152: Are PTs Forced to See Patients at a Loss?

Why do PTs feel like they’re being forced to see patients at a loss?

Recently, I’ve seen a few articles and social media posts in the physical therapy world discussing the downward pricing pressure (declining reimbursement rates) even while some payers (UHC often is the target here) report profits in the billions of dollars per quarter. And, at first sight, you can totally appreciate where these clinicians and writers are coming from. I mean, why cut payments to providers when your organization is raking in record profits? As many clinicians and practice owners put it: they feel forced to see these patients at a loss because of the declining reimbursement rates. But are PTs Forced to See Patients at a Loss?

Now, the reason for declining rates may vary on paper, but it really comes down to two things: 1) incentives and 2) the reimbursement model for healthcare in the US. And both of those things are tied together. I dedicated a whole chapter in my book about the problems with a fee for service model in healthcare, but here’s the basics: when clinicians get paid for their time (or the codes they bill), they re incentivized to bill as much as possible, in as little time as possible. Payers, on the other hand, only have two levers to pull to cut costs: 1) deny services all together (or gait them with authorizations and the like) or 2) pay less for those services. That means that it’s only natural that, under that environment, payers will place barriers to the service (preauthorizations etc.) and reduce their fee schedule (the amount they pay clinicians for those services). And that’s why PTs feel the squeeze, or the downward pricing pressure, affecting their practices.

But here’s one thing that we rarely talk about when it comes to insurance and reimbursement rates: who’s forcing us to see these patients at a loss? I mean, UHC isn’t storming clinics and coercing them into signing provider contracts. The truth is that contracting is a choice, a choice that many clinics and practices are making. In this episode, I break down the reasons why practices may consider contracting with a payer. The pros and cons of being “in network” providers. And the how to combat some of the downward pricing pressure in healthcare.

What we cover in this Episode:

• Understanding fee for service reimbursement models
• Why patients still get surprise bills because of the lack of transparency
• How clinicians come to the decision to sign contracts with payers
• The levers that payers have to control costs and profits
• Why value-based care can be difficult for smaller, independent practices
• How value-based care aligns incentives
• Making the decision to stay in or leave a payer network
• Why we need to think more deeply about the value our treatments and services bring

We post videos of certain podcast episodes, including this episode, which can find on the YouTube Channel.

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