Office Memo regarding MedPAC Report

Who:  MedPAC':

The Medicare Payment Advisory Commission (MedPAC) is an independent Congressional agency established by the Balanced Budget Act of 1997 (P.L. 105-33) to advise the U.S. Congress on issues affecting the Medicare program. The Commission's statutory mandate is quite broad: In addition to advising the Congress on payments to private health plans participating in Medicare and providers in Medicare's traditional fee-for-service program, MedPAC is also tasked with analyzing access to care, quality of care, and other issues affecting Medicare.

When:  June 2010

What:  Report to Congress:  Aligning Incentives in Medicare



10 Top Quotes

1. "Moreover, there is evidence that some diagnostic imaging and physical therapy services ordered by physicians are not clinically appropriate."

2.  "there is evidence that physician investment in ancillary services leads to higher volume through greater overall capacity and financial incentives for physicians to order additional services. In addition, there are concerns that physician ownership could skew clinical decisions."

 

3.  "we report that outpatient therapy (such as physical and occupational therapy) is rarely provided on the same day as a related office visit. In addition, half or fewer than half of imaging, clinical laboratory, and pathology services are performed on the same day as an office visit. The finding that many ancillary services are not usually provided during a patient’s office visit raises questions about one of the key rationales for the IOAS exception—that it enables physicians to provide ancillary services during a patient’s visit."

4.  "The Commission does not make any recommendations in Chapter 8, but it does explore several options in more detail:

• excluding therapeutic services such as physical therapy and radiation therapy from the IOAS exception,"

 

5. "On the other hand, physician investment in ancillary services could lead to higher volume through greater overall capacity and financial incentives for physicians to order additional services. A study by Baker and colleagues estimated that each additional MRI scanner in a market is associated with 733 additional MRI scans among Medicare beneficiaries, and each additional computed tomography (CT) machine is associated with 2,224 additional CT scans (Baker et al. 2008). It is unclear whether the growth in scans is driven by changes in demand for medically necessary care or changes in the supply of machines. Several studies—including recent research conducted by the Commission—have found that physicians who furnish imaging services in their offices refer patients for more imaging than other for MRI or computed tomography (CT) scans engaged in a block lease or similar arrangement (Mitchell 2007)."

 

6.  "Researchers also found that physicians with a financial interest in physical therapy initiated therapy for patients with musculoskeletal injuries more frequently than other physicians and that physical therapy clinics with physician ownership provided more visits per patient than non-physician-owned clinics (Mitchell and Sass 1995, Swedlow et al. 1992)."

 

7.  "Questions have also been raised about the medical necessity of physical therapy services (Medicare Payment Advisory Commission 2006a). An Office of Inspector General (OIG) investigation estimated that 26 percent of physical therapy services billed by physicians that were provided during the first half of 2002 were not medically necessary (Office of Inspector General 2006).

8.  Outpatient therapy services are not generally associated with a related office visit. In 2008, only 3 percent of outpatient therapy services were provided on the same day as an office visit, 9 percent within 7 days after a visit, and 14 percent within 14 days after a visit (Figure 8-2). These results are not surprising; under Medicare’s coverage rules, a beneficiary does not need to receive an office visit with each outpatient therapy service. Instead, a physician must certify the initial plan of care within 30 days of the initial therapy service and must recertify the plan of care every 90 days (Centers for Medicare & Medicaid Services 2007b). In addition, patients tend to receive multiple sessions of therapy within an episode of care (Ciolek and Hwang 2004).

 

9.  Physician investment in therapeutic services may differ from investment in diagnostic services because of its potential to skew clinical decisions about the treatment of patients. For example, some have suggested that financial incentives may influence how cancer patients are treated. One study found that physicians who were paid more generously than the national average for chemotherapy drugs prescribed more costly chemotherapy regimens for certain types of cancer patients (Jacobson et al. 2006). In addition, therapeutic services are not typically ancillary to a patient’s office visit. Outpatient therapy and radiation therapy generally involve multiple sessions and are rarely initiated on the same day as an office visit.14

 

10. Concerns about excluding outpatient therapy and radiation therapy from the in-office ancillary services exception There may be concern that excluding outpatient therapy and radiation therapy from the IOAS exception would inconvenience patients by forcing them to receive care at hospitals. However, physical and occupational therapists can deliver therapy in private practices that are separate from physician groups. Patients can also receive therapy in ORFs, CORFs, and SNFs.

Why:  Overall, spending for outpatient therapy services paid under the physician fee schedule grew from $1.4 billion to $2.2 billion between 2003 and 2008. These figures exclude outpatient therapy provided in hospital outpatient departments, outpatient rehabilitation facilities (ORFs), comprehensive outpatient rehabilitation facilities (CORFs), and skilled nursing facilities (SNFs). The share of spending for therapy services that were provided incident to a physician’s service declined by nearly half between 2003 and 2008, from 30 percent to 16 percent. “Incident to” services are provided by therapists employed by a physician’s practice. Meanwhile, the share of payments for therapy services delivered by physical or occupational TPP, who bill Medicare independently, grew from 70 percent to 84 percent. Several factors help explain the growth of services provided by TPP:

• In 1999, CMS allowed licensed employee therapists to begin billing Medicare independently; previously, owners of therapy practices had to be on site and do all the billing for services furnished by employed therapists.

• Also in 1999, CMS eliminated payment disparities between settings for therapy services; as a result, many therapists changed their practice from an ORF to an independent practice to avoid the survey and certification requirements of institutional settings.

• CMS clarified in 2003 that therapists could be employees of physicians’ practices but still be considered in independent practice, which allowed physicians to employ therapists without being responsible for supervising their work (Medicare Payment Advisory Commission 2006a).

 

Top 5 implications:

1.  PT is not "ancillary".

2.  Physician owned PT/OT clinics can skew clinical decisions about the treatment of patients.

3.  Without POPTS clinics patients will have plenty of access to PT thru a number of channels, including private practice PT's.

4. PT patients referred by POPTS seldom get PT the same day (side note: there is an obvious reason ignored or unknown to MedPAC-most intermediaries won't pay for PT eval on the same day.  This alone supports the contention that it in office PT is purely financial).

5.  Need to track PTPP which is MD versus private practice.

What is needed:

1. End IOAS exception for outpatient physical and occupational therapy

2. Put pressure on OIG to designate physical therapy as a designated health service whereby POPTS docs would be obliged to:

     1.  Disclose to patients that they have a financial interest in the physical therapy clinic that they refer patients.

     2.  Provide alternatives to self referral including names and addresses of physical therapy clinics

     3.  Inform the patient that they are free to seek services elsewhere and if they do they will not be discriminated against.

3.  In the absence of #1 and #2, create an MD Amnesty Day where all POPTS fess up about their self referral interest in physical therapy and permanently use #2's 3 step process.  Fuel the Amnesty Day thru social media, national PR, and marches.

4. More research.  Studies in PT demonstrating overutilization by MD's are 15-18 years old.

Thoughts?

larry@physicaltherapist.com

This blog post is the product of my own conclusion.