The 60 Minutes Rule-Private Practice PT Special Edition

How would you like a rep from the CBS show to come to your private practice office with the following questions:

1. Tell me about your partnership with the local orthopedist who is 12 miles away?

We have a deal that when they send me a patient, I get a percent of what the doc collects.

2. What the doc collects for you seeing the patient at your location?

Yes, we are a franchise operator for a big time company that says it is fair market value and legal.

3. What if the doc group doesn't collect anything for you seeing their patient?

I don't get a nickel.

4. Even though you had to see the patients and had cost involved?

That is correct. Aren't I lucky to have an exclusive franchise.

5. How is this legal?

Because it is fair market value and my franchise is protected and the group that I bought this franchise from has an attorney that says it is legal.

6. It is fair market value to collect zero dollars?

Well, there are patients that I often see that I don't get anything.

7.  What does the referring physician get out of it?

They get a percent, but since we don't do it with medicare patients it is legal.

8. What do they get a percent for?

It's their patients and they do the billing which saves us about 9% since that is our cost of billing. We pay them more than 10% though but the group that I bought the franchise says that I am paying them fair market rate and that it is legal.

9.  Does the physician have any risk?

Well, no but it stops them from having their own clinic and not sending me any patients.

10. How did you hear about such a great opportunity?

From some marketing that made me very nervous and made it sound like all private practices were partnering with orthopedists so that they can stay in business.  I get an exclusive territory and the contract is between me and the docs and I only have to give the company 5% of what I get.  If I didn't act in response to their email, I probably would be out of business.

11.  Does the company that you bought the franchise from and that gets the 5% have any legal liability on this?

I am a PT in private practice, not a lawyer but they have a lawyer though that says it is legal. The contract is between me and the physicians-isn't that great?  It's a good thing you don't have to be smart to be in private practice PT or else I would have gone out of business years ago.  I am thankful that so many good deals like this have come my way.

Have you heard of a Ponzi scheme or of Bernie Madoff?

larry@physicaltherapist.com

Comments

[David Straight]

Well put. It would be in the best interest of PTPPs to heed this warning and not get caught up in a Madoff-like scheme.

[Randy Johnson]

Thanks Larry! Once again you are "right on the money!" With all of the information available at our fingertips(courtesy of Al Gore's Internet)it's amazing how dumb people can still be. I am sure that if an orthopod told them to jump off a bridge cause it would make them rich and famous that they would do it!

I hope that the those PTs that are in private practice and are still thinking for themselves will get active and work for a change in the system!

[Spikey]

This is a very timely blog Larry. Several practice owners I know just today -and I-were talking about this scheme. We have all been contacted to give money every month right away or we will be left out of a PT network and go out of business. This slick snake oil salesman partnering off the backs of PT's with docs is a threat to us all in private practice. I have heard from two attorneys that say this arrangement is not ethical or can hold water and will hurt the owner associated with it at some point. Scare tactics--thats just what we need with all that is already going on with out patient practice. This guy claims to be our friend but is just selling us out faster than even POPTS.People should send this to every private owner they know.Someone should investigate these people!

[Selena Horner]

From a business perspective, it is crazy all the way around.

For one thing, there doesn't seem to be any check and balance system. Neither the PT nor MDPT Partners have an easy system in which to truly know when or how much the physician is being paid. Seems to be highly built on trust... but a twisted trust because the physician and MDPT Partners have a self-serving interest of increasing their profits by doing very little in assuming the risk.

The PT has no control or oversight into claim submission (there is an inherent risk of the physician billing fraudulently). I also don't quite understand the logistics... the PT does the service, the PT should have his/her NPI on the claim and the PT would need to reassign the benefits to the physician. The physician group NPI would be on the claim too.

Then... in doing the mathematics.. take a procedural code like therapeutic exercise. Let's say the code reimburses the physician at $30/unit. The physician takes $4.50 (if the cut is 15%). The PT gets $25.50. Then, the PT needs to give a cut of what the physician paid the PT to MDPT Partners (and if that is at 5%)... the PT gives MDPT Partners $1.28. So, the PT is now receiving $24.22 for therapeutic exercise.

How exactly does the situation benefit the PT? With reimbursement as low as it is, how will the PT survive with this "business" arrangement?

[Larry Benz]

Selena: This isn't about business. The scare tactics, implied simplicity and legal wrangling are way over the top. It cost virtually nothing to email tons of PT's and docs. The claims on contract numbers, business volume, and such are unverified to say the least. The most troubling is the current twist which involves mass mailing PT's in hi urban areas like Atlanta and claiming to form a "network" and that you better get in now as we have plenty of others suckers willing to give us their credit card for $100 per month and by the way we are mailing all of the docs in your area who will be sending patients to our newly formed "network" because they ge a percent. Does anybody seriously believe that these business models are sustainable? Oh, I forgot, it isn't medicare patients.

[PapaJohn]

My wife and I looked at this MD PT model and after having that 'doubt' we couldn't ignore in our minds-we sat down and made a list of things that were large red flags for this company. Many are tated already above but there are more:
1. The owner doug sparks is the only voice of the company and you can only reach him by email in order to make an appointment to talk to him.There is no transparency-in fact-there is nothing but information blocks.There is no one to talk to but him...don't you find that strange?
2. There is no 'office' or administrative staff despite mr sparks reporting he has hundreds of contracts with PT's and MD's. So there is no address, or office number or staff...sound odd to you? It should.
3. We asked for references...he wouldnt give any....yet he says he has hundreds of contracts...? In fact first he said 'sure'...but despite 2 reminders..no references.I wouldnt even hire a front office person without a reference...and you would consider going into business with the guy?
4. Now he is apparently out to hold the PT private practices hostage by wheeling and dealing with the referring community and telling the PT practices that he now controls your referrals...? You all should know that this guy is an EX wall street executive....sound good?

Everything about the deal sticks and is shady. People who do deals with this company are either very ignorant, naive or desperate for business. If the latter, then why not learn how to get referrals the old fashioned way and standing on your own 2 feet rather than giving 30-40% of the fees to a doctor and an ex wall street executive who now finds forming a PT netwrok is more lucrative than being on wall street....sound good?

Ya'all wake up!

[Jeff]

Do a lot of PT practices take part in this?

[papajohn]

The other thing for people to look at with this company that is shady at best....
Do you know where the business is that he supposedly has 'in the bag' that he is needing your clinic to be in the netwrok for?Do you even know if the business is in your county or STATE? ASK him...he won't tell you. It's a game of poker...and he holds his cards very close to his chest. Yet you would think of giving him a guaranteed monthly income to join a network with no structure, no support staff, no idea if there is business for you ? Also where is the network agreement if you are going to join his network and give him money...?
Dont let fear guide you into the lion's nest. If you want to deal with MD's/Ortho's...there are legal ways to have a referring relationship-I have done many.

[Stephen Edmonds]

MD/PT partners biggest clients are hospitals and corporate therapy providers. I seriously doubt if groups of this size would be involved with something unethical or illegal. From the info. I have seen MD/PT is just contract PT to doctors no different than contract PT to nursing homes, Home health agencies, etc.

[Todd]

What exactly is the difference with this model and the hospitals which have been doing for this for years? I don't feel sorry for the private outpatient clinic at all, as a contractor I can't tell you how many times I've been low balled by the greedy OP PP guy. Until they wake up realize we are all in this together and adopt a similar model to the MD's private practice where each professional has a little stake in the practice things will continue to get worse. If this kind of model were the norm you wouldn't see these MD/PT guys or POPTS for that matter have any kind of hold on the market.

[Selena Horner]

I hadn't received any emails with scare tactics from any company until... until I just got back from vacation. MD/PT Partners sent an email most definitely full of scare tactics and "act now" all over in it.

Sure, the medical world is in desperate times. Yes, reimbursement is horrible for physicians and physical therapists alike. The largest obstacle being faced is the unknown. When the capacity to survive is threatened, people will take various, extreme measures to survive. At the heart of this is the fact that physicians are financially hurting because of the trend....

The whole thing *is* about business... business for MD/PT Partners and additional business for physicians. (Heck even for PT's to be "Network Directors." The whole arrangement favors the loophole allowing for a conflict of interest to persist. And in that loophole, for physicians to make extra profit, they need physical therapists on board with them in some sort of arrangement. (The arrangement proposed by MD/PT Partners is much more than a contract for the PT to provide services.)

The arrangement proposed continues to be referral for profit. Referral for profit is a conflict of interest situation. Referral for profit alters the patient care equation. It makes it difficult to determine if the services suggested are really needed for the patient OR if the services are needed to pad the physician's pocket.

The worst aspect of the whole situation to me is the simple fact patients are the ones who lose. In the arrangement, the patient value is monetary. Patients... who are they going to trust? Of course, they are going to trust their physician! They are the most gullible when it comes to referral for profit situations. Patients tend to put a high value on their relationship with their physicians. Patients assume their physician has their best interest at heart (versus the almighty dollar).

The only way to help put a stop to referral for profit situations and be a patient advocate is through building a relationship with every single patient. I believe it is imperative to not only have reasonable outcomes, but to build a personal relationship with each patient. In that relationship, make it known, the patient has the power to choose and that you are always a phone call or email away whenever the patient has a question or a need. To prospective patients (all consumers), the message should be about the power to choose. Knowing what I know about our profession, I tend to think there are 7 things prospective patients should consider prior to scheduling their first appointment with a physical therapist: http://snippetsphysther.posterous.com/13645225

It isn't easy to survive in the outpatient world. Every day, every week and each year challenges are faced. I know, for me, I would choose to go out of business before signing a contract with MD/PT Partner. I won't let fear drive my business decisions; I don't want to second guess the physicians I collaborate with and have made a relationship with to wonder if they are putting profit before patients; and I'm sorry, but I don't believe I need to have a couple of financial pimps (MD/PT Partners and physicians) allowing me to survive and provide services. I'll either survive or go bankrupt, but a couple of pimps will never be involved.

[Brett N]

I received an email from the aforementioned group earlier this week claiming they were not on 60 minutes. I immediately forwarded this to my colleague which sparked conversation that started off my Tuesday morning with a laugh and frustration all at the same time. First off, I have always wondered how I began receiving these emails? I have never signed up for anything related to this practice model. I am always hesitant to unsubscribe myself and block the email but where is the fun in that. I would be missing out on all the scare tactics that make me feel as if the world is crashing around me.

Today, my colleague brought up a good point that I had not thought of. The fact that they have to use a disclaimer on their home page of "Let's start with the legal aspect" sends up an immediate red flag. The more you search around the website the more you see the word legal. It is almost as if the more I read the word legal, the more I believe the model in which they are proposing is legal. This is great marketing and advertising!

These are my colleagues thoughts:
"The premise is simple; a PT is a licensed extension of the physician, just like a PA or LCN. In both of those cases the physician does not need to be present to treat and bill for services under his/her provider number; just like a PT does not have to be present for the PTA"

That makes me so angry. This is what happens when the wall street businessmen and attorneys' combine to make money at the expense of our profession. I just read their website and they truly are the scum of the earth and need to be stopped. The problem is that they are also very smart and persuasive. The APTA needs to fight them aggressively and put an end to physicians being allowed to bill for PT.

[David Straight]

@Stephen Edmonds- I guess you missed the whole point of the post.

Ethics of convenience has to stop. We can't be part of the problem. We have to but the solution. There's no room for a greedy middle man anymore.

[Stephen Edmonds]

@David- I didn't miss the whole point of the post, I just have a different opinion. As a PT, I can understand established practice owners being upset about this type of arrangment. WE ALL WANT COMPLETE DIRECT ASSESS WITHOUT ANY MD REFERRAL, INPUT, ETC!!! But the fact is MD's are allowed to bill for PT services. Is it better for them to hire PT's(or worse PT tech's) and you don't get any of the business or contract with them and get a the vast mojority of the business? Frankly, the financial breakdown of what the PT is reimbursed in better than every other PT setting. I have a home health private practice in which we contract with home health agencies to providePT. Are you all against that as well? The agency pays us around 80-90 a visit but they are reimbursed around 250-300 per visit. We did contract work in SNf's. Are you all against that as well? Same type of reimbursement numbers. What the PT makes contracting outpatient is much more fair. This is the environment we are working in. We need to make the best of it while at the same time fighting for full direct access. Someone posted earlier that they would go bankrupt before they would enter into these types of arrangements. Respectfully, that is crazy. Adapt to the situation. We are kind of pointing out the speck in someone else's eye while we are ignoring the log in ours. I have seen all types of ethically bankrupted behavior (" bogus medical directorships, supposedly fair market real estate transactions, country club memberships, vacations, private school tuitions being paid for by PT's). All Private Practice owners don't have totally clean hands here. Again, from what I have seen this is out in the open contract PT, plain and simple.

[Selena Horner]

David, I think you are the one slightly confused.

Neither a home health agency nor a skilled nursing facility are in a referral for profit situation. Both a home health agency and a skilled nursing facility need to build their businesses, build their relationships with hospital systems and physicians in order to have business. When a physical therapist contracts with either of these entities, the physical therapist just provides the skilled services and provides the procedural codes for the visit. If the physical therapist could only negotiate $80-90 per visit, well, that was the physical therapist's problem. The arrangement is a done deal though - the physical therapist doesn't pay the home health agency or the skilled nursing facility to treat patients and the physical therapist doesn't pay some other party to allow the physical therapist to have a contract with either the agency or the facility.

I haven't seen any data suggesting home health agencies or skilled nursing facilities contracting out physical therapy services increase cost and utilization of physical therapy services. Read the MedPAC Larry wrote about - physicians who have a conflict of interest increase cost and utilization of physical therapy services. What MD/PT Partners allows is for the conflict of interest referral for profit situation to continue to exist.

Just because legally there is a loophole allowing for what MD/PT Partners does really doesn't mean it is the right thing to do, that it is good for society, that it really is a good opportunity for physical therapists and that it should be supported because it is an adaptation to the Stark Law with unintended consequences.

If MD/PT Partners had any clients in Illinois, looks like MD/PT Partners might be losing some business because the IL governor is onto self-referral and the spiral effect of increased costs, increased utilization and patients not having a choice. The IL governor said "no" loud and clear to referral for profit.

[Stephen Edmonds]

Selena, You may need to take a second look at the data. Medicare has home health PT in its sights for agency sponsored overutilization. I assume you have never worked or contracted with a home health agency that "strongly encourage" more visits when the PT knows the patient has reached his maximum potential or been asked to make sure every patient has had at least 10 visits. Assume you never had to "screen" SNF patients to pick up patients to increase caseload and keep the money flowing at the direction of the SNF administrator or rehab. director even when the patients have reached their functional maximum. So if it is not a straight referral for profit, it is ethically the same. We treat a patient, they pay us a portion and they keep a portion(with home health and SNF's a huge portion). Whatever you want to call , ethically it is the same thing. The real problem is that healthcare is a business. Anytime you have profit motive involved, all these types of problems arise. The real fight should be how to get business out of healthcare. In regards to Illinois, it will only stop MD's from employing PT's. I have not seen any language about stopping MD's from contracting PT's to perform services. The same thing that happened in South Carolina and Colorado. MD's can't employ PT's so they just contract with them. Until laws can be changed to stop MD's from being able to bill for our services then we have to work in the present system. Now if your clinic is robust enough not to need to work with these contracts then by all means don't do it, but some therapists may need to work with these contracts to survive. So in your opinion should those clinics just close or do what they have to do to survive?

[Selena Horner]

I have done home health for a short stint and I was employed by a physical therapy company which had the contract to provide rehabilitation services. I never had the 10 visit conversation with the owner... I was asked to treat patients that were not candidates for PT. I guess I'm a stubborn person, I just documented the patient wasn't a candidate and why.

MD/PT Partner arrangement is most definitely not the same thing as contract PT. The physician has a large volume of patients coming in the doors and just as large of an opportunity to increase profits by referring for physical therapy in the situation they receive money from the referral decision.

The IL governor said no to "fee-splitting." If the physician receives the payment and gives some money to the PT and then the PT gives some money to MD/PT Partners - that's fee-splitting.

Healthcare will always be business. The only way to take the business out of it is to provide services for free. That's not going to happen.

With regard to survival... I can't say because I don't know all the specifics of how those clinics are managed or how active in the community those clinics are. I also don't know if the clinics in those positions have joined forces to fight referral for profit - have those trying to survive worked with other private clinics and hospital clinics in the area to get a viral message out to the community?

My first choice would not be to take the easy route and join MD/PT Partners. If all my efforts failed... I'd close my doors. That's me. I generally like PT, but it isn't my identity. I believe I could do quite a few other things and love doing them just as much. Life would still be good - just different than it was.

[2012 advantage plan]

Too bad that health care is becoming more and more pro business instead of pro service. Unfortunately, it is not something within our control. Sigh :(

[medicare plans]

My wife works at a snf and it is definitely a profit center. They won't let a patient leave for a hospital stay without "reserving" the room for their return. I know they also work on referrals from local home health care facilities!