By Terry C. Brown, PT, DPT
As I sit down to write this letter, we are approaching the Private Practice Section (PPS) Annual Conference and I am looking back at the first year of my tenure as PPS president. The word that strikes me is “change” and it is all around us. Nothing is static. Payment models are changing: ICD-9 is now ICD-10. Practices are consolidating. Insurance companies are merging. Quality research proving the efficacy of physical therapy is being published. New models of practice are emerging that challenge the status quo. Education models are evolving. PPS has a new executive director and a new president.
Change is all around us. Maybe it is time we acknowledge that change is the new normal. I have seen the word transformed used when speaking of our profession’s objectives, but this word implies an end point or a goal to be reached. I believe evolution is what we are seeing, and it is constant. As a profession, we can evolve or we can try to hold the ground that we have had in the past. Evolution will require that we move out of our comfort zone and reach out to achieve new and challenging goals. The growth and progress necessary to achieve our goals is best accomplished together with PPS being the conduit to success.
I am proud of PPS and all of our members who are leading the evolution of our profession. We are at the forefront of many changes and will be fighting to gain access in others. By attending the PPS annual conference you will be exposed to many of the initiatives that are ongoing within the section. If you were unable, to be there then please read the annual report and see for yourself the evolution that is occurring. Change is constant, how we respond to it is critical. PPS is evolving right alongside the industry, and we will continue to advance our members’ ability to provide quality care to their clients.
Leadership strategies for improving your bottom line.
By Janet Lanham, RN
I have worked in health care for over 30 years, first as a registered nurse, then as an administrator, and ultimately as a revenue cycle management expert. Over the years, running a healthy practice has become increasingly complex and challenging. In the old days (like the 1990s) you opened an office, saw patients, submitted a claim, and got paid. Easy!
Then Medicare decided to introduce Sustainable Growth Rate (SGR), Correct Coding Initiative (CCI), Multiple Procedure Payment Reduction (MPPR), Physician Quality Reporting System (PQRS), and Council for Affordable Quality Healthcare (CAQH) regulations. Each new acronym meant a reduction in reimbursement. As Impact contributor, physical therapist, and business owner Sturdy McKee often says, today’s practice owner must think about working “on the business” as well as “in the business.”
Unfortunately, physical therapists are simply not a “bottom line–oriented” group. In order to achieve financial sustainability—and prosperity—you must change the way you view the revenue-generating, financial part of your professional life.
Over the past three decades, I have observed practices successfully make this shift and prioritize their bottom line. Below are some of their most effective leadership strategies for cultivating a financially healthy practice:
- Protect Your Time: Your time is your most precious, perishable asset. Manage it relentlessly. As part of your time management, make sure that you are spending part of every day working on important, strategic initiatives.
- Delegate the Right Things: Delegate anything that does not require your direct attention.
- Invest in Your Hiring Process: You cannot delegate anything if you have not hired the right team. Invest in recruiting. Consider hiring the right person an investment in your future, and make sure you understand what motivates your team. (It often is not money.)
- Coach for Continuous Improvement: John Woolf, PT, ATC, COMT, of ProActive Physical Therapy in Tucson, meets with his team regularly to review key metrics. They assess what is going well, what is not going well, and identify areas for improvement. John says, “I like to call this ‘watching game film.’ An accurate game film [business metrics in the form of clear reporting] lets us know where we are as a team relative to our goals. Analyzing the game film together helps us generate discussion about the potential root causes of any issues and inspires self-correction.”
He goes on to say “How effective is the football coach who stands on the sidelines during the game and screams: “Block!” “Tackle!” “Catch the ball!” compared with a coach that uses game film and practice effectively so that the players actually feel and understand how to block, tackle, and catch? The football coach who screams from the sidelines is like the manager who tells therapists they should be more productive or do a better job managing their caseload. A great coach will frame it for them, teach them the right moves, and what it looks like after every game. As a team, we all need to see where we are, and how each individual contributed to the result of the team.”
- Integrate Clinical and Financial Data: Health care in general, and physical therapy in particular, is too complex a business to run without an information system that integrates clinical and financial data to provide meaningful practice metrics.
- Measure What Matters: Decide what really matters and measure it routinely. Measuring units per visit may be an important productivity metric, but how important is it if you also have a high cancellation rate or if your patients do not typically complete their plan of care? Make sure that you look at “what matters” holistically before deciding what you are going to measure.
- Focus on Your Patients: Unfortunately, the short-term financial incentives in our fee-for-service system today often do not align with the best interests of our patients. As fee for service is gradually replaced by pay for performance initiatives, the financial incentives should align better with what is best for our patients. Keeping patients’ interests as the focus of managing your practice is critical today, but will become even more critical for your long-term success.
- Know Your Strengths: I often see small practices that “specialize” in everything from pediatrics to sports to geriatrics. Find your true strength, build on it, and excel at it rather than try to be all things to all people.
- Keep It Simple: There are times when less is more. A simple process that is 95 percent effective is much preferable to a complex process that is 96 percent effective.
Using simple systems to manage your time, a few key metrics to gauge your business health, a practical process like John Woolf’s “game film” talks to institute improvements, and a relentless focus on your patients is guaranteed to improve your bottom line.
Janet Lanham, RN, is a vice president of service delivery at Clinicient. She can be reached at firstname.lastname@example.org.
What is the effectiveness of measuring outcomes?
By Dan Fleury, PT, DPT, OCS
A fairly hot debate on the effectiveness of using outcomes to drive evidence-based practice exists. I have heard arguments from opponents and proponents, and they both have some valid points. I have even had the opportunity to participate in case reviews with a national health insurance provider to see what happens on the “dark side” when reviewing a case for decisions related to payment and continued care. That experience working with the health plan was extremely valuable in helping me understand why physical therapy continues to be a target of continued regulation, documentation burdens, and decreased payment. Their smoking gun: They were able to extrapolate your outcomes data. That is right, they are looking at each and every one of your charges and visits per patient. It really was an “ah-ha” moment.
Most incidences of denial of payment or denial for continued visits are due to “insufficient documentation.” Your patient gets a letter in the mail stating that the therapist did not provide enough information to the person paying the bill to warrant payment. This leaves you scratching your head because you thought you documented everything and you clearly identified that the patient made great functional progress and was close to reaching recovery.
Most likely the person reading your documentation and making that decision is not a rehabilitation provider and, furthermore, they have no idea what you are talking about in your attempt to wow them with your anatomical, biomechanical, musculoskeletal, and neurological jargon. They have no idea why a seemingly small restriction or loss of motion is worth the bill you have submitted, and therefore you receive a denial and it is blamed on you. Gone are the days when a payer simply accepts an educated and licensed rehabilitation provider’s jargon and ever changing goal status as an indicator of your skills as a provider and the payment for services.
We are all good therapists, and we all get patients better, right? Our patients tell us that we are good, they like us, and they keep coming back. Is that not enough? This sort of thinking is not understood by nonphysical therapists. They want and need a simple number backed by evidence that has been validated by research and shows functional improvement. Almost every contract negotiation, payment, or care discussion that I have been involved in over the past 5 years, I am met with the same response: Show me the data! Having the data to back up our claims of being great clinicians has proven invaluable. Here is an example of one success that I have had using outcomes in progressing my practice.
My company was born out of the idea that physical therapy could be provided in a better, faster, and less expensive delivery system—a clinically driven concept spearheaded by the underlying premise that only highly skilled interventions backed by evidence are employed as a first-line treatment for musculoskeletal injuries.
Cost savings and utilization are important in proving that physical therapy intervention is effective and efficient in the management of musculoskeletal disorders. Blindly cutting utilization and costs does not necessarily translate into having a positive impact on meaningful functional outcomes. Can we have a positive effect on cost, quality, patient experience, and meaningful functional outcome?
We approached a large local medical group with this exact concept. The medical group has several locations and is also the administrator for a large health plan covering active and retired military and their families. Working directly with a medical provider who is also a payer gave us unique access to a breadth of data so we could analyze physical therapy–related cost and utilization accurately. We were able to extract and analyze the cost and utilization data of our network and compare that to over 450 therapy providers in their network. Due to our success on both cost and utilization, our network of 23 locations was chosen to continue being the providers of high-quality services for this health care payer.
During our analysis we noted one of the medical centers had eight primary care providers and a national chain physical therapy provider on site. The data was extracted on that specific location with careful attention paid to the prior 12 months to improve the validity of the pending before and after comparison. The analysis indicated that cost and utilization of their existing therapy provider were two standard deviations higher than the network’s mean, identifying them as strong outliers in the data.
We were granted a contract to replace the existing therapy provider and prove our concept. After interviewing the medical staff and the health plan utilization review medical director, it was clear that a modern evidence-based practice that could accommodate same-day access for the large ticket items, low back pain, neck pain, shoulder pain, and knee pain, could have an impact on decreasing costs related to unwarranted imaging and specialist referrals.
At this point we had been tracking outcomes for several years using a web version outcomes database. The system we use is a computer adaptive test (CAT) that applies risk adjustment criteria based on specific criteria such as age, comorbidities, fear avoidance, diagnosis, and insurance carrier type, increasing the validity of the comparison between patients. For example, we know that not all back pain patients are created equal; this system adjusts the baseline and predicted outcome based on the risk-adjusted criteria to more accurately compare patients with like diagnosis.
The outcomes data can be drilled down further to compare a therapist or a facility’s efficiency, overall functional change, and patient satisfaction. The outcome data is compared to the outcome data of over 12,000 other physical therapists across the globe. The outcomes can be sorted by specific body part or surgical intervention. With 12,000 therapists and 450,000 patient encounters measured yearly we feel validated in assigning the predicted outcomes scores a safe representation of the national “average.”
This database has been shown to be meaningful, valid, and sensitive to change. (3,4,5,6). It has also been recognized by Congress and CMS through the National Quality Forum (NQF), which first endorsed their functional status measures in 2009. In 2010 CMS accepted the measures for use in the Physican Quality Reporting System (PQRS) program.
After one year, we completed an analysis on cost savings, utilization management, and functional outcomes of its integrated model of care. The data on utilization and cost was extracted from the payer database, and the outcomes were collected from my company’s outcome results from dates of service 11/1/2013–12/1/2014.
- Overall Patient Satisfaction: 99 percent
- Utilization decreased: 60 percent per case (compared to previous practice)
- Overall cost of physical therapy: 35 percent reduction (compared to previous practice)
- Functional improvements in the 7 CMS accepted measures compared to national average.
- Overall 46 percent higher
- Knee 71 percent higher
- Shoulder 57 percent higher
- Foot and Ankle 33 percent higher
- Spine 21 percent higher
- Hip 16 percent higher
- Neck 16 percent higher
The results overwhelmingly support the fact that outcome, evidence-based delivered care is not only less expensive but also that patients are highly satisfied, and the functional outcomes beat the national average!
1. Fritz, J et al 2015 : Physical Therapy or Advanced Imaging as First Management Strategy Following a New Consultation for Low Back Pain in Primary Care: Associations with Future Health Care Utilization and Charges. Article first published online: 16 MAR 2015DOI: 10.1111/1475-6773.12301c.
2. Childs et al. Implications of early and guideline adherent physical therapy for low back pain on utilization and costs. BMC Health Services Research (2015) 15:150 DOI 10.1186/s12913-015-0830-3.
3. Wang et al 2010: Clinical Interpretation of Outcome Measures Generated from a Lumbar Computerized Adaptive Test. Physical Therapy (2010) Vol 90:9.
4. Wang et al 2009: Clinical Interpretation of Computer Adaptive Test Outcome Measures in Patients with Foot/Ankle Impairments. JOSPT (2009) Vol 39:10.
5. Wang et al 2009: Clinical Interpretation of Computerized Adaptive Test Generated Outcome Measures in Patients with Knee Impairments. Archives Physical Medicine and Rehabilitation (August 2009) 90:1340-1348.
6. Deutscher, Daniel et al 2009: Associations between Treatment Processes, Patient Characteristics and Outcomes in Outpatient Physical Therapy Practice. Archives Physical Medicine and Rehabilitation (August 2009) 90:1349-1363.
7. Deutscher, Daniel et al 2007: Implementing an Integrated Electronic Outcomes and Electronic Health Record Process to Create a Foundation for Clinical Practice Improvement: Physical Therapy 2008 88:270-286.
8. Delitto, Anthony et al, Low Back Pain Clinical Practice Guidelines Linked to the International Classification of Functioning, Disability, and Health from the Orthopaedic Section of the American Physical Therapy Association J Orthop Sports Phys Ther. 2012;42(4):A1-A57. doi:10.2519/jospt.2012.030.
Dan Fleury, PT, DPT, OCS, is a PPS member and is a partner and director of Development of the Pinnacle Rehabilitation Network LLC. He can be reached at email@example.com.
Competition in the aquatic arena.
By Keith Ori, PT
Across the nation, physical therapy clinics are focused on two things: serving their client base and improving their bottom lines. Sometimes, it seems quite challenging to accomplish both goals, especially when it becomes evident that a potential customer base is not coming to a facility because it does not have the best amenities. In those cases, clinic owners can simply continue along the same marketing path and hope they stay in the black, or they can attempt to garner a larger piece of the client pie by adding equipment and services to attract clients.
One tool that many physical therapy practices are using to attract additional clients to their doors, rather than the doors of their competition, is aquatic therapy. Aquatic therapy has long been considered a niche of physical therapy; however, it is becoming a solid performer in its own right. Still, offering onsite aquatic therapies in a technologically advanced warm-water therapy pool can seem daunting, especially from a financial perspective. The key is to ensure that the investment in any type of water therapy equipment, including pools, will provide a sustainable and reliable return on investment.
For practices that are just starting on the journey toward offering aquatics as a modality for clients, especially those clients who cannot fully engage in land-based therapies, the key is to start slowly and do your homework. Pragmatism is a physical therapy clinic owner’s greatest ally; it can help lead the way through the following suggestions aimed at those just dipping their proverbial toes into the aquatic therapy waters.
#1 – Start Working with Clients in a
This can be a local YMCA pool or private pool. While it is probably not going to have the warmest waters or equipment, like an underwater treadmill and resistance jets, it will give physical therapists and clients a taste of what is available. Additionally, it provides a good starting point to see how interested people are in having aquatic therapy in addition to land-based physical therapy.
If and when a consistent number of aquatic therapy clients develops, and the annoyance of having to rely on another organization’s pool schedule becomes too great, it is an indication that it may be time to investigate buying a therapy pool for your clinic.
#2 – Investigate Therapy Pool Options
There are numerous therapy pools on the market, and you want to ensure that you will get the best product for your needs. Look less at the overall price tag and more at the features the therapy pools include and decide whether they match your clinic’s needs. For instance, some larger models allow aquatic therapists to work with more than one client simultaneously, or provide aquatics classes. Features that allow for different water depths can be very important. When the pool’s features match your clinic’s specific needs it can lead to a faster return on investment potential. During this period of examination and exploration, visit other clinics around your region—or even the country—with therapy pools and ask about their real-life experiences with the specific models.
#3 – Investigate Relocation Versus Current Site Expansion
A therapy pool takes up a good deal of space. For those who have room to expand through construction, it sometimes makes sense to simply add the pool to their current location. Just as often, though, physical therapy clinics that want to expand to aquatic therapy seek out new real estate. Make sure there is enough space to allow your clients to transition into land-based exercise programs as evidence of progress in their program.
Any properties that are being considered should be easy to find, central to the target population, and offer convenient parking. Commercial landlords should feel comfortable with the inclusion of a warm-water therapy pool on their property. In general, lease terms should be around seven years; this assures the clinic owner that the space will remain available, but he or she is not locked into decades of working in the same spot should conditions change.
#4 – Do the Numbers
If you are at the point of seriously considering adding a therapy pool (and amenities like locker rooms, maintenance of the pool, etc.), you need to be able to come up with data to support the decision. The data most important to consider includes:
- State reimbursement rates for aquatics codes. (States vary in what they pay for aquatic therapy and similar health care codes.)
- Cost of new aquatic therapy equipment and construction.
- Number of patients needed to reach the break even point.
- Understand your potential patient clientele. What kind of patients are you likely to see—from total joints to chronic pain—and what are their specific needs?
- Number of additional physical therapists (if any) needed to offer aquatic therapy. How to staff this facility is a critical decision.
- Amount of marketing dollars allocable toward aquatics.
- Amount of money set aside for annual employee training.
By carefully assessing current and projected future finances, it is possible to determine the break even point, or how many clients per week are needed to keep the aquatics program viable, and, eventually, profitable.
#5 – Take the Plunge and Start Construction… and Advertising
Do not wait for the pool room to be finished, start advertising your new services when ground is broken. Potential referral sources, such as physicians, surgeons, and perhaps even other physical therapy clinics, should become aware of the opportunity that is opening up for their patients.
As construction continues, it will become easier for others to begin to catch the excitement of what is happening. During this period, consider calling former clients to let them know about the upcoming positive changes. Word of mouth referrals are golden in the physical therapy world!
#6 – Open the (Pool) Doors and Keep Track of the Figures
This is a part of the business plan that too many physical therapy clinic owners fail to complete. They are so thrilled to have an up-and-running therapy pool with underwater treadmill, underwater jets, underwater camera, and variable depth floor that they forget to regularly assess their revenue. It is a costly mistake, because the figures will start to tell a story.
Instead of waiting, start tracking and evaluating immediately. Make sure all projected expenses (e.g., salaries, rent, utilities, upkeep, and annual maintenance agreement) have been included in the numbers. The story will start to unfold thanks to the numbers.
A Case Study: Our Clinic’s Entry into Aquatic Therapy in Rural Montana
Make no mistake—this article has not been written from theory. Our clinic went through the process, too. It went as smoothly as could be imagined, but took a couple of years to complete.
Being a rural Montana physical therapy clinic that dove into aquatics in the late 2000s, we determined that we needed five visits per day, and two to three units per visit in order to break even. Lo and behold, we hit the mark within the first few weeks of being open.
Since 2009, our visits have been steady and have more than paid for all elements of our aquatic therapy investment. Our average number of annual visits hovers around 2,200, which covers expenses. With that being said, the changes in health care took a slight nip in our profit margins in 2013 and 2014; however, everyone appeared to be hit in those years. Additionally, the charge per visit has varied, but we have been able to compensate.
I am pleased to say that our five-year return on investment summary proves we made a healthy decision. Our return on investment is a healthy 38 percent, and we are actively looking for ways to bring it up even more. Perhaps the most rewarding element of all is that we are able to keep growing and serving more of our population. We have a steady group of clients that return to our clinic for physical therapy due to their success with the aquatic program. By being careful up front, our team was able to make wise choices with the information they had, and they are proud to show individuals around our 2,800-square-foot clinic.
Keith Ori, PT, is the managing partner and chief executive officer of Orthopedic Rehab, Inc. He can be reached at firstname.lastname@example.org.
The number of measurement tools available per body part creates difficulty in comparing results.
By Alfonso L. Amato, PT, MBA
The introduction of Functional Limitation Reporting (FLR) by the Centers for Medicare and Medicaid Services (CMS) requires the use of a functional measurement tool. However, CMS has no recommendation or endorsement of what functional measurement tool to use in the outpatient rehabilitation setting.
Rehabilitation has led the way in health care by developing the science of measuring and reporting outcomes. A multitude of functional outcomes measures are available through commercial and open-access sources for nearly every type of patient health condition seen in rehabilitation. Although variety is typically considered positive, for rehabilitation professionals, this variety leads to a problem. The number of measurement tools available per body part can create difficulty in comparing results between patients, or between practices.
A simple head-to-head comparison of functional change between measurement tools is impossible. Let us analyze a common scenario. Two therapists are treating patients who have knee pain. Each therapist chooses a different functional measurement tool to measure function. Therapist A uses the Lysholm Knee Rating Scale and Therapist B uses the Lower Extremity Functional Scale (LEFS). Both tools are valid and reliable functional measurement instruments; both use a higher score to report better function. The LEFS top score is 80 points; the Lysholm top score is 100. Each therapist will report the resulting functional score from each instrument.
The challenge arises when you want to compare the outcomes between these two patients. A score of 40 on the LEFS is not the same as a score of 40 on the Lysholm. You cannot compare a patient’s outcome measured by the Lysholm with a patient outcome measured by the LEFS. Even with two measures with the same scaling of 0-100, a score of, say, 47 does not mean the same thing as a score of 47 on the other measure. Even if the necessary sophisticated statistical analyses were performed to “link” or “crosswalk” the scores of one measure to another, any change in scores would not be comparable. That is, clinical and statistical interpretations of change— the minimum clinically important difference (MCID) and Minimum clinical difference (MCD)—would remain unique to each measure.
When reporting change in function between patients, measurement properties of the tool are just one aspect in the comparison equation. Patient characteristics must also be taken into consideration. Certain patient factors affect functional outcomes and need to be considered when making a direct comparison. The science of outcomes has evolved to equalize patients via risk adjustment. The main factors considered via risk adjustment often include gender, age, and acuity of the condition. To accurately compare effectiveness and efficiency of care, risk adjustment is required. When comparing functional change of “knee patients,” even with the same functional measurement tool, you cannot compare functional change of each patient because you do not know what other confounding variables have influenced the patient’s potential for change. Risk adjustment accounts for the variables that influence the patient’s ability to respond to treatment and allows for one patient to be compared with another accurately. Using more risk adjustment variables allows you to better account for as many patient differences as possible.
No one wants to be punished for caring for the patients who are sicker, more severe, more complex, more difficult to get better, but that can happen if reimbursement is using a system that does not take risk adjustment into account.
Functional limitation reporting utilizes a G code modifier, which does not specify the specific measurement tools used. Use of different measurement tools can confound the understanding of the functional improvement as a result of care. The G code functional limitation levels are broken down into 20-point increments of change on a 0-100 scale. The following example can show how the reporting of change in a G code level may not provide an accurate picture of true functional change:
Patient A’s functional score at admission places the patient at the bottom of a G code scale; Patient B’s functional score at admission is placed at the top of a G code scale. Both patients had 19 points of change, but one is reported to be in a higher G code and the other patient remains in the same G code. This issue may lead to a missed opportunity to fully understand the change in function the G code reporting process was designed to capture. G code reporting, or a system like it, will possibly be the basis for future reimbursement policies. There is the real possibility that the rehab provider may be paid differently based on the G code level change, rather than on the patient’s actual functional change.
In summary, functional outcome reporting is here to stay. It will become the common language for reporting efficiency and effectiveness in outpatient rehab. It will increasingly be the basis for reimbursement. How do we ensure that reporting functional change will accurately reflect the benefit the patient received from the rehab provider, and that the rehab provider is paid fairly and credited for their contribution to the patient’s welfare?
A functional reporting system that has the following attributes will be the best opportunity to accurately measure and report functional outcomes, and become a basis for future reimbursement policy:
- The industry settles on a functional outcome measurement system used by all providers.
- The measurement system provides for the most accurate risk adjustment available for valid comparison of providers and treatments.
- The measurement system has psychometric properties that ensure high responsiveness, validity, reliability, and precision of measurement.
- The required G code method of reporting functional limitation allows for accurate reporting of change that captures true patient improvement.
- The measurement system has risk-adjusted predictive analytics that most accurately predict discharge functional level.
These five attributes of a functional outcomes reporting system will provide the basis for a fair and accurate process to fully understand patient change, better inform policy initiatives, and guide evidence-based practice.
Alfonso L. Amato, PT, MBA, is the president of FOTO, a private outcomes management and reporting company. He can be reached at email@example.com.