Physical therapists (PTs) are facing some ethical dilemmas over reimbursements for quantity over quality, according to the authors of a recent study.1

The issue is that reimbursement in skilled nursing facilities is linked to the number of minutes a patient receives treatment, which incentivizes over-treatment.

The researchers surveyed 340 PTs in nine workplace settings in Georgia. Of this group, 28 PTs worked at skilled nursing facilities. This group exhibited the lowest perceptions of ethical work environment.

Their primary ethical concerns were overuse issues, productivity standards, and billing and coding problems. The group reported that allowing PTs to make decisions autonomously and easing productivity standards would help ensure ethical care.

Medicare and Medicaid programs are shifting away from fee-for-service reimbursement models and toward value-based payment. “This transition toward value-based payments has the potential for improving healthcare while reducing costs. It also holds potential peril,” says Katharine Van Tassel, JD, MPH, a visiting professor of law at Case Western Reserve University in Cleveland.

It is true that fee-for-service reimbursement rewards quantity over quality. However, value-based payment models have the opposite problem since clinicians are financially incentivized to perform fewer services.

“A move from fee-for-service to value-based payment settings reorients the ethical framework for healthcare providers,” Van Tassel argues, adding that business decisions that are made as healthcare providers enter the value-based payment arena are “teeming with ethical consequences impacting patient care.”

Typically, such decisions are made by hospital leaders without ethics input. That is a mistake, according to Van Tassel. “Ethicists should request a seat at the table when decisions are being made on strategies for entering the value-based arena,” she says. The transition to value-based payments will discourage unnecessary resource use. However, there could be a move toward the underuse of vital tests and procedures. “The quality metrics used in value-based contracts are designed to safeguard against cost as the sole driver of care,” Van Tassel says.

The ethical concern is that financial gain, not quality, could drive clinicians’ healthcare decisions — or insurers might cherry-pick healthier patients. “Adding to this picture is the fact that a typical consumer is ill-equipped to self-protect,” Van Tassel notes.

Consumers are likely to be unaware of the types of underlying incentives that drive the care they receive. For instance, they would not realize that a fee-for-service model might incentivize providers to order additional, unnecessary testing and procedures. “In an ethical healthcare system, the consumer should have a seat at the table,” says Van Tassel, with reimbursement differences for healthcare choices openly discussed.

As value-based reimbursement plans become as numerous as fee-for-service plans, ethicists can assist healthcare providers. “Ethical and possible moral angst may arise from providing different treatment to consumers with similar problems based on the consumer’s payment model,” Van Tassel offers.

Ethicists can encourage healthcare providers to explain the reimbursement ramifications of various choices. Some people may choose to spend more out of pocket to pay for a treatment that the health plan does not cover. Others may decide to place more resources in a health savings account to pay for an uncovered treatment or choose the treatment that is covered under the plan. “This empowers the consumer’s decision-making based on the consumer’s own values,” Van Tassel says.


  1. Cantu R. Physical therapists’ ethical dilemmas in treatment, coding, and billing for rehabilitation services in skilled nursing facilities: A mixed-method pilot study. J Am Med Dir Assoc 2019; Aug 1. pii: S1525-8610(19)30499-2. doi: 10.1016/j.jamda.2019.06.013. [Epub ahead of print].