Practitioners adapting to realities of managed care

Yes, you can survive and thrive

Surviving in a managed care environment doesn’t have to be the end of the world for a rehab department or practice, say two national leaders in the physical therapy industry.

Larry Fronheiser, PT, and Peter Kovacek, MSA, PT, board members of the Alexandria, VA-based American Physical Therapy Association, say managed care has simply accelerated the direction in which the rehab industry was headed anyway: namely, becoming more efficient in providing patient care in terms of costs and average number of patient visits for a particular condition.

"Patients by and large are getting better under managed care. If a therapist remains flexible and goes the extra mile needed for additional authorization, patients will get the care they need," says Fronheiser, senior executive officer of Allegheny & Chesapeake Physical Therapists Inc. in Allegheny, PA.

Fronheiser’s practice has decided to apply managed care standards to its entire patient population rather than establishing one set of rules for those covered under managed care plans and another set for everyone else, he says. "We started out that way, but we found that managed care rules were the best ones to apply universally to get efficiency out of our staff."

Allegheny & Chesapeake PT has adapted to the needs of a managed care environment by:

Implementing clinical pathways and outcomes measurement for the major procedures done in the practice. The practice has tracked visit data for its top 50 ICD-9 codes for the past four years. Recently, practice leaders developed clinical pathways for the top 10 codes in this group to encourage good quality of care with fewer visits when possible. They incorporated these guidelines using their own best practices, networking with other practice leaders, and utilizing standards outlined in The Guide to Physical Therapy published by the Alexandria, VA-based American Physical Therapy Association.

A good first step Fronheiser, says, is for administrators to pick out the most common procedures they see during a year, using data from the practice’s billing system.

Benchmarking results against national standards. The practice participates in a national database called FOTO (Focus on Therapeutic Outcomes Inc.) as well as the Physical Therapy Provider Network to compare its results with practitioners in other parts of the country.

Educating staff about the need to adapt their skills to a managed care environment. "We’re still educating staff to come around," Fronheiser admits. "It’s an education process on the part of us in administration. The most significant roadblock to implementation has been among the general willingness of therapists to change their clinical practice [in implementing clinical pathways]. It’s become a part and parcel of every internal education [program] we’ve had."

Adding a director of utilization manage ment. This individual deals with the paperwork and billing components associated with managed care, such as the need to document medical necessity for specific treatments. Even in challenging financial times, Fronheiser considered hiring someone for this job to be worth the investment because of the paperwork and other "hassle factors" in dealing with managed care organizations.

Fronheiser’s practice also is going after an increasingly lucrative patient base that is attracting many firms: consumers who are willing to pay for services out of their own pockets. This patient population already has flocked to alternative care practitioners and is interested in many of the services physical therapy practices can provide, Fronheiser says. Allegheny & Chesa peake has started a program called ACE (Athletic Accredited Edge) that uses the expertise of physical therapists to address sports-specific remedies. For example, therapists work with patients to treat or avoid injuries that result from a bad posture or stance. In addition to treat ment from therapists, the program also includes tips from golf pros on how patients can improve their form to become better golfers. The practice has advertised the service through direct mail, billboards, and newspaper ads.

The No. 1 area rehab practitioners should study is productivity, says Kovacek, a physical therapy consultant and president of KovacekManage-mentServices in Harper Woods, MI.

When a market is in the early stages of managed care, revenue potential drops, he explains. This means managers have to better control their overhead. The largest part of overhead for most rehab facilities is in staff salaries and benefits.

Define productivity goals

While productivity long has been measured by patient visits, that isn’t always the solution in an era when many managed care organizations are reducing visits allowed for many patients, he says. "For some patients, being productive might be having more visits; for others, it might be having the patient become more independent earlier on. It’s very difficult to talk about productivity until you define what needs to get done."

He recommends two strategies to help rehab managers and their staff increase productivity. He developed a quiz he uses with clients to help staff improve in this area (see insert). The quiz helps identify ways for therapists to become more efficient. "It’s one thing to tell employees they need to be more productive. It’s another thing to tell them how to be more productive," he says.

The second strategy is for managers to become involved in industry organizations and talk with peers in more mature managed care markets as a way to learn from others. If managers try to work with managed care organizations rather than against them, the end result, both Kovacek and Fronheiser say, is that the challenges of managed care actually can benefit the rehab industry.

"I think physical therapy was coming to a crossroads in trying to decide how it was going to prove the efficacy of what we did, in terms of the types of procedures we were using and the amount of time it was taking to get an appropriate outcome," Fronheiser says. "Managed care, I think, served as a catalyst for getting that process accelerated."

Editor’s note: Kovacek Management Services operates a listserv for rehab managers to offer news affecting the rehab industry and offer a forum for exchange of ideas. Participation in the listserv is free. Details on signing up for the listserv can be found on the Inter net at