When Cuts Come Knocking

Medical instruments on blue background
By Robert Hall, PPS Senior Consultant

The philosopher Lao Tzu said in the sixth century, “Those who have knowledge, don’t predict. Those who predict, don’t have knowledge.”

As of this writing, we can predict that the Centers for Medicare and Medicaid Services (CMS) will impose an 8% cut in Medicare payments for physical therapy services beginning with calendar year 2021 payments. However, physical therapists need to know what such a large cut will do to their business and do everything they can to forestall its impact before January 1, 2021.

This column is focused on private payers, and so I hesitate to write a second column in two months devoted to a Medicare topic. But the reality is that cuts in Medicare have historically trickled down to private payment, and there is no reason to think differently this time. And while I urge you to work with your government relations leaders on the PPS Government Affairs Committee, I also urge you to take steps to forestall the impact of a significant cut in your payment from all public and private payers.

What should you do? First, engage with PPS and APTA as we push back on the cut. My colleague Alpha Lillstrom Cheng has a great column this month outlining strategies to do just that. There are letters you can draft, legislators to contact, and your stories that need to be told about the impact the cut will have on your individual patients, your practice, and your community. Visit the PPS Advocacy Hub to make the biggest collective impact.

Second, fight back against insurers contemplating the cut’s implementation. Calculate what an 8% across-the-board cut would mean for your business and use that knowledge to know (not predict) what you will have to do to modify your operations to absorb the cut. Will you have to add another line of business? Lay off staff? Close your doors?

Review your payer contracts and the terms they are obligated to abide by if they choose to change your fee schedule. What is the notice period? What are your contract termination clauses? Armed with all of this information, talk with each payer and try to persuade them that the implementation of the cut should not be automatic. Plenty of contracts with insurers reference fee schedules from prior years. Also, if your contracts peg payment at a percentage of Medicare rates, the payer clearly feels some flexibility to pay at a different rate than Medicare. Provide information about the impact that the cut will have on your practice and the patients they insure. Paying for quality care should not be considered a “medical loss,” but the core mission of the insurance company. Low rates hurt access to services across the board, and when practices can’t meet their bottom line, patients can’t find physical therapists who can afford to provide services to them.

PPS is here to help. This month, we are rolling out a comprehensive suite of materials to help you in your negotiations with insurers by illustrating the value of physical therapy. So, register for the PPS Webinar on April 29 to get a quick view of all the materials we are making available to you. These materials include a one-page document designed to bolster your case that your practice deserves better payment because of the value it brings in the care patients receive. For a deeper dive, we’ll also have available a white paper offering an overview of the scientific literature showing how valuable PT can be to address different patient conditions. We’ll have a slide deck you can use for presentations at your practice and at gatherings in your community; an infographic for folks who learn better visually; talking points for podcasts that you may be involved in; and sample social media posts that you can personalize to get out the word that physical therapy is valuable.

Finally, stay tuned for the development of alternative payment model ideas that may help payers evolve beyond the idea that PTs should only be paid for the services with a CPT code. Alternative payment models are designed to encourage overall patient health as opposed to paying only for specific services rendered, and almost always include payment streams beyond paying only for specific CPT codes. PTs help entire communities get and stay healthier as they avoid some of the negative impacts of drug overuse and the addiction that can follow. Movement is medicine. We hope to help decisionmakers incorporate that reality into new payment models as they struggle with the crushing cost of the health system on patients and state and federal governments.

PPS and APTA are pushing back hard against the 8% Medicare cut, but it makes sense to arm yourself with information and engage with private payers as they contemplate what to do about it. If they can be persuaded that your mission can help them, they may help keep your margin healthy.

Bob Hall is a Senior Consultant for PPS working to advocate with private payers. Prior to his work with PPS, he was the Director of Government Relations for the American Academy of Family Physicians, the access to care lobbyist for the American Academy of Pediatrics, the Director of Government Relations for the National Coalition for Cancer Survivorship, Counsel to US Senator Mark Dayton, Attorney Advisor to the US Securities and Exchange Commission, and Chief Clerk to the Texas House of Representatives Insurance Committee. He holds a Masters in Public Affairs from the LBJ School of Public Affairs, a Juris Doctor from the University of Texas School of Law and a BA from Haverford College.

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

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