Can Your Orthopedic Practice Support an Ancillary Hand Therapy Program: 6 Key Questions
By Jeff Goldberg, PT and Kay Kirkpatrick, MD
As pressures mount against physician fees, ancillary service lines are increasingly important to the financial success of orthopedic practices. Adding an in-house hand therapy program not only presents the potential to improve a practice’s bottom line, but more importantly, it can provide the opportunity for surgeons to work closely with the hand therapist. Communication is expedited by access to the same information and immediate access to physicians. Hand therapy services, however, can be challenging to establish and maintain in markets that have well established therapy providers. Jeff Goldberg, Director of Operations for Resurgens Orthopaedics, a 90-plus physician orthopedic practice with 20 locations in and around Atlanta, shares six considerations for developing a hand therapy program within your orthopedic practice.
The recruitment challenge
Mr. Goldberg, who is a licensed physical therapist and previously served as Resurgens' director of rehabilitation services, says there is little question orthopedic practice-owned therapy programs provide more collaborative care for patients, but recruiting certified hand therapists can be challenging. Not only does the national demand for these therapists outweigh the supply, but physician-owned therapy services are often looked down upon by the physical therapy industry. Although the majority of certified hand therapists come from the occupational therapy profession, many are physical therapists. “The American Physical Therapy Association, and most of the state physical therapy organizations, disapproves of physical therapy services owned by physician practices, so PT students are commonly discouraged from going to work for physicians," says Mr. Goldberg. "Therapists who do enter into this working relationship, however, recognize early on that they are able to provide a higher quality of care than is possible in a private therapy practice due to the collaborative experience. Hand therapists and physicians can easily communicate and medical records are shared. That's not the case in a private PT practice." It should be noted that these prejudices against physical therapists working for physicians are generally not held by the national organizations for occupational therapists or certified hand therapists.
While a bias against physician-owned PT services and an overall hand therapy provider shortage resulting in escalating salaries may make recruiting more difficult for some practices, Mr. Goldberg says recruitment and start-up concerns are outweighed by the benefits of a having a program, as long as the physicians have a referral volume to support the service. "Some physicians do have concerns about dedicating resources to get a program started, but often physicians can use their existing relationships with local hand therapists, to recruit those therapists or their colleagues to the practice," he says. "Even though we are seeing a decrease in the volume of therapy because of increasing deductibles and co-pays, in our practice, it still provides a very good revenue stream, in addition to making care more accessible to the patient. Patients continually express to us how much they appreciate the fact that they can see their physician and therapy provider at the same location. "
Practices exploring adding this ancillary service should consider the following questions.
1. Will your physicians create enough demand?
Generally, 3 physicians will produce enough referrals to sustain one therapist, though this can vary by subspecialty, says Mr. Goldberg. Practices should ensure they have enough demand for services before hiring a therapist or developing a program. "In our practice, we find about 10-12 percent of our physician visits end up being therapy patients," says Mr. Goldberg. In addition to covering therapist salaries, the expected revenue will also need to cover the cost of space to house the program and necessary equipment.
2. What are the expectations for profitability?
Therapy programs increase in profitability as they grow in size. "It is really difficult to be profitable with a low number of therapy providers and almost impossible with only one provider," says Mr. Goldberg. "Two or more therapists in one location are really needed to become profitable." While on-site therapy may be provided as a convenience to patients, practices with a goal of increasing profits through a hand therapy program will need to ensure it can produce the volume needed to support several therapists.
3. Will commercial insurers contract with your practice?
The patient access to your hand therapy services can vary greatly by region. "High managed care areas may present a challenge because they often have exclusive contracts with private therapy providers," says Mr. Goldberg. "You need to look at your payor mix and the access that mix will have to your services. If you know that 60 percent of your volume is from a payor that won't contract with you, it may not make sense to add this line of business."
4. Will your therapists see Medicare patients?
Another consideration for practices is whether or not its therapy program will see Medicare patients. Resurgens decided not to see these patients because of the additional regulatory and documentation requirements CMS places on therapy providers. "It can be a full-time job to manage the administration involved in treating and receiving reimbursement for these patients in a large practice," says Mr. Goldberg. "We weighed the risks and benefits, and in the end determined that referring our Medicare patients to the quality private therapy providers in our communities was the best model for our practice. This decision actually helps generate goodwill in the community for our practice because of the number of patients we refer to the private PT providers,” says Mr. Goldberg. (This must be looked at carefully as Medicare pays relatively well for DME.)
5. Who will manage the program?
The development of a hand therapy program should be overseen by an experienced therapy program manager. In most cases this will be a licensed occupational or physical therapist, who has managed a program previously, and ideally has developed a program at another practice, so he or she is familiar with recruitment and the regulatory and financial issues involved in a start-up. For smaller practices, this person will also see patients in addition to his or her administrative duties. However, if the program grows to include multiple locations (more than five locations would be an appropriate guideline), a dedicated manager will likely be required, says Mr. Goldberg.
6. Who will manage the billing, coding and collecting?
Finally, practices will need to consider if the existing business office staff will be able to support the billing, coding and collecting processes for the hand therapy program. Practices may need to train existing office staff on supporting this service line, or if the program is big enough, dedicated business office employees may be needed, says Mr. Goldberg.
And most importantly, get legal advice from a healthcare attorney before starting up this or any other practice-based ancillary. Ancillaries provided through medical practices are potentially subject to the in-office exception to the Stark rules, but this should be confirmed by an attorney experienced in health care.
Learn more about Resurgens Orthopaedics at http://www.resurgens.com/