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?