are we a neck down or neck up profession?
The Graham Sessions are an open forum think tank to discuss the current state of physical therapy and its future. Physical therapists from the private practice industry (both large and small), technology, academia, and research, as well as representatives from the American Physical Therapy Association (APTA), Private Practice Section (PPS), and Health Policy and Administration (HPA) participate.
Various expert panels discuss important topics affecting the industry, as well as hold point/counterpoint discussions between physical therapists where each person defends a side of a topic. Physical therapists are also invited to share what is on their minds in a 10-minute talk similar to a TED talk.
This was my first invitation and I did not know what to expect. However, a smile came to my face when Carl De Rosa, a prominent physical therapist and business leader, posed the question: “What is physical therapy?” I knew this is exactly the type of question we as a profession have to be asking ourselves.
This simple, unassuming question is so profound because it embodies our dilemma as a profession and organization.
The physical therapy profession is in the midst of an identity crisis. We are confused as to who we are and our true purpose in this world. What is the future role of the physical therapist?
When someone asks you: “What is physical therapy?” How do you respond? How should we respond collectively? It is a simple enough question, right? However, it was not so simple to answer as evident in the heated discussions during the Graham Sessions.
I heard once, “All success begins with clarity.” If we have an identity crisis as a profession and are not clear as to who we are, then it becomes impossible to answer Mr. De Rosa’s question.
What is a neck down profession?
A neck down profession looks at physical therapists as mostly “doers.” In other words, we as physical therapists are the chief cooks and bottle washers doing all of the activities required to provide quality treatment and care. A noble intention, but in my opinion, the wrong one. Physical therapists have much more to offer than just being the “doers.”
As physical therapy private practice owners, we take this mindset to a whole new level by including the “doing of activities” to practically every administrative job in the practice and putting them on our plate. This mindset is killing us. This mindset that we were taught in school and communicated by our national organization is spilling over to many of us who are running our practices.
We are taught: “Do it yourself because you are an expert and autonomous.” What about collaboration? What about delegation? Are we not just pigeon holing ourselves deeper and deeper?
The challenge we face is that insurance providers are searching for ways to reduce health care costs. One of those “cuts” will no doubt be to get rid of the overpriced physical therapy “doers” and replace them with less costly people who can deliver similar results.
Are you surprised? Wouldn’t you do the same thing to reduce costs? Is not our true value much more than professionals who help people by doing things to them? Are we not more brains than brawn? Is not the advice, recommendation, and solution that we provide to people actually more valuable than the delivery of physical treatment?
This confusion is our professional problem!
We govern ourselves as neck down doers by placing rules against extenders (physical therapy aides, athletic trainers, etc.) because we are trying to protect the very thing that commoditizes our profession: doing. If not changed, this antiquated mentality will destroy us.
When there is no unifying message within the physical therapy community, including private practice, APTA, academia, and research, it is impossible to have a unifying message to the public.
The result is everyone clamoring to hold on to what they have always done and protect their “turf” at all costs. That includes going after the government or anyone else trying to reduce our payments and limit our “doing.” Stop protecting what we do not need—that creates more rules to protect our “doing” ability!
Instead, we need to focus our efforts on creating a neck up profession! A neck up profession brings incredible value to the market place with their brains. Very similar to how family doctors gather information, assimilate it, and deliver a valuable result to the patient in the form of a solution.
Physical therapists provide solutions to the public every day. That is our value. That is our worth! Yes, we may provide a treatment technique, if needed, but our true worth is the expertise, advice, and direction in determining the patient needs and the best methods to help them!
In exchange for solutions and value, we are compensated with money. Of course, this is a significant mindset shift from the past and current models. This can be a scary reality to many of us who are stuck in the past and in the “old” way of thinking and doing.
Of course, the current payment model is not set up for this yet! However, it is coming. In the meantime, we have to come together and get organized in our thinking and agreement of who we are: neck up or neck down?
Confusion is the enemy!
Not Obamacare, not the hospital systems, not chiropractors, massage therapists, or acupuncturists. It is us. The more energy we expend on discussing, fighting, and worrying about these things, the less time we spend on creating a whole new playing field.
Let us stop reacting to problems and start innovating and creating. This is what a neck up profession does.
Let us stop complaining to each other and start serving those who appreciate the value we create as physical therapists!
Let us stop killing our profession with outdated laws that limit growth and opportunity for the physical therapy owner. Instead, it is time to start aligning ourselves as an industry with the future of physical therapy!
I believe we are a neck up profession! I believe we offer our valued customers significantly more than just exercises, electric stimulation, or even manual therapy. We offer direction, expertise, and solutions. We offer the ability to synthesize massive amounts of information quickly into easy to understand solutions for our customers.
I believe this is extremely valuable to people who value their time and money.
For us to thrive in the future, not just survive, we have to start seeing ourselves as a neck up profession. A profession that uses our brains more than our brawn.
As I mentioned before, all success starts with clarity.
Without a clear understanding of who we are as a profession, we will never be able to preach a clear message to the public thus creating our identity.
It starts by asking the question: Are we a neck up or neck down profession? Then working together to send a unified message to the public, the lawmakers, and insurance providers to begin to help our profession move forward.
Jamey Schrier, PT, DPT, OCS, is a business coach to many entrepreneurial-minded physical therapy clinic owners. He can be reached at email@example.com.
Tom Bates, PT, is the owner of Therapy Staffing and Outpatient Therapy Clinics in southeast Idaho. He can be reached at firstname.lastname@example.org.
Practice and location: Therapy Staffing and Outpatient Therapy Clinics, southeast Idaho
Practice specifics: Tom Bates has been practicing physical therapy for 17 years and today has seven separate locations varying from outpatient clinics, hospital-based contracts, and school contracts with 50 plus employees.
What or who is the most influential person/book/event? Without a doubt it would be my wife, Theresa. She has been a constant support and her dedication to our family through her role as a mother and spouse has allowed me to succeed many times over. I also am currently reading a book about the leadership philosophy of Bill Walsh. It has fantastic insight into how to be a highly successful leader with easily transferable tips for any business.
What is your average day like? There is no average day. I currently see patients in a couple of our outpatient settings three days a week and work on corporate issues one to two days a week. With as many different locations and types of therapy settings that the company is involved in, each day is somewhat unpredictable.
What is your business philosophy? My business philosophy has continued to transform over the years, but there are some constants that I feel are crucial to my success. I almost never say no. When physicians and patients made requests, our company tried to find a way to get it done. This built trust and reliability. I involve the patient as much as possible. The more invested and involved a patient is in the point of contact the more effort they expend. Have fun! Injuries stink, rehab should not. Uplift and laugh with your patients. I believe it is one of my best tools.
How did you start your practice? My first foray into private practice was with a fellow graduate and a company that invested in us. After a few years we split up assets and ventured out on our own. This has morphed into opportunities to contract with hospitals, schools, and outpatient clinics. Over the years, I feel the most important lessons I have learned are that there are some extremely bright individuals who work hard to be successful. Many of those people are members of the Private Practice Section (PPS) and are really willing to share philosophy, concepts, and tips on building a better business with you. You can read books and go to lots of courses, but if you want to be truly successful in private practice, join PPS and be involved. You are not on an island with unique challenges that no one else experiences. It will transform your practice, guaranteed.
What is your life motto: If you want it, go get it. If you are passionate about something, you most likely enjoy doing it and if you enjoy doing it, you will be better than the next person at that task. Life is simply too short to spend it doing something you do not enjoy.
What worries or excites you about the future of private practice? I do not worry about the future. I just look at contingency plans for every possible event. If you strategically plan for future possibilities and decide now what you will do in the heat of the moment you are going to make better decisions and are far less likely to fail. The things I see on the horizon are outcome-based reimbursement and cash-pay patients due to rising copays and deductibles.
What are new opportunities you see? Aggressively expanding our pediatric footprint. My wife and I want to leave a legacy in the form of a family-centered pediatric facility that gives back to the community, which has supported us in many ways.
By Jerome Connolly, PT, CAE
On April 14, the Senate passed The Medicare Access and CHIP Reauthorization Act of 2015 (H.R. 2) by a vote of 92 to 8 thus repealing and replacing the flawed sustainable growth rate (SGR) formula and averting the 21 percent reduction in provider payments that was scheduled to take effect in April. The legislation, which originated in the House and passed that chamber with an astounding 392 “yea” votes, was signed by the president and is now law. The measure extends the therapy cap exceptions process through December 31, 2017. An amendment in the Senate to fully repeal the cap fell two votes shy of the necessary 60-vote threshold. However, the underlying legislation does contain provisions for more targeted (and palatable) manual medical review vis-à-vis the therapy cap.
Obviously, much work remains for the Private Practice Section (PPS) in the advocacy arena and despite these favorable SGR and therapy cap developments we will continue to aggressively pursue our legislative priorities that include locum tenens and opt-out. But more activity on the therapy cap may still be possible this Congress. One senator (Dean Heller, R-NV) who opposed the therapy cap repeal amendment offered by Senators Ben Cardin (D-MD) and David Vitter (R-LA), indicated he did so only after receiving assurance from his leadership Majority Leader Mitch McConnell (KY) and Finance Committee Chairman Orrin Hatch (UT) that there would be another opportunity this year to advance and work on full repeal of the cap.
Since the spring congressional recess occurred between the House and Senate consideration of the Medicare bill, the PPS advocacy team took advantage of the two-week hiatus and worked diligently with the American Physical Therapy Association (APTA), the Therapy Cap Coalition, and our locum tenens allies to urge the Senate to delay, amend, and then pass H.R. 2. Numerous grassroots alerts—both broad and targeted—were issued and PPS members responded diligently. However, with the senators not being in Washington, decisions could not be made on how the bill would be handled procedurally, and whether or not any given senator would be willing to push for consideration of amendments. In addition, a decision had to be reached as to whether any given amendment, if offered, would require budgetary offsets.
Ultimately, the leadership allowed six amendments, and the Cardin/Vitter amendment to fully repeal the therapy cap was one of them. All six amendments were defeated but therapy cap repeal was the one that came closest to passage. The “postmortem” analysis determined that this was a purely political vote and not necessarily one that accurately reflects any given senator’s position on the policy. Nevertheless, reaching 58 affirmative votes in such a political climate is no insignificant feat. A close look at the yeas and nays reveals no member of the Republican leadership voted for the amendment. Likewise, no Republican chairman of a major committee voted “aye” and only one Republican member of the Senate Finance Committee (Sen. Richard Burr-NC) voted for the amendment. All Democrats with the exception of Sen. Joe Manchin (WV) voted in favor of the amendment. (See Senate Roll Call Vote Tally, p.25.)
The repeal of the SGR formula is also an enormous accomplishment as it was responsible for the frequent (nearly annual) threats of double-digit cuts in our Medicare payment rates. The new law replaces the SGR with an approach focused on rewarding high-performing providers while supporting alternative payment models such as accountable care organizations and patient-centered medical homes.1 As such, it represents a dramatic shift in Medicare reimbursement philosophy and pragmatics as it places an emphasis on value through the establishment of a merit-based incentive payment system (MIPS).
The regular threatened cuts to fees under the SGR will be replaced by modest annual updates allowing fees to increase by 0.5 percent this month (June) and each year from 2016 through 2019, after which they will remain at the 2019 level through 2025. But “high-performing providers and providers participating in alternative payment models” will have the opportunity for additional payments.2
Beginning in 2019, the MIPS will replace three previous incentive programs (physician quality reporting system [PQRS], meaningful use of electronic medical records, and the value-based modifier) with a combined value-based payment program that assesses the performance of each eligible provider based on quality, resource use, clinical practice improvement activities, and meaningful use of certified electronic health record technology.2
This is an open, clear statement of Congress’s intent to accelerate the move of the basis of Medicare reimbursement from volume to value. The legislation calls for a new payment plan that eventually bases physician payments on their participation in value or incentive-based payment models. The SGR replacement reinforces the need for health care organizations to have a strategy in place to address the shift away from the fee-for-service payment model.3
The Secretary of Health and Human Services (HHS) will have substantial flexibility—within guidelines—to specify the quality measures to be used in determining the MIPS payment adjustment and to update the measures list as appropriate. The Secretary also will be responsible for developing the methodology for assessing the performance of each provider and the formula for calculating payment adjustments, as well as setting the threshold for bonus payments for exceptional performance. While physical therapy was not specifically mentioned in the statute, there is direction that all non physician providers will be included through the regulatory process through the provision that empowers the Secretary to decide whether and which other categories of health care professionals would be eligible for the MIPS after the first two years.
Providers who participate in alternative payment models can receive extra payments, such as shared savings for accountable care organizations or patient-centered medical homes. In addition, a 5 percent bonus would be available each year from 2019 through 2024 for those physicians who receive a substantial portion (at least 25 percent) of their revenues through those models. Providers who choose to participate in the MIPS would be subject to positive or negative payment adjustments based on their performance, with $500 million in funding each year from 2019 through 2024 to provide an additional adjustment for providers with exceptional performance.1
Beginning in 2026, fees would increase by 0.75 percent each year for providers who participate in an alternative payment model and 0.25 percent per year for those who do not. All providers not participating in alternative payment models will be subject to the MIPS beginning that year.1
All this obviously means that much critical work lies ahead in the regulatory arena that will impact our Medicare reimbursement rates as private practitioners.
Given CMS and congressional history, it is clear that the MIPS will be predicated on quality and outcomes. Physical therapy is well positioned for this new era as functional outcomes measures abound in our profession. Conversely, the care of medical doctors generally is not as conducive to measuring the effects of care, which is why physicians are currently emphasizing process measures; that is, whether or not something was done, rather than the ultimate result (outcome) of their care on the patient.
Consequently, there is a level of angst within the physician community about the new payment method, even though the American Medical Association strongly endorsed H.R. 2. Some specialty societies are clearly concerned and some believe this is a dramatic step into the unknown. “American Society of Plastic Surgeons is greatly concerned about the impact H.R. 2 will have on patient care and maintains its conviction that the Act is not in the best interest of patients, access to care, nor the quality of patient care delivered by all medical specialties.”4
Under the new reimbursement schema, Medicare will pay doctors based on how well they do their jobs, but it is hazy on how the government will accomplish this. “I am very skeptical of this,” Urban Institute Fellow Robert Berenson, M.D., was quoted as saying. “It is really absurd that we do not have any measures for most doctors that can place a value on their performance.”5
Blair Childs, senior vice president of Premier Inc., a large provider alliance, was unequivocal about what the repeal means for their industry. “It’s a new era,” he said. Though his organization has been deeply involved in pursing alternative payment models such as accountable care organizations (ACOs), “I do think a lot of the physician organizations have not been as engaged in this area,” he added. “This is a wake-up call and it is going to have big implications for health care in this country.”6
The plan represents one of the biggest steps yet from the government to actively accelerate the transition from the traditional fee-for-service model to value-based care. Some experts such as Paul Keckley, managing director at the Navigant Center for Healthcare Research and Policy Analysis, believe this will significantly “raise the stakes for clinically integrated networks of physicians, allied health professionals and their business partners to take on payer-sponsored risk.”7
To refine and implement a value-based system, health care leaders and the government must take several steps, including standardizing the definition of value, developing payment models geared toward positive outcomes, and aligning stakeholder interest.8
Meanwhile, and separate from the SGR legislation, HHS has embarked on a fundamental reform of how it pays providers for treating Medicare patients in the coming years. The intent, according to HHS officials, is to cut down on the volume of unnecessary procedures while improving patient outcomes.
“Those models will depend on how well providers care for their patients, instead of how much care they provide,” HHS Secretary Sylvia Mathews Burwell said at a January press conference in Washington.9
For the first time, her agency is “setting clear goals—and establishing a clear timeline—for moving from volume to value in Medicare payments.” In doing so, CMS will tie 30 percent of all fee-for-service (FFS) payments to providers to quality initiatives through alternative payment models—particularly ACOs and bundled payments—by 2016. It will rise to 50 percent by 2018. According to HHS, about 20 percent of Medicare FFS payments are through new payment models.10
PPS members can be relieved that we no longer have to worry about Medicare cuts that caused the frequent legislative SGR “fire drills.” However, we cannot understate the importance of the shift to value-based payments, a method that is sure to gather momentum now that it is recognized by the major federal payer.11
1. H.R. 2: The Medicare Access and CHIP Reauthorization Act of 2015.
2. Guterman S, With SGR Repeal, Now We Can Proceed with Medicare Payment Reform, The Commonwealth Fund Blog, April 15, 2015.
3. Ellison A, SGR replacement reinforces move toward value-based care, Becker’s Hospital CFO, April 16, 2015.
4. www.plasticsurgery.org, accessed April 23, 2015.
5. Budryk Z, Is the proposed SGR fix too vague to work?, Deficit hawks question savings while healthcare experts call for better-defined quality measures, Vox. April 7, 2015.
6. Small L, What the SGR repeal means for value-based payment models, Providers, payers weigh in about “doc fix” replacement’s ‘wake-up call’ to industry, Fierce Healthcare, April 15, 2015.
7. Keckley P, The SGR fix: what does it mean for hospitals and health systems?, April 6, 2015, Hospital and Health Networks Daily, AHA Publications.
8. Szczerba R, The Medicare ‘Doc Fix’ Bill: How Do We Pay For Value-Based Care?, Forbes, April 7, 2015.
9. Millman J, The Obama administration wants to dramatically change how doctors are paid, Washington Post, January 26, 2015.
10. Burwell Statement, Progress Towards Achieving Better Care, Smarter Spending, Healthier People, HHS.gov, January 26, 2015.
11. Japsen B, Anthem Blue Cross’ $38 Billion Move From Fee-For-Service Medicine, Forbes, January 29, 2015.
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.