What is grossly missing from the analysis

Multiple choice question-something you won’t see on a PT licensure exam soon I hope.

All of the following are true except:

A.  About 2.2% of medicare part B expenditures are for outpatient PT/OT/SLP of which 75% or roughly $3 billion is on PT.  9.7% of medicare beneficiaries access outpatient therapy.

B.  Data demonstrates that between 2006 there was an increase of 3.5% beneficiaries accessing outpatient therapy but a reduction of 4.7% in medicare expenditure for outpatient therapy

C. The medicare cap and exemption process caused a reduction in expenditures between 2004 and 2006

D. All of the above are true statements

This is not a trick question.

If you were a member of congress or some type of CMS committee tasked with assessing the therapy cap and exemption process and you relied on recent reports from an entity that you contracted (CSC), you would guess D.

If you work are a PT and have been forced to deal with medicare patients over the last several years, you would answer C.

This is one of some follow ups on my previous post Pay for Caps.

Unfortunately, the most erroneous conclusion from the CSC reports is the following:

The outpatient therapy caps, as implemented in CY 2006 with the exceptions process decreased overall spending and had little or no impact on beneficiary access to outpatient therapy services, in contrast to the negative effects observed in CY 1999,

This is the difficulty in having an external organization examine medicare claims data without likewise examining other changes by medicare that were enacted in the same time.  This gross omission completely missed the real reasons that dollars were reduced.

The following are some real reasons almost all of which are regulatory constraints or consequences of them:

1. the superimposed rules (e.g. 8 minute and group therapy)

2. enhanced auditing of claims for technical compliance which causes a “fear factor” by PT’s and thus group therapy or interventions left purposely off the superbill (throw in notable news about companies being penalized by medicare for overbilling ther ex and underbilling group therapy and this adds to this factor)

3. increased medicare patients moving away from a hospital environment to a PTPP which in turn causes increased medicare patients in those settings which in turn causes overlaps which in turn increases an increase in #3.

4. shortage of PT’s which causes more patients per therapist and underutilization

There are other “real reasons” for the decrease in expenditures. Yes, the exemption process in fact is an additional regulatory constraint (let’s make sure we d/c the patient prior to them reaching the cap). Interestingly enough, only about 15% of patients in a non hospital outpatient clinic exceed the cap versus 27% for SNF versus 37% for CORF.

The biggest tragedy that will be disguised as “good news” for the PT industry?  You can be guaranteed that the great success of the cap and exemption process will be in place after its current June 30th deadline.  Erstwhile, disruptive process and continued medicare patient “hoops and ladders” in your clinic will exist.

thoughts?

larry@physicaltherapist.com

Comments

[PaulS]

This has been an interesting post ( and the multiple choice quiz in another post certainly relates to my assertion here).

The Gladwell book, ‘The Tipping Point’ states that small changes in small parameters can often have huge impacts on large scale behaviors. One example was linking an increase in managing petty subway crimes on the murder rate in New York.

Such a subtle thing has been happening in PT that is addition to everything else mentioned. In my opinion, these two factors are a big part of that impact.

1. Perception of crackdown on over billing.
2. The NPI.

For those who are still reading…

Documentation is stressed with the exemption/ exception process. We shall assume that PTs document and bill in accordance of what they do. With the focus of this process on documentation and billing, PTs are improving not just these two parameters. Quality of care is also enhanced by improvements of the other two. I could be wrong, but most PT love to treat, and document and bill because they have to. A PT who has good notes and honest billing is also providing high quality care.
Fewer PTs are billing ‘incident to.’ This brings a newer level of responsibility to the PT. The PT is now attached by the NPI (in a digital manner) to their work. Even if this is perception and not reality, and even if the NPI was not even online, its impact cannot be denied. Factory workers became disengaged in their final product when assembly lines dehumanized them. The NPI humanizes the billing and coding process, and with it, as stated above, as billing and documentation improves, care will follow.
Publicity abounds when a provider runs afoul of the law and meets the fierce penalty for billing Medicare. So like the state trooper sticking a radar gun out the window to ‘catch a speeder’, everyone else slows down. It does not matter if that trooper put any batteries in the radar gun, nor if the officer actually is paying attention. The radar gun is there, and it slows everyone down.

So there you have it, one crazy PTs impression of why these numbers make sense.
P

[Larry Benz]

Excellent Paul. I don't know how fully implemented NPI was in 2006 which the 100% of medicare data analysis was performed but your points are well taken. I think the cap was a very mild contributor to the decrease and have trumpeted for its ending since its inception.

One major point that I forgot about was the impact of medicare advantage plans. Not sure of its role in 2006 but there was a significant number of plans in place. Since almost 10% of beneficiaries end up in outpatient therapy, those claims could in part be reason for the decrease in overall expenditures. Again, not sure if the claim data included medicare advantage or not-I doubt it did.

[James Glinn]

Aaaarrrggh! C'mon, the "hoops" that have been created for seeing a Medicare client in PT are like efficiency speed bumps. They do nothing but interfere with where our profession is going. Long term these rules will ultimately increase costs while providing no improved quality of care. Medicare, like so many governmental agencies has figured out a way to decrease not just access to care but also how the care is delivered.

The current rules and regulations surrounding the delivery of PT care for Medicare beneficiaries are ridiculous. They put boundaries on innovation in care delivery that are detrimental to our profession both short and long term.

Great post Larry, but it sure gets me fired up to see the possible "spin" that will be put on this recent batch of data!

[Selena Horner]

Medicare keeps reducing their fee schedule - kind of a no brainer there - reduce the fee schedule and costs will be reduced.

Larry, what was the definition of 15% "exceed the cap?" Does "exceed the cap" literally mean that a EOB stated benefits were exhausted and the provider would not be paid? Does "exceed the cap" mean that providers received payments from Medicare above the capped limit because -KX modifiers were used?

Exactly how did Medicare track that a patient didn't go from a PTPP to a hospital setting for the same condition? The same ICD-9 code might not have been used and there might have been a chunk of time between provision of services for whatever reason.

I don't think there were any new "bundled" procedures, were there? If there were, that could affect cost. When they start looking at line items, I'm sure there isn't standardization among all physical therapists - some will include a bundled service on a claim and get a denial for that service and others will not include a bundled serviced on a claim.

There still isn't any clear cut data differentiating "physician" from PTPP. That decrease in physician providers was a change in business policy where "incident to" was not the billing practice and instead claims were sent via the therapist identifier.

The Medicare advantage products have been huge here. I wouldn't think that Medicare would truly know the physical therapy claims for these particular patients because claims don't go to Medicare for payment. With an increase in Medicare advantage will be a decrease in physical therapy costs for Medicare due to less of a population of Medicare beneficiaries.

If I understand what I have read, I believe the only way to not experience a 10% reduction in the fee schedule in July is to extend the exemption process. There are so many ways to get around that cap because of the exemption process, I'd vote to keep the cap AND exemptions in place (for now). Those big ol' illogical loopholes are fine by me. I do NOT want the conversion factor to go down to 34! If they want to live in their little fantasy world that the cap and exemption process saved them money - let 'em. Bottom line is that I want to be paid and I don't want the fee schedule to continue to decrease. I'm not looking forward to July 1st. My 8 ball keeps giving me different predictions.

[Larry Benz]

Selena:
16% of PT patients who go to PT outside of a hospital (where they do not have a cap) and this number of patients is the overwhelming majority exceed the caps. That is for all settings. For PTPP it is 15% vs. 37% for CORF and 24% SNF vs. 18% ORF.
The reports review the data collection process and yes, they would have to have the modifier as you aptly point out.
If you like the cap and the exception process, then I am sure you will be happy with their decision which will undoubtedly be to continue based on the CSC report. Keep in mind that as Part B expenditures for all of CMS grow exponentially, the estimate for fee schedule reductions for us low life medical providers is 40% over the next 9 years! Congress has and will likely continue to prevent that from happening but it is indeed frightening.
I believe the cap was a minor contributor to the decrease for the exact reason you state-many just throw their hands in the air instead of going thru hoops and ladders to get the exception even though it is almost always granted. The best analogy that I can think of is that MVA patients are miraculously healed by their chiropractors when their $10,000 PIP is up!

[Jeff]

I am a 2nd year PT student and I am constantly hearing that reimbursement from medicare is decreasing each year. What will the future hold and what can we do to secure a better and brighter future? I know it is not all about the money, but to be able to take care of another person you must first be able to take care of yourself. Any comments would be of great benefit.

[Selena Horner]

Larry, I never really said I liked the cap and exemption process nor that there should be a cap and exemption process. The process is just another delay in payments if a denial happens (exhausted benefit). Resubmit with a -KX modifier and viola, done deal. Or, if I'm really on my toes, remembering to tag a -KX modifier so there is no denial. (And yes, since this is very public, when I use a -KX modifier, the patients do require further services and really are exempt from the cap. It isn't worth lying to risk an audit and the penalties and fines nor the "extrapolation" of data to determine takebacks.)

For now, it doesn't appear to me that the cap and exemption process are negotiable nor is there time to negotiate a different idea.

HR 5445 will at least protect all providers from a 10% cut.

[Shawn]

I have worked in the skilled nursing setting for the last 5 years. Since the exceptions process was put in place, I have not had to tell a single patient that we needed to stop his or her therapy because they did not qualify for an exception to the cap. With a little extra effort (assuming we are properly educated on the exceptions process), almost no one should be affected by the cap, as long as it stays in its current form. It's a paper tiger. The real threat to our future is a Medicare system that will continue to cut payments and possibly set "real" limits on access to services in the future in order to keep from going broke.

[Shawn]

I have worked in the skilled nursing setting for the last 5 years. Since the exceptions process was put in place, I have not had to tell a single patient that we needed to stop his or her therapy because they did not qualify for an exception to the cap. With a little extra effort (assuming we are properly educated on the exceptions process), almost no one should be affected by the cap, as long as it stays in its current form. It's a paper tiger. The real threat to our future is a Medicare system that will continue to cut payments and possibly set "real" limits on access to services in the future in order to keep from going broke.