Review of Texas Medicaid Acute Care Therapy Programs. Prepared by: Strategic Decision Support Health and Human Services Commission

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1 Review of Acute Care Therapy Programs Prepared by: Strategic Decision Support Health and Human Services Commission February 25, 2015

2 TABLE OF CONTENTS TABLE OF CONTENTS. i INTRODUCTION, BACKGROUND, & SUMMARY OF RESULTS. 1 Figure 1. Amount paid for physical, occupational, and speech therapy services, FY Figure 2. Distinct acute care therapy clients, FY Figure 3. Average number of claims per client, FY PURPOSE OF THE STUDY Table 1. Rate Comparisons. 4 RESEARCH QUESTION 5 METHODS. 5 Data... 5 Data Structure Analysis Plan RESULTS... 7 Published Payment Rates... 7 Table 2. Published payment rates for pediatric therapy evaluation and re-evaluation procedures in, Arizona, California, Florida, and Minnesota 8 Table 3. Published payment rates for pediatric therapy treatment procedures in, Arizona, California, Florida, and Minnesota.. 9 Table 4. Ratio of published pediatric therapy evaluation and re-evaluation payment rates to payment rates in Arizona, California, Florida, and Minnesota Table 5. Ratio of published pediatric therapy treatment procedure payment rates to payment rates in Arizona, California, Florida, and Minnesota.. 13 Analysis by Payer Type Table 6. Median paid rate comparisons for physical, occupational, and speech therapy evaluations and re-evaluations by payer type.. 18 Table 7. Median paid rate comparisons for physical, occupational, and speech therapy treatments by payer type. 19 i

3 Table 8. Ratio of FFS compared to MC, 11-State Sample, Commercial, and National Commercial: Pediatric therapy evaluations and re-evaluations Table 9. Ratio of FFS compared to MC, 11-State Sample, Commercial, and National Commercial: Pediatric therapy treatment procedures SUMMARY ii

4 INTRODUCTION, BACKGROUND, & SUMMARY OF RESULTS Between fiscal years 2009 and 2014 there has been a dramatic increase in the cost and utilization of pediatric acute care therapy services (physical, occupational, and speech therapy) in the program. An examination of the overall cost to of acute care therapy services found that between fiscal year 2009 and fiscal year 2014 the cost to for pediatric acute care therapy services has increased from $412 million to $699 million with a peak in fiscal year 2012 of $732 million (see Figure 1). Figure 1. Amount paid for physical, occupational, and speech therapy services, FY $800,000,000 $700,000,000 $673M $732M $688M $699M $600,000,000 $500,000,000 $400,000,000 $300,000,000 $200,000,000 $100,000,000 $412M $536M $ Source: AHQP Claims Universe, TMHP; Encounters Best Picture Universe, TMHP Prepared by Strategic Decision Support, HHSC. February 2015 At the same time the number of clients receiving acute care therapy services has increased dramatically from 94,039 clients in fiscal year 2009 to 148,293 clients in fiscal year This represents a 58 percent increase in the number of clients served between fiscal years 2009 and 2014 (see Figure 2). 1

5 Figure 2. Distinct acute care therapy clients, FY , , K 151K 144K 148K 120, K 100,000 94K 80,000 60,000 40,000 20, Source: AHQP Claims Universe, TMHP; Encounters Best Picture Universe, TMHP Prepared by Strategic Decision Support, HHSC. February 2015 Finally, there has been increased utilization in the number of services (claims) per client (see Figure 3). In feefor-service (FFS) the average number of claims-per-client has increased from 45 claims in fiscal year 2009 to 57 claims in fiscal year In managed care (MC) the average number of claims-per-client has increased from 18 claims in fiscal year 2009 to 25 claims in fiscal year These show a 28 and 38 percent increase respectively. Figure 3. Average number of claims per client, FY Fee for Service Managed Care Source: AHQP Claims Universe, TMHP; Encounters Best Picture Universe, TMHP Prepared by Strategic Decision Support, HHSC. February

6 In recognition of the rising costs and utilization, Senate Bill 1, 83 rd Legislature, Regular Session, 2013 (Article II, Health and Human Services Commission, Rider 51) directed the Health and Human Services Commission (HHSC) to reduce funding and contain costs. Specifically, there is a mandated "reduction of $200,000,000 in general revenue funds and $284,730,974 in federal funds in fiscal year 2014 and $200,000,000 in general revenue funds and $276,871,722 in federal funds in fiscal year 2015, a biennial total of $400,000,000 in general revenue funds and $561,602,696 in Federal Funds." Rider 51, parts direct HHSC to phase down rates that exceed Medicare rates, with consideration of the service delivery model and to develop a more appropriate fee schedule for therapy services. Rider 51 cost savings associated with acute care therapies (FFS and MC) rate reductions were estimated to total $36.8 million in general revenue funds and $51.7 million in federal funds for the biennium. HHSC has implemented a series of FFS rate reductions, based on provider type and delivery model (i.e., services provided in an office/clinic setting versus services provided in the client s home). HHSC applied the following FFS rate reductions effective September 1, 2013: 1.5 percent rate reduction for services provided in client's home by a home health agency (HHA) or independent provider 2.5 percent rate reduction for services provided in a comprehensive outpatient rehabilitation facility (CORF)/outpatient rehabilitation facility (ORF) 4.0 percent rate reduction for services in an office or clinic by an independent provider The September 1, 2013, rate reductions were estimated to produce savings of $18.1 million in general revenue and $25.4 million in federal funds for the biennium. Legislative intent included an expectation that additional acute care therapy savings of $18.7 million in general revenue and $26.3 million in federal funds would be achieved during the biennium so that the entire cost savings assumed in Rider 51 for acute care therapies would be achieved. Support for this intent was demonstrated by correspondence from Senator Williams and Representative Pitts, then Chairs of the Senate Finance Committee and House Committee on Appropriations, respectively, in which they requested that "HHSC review the rates mid-year and make further adjustments or policy changes as needed in order to achieve overall budgeted savings while ensuring quality services are provided." 1 The legislators also encouraged HHSC to explore other cost saving options that would maintain quality of care and increase efficiency of acute care therapy services such as standardizing rates, increasing service consistency, encouraging service provision in appropriate settings, improving the quality of care, and achieving efficiencies through managed care therapy utilization. Concerns expressed by provider groups, other legislators, and some client advocates led HHSC to engage an independent researcher to address a series of questions regarding the comparability of rates paid for pediatric acute care therapy (occupational, physical, and speech) services among, other state programs and among commercial payers both within and outside. In collaboration with HHSC Strategic Decision Support, researchers from A&M s School of Public Health gathered published rate data and analyzed comparison claims and encounters data. Strategic Decision Support staff summarized the findings and 1 Letter from Tommy Williams, Senate Finance Committee, and Jim Pitts, House Committee on Appropriations, to Dr. Kyle Janek, Executive Commissioner Health and Human Services Commission. August 21,

7 provided a format for dissemination. Understanding the landscape of reimbursement for pediatric acute care therapy services will inform future decision-making regarding further rate adjustments. Using the results of this study, HHSC has prepared options for consideration by the Legislature for changes in authorization policies and payments rates. Those options are provided separately as they were not part of the scope of this study. Key findings of the study include: With the exception of one CPT, published payment rates were consistently higher than the four other comparison states. 2 In some cases, over three times higher (See Tables 2-4). Most therapy paid-per-unit rates for are higher than the rates paid in the 11-state comparison and the rates paid in the commercial comparisons both in and outside of (see Tables 5-9). In many cases the paid-per-unit rates were more than twice the paidper-unit rates in the comparison groups. PURPOSE OF THE STUDY The proposed study examined the rate structure of pediatric acute care therapy (occupational, physical, speech) in. Comparisons were made according to payer type and service delivery model (see Table 1). These comparisons illustrate how FFS compares to MC, from other states, and private insurers in and outside of. Results of this study will inform recommendations for future rate changes. Table 1. Rate Comparisons Therapy type Payer types Service delivery models Occupational Physical Speech fee-for-service in managed care in in other states Private insurance in Private insurance nationally Comprehensive outpatient rehabilitation facility (CORF)/ Outpatient rehabilitation facility (ORF) Home health agency (HHA) Independent provider - client's home Independent provider location other than the client s home 2 CPT Aquatic Therapy with Therapeutic Exercises per 15 minutes 4

8 RESEARCH QUESTION The purpose of the study was to examine how published and paid rates for pediatric acute care therapy compare among payer types. 3 To address this question the study: Compared published rates for selected pediatric acute care therapy procedure codes per treatment by payer, and service delivery model. Compared median paid rates for selected pediatric acute care therapy procedure codes paid-per-unit by payer, and service delivery model. These analyses provided a "head-to-head" comparison of rates among payer types but must be considered within the context of the authorization process of each respective payer. METHODS DATA Data from three different sources were used for these analyses. These data afford the comparison of, national, commercial, and national commercial claims for acute therapy programs, as defined by the three therapy types and procedure codes. Published Payment Rates The analysis included published payment rates for four comparison states: Arizona, Minnesota, Florida, and California. These were compared to the published 2013 FFS payment rates. Claims/Encounters Database HHSC provided claims and encounters data for 40 CPT codes related to physical, occupational, and speech therapy services for state fiscal years Data from state fiscal year 2013 were used in this analysis. Health Analytics Comparison Databases Health Analytics MarketScan Research Databases are a family of databases that include individuallevel claims and encounters data for commercial, Medicare, and clients. Large employers, managed care organizations, hospitals, and Medicare and programs provide data to Health Analytics and are made available to researchers for a fee. Variables in these datasets include, but are not limited to, demographic data, medical data (admission dates, diagnosis codes, dates of service, procedure codes, length of stay, DRG codes, place of service, provider ID, and quantity of service), health plan and payment information, drug utilization, and enrollment data. These samples have been used as a credible resource for National analyses and comparisons between state-specific programs and overall. Two comparison 3 For, published rates were effective as of September 1,

9 data sets were constructed from the Health Analytics MarketScan claims data. Data from state fiscal year 2013 were used in this analysis. MarketScan Multi-State Claims and Encounters Database The multi-state (11 states) database contains medical, surgical, and prescription drug claims and encounters of more than 35 million enrollees from multiple states. It includes records of inpatient services, inpatient admissions, outpatient services, and prescription drug claims, as well as information about long-term care and other medical care. Data on eligibility (by month), service, and provider type are also included. Standard demographic data are also included. These data are directly collected from participating state programs. is not a participating program. Licensing stipulates that not disclose state-level specifics in the sample. MarketScan Commercial Claims and Encounters Database The commercial claims and encounters database consists of medical and drug data from large employers and managed care organizations. This database includes geographic location (state, county, metropolitan statistical area) which allows researchers to examine state specific commercial plans as well as national data. It contains data for several million individuals annually. For this analysis, commercial managed care organizations were examined separately from the national sample. DATA STRUCTURE To examine average paid rates, FFS claims and MC encounters data were compared to equivalent claims for other state programs, and commercial claims, both in, and nationally. Data transformations were required to generate key study variables in the MarketScan data sets to match those provided in the data. These transformations included conversion of calendar to state fiscal year, grouping of point of service into four main categories, and identification of service type (e.g. PT, OT and ST). ANALYSIS PLAN Therapy service utilization was measured through actual payments made and units of service provided. and Health Analytic datasets provide claim-line level data. These analytic files summarized utilization-per-beneficiary, per year, per therapy type, per point-of-service. This allowed for accurate comparison of utilization patterns by clients across all files. To identify differences between the published rate structure and payment rates by payer, the median payment rate for each procedure code was calculated. The median was used as the measure of central tendency for this analysis, because data were not normally distributed and presenting means would provide biased results. Payment Rates Median payment rates for were calculated for each type of service and service delivery model. To accomplish this, place of service and the service provider type were used to identify four service delivery models: 6

10 Comprehensive Outpatient Rehabilitation Facilities/Outpatient Rehabilitation Facilities Independent therapist providing services in a non-home setting Independent therapists providing services in the home Home Health Agency FFS claims were examined separately from MC encounters. Each dataset was split by type of service (occupational, physical, or speech). For each service delivery model, the median payment rate was calculated for each procedure code. The median payment rates were presented for each unit of service. In order to calculate the average payment rate of services provided across all service delivery models, where applicable, HHA rates were converted from rate-per-session to rate-per-15 minutes. This conversion assumed that each HHA visit was one hour. For procedures paid-per-session (e.g. evaluations) at a CORF/ORF or by an independent therapist, the HHA rate was not converted. MarketScan Comparison Payment Rates Median payment rates for the comparison groups were also calculated for each unit. The data from the multistate comparison, the employer-sponsored commercial plans, and the national employersponsored commercial plans indicated these payers reimburse at the same rate for PT, OT, and ST regardless of service delivery model. RESULTS PUBLISHED MEDIID PAYMENT RATES published payment rates for selected pediatric acute care therapy procedure codes were compared to the published payment rates from Arizona, Minnesota, Florida, and California (see Tables 2 and 3). Tables 4 and 5 provide the ratio of published payment rates to other state s rates. For this analysis, the published payment rates for independent therapists providing services in a non-home setting were compared to the other four state s published payment rates. The published payment rates for independent therapists are the lowest published rates and therefore this comparison yields the most conservative ratios. With the exception of Aquatic Therapy with Therapeutic Exercises per 15 minutes (CPT 97113), the published payment rates were consistently higher than the four other states. In some cases the published rates were over three times higher than the comparison state s published payment rate (see Table 4 on page 12). 7

11 Table 2. Published payment rates for pediatric therapy evaluation and re-evaluation procedures in, Arizona, California, Florida, and Minnesota 2013 Published Rates Published Rates From Other States Independent Non-home Setting Independent Home Setting Home Health Agency* Non- Facility Local Education Agency TX CORF/ ORF* Facility MN FL Medicine Podiatrist Evaluation of speech, language, voice, communication, and/ or auditory processing $ $ $ $ $51.05 $ Evaluation of oral and pharyngeal swallowing function $ $ $ $ $66.53 $57.36 $59.59 $48.78 S9152 Speech therapy, re-evaluation $ $ $ $ X SLP re-evaluation, per session Therapy Evaluation $ $ $ $ $63.86 $63.86 $52.77 $ Physical Therapy re-evaluation $ $ $ $ $35.95 $35.95 $29.54 $ Occupational therapy evaluation $ $ $ $ $72.17 $72.17 $59.33 $ Occupational therapy re-evaluation $ $ $ $ $45.40 $45.40 $37.37 $55.58 * rate per visit Sources: rates provided by HHSC as of July Arizona rates can be found at Minnesota rates can be found at Florida rates can be found at California rates can be found at CORF/ORF = Comprehensive Outpatient Rehabilitation Facility/Outpatient Rehabilitation Facility Note: reimbursement rates reflected above were current when study was contracted. Current reimbursement rates may vary slightly from those displayed. 8

12 Table 3. Published payment rates for pediatric therapy treatment procedures in, Arizona, California, Florida, and Minnesota TX CORF/ORF 2013 Published Rates Published Rates From Other States Independent Non-home Setting Independent Home Setting Home Health Agency* 9 Non- Facility Facility MN FL Medicine Treatment of speech, language, voice, communication, and/or auditory processing disorder; ind. $40.80 $32.55 $34.30 $ $ Group, two or more individuals $20.41 $17.15 $16.28 $68.60 Treatment of swallowing dysfunct and/or oral function for feeding $40.80 $32.55 $34.30 $ Evaluation of auditory rehabilitation status; first hour. $76.33 $64.59 $63.12 $45.28 $ Evaluation of auditory rehabilitation status; each additional 15 minutes. Podiatrist Auditory rehabilitation; pre-lingual hearing loss $37.29 $ Auditory rehabilitation; postlingual hearing loss Mechanical traction $40.80 $32.55 $34.30 $ $13.64 $13.64 $11.11 $11.14 $ Electrical stimulation (unattended) $40.80 $32.55 $34.30 $ $13.59 $13.59 $11.11 $11.14 $ Vasopneumatic devices $40.80 $32.55 $34.30 $ $16.75 $16.75 $13.38 $11.14 $ Paraffin bath $40.80 $32.55 $34.30 $ $9.50 $9.50 $7.57 $9.84 $ Whirlpool $40.80 $32.55 $34.30 $ $20.18 $20.18 $16.66 $11.14 $ Diathermy (e.g., microwave) $40.80 $32.55 $34.30 $ $5.49 $5.49 $4.29 $9.84 $ Infrared $40.80 $32.55 $34.30 $ $5.21 $5.21 $4.04 $9.84 $9.84 Local Education Agency Ultraviolet $40.80 $32.55 $34.30 $ $6.37 $6.37 $5.05 $9.84 $ Application of a modality to one or more areas; electrical stimulation (manual), (15 minutes) $40.80 $32.55 $34.30 $ $16.22 $16.22 $13.38 $8.66 $ Lontophoresis (15 minutes) $40.80 $32.55 $34.30 $ $27.97 $27.97 $22.97 $9.18 $ Contrast baths, (15 minutes) $40.80 $32.55 $34.30 $ $15.33 $15.33 $12.62 $7.83 $ Ultrasound, (15 minutes) $40.80 $32.55 $34.30 $ $10.75 $10.75 $8.83 $7.43 $ Hubbard tank, (15 minutes) $40.80 $32.55 $34.30 $ $28.27 $28.27 $23.23 $11.14 $11.14 * rate per visit Sources: rates provided by HHSC as of July Arizona rates can be found at Minnesota rates can be found at Florida rates can be found at California rates can be found at

13 Table 3. Published payment rates for pediatric therapy treatment procedures in, Arizona, California, Florida, and Minnesota (continued) Published Rates Published Rates From Other States Independent Non-home Setting Independent Home Setting Home Health Agency* Non- Facility TX CORF/ORF Facility MN FL Medicine Podiatrist Unlisted modality (specify type and time if constant attendance) $40.80 $32.55 $34.30 $ $9.54 $9.54 $21.88 $14.27 $14.27 Local Education Agency Therapeutic procedure, one or more areas, each 15 minutes; therapeutic exercises to develop strength and endurance, range of motion and flexibility $40.80 $32.55 $34.30 $ $27.23 $27.23 $22.47 $10.96 $10.96 $6.37 Neuromuscular reeducation of movement, balance, coordination, kinesthetic sense, posture, and/or proprioception for sitting and/or standing activities $40.80 $32.55 $34.30 $ $28.38 $28.38 $23.48 $12.22 $12.22 Aquatic therapy with therapeutic exercises (15 minutes) $40.80 $32.55 $34.30 $36.97 $36.97 $30.55 $13.93 $ Gait training (incl. stair climbing) $40.80 $32.55 $34.30 $ $24.05 $24.05 $19.94 $11.28 $ Massage, including effleurage, petrissage, and/or tapotement (stroking, compression, percussion) (15 minutes) $40.80 $32.55 $34.30 $ $22.30 $22.30 $18.43 $10.29 $ Unlisted therapeutic procedure (specify) $40.80 $32.55 $34.30 $ $12.90 $12.90 $7.65 $ Manual therapy techniques (e.g., mobilization/manipulation, manual lymphatic drainage, manual $40.80 $32.55 $34.30 $ $25.50 $25.50 $20.95 $22.21 $ (Traction), one or more regions, (15 minutes) $20.41 $32.55 $34.30 $ $14.81 $14.81 $ Therapeutic activities, direct (oneon-one) patient contact (use of dynamic activities to improve functional performance), (15 minutes) $40.80 $32.55 $34.30 $ $29.81 $29.81 $24.49 $11.14 * rate per visit Sources: rates provided by HHSC as of July Arizona rates can be found at Minnesota rates can be found at Florida rates can be found at California rates can be found at 10

14 Table 3. Published payment rates for pediatric therapy treatment procedures in, Arizona, California, Florida, and Minnesota (continued) Published Rates Published Rates From Other States Independent Non-home Setting Independent Home Setting TX CORF/ORF Self-care/home management training (e.g., activities of daily living [ADL] and compensatory training, meal preparation, safety procedures, and instructions in use of assistive technology devices/adaptive equipment), direct one-on-one contact (15 minutes) $40.80 $32.55 $34.30 $ $29.53 $29.53 $ Home Health Agency* Non- Facility Facility MN FL Medicine Podiatrist Community/work reintegration training (e.g., shopping, transportation, money management, avocational activities and/or work environment/modification analysis, work task analysis, use of assistive technology device/adaptive equipment), direct one-on-one contact, (15 minutes) $40.80 $32.55 $34.30 $ $25.51 $25.51 $ Wheelchair management (e.g., assessment, fitting, training), (15 min) $40.80 $32.55 $34.30 $ $25.80 $25.80 $ Physical performance test or measurement (e.g., musculoskeletal, functional capacity), with written report (15 minutes) $40.80 $32.55 $34.30 $ Orthotic(s) management and training (including assessment and fitting when not otherwise reported), upper extremity(s), lower extremity(s) and/or trunk, (15 minutes) $40.80 $34.12 $35.96 $ $32.70 $ Prosthetic training, upper and/or lower extremity(s), (15 minutes) $40.80 $32.55 $34.30 $ $28.40 $ Checkout for orthotic/prosthetic use, established patient, (15 minutes) $41.39 $41.39 $43.62 $ $41.43 $ Unlisted physical medicine/ rehabilitation service or procedure $40.80 $32.55 $34.30 $ * rate per visit Sources: rates provided by HHSC as of July Arizona rates can be found at Minnesota rates can be found at Florida rates can be found at California rates can be found at Note: reimbursement rates reflected above were current when study was contracted. Current reimbursement rates may vary slightly from those displayed. Local Education Agency

15 Table 4. Ratio of published pediatric therapy evaluation and re-evaluation payment rates to payment rates in Arizona, California, Florida, and Minnesota Ratio** Lowest Published Rate* Non- Facility Facility values >1 indicate the rate is higher values <1 indicate the rate is lower MN FL Medicine Podiatrist Local Education Agency Evaluation of speech, language, voice, communication, and/ or auditory processing Evaluation of oral and pharyngeal swallowing function $ $ S9152 Speech therapy, re-evaluation $ X SLP re-evaluation, per session Therapy evaluation $ Physical therapy re-evaluation $ Occupational therapy evaluation $ Occupational therapy re-evaluation $ * Independent non-home setting ** E.g. for CPT 92506, lowest published rate is 3.8 times higher than Florida s published rate. 12

16 Table 5. Ratio of published pediatric therapy treatment procedure payment rates to payment rates in Arizona, California, Florida, and Minnesota Ratio** values >1 indicate the rate is higher values <1 indicate the rate is lower Lowest Published Rate* Non- Facility Facility MN FL Medicine Podiatrist Local Education Agency Treatment of speech, language, voice, communication, and/ or auditory processing disorder; individual $ Group, two or more individuals $ Treatment of swallowing dysfunction and/or oral function for feeding Evaluation of auditory rehabilitation status; first hour. Evaluation of auditory rehabilitation status; (each additional 15 minutes) Auditory rehabilitation; pre-lingual hearing loss Auditory rehabilitation; post-lingual hearing loss $ Mechanical traction $ Electrical stimulation (unattended) $ Vasopneumatic devices $ Paraffin bath $ Whirlpool $ Diathermy (e.g., microwave) $ * Independent non-home setting except for CPT For CPT the lowest rate was for independent therapist in a home setting. ** E.g. for CPT 92507, lowest published rate is 1.82 times higher than Florida s published rate. 13

17 Table 5. Ratio of published pediatric therapy treatment procedure payment rates to payment rates in Arizona, California, Florida, and Minnesota (continued) Lowest Non- MN FL Published Facility Medicine Podiatrist Facility Rate* Infrared $ Ratio** values >1 indicate the rate is higher values <1 indicate the rate is lower Ultraviolet $ Application of a modality to one or more areas; electrical stimulation (manual), each 15 minutes $ Lontophoresis (15 minutes) $ Contrast baths, (15 minutes) $ Ultrasound, (15 minutes) $ Hubbard tank, (15 minutes) $ Unlisted modality (specify type and time if constant attendance) Therapeutic procedure, one or more areas; therapeutic exercises to develop strength and endurance, range of motion and flexibility (15 minutes) Neuromuscular re-education of movement, balance, coordination, kinesthetic sense, posture, and/or proprioception for sitting and/or standing activities Aquatic therapy with therapeutic exercises (15 minutes) Gait training (includes stair climbing) $ Local Education Agency $ $6.37 $ $32.55 (0.88) (0.88) $ * Independent non-home setting except for CPT For CPT the lowest rate was for independent therapist in a home setting ** E.g. for CPT 97026, lowest published rate is 6.25 times higher than Arizona s Non-Facility published rate.

18 Table 5. Ratio of published pediatric therapy treatment procedure payment rates to payment rates in Arizona, California, Florida, and Minnesota (continued) Ratio** Lowest Published Rate* Non- Facility Facility values >1 indicate the rate is higher values <1 indicate the rate is lower MN FL Medicine Podiatrist Local Education Agency Massage, including effleurage, petrissage, and/or tapotement (stroking, compression, percussion) (15 minutes) $ Unlisted therapeutic procedure (specify) $ Manual therapy techniques (e.g., mobilization/manipulation, manual lymphatic drainage, manual $ (Traction), one or more regions, (15 minutes) Therapeutic activities, direct (oneon-one) patient contact (use of dynamic activities to improve functional performance), (15 minutes) $ $ Self-care/home management training (e.g., activities of daily living [ADL] and compensatory training, meal preparation, safety procedures, and instructions in use $ of assistive technology devices/adaptive equipment), direct one-on-one contact (15 minutes) * Independent non-home setting except for CPT For CPT the lowest rate was for independent therapist in a home setting ** E.g. for CPT 97124, lowest published rate is 3.16 times higher than California s Medicine published rate. 15

19 Table 5. Ratio of published pediatric therapy treatment procedure payment rates to payment rates in Arizona, California, Florida, and Minnesota (continued) Ratio** Community/work re-integration training (e.g., shopping, transportation, money management, avocational activities and/or work environment/modification analysis, work task analysis, use of assistive technology device/adaptive equipment), direct one-on-one contact, (15 minute) Wheelchair management (e.g., assessment, fitting, training), (15 minutes) Physical performance test or measurement (e.g., musculoskeletal, functional capacity), with written report (15 minutes) Orthotic(s) management and training (including assessment and fitting when not otherwise reported), upper extremity(s), lower extremity(s) and/or trunk, (15 minutes) Lowest Publishe d Rate* Non- Facility Facility values >1 indicate the rate is higher values <1 indicate the rate is lower MN $ $ $32.55 $ Prosthetic training, upper and/or lower extremity(s), (15 minutes) $ Checkout for orthotic/prosthetic use, established patient, (15 minutes) $ Unlisted physical medicine/ rehabilitation service or procedure $32.55 * Independent non-home setting except for CPT For CPT the lowest rate was for independent therapist in a home setting ** E.g. for CPT 97542, lowest published rate is 1.26 times higher than Arizona s Non-Facility published rate. FL Medicine Podiatrist Local Education Agency 16

20 PAID RATE ANALYSIS BY PAYER TYPE The next analysis compared the median paid rates for selected pediatric acute care therapy procedure codes paid per unit by payer type (see Table 6 and 7). median paid rates were averaged across provider type. As described previously, in order to calculate the median payment rate of services provided across all service delivery models, HHA rates were converted from rate-per-session to rate-per- 15 minutes. This conversion assumed that each HHA visit was one hour. For procedures paid-persession (e.g. evaluations) at a CORF/ORF or by an independent therapist, the HHA rate was not converted. The analysis examined the median paid rates across the five payer types. Fee-for-service Managed Care 11-State Employer- Sponsored Commercial National Employer-Sponsored Commercial Results show that most physical therapy, occupational therapy, and speech therapy rates paid-per-unit for are higher than the 11-State paid-per-unit rates and the commercial paidper-unit rates both in and in other states. Tables 8 and 9 provide the ratio of FFS compared to Managed Care, the 11-State sample, the Employer-Sponsored Commercial, and the National Employer-Sponsored Commercial. For most therapy services, Fee-for-service paid-per-unit rates were higher than the comparison samples. In many cases, the FFS paid-per-unit rates were more than twice the paid-perunit rates for the comparison groups (see Table 9 on page 22). 17

21 Table 6. Median paid rate comparisons for physical, occupational, and speech therapy evaluations and re-evaluations by payer type Fee-for- Service Average Managed Care Average 11-State Commercial National Commercial Evaluation of speech, language, voice, communication, and/or auditory processing (discontinued ) $ $ $91.78 $ $ Evaluation of speech fluency (e.g., stuttering and cluttering) (added ) Evaluation of speech sound production (e.g., articulation, phonological process, apraxia, dysarthria) (added ) Evaluation of speech sound production (e.g., articulation, phonological process, apraxia, dysarthria); with evaluation of language comprehension and expression (e.g., receptive and expressive language) (added ) Behavioral and qualitative analysis of voice and resonance (added ) Evaluation of oral and pharyngeal swallowing function $ $ S9152 Speech therapy, re-evaluation $ $ $85.00 $ Therapy Evaluation $ $ $55.23 $60.07 $ Physical Therapy re-evaluation $ $ $32.75 $33.28 $ Occupational therapy evaluation $ $ $59.47 $66.27 $ Occupational therapy re-evaluation $ $ $32.95 $70.46 $

22 Table 7. Median paid rate comparisons for physical, occupational, and speech therapy treatments by payer type Fee-for- Service Average Managed Care Average 11-State Commercial National Commercial 92507* Treatment of speech, language, voice, communication, and/or auditory processing disorder; individual $35.48 $30.55 $66.89 $68.24 $ Group, two or more individuals $17.52 $16.28 $23.88 $22.28 $ Treatment of swallowing dysfunction and/or oral function for feeding $35.19 $32.64 Evaluation of auditory rehabilitation status; first hour $61.47 $62.02 Evaluation of auditory rehabilitation status; each additional 15 minutes $0.00 $ Auditory rehabilitation; pre-lingual hearing loss $68.72 $ Auditory rehabilitation; post-lingual hearing loss $ Mechanical traction $33.07 $30.43 $11.01 $ Electrical stimulation (unattended) $33.43 $29.31 $9.68 $11.59 $ Vasopneumatic devices $32.55 $30.00 $9.00 $14.38 $ Paraffin bath $27.42 $15.18 $7.90 $ Whirlpool $36.99 $29.95 $16.92 $ Diathermy (e.g., microwave) $32.55 $13.69 $4.40 $ Infrared $30.00 $28.72 $1.72 $4.40 $ Ultraviolet $49.34 $4.80 $ Application of a modality to one or more areas; electrical stimulation (manual), (15 minutes) $34.12 $30.86 $12.72 $ Lontophoresis (15 minutes) $32.55 $32.55 $23.41 $ Contrast baths, (15 minutes) $13.54 $ Ultrasound, (15 minutes) $32.85 $29.31 $9.87 $ Hubbard tank, (15 minutes) $22.57 $ Unlisted modality (specify type and time if constant attendance) $34.30 $27.08 $15.00 $10.55 $ Therapeutic procedure, one or more areas, each 15 minutes; therapeutic exercises to develop strength and endurance, range of motion and flexibility $35.21 $31.50 $40.25 $49.07 $ Neuromuscular re-education of movement, balance, coordination, kinesthetic sense, posture, and/or proprioception for sitting and/or standing activities $22.17 $31.96 $32.90 $29.28 $ Aquatic therapy with therapeutic exercises (15 minutes) $39.28 $38.11 $78.34 $96.44 $87.00 * For 92507, rates are for 15-minute units of service while comparison rates are for a treatment. 19

23 Table 7. Median paid rate comparisons for physical, occupational, and speech therapy treatments by payer type (continued) 20 Fee-for- Service Average Managed Average Care Paid Rate 11-State Commercial National Commercial Gait training (includes stair climbing) $36.10 $31.05 $20.05 $25.04 $ Massage, including effleurage, petrissage, and/or tapotement (stroking, compression, percussion) (15 minutes) $34.34 $29.99 $12.54 $17.37 $ Unlisted therapeutic procedure (specify) $11.55 $32.55 $26.00 $14.30 $ Manual therapy techniques (e.g., mobilization /manipulation, manual lymphatic drainage, manual $35.90 $32.16 $20.56 $23.12 $ (Traction), one or more regions, each 15 minutes $26.77 $27.20 $37.50 $ Therapeutic activities, direct (one on one) patient contact (use of dynamic activities to improve functional performance), (15 minutes) $35.43 $32.76 $73.77 $71.50 $60.00 Self-care/home management training (e.g., activities of daily living [ADL] and compensatory training, meal preparation, safety procedures, and instructions in use of assistive technology devices/adaptive equipment), direct one-on-one contact (15 minutes) $34.58 $32.65 $40.00 $32.28 $41.01 Community/work reintegration training (e.g., shopping, transportation, money management, avocational activities and/or work environment/modification analysis, work task analysis, use of assistive technology device/adaptive equipment), direct one-on-one contact, (15 minutes) $40.12 $93.01 $27.00 Wheelchair management (e.g., assessment, fitting, training), (15 minutes) $37.54 $34.05 $46.02 $15.00 $ Physical performance test or measurement (e.g., musculoskeletal, functional capacity), with written report (15 minutes) $33.81 $32.55 $70.38 $25.94 $45.18 Orthotic(s) management and training (including assessment and fitting when not otherwise reported), upper extremity(s), lower extremity(s) and/or trunk, (15 minutes) $38.04 $34.18 $25.91 $29.05 $45.25 Prosthetic training, upper and/or lower extremity(s), (15 minutes) $29.85 $32.55 $48.02 $64.14 Checkout for orthotic/prosthetic use, established patient, (15 minutes) $41.46 $41.39 $23.39 $33.62 $ Unlisted physical medicine/rehabilitation service or procedure $38.09 $90.00 $73.00 Note: reimbursement rates reflected above were current when study was contracted. Current reimbursement rates may vary slightly from those displayed.

24 Table 8. Ratio of FFS compared to MC, 11-State Sample, Commercial, and National Commercial: Pediatric therapy evaluations and re-evaluations Evaluation of speech, language, voice, communication, and/ or auditory processing (discontinued ) Evaluation of speech fluency (e.g., stuttering and cluttering) (added ) Evaluation of speech sound production (e.g., articulation, phonological process, apraxia, dysarthria) (added ) Evaluation of speech sound production (e.g., articulation, phonological process, apraxia, dysarthria); with evaluation of language comprehension and expression (e.g., receptive and expressive language) (added ) Behavioral and qualitative analysis of voice and resonance (added ) Fee-for- Service Average Managed Care Average Evaluation of oral and pharyngeal swallowing function $ Ratio* Values >1 indicate the rate is higher Values <1 indicate the rate is lower 11- State Commercial National Commercial $ S9152 Speech therapy, re-evaluation $ Therapy Evaluation $ Physical Therapy re-evaluation $ Occupational therapy evaluation $ Occupational therapy re-evaluation $ *E.g. for CPT 92506, FFS average paid rate (median) is 2.24 times higher than the 11-state average paid rate. 21

25 Table 9. Ratio of FFS compared to MC, 11-State Sample, Commercial, and National Commercial: Pediatric therapy treatment procedures Ratio* Treatment of speech, language, voice, communication, and/or auditory processing disorder; individual Fee-for- Service Average Managed Care Average Values >1 indicate the rate is higher Values <1 indicate the rate is lower 11- State Commercia l National Commercia l $ Group, two or more individuals $ Treatment of swallowing dysfunction and/or oral function for feeding $ Evaluation of auditory rehabilitation status; first hour. $ Evaluation of auditory rehabilitation status; each additional 15 minutes Auditory rehabilitation; pre-lingual hearing loss $ Auditory rehabilitation; post-lingual hearing loss Mechanical traction $ Electrical stimulation (unattended) $ Vasopneumatic devices $ Paraffin bath Whirlpool $ *E.g. for CPT 97014, FFS average paid rate (median) is 3.45 times higher than the 11-state average paid rate. 22

26 Table 9. Ratio of FFS compared to MC, 11-State Sample, Commercial, and National Commercial: Pediatric therapy treatment procedures (continued) Fee-for- Service Average Managed Care Average Ratio* Values >1 indicate the rate is higher Values <1 indicate the rate is lower 11- State Commercia l National Commercia l Diathermy (e.g., microwave) $ Infrared $ Ultraviolet Application of a modality to one or more areas; electrical stimulation (manual), (15 minutes) $ Lontophoresis (15 minutes) $ Contrast baths (15 minutes) Ultrasound (15 minutes) $ Hubbard tank (15 minutes) Unlisted modality (specify type and time if constant attendance) $ Therapeutic procedure, one or more areas; therapeutic exercises to develop strength and endurance, range of motion and flexibility (15 minutes) $ Neuromuscular reeducation of movement, balance, coordination, kinesthetic sense, posture, and/or proprioception for sitting and/or standing activities $ Aquatic therapy with therapeutic exercises ( $ minutes) *E.g. for CPT 97024, FFS average paid rate (median) is 2.38 times higher than the 11-state average paid rate. 23

27 Table 9. Ratio of FFS compared to MC, 11-State Sample, Commercial, and National Commercial: Pediatric therapy treatment procedures (continued) Fee-for- Service Average Managed Care Average Ratio* Values >1 indicate the rate is higher Values <1 indicate the rate is lower 11- State Commercia l National Commercia l Gait training (includes stair climbing) $ Massage, including effleurage, petrissage, and/or tapotement (stroking, compression, percussion) (15 minutes) $ Unlisted therapeutic procedure (specify) $ Manual therapy techniques (e.g., mobilization /manipulation, manual lymphatic drainage, manual $ (Traction), one or more regions, (15 minutes) $ Therapeutic activities, direct (one on one) patient contact (use of dynamic activities to improve functional performance), (15 minutes) $ Self-care/home management training (e.g., activities of daily living [ADL] and compensatory training, meal preparation, safety procedures, and instructions in use $ of assistive technology devices/adaptive equipment), direct one-on-one contact (15 minutes) *E.g. for CPT 97116, FFS average paid rate (median) is 1.80 times higher than the 11-state average paid rate. 24

28 Table 9. Ratio of FFS compared to MC, 11-State Sample, Commercial, and National Commercial: Pediatric therapy treatment procedures (continued) Community/work reintegration training (e.g., shopping, transportation, money management, avocational activities and/or work environment/modification analysis, work task analysis, use of assistive technology device/adaptive equipment), direct one-on-one contact, (15 minutes) Fee-for- Service Average Managed Care Average Ratio* Values >1 indicate the rate is higher Values <1 indicate the rate is lower 11- State Commercia l National Commercia l $ Wheelchair management (e.g., assessment, fitting, training), (15 minutes) $ Physical performance test or measurement (e.g., musculoskeletal, functional capacity), with written $ report (15 minutes) Orthotic(s) management and training (including assessment and fitting when not otherwise reported), upper extremity(s), lower extremity(s) and/or trunk, $ (15 minutes) Prosthetic training, upper and/or lower extremity(s), (15 minutes) $ Checkout for orthotic/prosthetic use, established patient, (15 minutes) $ Unlisted physical medicine/rehabilitation service or procedure *E.g. for CPT 97762, FFS average paid rate (median) is 1.77 times higher than the 11-state average paid rate. 25

29 SUMMARY Results of both the published payment rate and the median paid-per-unit rate analyses show that rates for pediatric acute care therapy services is substantially higher than those of other state programs and private insurance (both nationally and in ). These results provide strong evidence that payment policies are inconsistent with other programs, and provides support for decision makers to consider cost containment action in order to better align payments with other state programs and private insurance in. 26

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