Posts in MD owned PT service
Study Shows Cost Effectiveness Of Out Of Network Physical Therapy Practices

When we opened MEND we wanted a Physical Therapy practice focused on excellent patient outcomes, in fewer visits, delivered by experts in their field. Our practice will not employ anyone other than board certified Physical Therapy orthopedic specialists and the care would be one on one in nature. To maintain our clinical principles we decided to become an out of network provider of Physical Therapy services and have seen our practice thrive as patients seek out an alternative to the standard quo.

Consumers often mistakenly believe out of network is more expensive than in network care. When you compare the number of visits utilized by MEND, on average 3-4, it is significantly less expensive than an in network model seeing a patient 2-3 times per week for 6-8 weeks. In addition, services provided in Physical Therapy clinics owned by physicians (POPTS) often bill under “incident to” allowing them to charge a more expensive rate than in or out of network Physical Therapy practices. Incident to billing, increased visits, and a higher utilization of technicians and aides contributes to the increased Physical Therapy costs seen with POPTS. A recent study highlights these trends and documents the cost effectiveness of the out of network Physical Therapy model.

Pulford and colleagues examined the cost effectiveness of Physical Therapy services provided by an out of network (cash based) provider (Health Care Manag. 2019). They analyzed the charts of 48 randomly selected patients over a 3 year period. Authors reported patients were seen a median of 5 visits at an average cost of $98 per visit for a total cost of $780. Conversely, in network care averaged $936. This is the first study to examine the practice patterns and health care costs associated with out of network or cash based practices. In the presence of higher deductibles and co pays, patients are advised to consider both in and out of network models of care to see which model is most appropriate for their clinical and financial needs.

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PT Visits in Physician Owned Practices Comes at a Cost

Patients have a choice for where they attend Physical Therapy even if directed to a single PT practice by their physician. Unfortunately, physician owned physical therapy practices, either on or off site, are on the rise around the country and referrals are being driven to these practices due to financial incentives. These practices often utilize less qualified personnel (aides, technicians) to deliver PT services at a higher cost than independently owned practices. In addition, research shows these practices utilize a higher percentage of passive modalities (ultrasound) inconsistent with current medical research guidelines.

A recent article highlights the importance of choice when patients select a Physical Therapist after knee surgery.  Mitchell and colleagues researched Medicare data on 3,771 total knee replacements performed between 2007 and 2009 (Health Services Research. 2016).  Researchers divided these patients into three groups based on where they attended Physical Therapy and the financial relationship between the Physical Therapy clinic and the physician.  

1. 709 patients received PT a a clinic where there was a financial connection with the physician  

2. 2215 patients received PT at a clinic where there was no financial relationship             

3. 847 patients received PT at a clinic with an independent provider, but referring physician had a financial interest

The researchers found patients who received Physical Therapy at a physician owned clinic were seen for twice as many visits and received less individualized care.  Authors also noted a decrease in intensity at the physician owned clinics likely responsible for the longer plan of care.  Intensity was described as the amount of individualized interventions designed to improve range of motion, strength, and endurance.  These results are consistent with prior research demonstrating the key financial and quality differences between physician owned and non physician owned Physical Therapy practices.   

Patients are advised to research into the ownership of their Physical Therapy clinic and choose a Physical Therapist who can deliver the most effective and efficient interventions possible.   


35% Greater Cost For Physical Therapy Care At Physician Owned Practices

Currently, consumers have many choices of where to obtain Physical Therapy services for their pain and sports injuries.  One option includes a clinic owned by the physician, often an orthopedist or physiatrist, who refers the patient to the clinic in which he/she has financial ownership.  This arrangement, described as a physician owned physical therapy service (POPTS) has been around for decades as physicians try to increase revenue within their practices.  Unfortunately, this arrangement comes with a higher cost and poorer outcomes for patients.  

Mitchell et al. (JAMA, 1992) was one of the first researchers to describe the limitations of these arrangements as compared to privately owned Physical Therapy services.  The authors reported patients who were seen at a POPTS used 45% more visits at a 30-40% greater cost for the same diagnosis as compared to a PT owned practice.   Often this care is associated with a greater utilization of less educated and trained providers including Physical Therapist Assistants (PTA), aides, or technicians (Resnik et al. Health Res Ed Trust. 2006).  In comparison clinics who utilize only Physical Therapists document superior outcomes to those using more Physical Therapy extenders.  

An interesting study was just published looking at these two clinic settings in relation to patients with low back pain (LBP).   Mitchell et al. studied 158,151 patient visits for low back pain in Texas between 2008-2011 to determine the impact of clinic ownership on patients outcomes and cost.  Consistent with prior research, if a patient was referred to a clinic in which the physician had financial ownership he/she experienced a higher percentage of passive care including modalities like ultrasound as well as 35% greater cost per episode of care.  The utilization of passive care for low back pain is inconsistent with the latest medical research advocating for active treatments to reduce pain and disability and likely creates a longer episode of care for patients suffering with low back pain symptoms.  The greater cost is attributed to the use of "incident to" billing in physicians offices which allows them to bill a higher rate for the same service.  

physician owner physical therapy practice, low back pain,

The evidence has been consistent with POPTS, when physicians have an ownership in a service whether it be an MRI scanner or PT clinic the  utilization of these services increases.  In regards to POPTS, this increased utilization comes with poorer outcomes and an increased cost.  If you are referred to Physical Therapy you always have a choice on where you obtain these services.  I encourage you to do your research and find a local, knowledgeable PT.