MisAligned Network: Heads I win, Tails you lose approach to #physicaltherapy

I have been around the billing and collections aspect of #physicaltherapy for a long time.  I thought I had seen every gimmick and cockamamie the “middlemen” have devised (see posts here, and here for the post on MedRipOff and OrthoNuts and second one here on OrthoNuts).

By way of reminder, these middlemen under the banner of “specialty benefit manager” are in the business of scamming money off of the top in worker’s comp. Of course, they don’t call it that-they refer to it as utilization review, cost controls, and “looking out for our employer’s interests”.  To be fair, they prey on the well noted peace corps genes of physical therapists (generally an inability to say no to low paying contracts, take any contract under the misguided notion that it would not be nice to not see patients, etc.).  The latest is Align Networks with a fun tagline of “a healthier approach to worker’s comp” which really means “a craftier way to take money away from providers”.

Here is the latest scam (thanks to Jeff Hathaway for the example). But first a reminder: remember there are two beliefs that drive payer behavior – #1 #physicaltherapy is a commodity (see recent post here on race to sameness); #2 Costs are measured and managed in Silos.  With these two beliefs solidly entrenched, It becomes simple math from the payer perspective and the trickery looks like this (numbers for illustration purposes only):

2013 Avg WC PT/Visit = $80/v

2014 Avg WC PT/Visit = $120v

Employer/work comp payor FEARS:  utilization will go up due to financial incentives – how do we manage “over utilizers” and silo costs will go up significantly scaring the payers manager of the PT silo.

Solution: MisAligned Network comes in and says we will manage all PT and you pay  $100/v = SAVINGS of $20/v to payer GUARANTEED and network promises to keep visits under control.

MisAligned will then negotiate rates with PT clinics in the $70/v range netting $30/v Payer (“heads I win”savings of $20/v or net to MisAligned of $30/v). #physicaltherapy provider is SCREWED (“tails I lose out $50/v).

Patient and employer is completely unaware of any issues with their care relative to the network involvement. A secondary strategy by MisAligned (second coin toss with same results) – negotiate with providers – then they will direct referrals to the “lowest negotiated rate” clinics to create the best margin for themselves telling clients (Payers/employers) that is “cheaper” – or to use their words “your margin is not preferred”. By the way mostly these contracts prohibit you the provider from communicating with the employer, carrier or TPA.  In states where the employer can direct care for a certain time period or indefinitely, #physicaltherapy providers are taking it under the chin of this new process.

This poses an interesting dilemma for PT clinics.  I have heard from many saying how proud they are of negotiating a good contract with MisAligned.  Unfortunately, so many of your colleagues did not and they are now getting the volume!  Recently, I have seen this new contracting technique extend to a private insurance contract-beware.

What is the Kryptonite for this? If your state fee schedule in worker’s comp is a good one-how about refusing to negotiate below it?

Thoughts? Experience? Advice?


11 responses to “MisAligned Network: Heads I win, Tails you lose approach to #physicaltherapy

  1. The only advice… know the cost of delivering services. Know your target profit margin. Stay within it.

  2. Jeff Ostrowski says:

    The peace corps gene is a big part of the problem. PTs are intentionally indoctrinated to view successful practices as unethical and further that fewer visits = quality care. This feeds right into the business model of these “re-pricers”.

  3. Paul Potter says:

    MisAligned Network has been a distraction to us for several years of trying to serve our local employers and their injuried employees.

    We finally refused to participate and since we are in a rural location we normally are able to treat the patients anyway after being contacted by the carrier.

    It’s at our state’s WC fee schedule and we don’t regret missing out on the MisAligned Mismanagement.

  4. Selena’s concise three sentence statement says it all. Playing the low ball game serves no one except the middlemen and payers. Stand your ground and just say “no”. Empty schedule spots will soon fill up.

    Jim Glinn,Sr

  5. Larry says:

    I certainly agree that knowing your cost is sound advice. The dynamics of the market though coupled with the highest variable cost being labor make this a more difficult calculation for work comp contracts (labor is not easy to flex up or down in private practice). Volume in comp is very hard to determine. One approach that makes the most sense is still the simplest-do not negotiate between state mandated fee schedule.

  6. Mark says:

    Larry you are right on the money. These MM networks have taken over AZ and become a real threat to our work comp business and volume. Your example is correct but low in what the MM’s take is. At least in AZ they are pocketing over 60% of the monies is some instances! My local colleagues and practices seem oblivious to what is happening. It seems they really just do not understand the basic economics of it?

    As you say Larry we all universally seem to dislike the Kool-aide yet most of it still drink it. Interestingly, in AZ the majority of injured workers have choice of providers yet these networks have somehow convinced adjustors it is ok the break the law. We have had injured workers intimidated and pulled from our clinics and sent to a participating provider. I have filed complaints with our work comp regulator (who is well aware of the problem) but most of the time it just leads to a slap on the wrist.

    I am happy to say we do not participate in any of these win-lose contracts. Unfortunately, until we organize and figure this out as a community we will continue to get crushed. Even our local therapy networks (traditionals like Preferred and PTPN) are forced to play the game to compete which is not helping out the cause.

    Lets hope we #getwise soon or else. Know your state mandated fee schedule and work comp rules so you can manage from a position of knowledge.

  7. Great message Larry! We have managed to keep most of the discounters out of Washington State L and I work. That said, occationally a provider will “negotiate a rate” with a PPO thinking it is just for “private patients” and then the PPO “sells them” to a work comp insurer. I guess “buyer beware” should include “contractor beware!” Thanks for all your efforts Larry!

  8. Anonymous says:

    I guess we should expose the TPA’s and Bill Review companies that participate in percentage of savings. Employers are non the wiser. It’s the perfect scam, the greater the savings they “allegedly” provide the employers, the more money they all make.

    Providers and Employers are reminiscent of the unsuspecting tourist waiting for the train in Rome. They have no idea they are getting pick pocketed.

    There are ways to respond. But it must be a united front. One state at a time.

  9. Andy says:

    I am a chiropractor in CA and I signed up with misAlignNetworks but only received a few patients in one year. I called the Providers representative and I asked why I rarely receive a referral from them. She told me over the phone that there are tier systems. If I want them to send me more patients, I would have to agree to a lesser pay-out fee schedule. I practice in a medical building and there is another chiropractor who graduated 18 months ago who has an office in the same building. He signed the lesser fee schedule so they send him at least five new patients a day.
    It’s not about finding a good doctor for the patient with them. It’s all about being the middle man and take as much money from both sides (insurance companies and providers).

  10. Greg C. Bieg says:

    Keep an eye on MedRisk, they seem to be applying the same model as Align, they intercept referrals from the PTP and send them to a Provider “closer to the patient’s home . When questioned regarding my referrals, I was told perhaps I should be more competitive, meaning they wanted me to take a larger discount.

    1. Dahlia Fahmy says:

      I too was told that by Medrisk. CA is suing Align, I think a similar lawsuit should be brought against Medrisk for the same tactics.

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