Reimbursement is the Key to Beating POPTS

On one of my earliest posts, I responded to a comment regarding reimbursement and would like to follow up and expound on a few of those ideas here.  

What is the most important fight we face today in out-patient PT?

Other than having a legitimate direct access law on the books (which we of course lack in CA), the most important thing is having a reimbursement scheme that is equal and fair. Our current reimbursement rules allow Medicare (as well as other insurances) to provide different rates of reimbursement for the same services provided in a given geographical area. There are generally three tiers of rates:

1.  Out patient clinics owned by PT's 
2.  Out patient clinics owned by MD's (POPTS)
3.  The most egregious offender of the group would be the rates hospitals get for the out patient services they provide. 

For example, most PT practices in SoCal get close to 100% RBRVS (a relative value scale) for Medicare patients due to the expense of doing business here. POPTS in the same area get closer to 120% RBRVS, and hospital out patient PT gets over 200%!  Couple that with the fact that hospital out-patient PT is NOT capped by Medicare as are all other out patient clinics and you have one big money grab.  I used to think that hospitals were taking a hit by seeing those chronically afflicted Medicare patients, but after finding out a few of these facts, I'm more inclined to think that they probably can't open their doors fast enough to get them into their clinics!

So how is it when talking about how to save the Medicare system millions of dollars, this prescient issue is seemingly off the APTA radar???  I've followed the POPTS debate here in California closely over the past year, and this issue wasn't even part of the discussion against POPTS.  It is many times more significant than the concept of self-referral, and I will expand on this idea in a moment.

Unequal reimbursement is one of the most crippling offenses in healthcare; getting paid differently for the exact same services that are being provided simply because (in this case) you submit your bill under a physician group or a hospital system.  This factor is the primary reason the concept of "a level playing field" is currently a joke for independent practitioners trying to compete in the out patient arena.

It has become common to see private insurers make concessions to their largest providers while recouping those lost dollars by reducing their reimbursement to other smaller clinics in their networks.  In the PT world, the closest thing that exists to having leverage with an insurance company is to have a network of clinics.  We see it with the large companies like Physiotherapy and Associates and HealthSouth to name two.  The other option is to join a network like PTPN that tries to bundle independent clinics in an effort to negotiate better rates on the same basis.  The idea being that by having hundreds of clinics (that serve thousands of patients), you might be able to negotiate a better contract than if done alone as a single clinic.  Sometimes it works, and sometimes it doesn't, but at least you have a seat at the table.  Single entity providers have to take what they can get when trying to become a preferred provider for any of the large insurance companies.  If you don't like their rates, don't join, it's that simple.

But the leverage that is applied within the boundaries of PT corporations is minuscule in comparison to the leverage ACO's, hospitals, and large physician groups can place on an insurer.  Since they are generally the point of access for most of their patients, loosing their services would effect, in some cases, hundreds of thousands of lives, and insurance companies often can't afford the backlash from their participants.  Therefore, they usually are forced to pay these groups higher rates for their services.  When a PT entity is involved in that negotiation (as part of an ACO or POPTS), they usually get a better deal than non-POPTS or non-hospital based clinics would receive.  This fact is what makes offering PT services attractive to these groups.

Where is the APTA on this argument? Your guess is as good as mine.  However, the way to beat this phenomena might be counter intuitive.  PT's, as with most health professionals, are always calling for more reimbursement and more dollars from the federal budget.  But isn't Medicare going broke?   Wouldn't this be the easiest band wagon to start of all time regarding PT on Capital Hill?

PT WANTS LESS REIMBURSEMENT TO SAVE MEDICARE.  

And when I say less, I mean, do away with the 120% and 200% RBRVS amounts being paid to hospitals and POPTS.  Put the care back in the hands of private PT's and let's save the system millions while providing better care.  The data supports this idea.  The pressure would have to come from Medicare via the voters.  No small task given that medical and hospital lobbies would try to crucify any such cuts.   But if it were put into place, can you see, given the economic state of the country, that the house of cards could start coming down quickly?

If the battle cry "Equal reimbursement for all!" started to resonate, PT's might be able to knock the financial carrot right off the stick!  The profit margins that attract our services to hospitals and POPTS would evaporate and maybe they would get out of the game.  The insurers would love it for obvious reasons, and wouldn't the public as well?

It would be difficult to keep going with these lower rates in the short term, but the out-patient PT centers that are already in existence have a distinct advantage.  They have already figured out ways to succeed with the current rates in place.  If the plan worked, eventually as the POPTS and hospital based centers got out of the game (due to lack of profitability), there would be more patients to go around and it would start to get easier via increased patient volume for the remaining clinics.  PT would be more than half way to controlling its own destiny.

The second phase of this process would be to continue working on tightening legislation on the employment of physical therapists, similar to what has been achieved in Delaware and South Carolina, to permanently change the landscape of PT in the United States.  This would set the table for the last transition of this idea.  For those individuals asking themselves, "aren't we unsuccessfully trying to do that right now?"  I would respond, there would be a major difference going forward at that point.  If the money wasn't there, the amount of opposition should be significantly less from the American Medical Association and hospital associations.  Why would they fight for something that is loosing them money?  (Because they want to continue to strive to provide better patient care.....right!)

Continuing with that thought, as PT owned clinics started providing the majority of services in the country, a clear crossroads would surface:  How to charge for PT services?  At that critical point in time, there might be room to jump off the preferred provider merry-go-round.  Physical therapy would have the opportunity to start thinking like dentists and a payer model that is more fee for service, in its truest sense:  set a fee, allow insurance to pay out of network rates, and let the patient make up the difference out of pocket.  Stop making exorbitant write offs, via low-ball preferred provider contracts, and start collecting for what should have been all along.

The biggest obstacle at that point would be PT's themselves.  Because if it ever got to that point, they'd then have to compete with each other based on skill and outcomes.  Something many PT's would fear, similar to what the teacher's unions run into when they start trying to reward good teachers and weed out weak ones.  Additionally, there would be those providers that would never want to stop participating with insurance companies for their low, guaranteed rates due to the members that come along with it.  This would only complicate the horizon.  But if only a handful of clinics participated in these networks due to their low reimbursement, then the net effect of these weak few, would be marginal.  The idea would be to start changing the public's perception of what is normal and customary for PT.

If a low insurance and moderate patient contribution was PT's primary private payer mix (similar to how out of network dentists handle their business), then setting the price for services would become a careful balance of a PT's skills, the market for a given region, and ultimately patient choice.  Isn't that what a free market is all about?  People would have to decide as to whether or not your services validated your fees.

Just think about your dentist.  Why do you keep going there, or why have you left recently?  Wouldn't you like to have a chance at putting yourself in front of the public in a similar fashion?  I would and you should too.  But if the idea scares you, you should take a good look in the mirror and start working on your skills.  Autonomy doesn't come cheap.  And if physical therapists continue to ask for it, they need to be prepared to ready themselves for the transition.

California SB 543 is Signed Into Law

It's official.  Good ol' Gov. Jerry Brown couldn't sign this bill fast enough to clear off some space on his desk.  In a message from the California Physical Therapy Association:

On Monday October 3, Governor Jerry Brown signed into law SB 543 a bill that prevents the Physical Therapy Board of California from enforcing the law pertaining to physical therapists that are employed by medical, chiropractic and podiatric corporations.

The impact: POPTS will continue in CA without flinching until 2013.  Then a sunset provision takes effect and this bill will have to be re-heard.   Unless Medicare breaks out some sweeping changes in the federal law, this issue (as far as the PT Board is concerned) is now very much a non issue.

CrossFit: a True Gift to Physical Therapy

If any of you have come across the newest fitness craze, CrossFit, you know that this is hyped as the next best thing in personal training.  I was introduced to this program at a party a few months ago where I was able to talk to an owner of 2 such facilities.  He let me know that these programs are run in his gyms at a cost of roughly $135/ month per client.  Their programs emphasize small group workouts with personal trainers that specialize in high intensity, compound movement exercises that get your heart rate up quickly and fatigue you in a 20-30 minute session.  Appropriate warm up is provided before the workout.  He emphasized that their trainers carefully watch form and provide close supervision at all times.  It all sounded like stuff I'd heard before and I didn't think much of it, until I saw the CrossFit World Championships last weekend on ESPN2.  After witnessing that, I became much more interested.  To bring you up to speed, here's what it all seems to be about:

• Crossfit World Championships show young, incredible athletes going through a series of activities that would put the average person in bed on Advil and ice for a week.  It is a newer, hipper version of the Worlds Strongest Man contests that you can usually catch at 2 am on ESPN.  Check out this link to get a feel for it. http://games.crossfit.com/    I had such a montage of emotions watching this event, I had to write this blog.  A combination of laughing, wincing, analyzing body mechanics, and watching in amazement at what the athletes could tolerate and overcome.  Certainly worth tuning in if you get the chance.  I was amazed I didn't witness a significant shoulder or knee injury during the finals due to the brutality of the event activities.  
• CrossFit Centers regularly include exercises in their training workouts that include squats, box jumps, lifting objects such as tires, various types of push-ups, inverted push-ups, lunges, medicine ball activities, and most accepted types of plyometric exercises for the upper and lower extremities to name a few.  
• The workouts are changed almost daily, to help confuse the muscles and get better strength results.  Similar to the P90X philosophy.  The list of exercise activities I made above is only a small slice of what you would see at one of these facilities.  
• An entire video library of examples can be seen at: http://www.crossfit.com/cf-info/excercise.html#Exer.   I added one here so you can get a feel for one of their milder exercises.

 This quote was taken directly from their website:

The CrossFit program is designed for universal scalability making it the perfect application for any committed individual regardless of experience. We’ve used our same routines for elderly individuals with heart disease and cage fighters one month out from televised bouts. We scale load and intensity; we don’t change programs.

Isn't that great, the same routines for our elderly and our cage fighters.  I don't care how you scale it down, certain exercises are not appropriate for the elderly.  The above example, the full squat, while great on a young healthy knee, puts incredible compressive force on the knee cap as well as the knee joint surfaces between the thigh and leg bones of the knee.  This video would be the perfect way to tear a meniscus or irritate a mildly arthritic knee.  The real question you should ask yourself before trying an exercise like this is, why do I need to do this exercise?  If you are a furniture mover and need to bend down fully many times a day, you might have a reason.  But if you are the average 9 to 5'er that sits at a desk all day, you really don't need to punish your knee joint like this to strengthen your hips and thigh muscles.  If you don't believe me, go see a physical therapist and they will show you how to save your knees while doing squats.  Maybe a good topic to discuss in a future blog.

After looking at a few of the exercises on the CrossFit website, I thought I'd pull out an example of an exercise that really has no place in an exercise regimen when exercising the elderly (or average weekend warriors for that matter).   An example would be the box jump, which is an activity where an individual either jumps down from a box, or up onto a box repeatedly.  The faster the transition from the jump down to the jump back up, the better.  This family of training techniques are referred to as plyometrics and were originated in The Soviet Union for olympic athletes in the 1970's to improve speed and power.    A video is worth a thousand words, to see the CrossFit version of these activities, see below:

Even from the most modest heights this exercise could be a nightmare for an osteoporotic grandmother wanting to "get in shape" given the increased risk of compression fracture in the spine, hip fracture, or joint damage on arthritic lower extremity joints.   If a physical therapist were to prescribe these exercises to a Medicare patient and they subsequently broke a bone, at best you'd never see another patient from the referral source, and at worst you'd be sued by the patient.  I would hope CrossFit trainers receive training that would make them aware of some of these contraindications, but I have no way to verify that, and I probably wouldn't bet on it.  

For those 40-50 year olds wanting to give these workouts a try, I would advise you to remember a few things.

• Most of the athletes you see doing these exercises are in the prime of their lives (20 to mid-30 somethings).  Their joints and discs are in very different places than someone 20 years older.  What is a challenging workout for them, could be pathological to an older, less fit individual.
• Plyometrics were designed originally for olympic athletes.  These are individuals that are professional athletes.  A tenth of a second in a sprint event, or an extra inch or two of vertical jump can be the difference between being on a medal podium or watching from the bleachers.  For them, these exercises are required to excel in their respective sports.  Therefore, the risks of plyometric exercises are an acceptable part of their training regimens.
• Risk you ask?  These exercises have a much higher risk/ reward ratio than doing traditional exercises on weight machines or with controlled free weights or bands.  Simply put, plyometrics do have the potential to provide great power and strength increases for an individual.   But they are also some of the most risky activities to include in a work out program due to their explosive nature.  They put extremely high loads on tendons and muscles, which greatly increases the chance of muscle/ tendon strains or worse, rupture.  And that's only the contractile tissues!   They also place incredible loads on passive structures like ligaments, bones, fascia, cartilage, and discs to name a few.  These activities can easily land you in an orthopedist's office, even with the best of form.  
• Pro and college teams usually only include these activities in the off season workouts due to the increased time muscles need to recuperate from these workouts.  Performing plyometrics during the regular season would overload muscles and tendons and put athletes at increased risk for injury.  That should hopefully get your attention as to how serious these exercises are, especially if you are reading this in the capacity of a weekend warrior.  
• If you are not a relatively fit individual, be very cautious entering into one of these programs.  Make sure you have excellent instruction, know the risks involved, ask yourself if you need to take these risks, and know your medical history.  If you have any kind of joint, disc, or bone density pathology, check with your physician or physical therapist before you proceed.  
• Exercise is needed in most individuals lives to be happy and healthy individuals.  Fortunately, to gain the health benefits from resistive exercises, you are not required to perform exotic exercises that involve jumping off boxes or lifting up tires.  Moderate resistance exercises performed 3 x week is adequate to gain strength in a 4-6 week period.  Moderate intensity resistive exercise has also been shown to improve bone density in many studies.  Use common sense when choosing your workout plan.  

A wise physician once told one of my patients "All things physical, are not therapy."  Keep that in mind as you weigh your exercise choices.  Be smart and remember, exercise is supposed to help you stay healthy, not hurt you!

How Can PT's Get on The Same Page Clinically?

I can remember being in PT school during the late 90's and talking about an article written in the mid 90's by an under cover reporter who went to 10 PT clinics and got 10 different diagnosis for their back pain.  It was not a flattering article for the PT profession!  My classmates and myself sat around and said "wow, glad we are going to be part of changing all that inconsistency."  We figured with our classes in differential diagnosis and up to date orthopedics, this would certainly change.  Not to mention, we were going to have the brand new "Guide to Physical Therapy Practice" to lean on, we were all set.

• Well, I've had two encounters in the past week that makes me think we still have a very long way to go.  The first case was a lady that came to my clinic from a familiar referral source requesting this patient see a McKenzie Trained therapist.  Although I am not McKenzie certified (and I explained this to both the MD office and the patient before seeing her) I am very familiar with the concepts and know how to treat a patient with discogenic pain with radicular symptoms.  I find out after evaluating the patient she spent 4 weeks at another PT clinic that didn't give her one extension exercise or trial traction with her during that time.  Her presentation was textbook disc, unilateral pain down lateral calf and foot.  Increased pain with flexion, relief with extension.  Numbness and tingling, worse with sitting, better in standing.  And so on, and so on.  I mean, you could have used her for a licensure board question.  So how is it that there are clinics out there that have no idea about standards of care for a disc injury?  This was not some tricky, fringe diagnosis, or even something that required a series of special tests.  This was a disc injury, arguably the most diagnosed back problem in the United States.  You can easily argue that the clinic should be categorized as incompetent.  When I encounter these stories I don't jump up and down thanking the PT gods that I gained a new patient, I get frustrated that I have to associate myself with this level of therapist that holds the same license I do.    
• The second case I happened across was on the sidelines of my daughter's soccer game.  One of my fellow parents had an ankle splint on.  I asked him what he did, and he mentioned he fractured his distal fibula 4 months ago at work and was dealing with a non-union injury.  He was trying to avoid surgery, and had been receiving PT over the past 2 MONTHS!  He also mentioned this was a work comp injury.  My question is this: what the heck are you doing with a fractured ankle for 2 months in a PT clinic?  His range seemed fine, so last time I checked it needed rest, protection from a boot and possibly a bone stimulator.  The boot was removed after 4 weeks, no bone stimulator, and the PT clinic kept treating him with band exercises, stretches, and ice and electrical stimulation.  As a reminder, I work for one of the "substandard quality of care POPTS" and this person was being seen by a PT working at a PT owned and operated clinic.  That obviously has everything to do with quality of care.... but I digress.
• Anyway, I told the guy that non-union fractures don't need exercise they need protection, a bone stimulator trial, and making sure his calcium/ vitamin D intake was at recommended levels (which it wasn't since he didn't like to drink milk).  He agreed, and was wondering why the clinic kept doing the same things over the past 2 months despite his ankle not getting better.  I told him it really wasn't a PT issue until that bone starts healing.  Did the clinic need the business that badly to max out this guy's work comp benefit?  Or is it simply another case of negligence?  The nice second part of the story will be that when it comes time to gait train this guy and work on his significant leg atrophy, he will have used up his 24 visits the state provides and be left out of the clinic during the time he needs this benefit.  
• In both cases, I walked away feeling queezy about our profession.  I think it is time we start looking for ways to guarantee that our PT work force is up to date and weed out the dead wood.  Yes, that might mean we have to take board exams on regular intervals similar to what MD's do.  We are trying to talk about ourselves as doctors right?  Well, maybe it is time we do a little more from within our profession to improve the care we are providing as a whole which would only strengthen our argument for direct access.  When I hear these stories, I wonder if my brethren are really qualified for direct access responsibilities?  Think about the PT's in your clinic, would you trust them to treat your mother as a primary care provider?  How about PT's you encountered during your clinical education or from your PT program?  The number I would trust are counted on one hand, maybe two.

Anyone else out there seeing these types of problems?  If so, I would like to hear the ideas and possible solutions to this significant problem you have come across.  It's a discussion that obviously warrants more attention from the PT profession.  

And The CA POPTS Winner By TKO is.........

The California Medical Association (CMA) is on the brink of dealing the California PT private practice effort to stop POPTS (physician owned physical therapy service) a deathblow.  CMA's funding and support of senate president Darrell Steinberg has landed them a piece of legislature (SB 543) on the desk of Governor Jerry Brown's desk that will prevent the PT Board of California from being able to take action against the PT's that are working in Medical, Chiropractic, and Podiatric Corporations.  It easily passed through the senate with a vote of 32-5 earlier today.
If signed into law, it will make the Board's interpretation of the Moscone Knox Act irrelevant.  Even though the Board feels physical therapists are working illegally for these corporations, they may very well find themselves powerless to do anything about it.
For all the fanfare the Private Practice Special Interest Group of California raised for their stalling of AB 783 (which would have flatly made these medical corporations legal by all accounts in California), they ultimately lost the fight by knockout to SB 543.  The submission of a bill that voids the Board's authority on this entire issue was brutally clever, and obviously caught the PT lobbying group with their guard down.  If passed, the anti-POPTS issue becomes about as dead as disco over night.
I have mixed emotions about this matter.  For one, I have gained a healthy respect for the power of the CMA in this state and their ability not to simply support and pass a bill, but to fund and pass an entire idea.  They wanted POPTS to stay, and worked on multiple pieces of legislation and multiple congressman/ women to make it happen.
With regard to the PT effort, maybe it is time the PT world starts admitting that going head to head with the AMA is not a great solution to many of these issues.  I'm seeing a prize fight that offers up a Heavy Weight vs. a Middle Weight.  Do PT's think they can out maneuver the CMA/ AMA?  Out spend them?  Do they think PT's have more influence in the healthcare debate then doctors do?  We might be able to slip in a jab here and there, but the probability of a knockout punch on any of the major issues of direct access, POPTS, fair representation in the ACO discussion, and equal reimbursement amongst providers is slim at best.  
If the PT leadership cannot change its tact slightly to work towards thoughtful and meaningful compromise, as other states have on some of these issues, I fear PT's are doomed to see very little change in the coming years in the state of California, and maybe even see things get worse.   By drawing lines in the sand and taking an all or nothing stance on issues such as direct access and POPTS we ultimately leave ourselves open to stark defeat.  This same flavor of politics is being played out in our nation's capital as we speak, and look how effective that has been over the past couple years!?
Hopefully this significant defeat will serve as a beacon that it is time to re-think the physical therapy position and really focus on the most important issue on the table, REIMBURSEMENT.  By doing so, PT's can make sure they don't repeat their POPTS battle mistakes when entering the political ring for that title fight.  

SI Pain Subjective Feedback Key

Are any of you clinicians who might be wondering what historical feedback can help cue you into a patient with SI pain?  The good news is you only have to ask one question (that has any real relevance statistically).  


Michaelsen, Pauza, McLarty, and Bogduk showed that most historical data are not useful for diagnosing SI joint dysfunction with the exception of patients stating “relief with standing” which had a likelihood ratio of 3.9. This means that people who report reduced pain at the lower back with standing are 3.9 times more likely to have a SI joint dysfunction.  The Confidence Interval (CI) was not reported.  


So if you are thinking of altering your back evaluation forms to help screen for SI dysfunction, make sure this question is included.  

The Answer: Why PT Board CA Backs-Off

Based on this August 30, 2011 report from NBC LA, I think I understand why the PT Board of CA changed its tune so quickly.

The California Medical Association and its legislative allies in Sacramento have triggered a state audit of a regulatory agency that, they say, is too cozy with independent practitioners in the lucrative physical therapy trade.

On April 23, the Assembly's Joint Legislative Audit Committee voted 12-2 in favor of a five-month examination of the Physical Therapy Board of California, the watchdog agency responsible for overseeing "PT" clinics and practitioners across the state.

To see the entire article, click on link below.

http://www.nbclosangeles.com/news/politics/Physical-Therapy-Group-Audited-by-State-128717163.html

You can only guess if this audit had anything to do with slowing down the Board on enforcing action against POPTS clinics, but my guess is this is what put the brakes on things.  Of course, the whining about this matter couldn't be louder from the PT world as noted by most of the comments on this story.  For a detailed build up to this point, please read my previous blog dated 8/31/11 on this topic.

Insight on PT Board Backing-Off POPTS Enforcement with Commentary on the Private Practice Special Interest Group of CA

As of August 25, 2011 the Board has backed off enforcing their July 2011 interpretation of the Moscone-Knox Act.  As with most good stories, there is more than meets the eye with this one.  A timeline will help clarify the Board's recent position change.

Business arrangements between MD's and PT's that were deemed completely legal by the California Physical Therapy Association in 1990, magically became taboo in 2010 when the California Private Practice Special Interest Group stumbled upon a piece of legislature from 1968 that provided a loop hole to move the anti-POPTS movement forward.  They quickly lobbied to change the code of the California Practice Act and made way for its recent interpretation of the Moscone-Knox Professional Corporation Act which is what AB 783 was intended to amend, making it legal for medical corporations to employ PT's.  AB 783 was subsequently hung up in a state senate subcommittee in June 2011, that effectively killed the bill through 2012.   A victory for the CAPTA.

May 2011, the following letter was sent to the Audit Committee at the California State Capital regarding the actions of the CA PT Board from Mary Hayashi, congresswoman and author of AB 783.  Apparently there might be a few problems with how the Board and the Private Practice Section have been interfacing, how the Board has been adjudicating this process, and if public funds have been used appropriately by the PT Board members.     

July 20, 2011 despite this letter, the Board pushed the button (by the urging of the Private Practice Section) and sent out 155 letters to therapists that had been reported to them by "the public", otherwise known as, competing out-patient therapists.  

August 3, 2011 at their quarterly board meeting, the Physical Therapy Licensing Board (PTBC) had a change of heart.  They heard testimony from the Department of Consumer Affairs, the California Orthopaedic Association, the California Physical Therapy Association, and the California Private Practice Group.  The two former groups pressed the Board to hold off on enforcement of Moscone-Knox Act.  Paul Gaspar and Jim Dagostino, both PT's speaking on behalf of the Private Practice section urged immediate action continue to proceed against POPTS clinics.

August 25, 2011 the Board sent out letters to those POPTS therapists who had submitted compliance plans informing them that they were suspending enforcement of all pending cases until additional legislative time passes to clarify the existing law.  A total reversal of their July position and a clear defeat for the private practice group.  

Why did the Board change course?  Take a look at this timeline and draw your own conclusions.  But I think their actions make it clear that the PT Board realizes there are more than a few holes in their case and want to hold off on getting hammered in court as things stand currently.  Especially if you consider that the Board's big push to enforce the Moscone Knox Act was based on two factors.  One, they had to change the PT practice act that had been in effect for over 20 years to accommodate enforcement procedures by the Board.  Second, the entire basis of their legal argument was based on one or two legal opinions, which don't necessarily have any jurisdiction on the Board or its members.  Specifically:

• Lawyers on the CMA (California Medical Association) have pointed out that this move was based on the opinion paper by Legislative Counsel which isn't binding to the board or its licensees.  
• Unenforceable underground regulation is the term that was used by CMA lawyers to define the CA Boards move to change the practice act in order to enforce their "new" interpretation of Moscone Knox.  This term does not seem to be one that would hold up in court if proved to be true.
• For the entire CMA argument, see my previous blog: CMA Responds to CPTA POPTS Mandates.  Although this letter was dated December 2010, it clearly was a shot across the Board's bow letting them know enforcement of Moscone-Knox, based on an opinion paper, was definitely going to be challenged in court.

• And to put a cherry on top of this story, an email was sent out to orthopedic section members on August 29, 2011 from the CA Private Practice Group Board of Directors stating that due to the actions of Mary Hayashi, the key proponent of AB 783, and her recent inquiry into the PT Boards actions, they want to try to organize a recall of the congresswoman!  Are you kidding me?  
• Shouldn't the private practice section be focusing on clearing themselves of the accusations made in the May 2011 inquiry and focus on the strength of their legal argument (as well as start raising funds for the impending legal battle) instead of going off on yet another emotional rant regarding this issue?   This type of back biting, reactionary politics is unsightly and ineffective at best.  It begs the question: Can the CAPTA afford to waste time, money, and effort on a cause like recalling a political opponent when its Board has misfired this badly over the span of one month?  
• One final point that I hope does not get lost in the minutia of this story.  For all those involved in the POPTS debate both in California and nationally, it should not be overlooked that AB 783 and the surrounding legal debate is serious legislation that has the potential to effect the lives of thousands of therapists not only in California, but the entire United States when you consider how it will be used for precedent in other states.  It should be treated as such by our elected PT representatives.  
• A question for my colleagues.  Why would the private practice section feel the need to go down the recall road (a day after they realized the Board was backing off enforcing their anti-POPTS position) when they successfully defeated this congresswoman and her bill just a few months ago?   Recall her!?  Going in this direction would appear to only muddy the water, making it more difficult to appreciate the good work they just recently accomplished.   
• The Private Practice Section of CA might need to be reminded that they are representing a group of educated professionals in this debate.  Their arguments and actions should be based on fact and merit, and regardless of what tactics are being used on the other side of the isle, conduct themselves with dignity at all times.  If they are deemed to be on the right side of this legal matter, their voice will eventually be heard.   With this in mind, my sincere hope is that they start conducting themselves accordingly.  

CA PT Board Backs Off POPTS Enforcement on California PT's

If you are one those people that thought September 1, 2011 was going to be the end of POPTS (Physician Owned Physical Therapy Service) clinics in California, you probably lost sleep on the eve of the Rapture too.  Allow me to be the one to break it to you, September 1 has as much to do with the end of POPTS as the Rapture did with the end of the world.  
For those of you that have been following this blog, you know that I direct a POPTS clinic and submitted my compliance plan to the board several weeks ago (see blog dated 7/27/11).   Today, I received their response letter and what did it say.....

On August 3, 2011 the Board adopted a motion to suspend enforcement of all pending cases relating to alleged violations of the Moscone Knox Professional Corporations Act.  The Board took this action in order to afford the Legislature time to clarify the existing law.  Accordingly, the Board will take no further action until the Legislature has had an opportunity to take appropriate legislative action to address the issue.

They go on to later state they will continue to monitor the issue, place it on future meeting agendas, but will not be seeking additional compliance plans at this time and no further action is required by individuals working in a POPTS structure.   In other words, it's business as usual..... indefinitely.  Imagine that!?  The home run that the CA Private Practice Section has been so busy patting themselves on the back for over the past 2 months, is really just a long fly ball to right field.

SI Joint Pain, What is it and Who Can Treat it?

If you are suffering from back pain that has not been treated successfully by your health care provider of choice, at your next office visit ask: "Could my SI joint be part of the problem, and do you know how to assess and treat it?"  Get prepared for the twisting of the brow from your average MD as they tell you that is not a common source of back pain, or a stream of babble from your PT or chiropractor about what they can do for you (more on that in a minute).

The truth is, very few people know how to assess this problem, much less treat it.

Finding a qualified health care agent to help you out is like finding a needle in a haystack.  I wish I could post a link to a website or group of qualified treatment professionals that I can comfortably recommend regarding this area, but I haven't found one to date.

Because the waters are murky regarding this topic, I thought I'd help you be a more educated consumer when it comes to this problem.  By asking the right questions and knowing some of the common signs and symptoms, you might be able to help your healthcare professional treat your back/ buttock pain.

Before I get started, it goes without saying that if you are having chronic low back pain or pain in your leg, you should have the requisite tests performed to rule out other pathologies that can cause similar symptoms.  But if you have exhausted the list of possible tests (namely blood tests, MRI, and X-Ray) with your doctor and are still in pain, this discussion might be very helpful.

Here are some facts that might help you decide if you are suffering from this problem and if the person you are seeing is helping you or wasting your time.

• SI joint pain is usually found to cause pain in the buttock area and very often felt on one or both sides of your sacrum "your tailbone."  Depending on how irritated the area is, you may have pain that radiates into your lateral hip and hamstring area, have tightness and pain in the muscles of the buttocks, but rarely does this problem refer pain below the knee level into your calf and foot.  You may experience knee pain on the effected side.
• Sitting on hard surfaces usually is uncomfortable.  You will shift a lot when sitting to find comfort.  Standing will often relieve pain as will walking short to moderate distances.  Arching backwards is usually tight and painful.  Forward bending in most cases will not be limited significantly.
• You may have impaired balance and experience difficulty standing on one leg (the side of your pain) due to weakness at your hip.  In chronic cases that aren't acutely painful, you might simply notice that you sway more on that side compared to the other side.
• Often the pain is described as being deep in the buttock, and is annoying, but not debilitating to the average healthy person.  Due to the mechanical nature of this problem, certain motions of the trunk or leg will usually promote the pain.   The specific motion can vary depending on how the joint is positioned.  

The most difficult task in treating back pain as a health professional is figuring out what is causing the pain.  To be successful in defining back pain you need to work with a health professional that is a skilled problem solver, not a pain chaser.  They must be very good at deductive reasoning and when they are explaining how they are going to help you, should be doing so in a very logical fashion.  If the entire discussion is centered around your pain and how they will address it by working on your soft tissues, BEWARE!  This is a mechanical problem and needs to be addressed as such.  That's not to say that there isn't a time and place for addressing muscle spasms and pain, but at some point, there should be a discussion about the mechanical dysfunction of your Sacrum (tailbone) and your Ilium, i.e. the SI joint.  If this part of the discussion is absent, you can bet they are not highly knowledgable in this area.

In reviewing a couple websites on back pain from The American Academy of Orthopaedic Surgeons and the National Institute of Neurologic Disorders and Stroke, they didn't even mention the SI joint as a possible cause of back pain!  So am I on some crazy tangent regarding back pain or is there a reason why this might be the case.  It depends who you ask.
If you were to ask a group of average family practitioners or even orthopedic surgeons about the SI joint, they will probably blow off the topic, stating that the small amount of motion at the SI joint (9 mm of motion to be exact) is insignificant and, therefore, really couldn't be the source of your pain.  If that were the case, I wouldn't see patients get relief on a daily basis by restoring motion to this joint.  So don't believe that line for a minute.
That being said, if you inquire about the SI joint to a group of doctors called Physiatrists (physical medicine doctors) or skilled orthopedic physical therapists who deal with a lot of patients with lumbar dysfunction, your comment might not get trivialized.  Here's why:

• I once asked a good friend of mine who is an orthopedic MD how much education they got on the SI joint?   He said less than 2 hours of lecture on the topic during medical school.  That might sound surprising, but when you realize the small number of patients that would ever get surgery to this area of the spine, it begins to make sense.  Due to the inherent stability of this joint and lack of intervertebral discs in the normal Sacrum, there isn't much that can be done with a scalpel (except in radical cases).  Since it generally isn't a surgical problem, and is usually addressed with anti-inflammatory and pain medications, it gets blown off as an aside to other back problems.   
• Treating this problem almost always requires some kind of physical medicine; specifically manipulation/ mobilization of the SI joint.  MD's generally don't get this training.  DO's (Doctors of Osteopathy) do get this training, but rarely apply it in their clinical settings, possibly due to the time constraints of an average office visit.  Either way, I believe the lack of treatment capacity by the primary care doctors is another barrier to it being properly diagnosed. 
• Probably the biggest reason SI joint dysfunction doesn't get the press it deserves is that there is not a Gold Standard Test for this problem.  That's right, MRI's and X-Rays are not sensitive to this problem.  I believe this is this reason why it is probably the most underrated back pathology out there.  Don't be fooled when your chiropractor holds up your radiograph and says, "look, your sacrum is off."  If he really believes he can read that from an X-Ray, you should start looking for the door.  
• The closest thing to a gold standard test is a direct injection of the SI joint with a numbing agent.  If you get 80-85% relief, that is considered a positive test and confirms a SI joint problem.  It isn't perfect, but if your doctor goes down this road you at least know he is knocking on the right door (if other pathology has been ruled out).  
• From an office evaluation with your MD or PT, there are a series of tests that can be performed that are called provocation tests because they provoke the pain being caused at the SI joint.    If you get 3 out of 5 positive tests from a select group of these tests, you can also be diagnosed with a SI dysfunction with pretty high reliability.  Which tests are the best is a topic of debate in the literature.  How to treat it is even less defined and is the next major hurdle to getting better.

I will address some of the treatment ideas I use in future blogs.  If you read my previous blog, you are already aware of some of my assessment tests.  If you are a keen observer, you will have noticed that they were not provocation tests and might be thinking isn't that a contradiction to his last point listed above?  This interesting area will also be addressed down the road in future discussions in more detail.  

After reading a few of these SI related blogs you might start thinking there are some ideas out there that haven't made it to main street that could greatly help clarify how to address this tricky dysfunction.  And to that, I would say "I agree whole heartedly!"  Give me a chance, I plan to start working on this issue in the near future.

SI Dysfunction: A Few Easy Diagnostic Tips

For those clinicians that go round and round with how to assess the SI joint, I thought I'd point out a few relationships I came across during my doctoral case study literature review.  My intent here is not to write a literature review, but just plant a few seeds for you to use next time you assess a patient with suspected SI pain.

1. Don't overlook manual muscle test data!  It can tell you a lot more than if a muscle is weak.  Specifically, hip abduction and the L5 myotomal test. You will very often find the side of the up-slip and rotation will have ipsilateral abductor weakness and ipsilateral L5 myotomal weakness.    Take special notice if the weakness is not bilateral.  Take extra notice if you have unilateral weakness in these areas in a fit individual.  After correcting the SI dysfunction, if your treatment is successful, these two tests will often improve immediately upon retesting the same day.
2. Long Sit Test: don't use the traditional ideas discussed in Magee to determine the effectiveness of this test (the studies show it is a poor test based on their definitions).   But when used as a broader "red flag" test, I feel it is an excellent tool.  If the malleoli change in ANY WAY during the supine to sit, don't over think it, just consider the test positive and start seriously suspecting an SI problem.  If the leg length is the same difference in supine and long sit, you have a true difference and start digging around for a heel lift (but I've found this is the minority of people).
3. Last test to consider.  The "Shotgun Test" for adduction strength in a hook-lye position.  If this test is painful or weak (or both) you probably have an SI problem.  Also will need to clear L5-S1 if this is weak.  

These tests are ones that are performed as part of most evaluations, and the Shotgun Test is used as a part of most SI treatments.  But start putting them into your mental assessment calculator, using them as possible SI tells, and you might find your success rate when treating these difficult patients goes up a notch or two.  All questions regarding this topic are welcomed.  

Cost of PT Education

Does anyone think the cost of a PT degree is getting out of control?  I'll admit, the cost of all college education is getting ridiculous, but let's take a look at the cost of PT education.  With the average private graduate program pushing $50K per year and the public schools not far behind, when is the bubble going to be reached where the truly smart individuals start to say, "why would I pay that much to make $65K per year?"   It is a significant problem.  The schools continue to pump out DPT's with the ideals that they are the next greatest thing to the field, and are demanding higher starting salaries as a result.  Clinic owners are short of staff and scared not to meet their demands, offering higher starting salaries, while only modestly increasing their most senior therapists' salaries.  (Which by they way, are the real casualties in this argument.  The new grads are now making close to the experienced therapists.  Is that fair?)
What seems odd is that when I turn away a new grad after stating "this is the best I can offer you," there tends to be another clinic owner out there ready to meet their outrageous demands the following day.  The perfect example was a person I interviewed last year for a vestibular position.  She wanted in excess of $85k per year based on her experience.  But given that she could only see one patient per hour, my math showed she would be making 55% of the gross on her maximum that she could bill (if she were 100% booked), guaranteed regardless of her patient volume.  That didn't seem right and I told her this, stating that a bonus structure could be arranged once her program generated new business outside her own 40 hour a week caseload.  She of course balked, and went to work for a local hospital system.  My question is, what are the bean counters at the hospital doing to create an hourly wage for these people?  At some point, do you not have to figure out how much a person generates vs. what their salary requirements are to make a logical decision?  I sometimes feel I am in the minority when it comes to these business decisions in the PT profession.  And if the majority of clinics are not doing this type of calculus, how are they staying in business?
I fear our profession is in jeopardy of two things.  First, pricing itself out of the market regarding fiscally responsible job offers.  Second, eventually limiting the number of quality applicants in the work field by offering a poor return on investment regarding the cost of their education.  Sure, right now while the overall job market is bleak, there are plenty of people applying to PT programs, but what happens when things turn around?  You don't have to be a genius to figure out a $150-200K loan for  a $65K/ year job is a bad deal.  Will we have bright people coming into the profession down the road if they are smart enough to figure this financing nightmare out?  Can the PT schools figure out how to get the job done of educating our students in a more cost effective manner?  The question needs to be examined.  We certainly can't just keep cranking up the costs year after year and expect things to continue to work out (see the US debt scenario as an example).
Given that reimbursement is only going to continue to decrease in the coming years, the leeway clinics are going to have to hire new grads at these higher rates is only going to shrink.  Would you want to be a new PT in the current market?  How about five years from now?  When are salaries going to have to drop to match the reimbursement of the day?
Unfortunately, I doubt schools are going to get cheaper, much less do I think insurance companies are going to pay us more for our services in the coming years.  It's a pretty picture isn't it!?   But this is a discussion that needs to be addressed.  Why it rarely seems to come up is puzzling to me.  Nothing would make me happier than to have someone convince me things are going in a different direction and that I have it all wrong.  I'll be listening.

ACO's Competing for PPO Business

Historically, ACO (Accountable Care Organization) groups have serviced HMO contracts.  Because of this fact, they have flown under the radar of most PT and MD offices that provide services to PPO patients.  But will that always be the case?  It has yet to be determined, but it is one of the key ideas that will need to be ironed out if the ACO movement is going to have an impact nationally.

• If you were running an ACO, why wouldn't you want PPO business?  The primary reason would center around the capitated pay structure most ACO's were built around and how that impacts how it's physicians are paid.  PPO's with fee-for-service structure don't fit this model easily.
• However, attracting PPO business is important since increasing numbers of national employers are getting away from individual, local HMO products and purchasing national PPO plans for their employees.  This trend has shifted overall insurance coverage away from HMO plans.  
• PPO's are also attractive because they are not regulated by groups like The California Department of Managed Health Care (DMHC), which place significant regulations on ACO business.  PPO service is resultantly much cheaper and easier to provide to patients. 

No one has yet come up with the perfect fix for this HMO/ PPO problem, but given that both providers (ACO groups) and insurers are motivated to find out a solution via the Obama-care initiatives that are coming, it will eventually get worked out.  If a cost effective model can be created (call it whatever you want), the employers who have been getting killed with increasing annual premiums will jump on board quickly if it helps them save money on their bottom line.  And when that happens, the ACO issue might become very real to the general public.

Looking forward, here's where it gets a little scary.  What if you are an independent provider in an area where an ACO aligns itself with all the providers (Medicare, PPO, HMO)?  What if the ACO includes the largest hospital system in your neighborhood?  Can you still compete?  Where are your patients going to come from?  Will your reimbursement rates be anywhere close to theirs?  

For those of you thinking, "Isn't it illegal for hospitals to employ physicians in California?"  Well, there is a business structure called "the foundation model" that makes it all work legally.  The physicians become part of the hospital's foundation, creating an obvious allegiance, but are not considered simple "employees" of the hospital.  The result is you have a group of MD's that become part of that hospital system.  

• The sales pitch from the ACO to the consumer will be that they will be able to provide the best care around because of their signifiant integration of great doctors, the hospital, ancillary services, and great electronic communication.  Patients won't have to fill out their information repeatedly for each doctor they see, since all their information will be shared amongst each of their providers.  This will increase efficiency on both ends and also cut down on repeat tests due to improved communication.  There is a lot of truth to all this.  This is the utopic vision that is driving the EMR revolution.  
• The ACO pitch to the insurer will be that since they can control costs better, they should be able to offer lower rates to their customers.  Initially that may be the case, but eventually the more probable truth of the matter will be that you will have an entity that cannot be overlooked at the negotiating table.  The ACO will have significant leverage to negotiate contracts with PPO providers, which will only make the playing field that much more unbalanced for the independent providers.  Sure there are federal anti-trust laws that help protect against these practices, but they are already in place, and look how fair things are currently!?  The combination of hospital reimbursement rates for Medicare patients and leveraged increases in PPO reimbursement, due to the percentage of the population they are serving, makes sense for the ACO.  But it could very well spell difficult times for those outside the ACO umbrella.  
• Would you want to compete against this group?  I hope for your sake you never will, but I wouldn't bet on it.  Keep an eye on this topic as 2012 unfolds.

Revision of CMA Response Post

I last reported that California Medical Association (CMA) had responded to the CA PT Board and posted a letter that was taken from the stoppopts.org site.  After further review, it was noted the letter was dated December 10, 2010.  So it wasn't exactly current, nor was it in response to the latest letters sent out to California POPTS PT's.
In any case, the CMA's website has stated in their July 22 legislative update that both AB 783 and SB 924 (PT direct access) are on the top of their agenda once the legislative summer recess ends on August 15.  All bills that are going to be passed will need to be through the legislative process by September 9.  So it should be a busy end of the summer.  It will be interesting to see what happens as the CMA and PTBCA continue to duke it out.

For those interested, the CMA verbiage regarding these two bills is listed below.

AB 783 (Hayashi) is the technical fix that codifies into law the longstanding practice that allows for medical corporations to hire certain allied health practitioners, most notably physical therapists. Thought the bill received zero “no” votes in the Assembly, it did not receive the votes to pass out of Senate Business & Professions (B&P) Committee. After the failure of SB 924 (Walters), a bill that would have allowed physical therapists direct access to patients without a prior diagnosis, Senate B&P tried to take another bite at the apple by asking for AB 783to be amended to include direct access in order to receive the support of the Chair, Senator Curren Price. The committee heard testimony from all of the providers in support of the bill, and hundreds of physical therapists asking to keep their jobs. The California Physical Therapy Association (CPTA) testified in opposition, arguing that this bill brought a competitive disadvantage to physical therapy small business owners. An equal number of physical therapists testified in opposition as well. The discussion quickly disintegrated into a debate about direct access, with the CPTA arguing that it would it was necessary to equalize competition. Senators Correa, Vargas and Wyland all voted in favor of AB 783 and spoke to remind the committee that the bill before them was not about scope of practice, but was closing a loophole in corporate code. Still, the bill was 2 votes shy and failed to pass out of committee.

CMA Responds to CPTA POPTS Mandates

Well it appears that the California Medical Association (CMA) isn't going to just sit back and let the California Physical Therapy Association (CPTA) break up their POPTS clinics without a little more money and a some more legal fighting.  Imagine that!?  If I spent over $2.4 million dollars trying to get a piece of legislation passed (and lost), I think I might counter punch a few more times on principle alone.
The next round will more than likely happen in a court of law after the California Board gets sued for the first clinic they force to disband via their new interpretation of California business law: see brief description of the Moscone-Knox Act below: 

Moscone-Knox Professional Corporation Act is the general corporation law which govern the professional corporations of California. Certain professionals those who must be licensed by the State of California to carry on their professional trade may only incorporate their practice as a Professional Corporation. Such Corporations are governed by the Moscone-Knox Professional Corporations Act

 To see the details of the objections being put forth, please read the following letter which was sent by the California Medical Association's legal counsel to the CA PT Board:

So the PT Board has their legal argument and so does the California Medical Association.  Stay tuned to see who wins the next round.  In the meantime, the POPTS will continue to do business as usual.

ACO and Insurance Company Ownership

In my last blog I discussed some of the basic tenants of what an Accountable Care Organization (ACO) is all about.  So now that you are up to speed, I'd like to now talk more about how insurance companies work with the ACO model and why that topic is relevant to the national healthcare discussion.

• To date, most people in the PT world that know anything about ACO's probably have taken the position, "Isn't that what Kaiser is all about?  But they are their own thing, not competing for my PPO or Medicare business, so who cares?"  Well, Given that Kaiser Permanente has figured out how to make a profit on servicing 6.7 million enrollees, maybe we should.   Other insurance companies are starting to get it, but more on that in a minute.   Regarding ACO structure, the Integrated Healthcare Association points out that the most successful ACO in California is Kaiser Permanente,

"where there is an exclusive relationship between the insurer and its medical groups and, in most regions, with its own hospitals.  Some thought leaders consider vertical integration with an insurance provider to be core to the success of this ACO...."

• That's right, everyone is on the same team: The hospital, the doctors, and the insurance company.  (Start making your cries about socialized medicine now, it might be closer than you think in some regions!)  Imagine that, all the players with the same goal; control services to make a profit while providing adequate enough care to keep new customers rolling in.  If you think I'm stretching this idea, then check out this piece from June 2011 in The Washington Post: http://www.washingtonpost.com/insurers-quietly-gaining-control-of-doctors-covered-by-companies-plans/2011/06/29/AG5DNftH_story.html.  The article points out how insurance companies are quietly purchasing medical groups.  Why you ask?  Can you think of a better way for an insurer to control costs than to control the providers that see their members?  "Oh, you don't want to streamline your care and help us save on the bottom line?  We aren't going to kick you out of our network, we are going to FIRE YOU."  Has a nice ring to it, doesn't it?  "Now go treat some patients!"
• So if you are an insurance company and you want to have the most bang for your buck regarding control, where would you turn?  Wouldn't you try to purchase as many services as possible?  In doing so, you'd have better control of the entire healthcare ship (that includes ancillary services, which is where the high and mighty PT profession stands in this grand discussion).  Enter: ACO structure.  You have a nice and neat working community with all the services under one managed umbrella.  It then comes down to grabbing enough market share in an area, controlling costs well enough to keep premiums down so you can attract new enrollees, and slowly you start to take over the market in that area.  
• Would joining a Kaiser system (as a patient) be that bad if the majority of your doctors worked in that system?  Wouldn't that take out the need to have infinite choice as a consumer and make the HMO you are looking at more attractive, especially if it were cheaper and had a much more solid cap on your maximum out of pocket expenses?  (Oh, and what if there were also a way to see those few doctors out of network by paying a little more out of pocket for their services?  See more in my next Blog on how that can be done.)
• Hopefully by now you are beginning to see how big the players are in this equation and how the PT victory of AB 783 could really mean next to nothing in the grand scheme of things if these types of groups start to form across the state.  If you still aren't putting the pieces together, know that these groups are going to have their own PT groups.  If the ones they have aren't adequate, they could very well build satellite clinics to meet their needs.  The only reason they'd need to contract out to an independent PT clinic would be if it made financial sense to have them provide service to a zip code outside the spheres of their primary locations.  So for those of you about to cry, "that's not fair!  What about national anti-trust laws, can't they help us?"  The ACO model is Stark exempt, so they can refer to themselves as much as they want and nobody can cry foul (this is because the ACO model removes the entire concept of referral for profit.  Both the doctor and the PT want the patient out in the fewest visits possible to control costs and make the group more profitable.  There is no inherent reason to regulate over utilization in a capitated system).  
• So toss this thought around a little bit longer, all the players on the same team: doctors, hospitals, insurer, ancillary services.... the real question is, will your clinic even be on the field?  
• My next post will discuss how ACO's that aren't partnered directly with a single insurer can still turn your lights out.

What is an ACO?

Many of you have probably never heard of an Accountable Care Organization (ACO), but many of you will begin hearing about them in the coming months due to their role in the Patient Protection and Affordable Care Act.  Due to their complexity, I will be making multiple posts describing them as well as highlighting how they may or may not influence your current practice.  Much of the data I will be quoting was provided by The Integrated Healthcare Association, a not-for-profit multi-stakeholder leadership group located in CA http://www.iha.org/.
Definition:   An ACO is a group of providers that work together in controlling health care costs while improving quality of care.  The group may or may not include a hospital in their structure.  They have traditionally been the operative arm of HMO contracts, where capitated rates could be paid to an ACO for the care of a group of participating patients, usually no less than 5000 in number.  In very simplistic theory, if the group kept their costs below their capitation pool total, they were rewarded by keeping the surplus.  The risk being that if the provided services exceed their capitation pool, they lost money.  Big picture: generally cut back on patient services, the ACO makes money.  The balance for patient protection was provided via various regulatory statutes on the ACO by the state of CA.
History:  When I started researching ACO's, I was under the impression they were a relatively new phenomena.  However, they have been present in California for 30 years and provide 54% of the medical services provided to insured Californians.  The largest of these groups is Kaiser Permanente, which provides service to over 6.6 million people.  There are 285 physician organizations (ACO's) in CA that range in structure and size, as well as the contracts they serve.  These variables make the topic quite confusing and complex when trying to apply it to your own zip code.
Relevance:  Health care providers need to understand the implications of ACO's, because they are a major structural tool that Medicare and other insurance providers intended use to address the demands of the Patient Protection and Affordable Care Act, aka "Obama-care," in CA and across the country.  For an Obama-care refresher, you can find details at: http://dpc.senate.gov/healthreformbill/healthbill04.pdf.  Currently, trial markets across specific areas of the US are participating in data collection that will help define future ACO structure.  South Orange County, CA  is one of these areas and the primary reason why I am investigating this topic.
Details:  Let's look at some of the ACO details to help you better understand what they really present to the health care community.

1. Size: ACO's can range in size from <5000 enrollees (26% of ACO's) to >100,000 enrollees (8% of ACO's).  The size of a group does not dictate the profitability of the group, however, larger groups benefit from modest economies of scale when investing in their infrastructure (IT, electronic records, supporting programs).
2. Structure:

• Integrated Medical Groups (IMG).  133 groups in CA.  They are groups of primary care and specialty physicians that are usually associated with a hospital or community clinics.  ( Example: Kaiser).   
• Independent Practice Associations (IPA).  152 groups in CA.  It is an umbrella organization that encompasses solo practitioners and small to mid-size groups.  This format serves 4.8 million HMO enrollees, where the network performs many of the same tasks as an IMG: contracting, paying physicians, providing information technology services, billing services, etc.  (Examples: Monarch HealthCare, Sharp Community Medical Group).
• Some organizations incorporate both models.
• Structure has not been directly linked to profitability or quality of care of a group.

    3.  Insurances:  The initial intent of an ACO was to provide capitated service to private HMO participants, Medicare (HMO), and Medicaid participants.  They have traditionally had trouble attracting PPO business, but due to the leveling of HMO and PPO costs (similar monthly premiums) and several other factors, this is no longer a cut and dry issue.  This key aspect of the insurance make-up of an ACO has been changing in certain markets and has the potential to significantly change in the future.  This will be the key topic I will touch on in my next post.  It is very important to understand that the regulation of PPO contracts (and the services they provide their members) is much less regulated than HMO contracts in CA.  See the California Department of Managed Health Care (DMHC).  As a result, if ACO's start attracting PPO clientele through more promising rates and better coordinated care, there will be very little watch dog supervision over them.  Did I mention that ACO's are Stark exempted as well?   Maybe you can start to connect the dots and see how this is going to effect PT.  Imagine your Medicare patients and a large chunk of your private pay patients becoming ACO participants during future open enrollments.  For them to continue to seek your services, they will have to pay more to go outside their network, similar to our current PPO provider network arrangements.  The difference in this case is that as an isolated PT provider you will have a marginal chance at becoming a future preferred provider and the pool of patients you will be out of network on could be greater than 300,000 patients (in the case of South Orange County, CA).   Do you think that your PT clinic could be influenced significantly?  Think about that for a few minutes....  There will be much more to come on the PPO/ ACO topic in my next post.  At least now you should have a feel for what an ACO is if you hear about one forming in your backyard in the coming months, and have justification for the headache that ensues.