Finding Opportunity in the New Health Care Economy

By Sean McEnroe, PT, SCS

State health insurance exchanges are a moving target for many of us as both practitioners and employers. In April, the first state program was declared a failure as Oregon’s “Cover Oregon” voted to close down its website and send customers to In the same month, Obama declared the success of eight million newly insured Americans. As physical therapists, these volatile changes can be seen as an opportunity, a threat, or both.

One opportunity is the growing insured population. In my practice, we have only seen five patients this year from an exchange-based product—five more than we saw last year. Political affiliations aside, we might have considered treating these patients under a charity provision, or they may not have sought the services of a physical therapist because they did not have coverage.

On the downside, risks do exist in this coverage. We can verify coverage, but we are not guaranteed payment if the patient fails to pay his or her premium after the second month. In a business, this factor is difficult to manage. I encourage you to be attentive to these policies, their payment provisions, and the risks of taking new contracts.

Like most therapists, I see opportunity more often than I see threats. Physical therapy interventions are designed to improve bad situations, and the current health care situation could use some physical therapy!

The Affordable Care Act and the onset of health care exchanges have pushed creativity in payment and contracting. Two private practice areas are ripe for opportunity. The first is the Medicare and Medicaid Eligible (MME) population. The Centers for Medicare and Medicaid Services have signed agreements with nine states to implement demonstrations to integrate care for their MME populations. While all states offer variations on the plans, the essentials are similar. The participating state takes a three-year, declining, capitated rate to manage the health of the MME population.

Physical therapists have an opportunity to get involved as the participating health plans are already designing new algorithms and treatment protocols. In a limited population, with defined cost-savings goals, they look for high value/low cost health care. Who is going to take the physical therapy–based, cost-reducing outcomes to improve their state? Is that too “big” for a small practice? Is that too far of a reach? I believe someone is going to make that reach and manage that population. Why not your practice and your colleagues in your state?

Another group of plans that are gaining traction and providing opportunity are the Medicare Advantage (MA) plans. MA plans accept a certain payment to manage the risk and outcomes of Medicare patients. One little known—but important—component of payment from Medicare involves risk adjustment. Risk adjustment allows the MA plans to account for the differences in expected health costs of individuals. Essentially, if they can prove that a patient requires more care, they can ask Medicare for higher risk-adjusted rates.

How does an MA plan evaluate every patient? Today physician–, physician assistant–, nurse practitioner–, nurse–, and other clinician–based companies receive fees for evaluating the risk profile for the MA plans. Why not a physical therapist? It may sound like a reach, but why does a “cash-based business” always mean selling elastic tubing or running a fitness center? Why shouldn’t private practices use our doctoral-trained clinicians across a larger platform?

I do not know who coined the phrase “There are riches in the niches,” but whoever it was must have been talking about how private practitioners can use their entrepreneurial spirit to create long-lasting and meaningful changes in the new health care equation. Whether it is with state exchanges or with specialty programs, such as MME or MA plans, private practice physical therapists will take the lead in developing a role in the new health care economy.


Sean McEnroe, PT, SCS, is a PPS board member and the chief executive officer of Proaxis Therapy in Greenville, South Carolina. He can be reached at Sean.

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