Impact of Obamacare on Physical Therapy

As different elements of the Affordable Health Care Act (a.k.a. Obamacare) unfold, it’s emerging that this law has had a radical impact on private practices of all types. In Part 1 of this THREE PART article series, founder and CEO of In Touch EMR, Nitin Chhoda discusses the outlook for physical therapy private practices in the Obamacare economy.

2013 has been a very interesting year, and we still have three months to go.

In the last 8 months, the pressure on private practice owners has increased substantially, in more ways than one.

Regardless of the intentions of the administration, a disturbing result of the legislation is that clinicians are closing their practices and many are joining the ranks of hospital-employed providers.

Physical therapists are spending less time with patients and more with their EMR-enabled devices filling out digital paperwork to satisfy government requirements, all under the guise of improving patient care.

Medicare continues to reduce reimbursement amounts and tighten the nooze on private practices. Functional limitation G code reporting, PQRS reporting and manual medical review are just the tip of the iceberg.

The fact is, practitioners are opting out of insurance programs entirely, instituting cash only clinics, or closing up shop.

Results of a survey by the Doctor Patient Medical Association…

An increasing number of clinicians are selling their practices or joining the ranks of hospital-employed providers to combat their loss of revenues. In a 2012 study by the Doctor Patient Medical Association, ninety percent of practitioners polled indicated that private practice is losing out to the business side of medicine and 83 percent were thinking of leaving the profession.

When asked why; government intervention was cited as the root of the problem.

In a 2013 Deloitte survey, fifty percent of respondents said the practice of medicine is in jeopardy. Sixty-two percent indicated they were going to retire early as a result of Obamacare, and seventy five percent voiced the fear that fewer individuals will pursue a career in medicine in the future.

Athenahealth and Sermo both conducted their own surveys with similar results. Their polls also showed that 93 percent of participants were very concerned that they wouldn’t be adequately compensated for their services and expected their revenues to dip dramatically when Obamacare is fully implemented.

The Winds of Change

There are many factors influencing providers – loss of income, tremendous amounts of documentation and additional compliance based reporting, and the fear that legislation will become the motivating force behind medicine. Under new regulations, special G codes and modifiers aren’t payable and many procedures will be bundled for a flat fee.

Reduced incentive payments and Medicare reimbursements, bundled payments and reimbursements based on metrics, along with more regulatory reporting, disclosure and compliance requirements, are creating an insurmountable force that can make private practice unprofitable for those who do not adapt.

We are living in a new economy, called the ‘post medicare’ or the ‘Obamacare’ economy.

The writing is on the wall. There is a reason that CMS is collecting data with functional limitation G code reporting and PQRS reporting. Physical therapists are concerned that the Centers for Medicare and Medicaid Services will use the information obtained through additional reporting to limit services or not pay for them at all. Payment and services would be based on paperwork and statistics instead of a physical examination.

Clinical Care Driven by Numbers?

For example, there is a distinct possibility that Medicare says “Statistically, an ankle sprain patient improves from severity modifier CI to severity modifier CM in ten visits, based on the data we have collected, and the reporting of the functional limitation G code by clinicians in your area. Therefore, you need to get the patient better in ten visits, and we won’t pay for more than ten visits”.

As clinicians, we know this sounds ridiculous since every single patient is different, and may have different goals and other limitations. No two patients are the same. The question is – will this even matter in the Obamacare economy?

I hope I’m wrong, but this could be where things are headed.

If I’m right, we’re talking about healthcare driven by statistics, not by clinical expertise.

Physical therapists are already feeling the impact of PQRS, Functional Limitation G codes and Multiple Procedure Payment Reduction (MPPR). The APTA has estimated a 6 – 20% reduction in Medicare payments for physical therapists in private practice. In fact, they have indicated that some practices may go out of business with these new changes.

Concerns from Private Practice Owners

Clinicians say there are too few doctors to care for the influx of new patients under Obamacare and this has the potential to eliminate the sanctity, the integrity of the patient-clinician relationship. It has the potential to significantly lower standards of care.

It’s likely that there will be a significant influx of Medicaid patients, with very few clinicians to care for them. Incidentally, Medicaid pays approximately fifty six percent of what commercial carriers reimburse. In addition, some estimate an estimated twenty seven percent reduction in Medicare payments.

An oversight panel has been charged with reducing Medicare costs and determined the most effective treatments. Practitioners say it will place uninformed individuals in charge of dictating patient treatments based on cost rather than need.

Hospital-Employed Physicians and Monopolies

An increasing number of private practice owners are choosing employment in hospitals where they often earn more than in private practice, with no overhead, better hours, greater lifestyle flexibility and less administrative burdens. An article in the New England Journal of Medicine attributed the trend to Obamacare, noting that more than half of all physicians are now employed in hospitals.

Under Obamacare, hospitals typically receive higher reimbursements for specialty services than those in private practice. The end result will be alliances between hospitals and insurance carriers, where hospitals hold a monopoly among payers and offered services. Hospitals and payers who saw the financial potential embraced the new legislation.

Obamacare was never about containing escalating healthcare costs – at least not completely. Insurance companies and hospitals agreed to play the Obamacare game with the Affordable Health Care Act, using it to establish themselves as “too big to fail” in the eyes of the government, thereby obtaining the power to call the shots on how healthcare is delivered and reimbursed. For private practice owners, this was always a tough battle to win, if they continued to do business the same way.

In Touch EMR and In Touch Biller Pro – Your Competitive Options in this New Economy

In this economy, your choice of an EMR and billing software is critical. In fact, never before has it been more critical.

The right system can lower costs, improve efficiency and make you and your staff happy and productive. The wrong one can create a never ending cycle of frustration, pain and agony.

Cost effective systems such as In Touch EMR and In Touch Biller Pro provide solutions that help private practices streamline the before, during and after patient experience by providing the following benefits:

Complete eligibility verification online
Create patient records with one click (auto patient chart creation)
Create custom templates with a point and click template builder
Scrub claims, submit claims automatically with one click (automatic claims batching)
Post ERAs with one click
Generate patient statements automatically and much more…..

The future of medicine, how it’s delivered, and the private practice are imperiled. As more patients enter the system, the number of therapists in private practice will decrease. Patients will have less access to care, a situation Obamacare was supposed to remedy. The bottom line is that socialistic medicine favors conglomerates over small businesses like your own private practice.

The Importance of Live Events and Workshops

Attending live events and workshops like the upcoming Private Practice Retreat in Las Vegas is the best one to stay one step ahead of the curve, and prepare your practice for the ‘Obamacare’ economy.