Value-Based Care: How to Participate

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The first in a series of articles prepared by the PPS Payment Policy Committee.

By Rick Katz, PT, DPT, MA

Value-based care is often defined as demonstrating the relationship between patient outcomes and cost.

In physical therapy, the cost side of the equation often relates to controlling the costs of physical therapy via the provision of evidence-based care. However, the true value of physical therapy should not be measured only by cost and outcomes of the patient’s single episode of care with the physical therapist. It should be measured by the total cost of care for all interventions provided by all health care services necessary to produce the best outcome for that episode of care. The overall goal is to provide the best outcomes to patients via the most efficient interventions and management strategies.

Payers traditionally determine that physical therapy is of value if the cost/utilization is low/reasonable and balanced with a low incidence of patient complaints (satisfaction). Physical therapists must recognize the mentality of payers when approached to participate in the emerging value-based programs. As a profession and industry, we are compelled to change this mindset of the payer to recognize that value-based care really refers to the overall cost versus outcome of an entire patient condition or episode of care and should not be siloed only into the physical therapy costs.

To do this, a physical therapist must possess the following:

  • Understanding of practice costs and metrics (this will be covered in a future article in the series)
  • An electronic health record (EHR) platform that can be integrated, interfaced, or compatible with that of other physical therapy providers, medical groups, or systems
  • Understanding of the predictive modeling approach for the treatment of various populations and conditions
  • An outcome system that utilizes information that is understood by payers
  • Patient satisfaction or net promoter score tools
  • Willingness to accept some degree of financial risk that allows the therapy practice an upside benefit for above the line performance and also assumes some degree of downside risk for underperformance or dealing with outliers
  • Willingness to collaborate with other small practices to provide a comprehensive and cohesive product to a payer, hospital, Medical Services of America (MSA), or similar group

To demonstrate how one such model works, we are highlighting a joint venture between a hospital, health plan, and physical therapy provider who combined to deliver a model of musculoskeletal management that lowered overall costs. In this model, the physical therapy group obtained the utilization data by ICD-10 and ICD-9 codes to determine the cost basis for providing care to patients with all aspects of acute low back and neck pain. They measured value via patient outcomes, total cost of care, and functional improvement related to the overall management of a specific injury. The model was developed via a joint venture between Blue Cross/Blue Shield of South Carolina, Greenville Health Systems, and ATI Physical Therapy.

Evidence-based benchmarks show 70 percent of orthopedic patients should respond to physical therapy without:

  • MRI
  • Pharmacy (Opioids)
  • Injections
  • Surgery
  • Emergency Department

This study was published in the Journal of Orthopaedic & Sports Physical Therapy, February 2018, looking to compare total claims paid and patient outcomes for patients with neck and back pain who received physical therapy intervention via direct access versus medical referral. Patients who were experiencing low back pain were incentivized to access a physical therapist versus a physician in return for reduced copays and immediate access to physical therapy intervention.

Using a clinical registry, researchers compared two years’ worth of claims data and patient outcomes for 447 patients who received physical therapy for back or neck pain in a “physical therapy–led spine management program” via medical referral versus patients who accessed physical therapist care without a referral. Outcome measures used for the study were the numeric pain rating scale, Oswestry Low Back Disability Index or Neck Disability Index (as appropriate), the Patient Health Questionnaire for anxiety and depression (PHQ-4), and the EQ-5D, a standardized overall health status measurement instrument.

There was a 50 percent reduction in MRI use, 25 percent reduction in ED visits, and 52 percent reduction in pharmacy costs. Patients who chose to enter care via the direct-access, physical therapy–led spine management program displayed significantly lower total costs (mean difference, $1,543 per episode of care, a 34 percent reduction) than those who chose traditional medical referral. Patients in both groups showed clinically important improvements in pain and disability, which were similar between groups.

The initial patient choice to begin care with a physical therapist for back or neck pain resulted in lower cost of care over the next year, while resulting in similar improvements in patient outcomes at discharge from physical therapy. These findings add to the emerging literature suggesting that patients’ choice to access physical therapy through direct access may be associated with lower health care expenditures for patients with neck and back pain.


Rick Katz is a PPS member and vice president of operations and payer contracting with ATI Physical Therapy. He can be reached at Richard.Katz@atipt.com.

Copyright © 2018, Private Practice Section of the American Physical Therapy Association. All Rights Reserved.

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