Healthcare Business News

Physical therapy services up 30%, but self-referrals not to blame

By Andis Robeznieks
Posted: June 3, 2014 - 4:00 pm ET

Physical therapy services provided to Medicare beneficiaries increased by almost 30% between 2004 and 2010, but unlike other healthcare service-utilization increases, self-referring physicians were not the cause for the jump, according to a new U.S. Government Accountability Office report.

About 4.3 million Medicare beneficiaries received outpatient physical therapy treatments worth $4.1 billion in 2011. And, according to the GAO, the number of physical therapy services provided per 1,000 Medicare fee-for-service beneficiaries increased from 1,223 in 2004 to 1,595 in 2010. While the number of services generated by self-referring family physicians, internists and orthopedic surgeons stayed flat at 320, the number of non-self-referred services grew by 41% from 903 in 2004 to 1,275 in 2010.

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This is in stark contrast to the findings of three other GAO reports on self-referral for diagnostic imaging, anatomic pathology services and intensity-modulated radiation therapy, or IMRT, for prostate cancer. In those sectors, utilization increased among physicians who referred patients to a facility that they or a family member had a financial interest in.

The GAO examined 2004-10 Medicare Part B claims for family physicians, internists and orthopedic physicians—the specialties that account for almost 75% of all physical therapy referrals. It identified the number of physical therapy services referred per provider, the number of beneficiaries referred, and the number of physical therapy services received per beneficiary.

The GAO found that self-referring physicians in all three specialties generally referred more patients for physical therapy, but their patients, on average, received fewer services than doctors who didn't do self-referring.

Expenditures for self-referred services increased 10% during the study period from $389 million to $428 million. The cost of non-self-referred services increased about 57% from $1.2 billion to $1.9 billion.

“One potential reason for this difference is that non-self-referred PT services can be performed by providers who can directly influence the amount, duration and frequency of PT services through the written plan of care required by Medicare,” the GAO concluded. “In contrast, non-self-referred services we examined for our prior work tend to be performed by providers who have more limited ability to generate additional services or referrals.”

Radiologists, for example, do not have the discretion to order more or more-intense services, the GAO noted.

The report also cited comments made by the associations whose specialties were examined in the report. The American Academy of Family Physicians considers physical therapy a more cost-effective and less invasive way to treat patients than surgery or prescribing opioids to manage pain, the report noted.

Nine states changed their laws on self-referring during the study period and that may have affected its findings, the American Academy of Orthopaedic Surgeons said. The AAOS also noted that they are on the low end of self-referral among the “switchers,” physicians who changed from non-self-referral to self-referral status during the period studied. The GAO noted that, between 2008 and 2010, orthopedic surgeon switchers increased referrals by about 4% while the rate was 18% and 20% for internists and family medicine switchers.

The GAO also noted that the American Physical Therapy Association “expressed concern” about the findings because the study did not take into account patient condition, physical impairments or co-morbidities, which it said have a major correlation to the amount, duration and frequency of treatment.

Follow Andis Robeznieks on Twitter: @MHARobeznieks

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