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  • Physician Self-Referral to Physical Therapy for LBP Does Less, Costs More

    Patients who receive care from self-referring physicians for the treatment of low back pain (LBP) are more likely to be referred for some form of physical therapy, but that's just part of the story. According to newly published research, LBP patients who are self-referred receive fewer physical therapy visits and more ineffective passive modalities than patients who aren't self-referred—and all at a higher overall cost.

    In the study, researchers analyzed 158,151 LBP episodes in private health insurance claims records for nonelderly individuals enrolled in plans offered by Blue Cross Blue Shield of Texas. They found that physicians who "self-referred"—that is, referred their patients to a business with which they have a financial relationship—referred 26% of their patients to physical therapy. That rate was 16 percentage points higher than among non-self-referrals. Overall physical therapy was referred at a rate of 14%.

    But the higher rate of referrals doesn't tell the whole story, according to the study's authors, who analyzed what happened next—and how much it wound up costing. Results of the study were e-published ahead of print in the Forum for Health Economics and Policy (abstract only available for free).

    What they found was that the self-referred patients received, on average, 2 fewer physical therapy visits and 10 fewer 15-minute physical therapy service units compared with treatments by providers who did not self-refer. And when self-referred patients did receive physical therapy, they were treated differently from their non-self-referred counterparts, with an increased use of passive modalities such as hot and cold packs, mechanical traction, ultrasound, and electrical stimulation—approaches authors describe as "ineffective" in treatment of LBP.

    Looking more closely at Healthcare Common Procedure Coding System (HCPCS) records, authors found that about 46% of physical therapy services rendered during non-self-referred episodes included individualized exercises to develop strength, endurance, range of motion, and flexibility, compared with a 31.5% rate among the self-referred episodes. Significant differences were also found in the use of dynamic activities designed to improve function, which occurred at a 6.7% rate for non-self-referred episodes but in only 4.2% of the self-referred episodes. Conversely, electrical stimulation accounted for almost 9% of the physical therapy services in self-referring episodes. Among the non-self-referred episodes, use of that passive modality was 1.4%.

    Authors write that the use of exercise and dynamic activities "implies that [LBP] patients treated by non self-referring providers received skilled one-on-one care," and that "patients seen by self-referring providers received higher proportions of passive treatments." According to the authors, these passive treatments "can be easily performed by non physical therapists (medical assistants or technologists) in physicians' offices," and billed as physical therapy services under the "incident to" rule.

    And what about overall cost? It turns out that fewer physical therapy sessions and a greater use of passive modalities doesn't wind up saving money—in fact, the LBP episodes addressed through self-referral averaged $889 in insurer-allowed costs, compared with $602 for non-self-referred episodes—a 49% difference. As for spending on individual physical therapy services, self-referral episodes averaged costs that were double non-self-referrals—an average of $144 for the self-referring provider, compared with $73 for the non-self-referring provider.

    Results of the study not only inform physical therapist practice, but they help to clarify issues that have been at the heart of a policy debate over the reach of the Stark law, a law intended to prohibit referrals to a business that has a financial relationship with the referring provider under Medicare. That prohibition applies to most in-office ancillary services, but there a few exceptions: physical therapy is one of them. APTA has made elimination of these exceptions one of its public policy priorities.

    The new study also fills in some of the gaps left in a 2014 report from the US General Accountability Office (GAO), which looked at self-referral for physical therapy across all health conditions under Medicare. That report found a higher rate of referral to physical therapy (and fewer physical therapist services received) among self-referred cases, but was limited in its scope. Authors of the new study cite a number of "deficiencies" in the report, including its focus only on elderly patients, and the lack of any analysis of the types and quality of physical therapist services rendered.

    “The results of this study further confirm what APTA has firmly believed for years now,” said APTA President Sharon L. Dunn, PT, PhD, OCS, in an APTA news release. “Referral for profit leads to health care practices that benefit the provider and remove the focus from where it should be; the patient. APTA has long advocated for the elimination of referral for profit for physical therapist services from health care.”

    For their part, the study's authors keep the focus on the ways in which the quality of physical therapy services differ between self-referred and non-self-referred episodes.

    "An important contribution of this study is the finding that the composition of physical therapy services rendered to [LBP] differs between self-referring and non self-referring practices," authors write. "The care provided by independent therapists is comprised of more active, hands on treatments which appear to be appropriate in light of empirical evidence showing that passive procedures are not effective treatments for LBP."

    The study was funded in part by the Foundation for Physical Therapy and the National Institute on Aging.


    • Didnt really need this study to show this, LOL. Yes and I am sure there will be those who jump in and say there in-house does not do this. Interesting though, if they compared apples to apples in insurer-allowed costs. All of us in Private Practice know all the disparity in insurer-allowed costs when billed under the MD NPI vs ours. Often the get 2x as much for the same codes, hospital based is same thing.

      Posted by dano napoli on 8/12/2015 8:39 AM

    • The APTA is a co-author. Neutrality destroyed. Wish Mrs. Mitchell-head author- had done this on her own :(

      Posted by Eric on 8/12/2015 4:12 PM

    • Self referral will continue to be an issue until Physical Therapy becomes a protected profession like most other professional services. Until then, PT will continue to be controlled by outside interests. If you do not understand what I mean then ask an attorney about who can "own" his/her services.

      Posted by Joel on 8/12/2015 4:27 PM

    • Co-authored by someone affiliated with the APTA. Interesting.

      Posted by Robert on 8/12/2015 5:21 PM

    • I thought "Incident To" services were to be provided by licensed PTs practicing in Physicians' offices not by technicians and medical assistants. If not done by a PT then only the doctor is supposed to be legally able to perform the services. Perhaps Texas law is different and perhaps since they looked at non-elderly patients Medicare statutes were not violated but most insurance plans use Medicare standards as guidelines.

      Posted by Charles Kibbey, PT, DPT on 8/12/2015 9:16 PM

    • surprise, surprise. didn't we already learn this in the 1980's, early 90's?

      Posted by janice on 8/13/2015 8:23 AM

    • Even after 51 years as a active life member of APTA the master/servant relationship between physician & physical therapist has not changed!

      Posted by Ralph f. lucarelli,PT,Ed. MS on 8/13/2015 8:28 AM

    • No. Unless something changed in the past few years, "Incident to" services may be provided by technicians when the provider (Doctor) is on site. I will read this study with interest. Who, in their right mind, bills less for a procedure than they can be reimbursed. The fact that reimbursement is better in the hospital based and physician based practices may be correct, but is not a testimonial against RFP. The fact that there were 10 less procedure charges and two less visits should not be ignored. Until we have outcomes measures, we are premature in stating that the treatments were ineffectual, and those comparisons seem to demonstrate bias in the interpretation. It is possible that individual treatment sessions MAY be more effective in one setting than the other, while the most effective session may be partly comprised of individual procedures that may have been empirically shown to be less effective than those used in the less effective sessions. Number of sessions, Number of procedures, and valid outcome measures are required to make valid comparisons.

      Posted by Rick Blais PT on 8/13/2015 11:47 AM

    • Oh, and the fact that RFPs utilize self referral more than other referral sources MAY not be JUST about the $$. If I invest in a pool for my practice, I do it only after determining that it will be a good investment. Thereafter, I don't use the pool just because I get paid for it, but also because I HAVE IT. If you have it, you use it. If you don't, you consider what other options you have.

      Posted by Rick Blais PT on 8/13/2015 11:55 AM

    • POPTS are able to get paid at the Physician fee schedule which tends to be higher than the rate I get as a private practice PT. Partly explains the more $ for less treatment

      Posted by Rich on 8/13/2015 2:26 PM

    • The writing is on the wall. Yep, of course , there is good and bad everywhere. But I would put my money on the guy/gal who has to compete for his business. Funny how some of the POPT's refer out all there Medicare, bc either they are afraid of the one to one issues, or no doc in the office on Friday's which makes it difficult to bill under the Doc's NPI when they are not there. Docs cant write script's for Med's then sell those same med's to their patients, so how is this different. Look at the legal reason it was allowed in the first place, "incident to" is not at all what it is. I hate to say to all my friends/peers who work in these arraignments but I really would be anticipating a change in employment.

      Posted by dano napoli on 8/14/2015 9:41 AM

    • I will also be interested in reading this full report. It's easy to jump to conclusions based on an abstract, but some things don't add up on the surface. As Charles pointed out, this sentence doesn't make sense..According to the authors, these passive treatments "can be easily performed by non physical therapists (medical assistants or technologists) in physicians' offices," and billed as physical therapy services under the "incident to" rule." In Michigan, that is illegal. If Texas laws are different, this study is not generalizable. Are the practices in Texas set up where a PT is working in a physician practice? This is different ownership model than the "medical village" model multi-site, multiple practitioners and cannot be generalized to that setup. Also, I can't figure out the math on this...if there are an average of 10 fewer units overall and self-referers are using more passive modalities and less direct intervention, wouldn't that be less overall cost? I'm not justifying that if that's the case, however modalities are reimbursed at a lot lower rate than therapeutic exercise and manual treatment. Hopefully the study itself will provide more clarification.

      Posted by Karen Litos on 8/14/2015 10:25 AM

    • I appreciate the remarks of Sharon Dunn PT, and Rick Blais PT in evaluating this research for my use. The focus of health care practices should be the patient. Until we have outcome measures that are uniform for private practice, hospital based, and self-referred situations, we will not know the costs of care. Is a patient strong, informed and able to prevent re-injury or symptom recurrence? If so, it does not matter which modalities, how many visits, or units of care are involved! We may do in depth patient education w/ passive, hands-on or dynamic individualized, functional exercise. It is not reimbursed, therefore not documented, but is massively important in quality of care. The dichotomy of elderly vs non-elderly is specious. Many elderly people have a lot more rehab potential than many younger people. So we need more like CD10 definitions of diagnoses to define our effectiveness & outcomes. Let's all work with clarity of focus to empower our patients to be healthy! A longitudinal study of clear diagnoses with level of essential vitality, with PT treatment procedures (inferring adequate patient understanding of offered education), compared with cost, is needed for research that is not weak or petty territorialism. Patient satisfaction, independent management, return to work, and pain control for 6 months are good outcome measures. Jeanette PT

      Posted by Jeanette Lundberg PT on 8/14/2015 12:36 PM

    • I think step 1 is to level the playing field with regards to reimbursement. No matter where a patient is being treated (hospital outpatient, physician office or private practice), you need to reimburse the provider(s) and keep the patient’s out of pocket costs the same in that geographic region/state, etc.,. Only then do I believe you could then accurately perform step 2, which is compare outcomes. Yes, most research supports manual and exercise-based rehab and does not endorse the use of passive modalities in treating LBP, however I will also concede those procedures are reimbursed more (on average) than passive modalities. So, are exercises and manual therapy sometimes used too much in private practice because of the substantially lower fee schedules? Are there too many units billed in private practice vs POPTS in order maximize the reduced reimbursement? That I do not know. I can agree there could be some bias in the study based on being co-sponsored by the APTA and their position on POPTS. That being said, when one provider is receiving (on average) over 2x the reimbursement for the same services, in theory that should demonstrate a substantial over-utilization/more visits to the provider receiving less reimbursement. I would also argue that, in theory, it should demonstrate considerably less one-on-one time with the provider receiving less reimbursement. The fact that it was even close should be even more of a testament to seek out a non-self-referral practitioner. I would love to see a study comparing outcomes when the providers (hospitals, POPTS and private practices) all have the same fee schedule….whatever that fee schedule is. That should be the priority of the APTA.

      Posted by Darin McCarthy on 8/17/2015 12:34 PM

    • Having not read the study, my comments address one change that has the potential to alter decision making on the part of the MD's compared to the original studies by Mitchell around 1990. That change is the use of Pain Management services. Most Orthopedic Surgeons have moved to use of epidurals and other procedures performed in house by other MD's. This approach produces much better revenue than PT. In our area, Orthopedists are cutting off PT sooner and moving to injections, which includes a minimum of 3 epidurals, SI jt. injections, facet injections, and implantable devices to reduce symptoms. This produces revenue at a rate more than 10 times the rates of PT. It would be interesting to count the total cost of patient treatment with this in mind. My suspicion is that the average per episode cost of care will be thousands of dollars higher. Orthopedists aren't making nearly as much off PT ownership as they once did, but they can control the service, and cut it off when they need to in order to gain insurance approval for a series of injections. Unfortunately, as we all know, lack of progress in PT is the prerequisite of most insurers before approving either injections or surgery, except in specific circumstances. This likely explains the shift to fewer treatment episodes and perhaps even the shift to less effective treatment methods.

      Posted by Brian P. D'Orazio on 8/17/2015 2:08 PM

    • In response to some misconceptions that have been posted here and elsewhere, the Foundation for Physical Therapy—not the American Physical Therapy Association (APTA)—helped to fund this study. The Foundation for Physical Therapy is a nonprofit organization independent of APTA that is dedicated to funding research to optimize movement and health. Jean M. Mitchell, PhD, Professor of Public Policy, Georgetown University, was awarded a grant in 2012 to investigate physical therapy referral characteristics and practices on quality, cost effectiveness, and utilization. No author of the study was on APTA staff at the time the study was commissioned, conducted, submitted, accepted, or published, and the study went through several levels of interdisciplinary peer review (funding and publication). -- Foundation President, Barbara Connolly, PT, DPT, EdD, FAPTA (http://www.foundation4pt.org/)

      Posted by Foundation President, Barbara Connolly, PT, DPT, E on 8/17/2015 3:56 PM

    • Barbara, perhaps it was a mistake, but when this article's abstract was first made available it showed Elizabeth Anne Reicherter's credentials as being affiliated with the APTA.

      Posted by Robert on 8/17/2015 6:01 PM

    • We should be more concerned that the overall referral rate to PT was only 14%!

      Posted by Meg, PT on 8/18/2015 8:25 AM

    • Furthermore, for years we've been encouraged to educate physicians regarding the benefit of early PT in the treatment of back pain instead of imaging, meds, etc. Is it not quite possible that the increase in utilization by MDs with their own PT understand the benefits of PT and, therefore, use it as a first option when it comes to the treatment of back pain? And furthermore, if more of those patients are seen acutely that modalities may be used in the early phases of treatment in an attempt to decrease pain and to facilitate manual interventions and exercise? I know we spend a lot of time educating our physicians on the benefits of PT not only for back pain but for other diagnoses as well. If anything, we are often UNDERUTILIZED.

      Posted by Robert on 9/11/2015 2:49 PM

    • Unless WE all start an EXTENSIVE LOCAL AND NATIONAL campaign , educating our patients and the public about DIRECT CARE to PT, we will never win this battle. It seems as if most local clinics are 'afraid' to educate the public in fear of 'burning bridges' with these physicians. It is truly disgusting what is taking place in our profession. I have not seen any ads in our local areas (i.eTV/radio) paid by the local APTA's regarding this matter. Until the APTA allocates resources towards EXTENSIVE and INNOVATIVE marketing, you will have a decline of PT's becoming APTA members. I am sure this is not an easy task, but I am talking on behalf of some colleges who have not seen any good results for many years. Keep trying!

      Posted by HECTOR on 1/10/2016 9:17 AM

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