This post is in response to over 15 requests that were privately emailed to me regarding my reference to "the math" in my May 13 post regarding confusion when giving patients information on pricing. My point is that thru the bizarre set of restrictive guidelines by CMS that physical therapists essentially have a maximum earnings cap at around 60K.
Before I get to "the math", let me make a few points of distinction:
-my beef is not with RBRVS in and of itself. The methodology is actually quite sound. We might disagree with the weightings but the rational is appropriate and much, much better than number of various valuing systems in place prior to RBRVS or the even more inappropriate per visit rates that I have seen. In fact, we have input into RBRVS thru our involvement in practice surveys and feedback.
-my beef is the entire notion that concurrent treatment is bad, unethical, illegal per the mentality of CMS per their superimposed rules. Even though the CPT codes had definitions, CMS sought in their infinite wisdom to further define them in terms of what cannot be billed when you use certain codes and under a variety of different clinical situations, essentially mandating the use of stopwatches during the course of treatment, creating a whole new definition of "group therapy. side note: I still find it absurd that if you are applying manual therapy techniques to one patient and another CMS patient is exercising on the bike that both patients should be billed as group therapy!
Now, for the math.
The assumptions:
- therapist is treating only CMS patients or those that follow the CMS guidelines (e.g. Tricare, CHAMPUS)
-following the rules, all therapy is one-on-one/direct with no concurrent patients (by the way, if the whole notion that concurrent therapy does not produce appropriate outcomes, wouldn't they follow this in an NFL training room where cost is not a factor and outcome is the only benchmark?)
What started as an economic model to accurately determine the relative weight of some 8000 CPT codes has evolved into a counter-productive practice model based on unwarranted assumptions related to patient care and quality outcomes.
I believe we have lost our way.
CPT definitions of one-on-one have been translated into CMS reimbursement guidelines.
And what’s so profoundly disturbing is that so few seem to realize the foolishness of the “rules” and how the future of the profession is being negatively impacted.
Now let’s look at the economics:
-the therapist bills an average of 3.5 units per patient
-therapist sees the equivalent of 7 hours worth of patients per day (3.5 units x 7). Because all therapy to these patients is 1 on 1, there is no overlap in scheduling as the group therapy would further reduce the hourly rate
-therapist works 5 days a week and we allow for 47 work weeks a year (5 weeks off includes vacation, holidays, sick time, cont educ, professional meetings, etc.)
-the other components of RBRVS (e.g. practice expense, liability expense) are adequate to provide all overhead which includes billing/collections, accounting, HR, advertising, etc. There are few people that believe that the non-work components can actually cover these components Using RBRVS which would even make "the math" wildly optimistic.
-you will have a 10% no show/cancellation average which is probably a little low for medicare population
-you get no support staff help in any way in the clinic including cleaning, set-ups, etc.
I had an analysis done of the top CPT codes billed to CMS and I used the work component of these procedures as the compensation that a therapist would make. The top codes in order with their work components:
RBRVS values for each procedure include a comprehensive breakdown of the expenses (resources) required to deliver the service. If we look at just the ‘work’ component we see the maximum income a therapist can generate per procedure:
Therapeutic exercise $17.05
Therapeutic activities $16.67
Manual therapy $16.30
electric stim $6.82
(side note: group therapy is around 10.00).
So a typical treatment consisting of 3.5 units would generate about $50 for the “work”. That’s $50 per hour TOTAL including benefits, taxes, etc.
. Applying this assumption, total compensation would be about $57, 000 per year.
That’s the MAXIMUM earning capacity of a therapist under the Medicare model in an outpatient setting.
Thoughts?
Larry
