To Outsource or Not to Outsource Your Physical Therapy Service Line Management?
You currently offer a physical therapy (PT) service line but feel like it could be doing better, or you are thinking of adding PT services and are not sure where to begin. Either way, the thought of your patients and bottom line benefiting from PT services within your practice but without you having to manage another service line is appealing. Although related to orthopedic surgery and an obvious ancillary service, PT is a different type of practice that requires active management of the professionals, revenue cycle, operations, regulatory requirements, and changing coding and reimbursement protocols. There are more and more companies nationwide that claim a mastery of the PT management niche and would be more than happy to shoulder your burden and share in your profits. Whether you already have PT services in your practice or are looking to add them, proceed with care and caution as you consider partnering with a PT management company.
Drawing on my involvement with both successful PT management–orthopedic practice partnerships and the arduous, expensive demise of one, this article offers my recommendations for determining if a PT management partnership is best for your practice. Many of the contracts last for several years and include clauses that are extremely binding even after the contract conclusion. As with any decision to outsource, the decision to outsource PT services deserves a comprehensive request for proposal (RFP) to multiple candidate companies, a thorough vetting and decision process that includes all partners or an executive committee/board, and legal review of the contract by an experienced health care attorney representing the practice.
Request for Proposal
Begin the RFP with a reference to your website and a brief description of the practice and current PT services. For example, state that you don’t have PT and are looking to start it, or, if your practice offers PT, include a description of the number of locations, square footage allocation, and number of full-time equivalent (FTE) physical therapists, occupational therapists, physical therapy assistants, and support staff of the existing program. Also mention whether the billing is done within the practice or is outsourced.
Next, you want to learn about the company. Ask about its number of years in PT management and the history of the company. Ask them to provide the previous business names and an overview of the history of ownership. You want to know this because the national PT management community is relatively small and includes frequent acquisitions and mergers. Just as important as the company’s history is any future plans it has to acquire or be acquired. This is all part of knowing who you may be partnering with.
You will want to know how many other practices the company provides PT/occupational therapy (OT) management services for, in what states those practices are located, and a breakdown of specialties. The number of physician providers the company represents along with the answers to the other questions will give you an idea of its size, experience, location, alignment, and focus. Some of these companies manage PT in family practices. You will want to know how many orthopedic practices the company partners with. If your practice has subspecialties, ask about its experience with subspecialty orthopedics.
Ask for the company’s website so that you can get an idea of the company and its mission, vision, and values. Even though you will likely be interacting with regional representatives, you will be signing the contract with the company leadership, so be sure to learn—either from the company’s website or its response to the RFP—about the individuals leading the organization and any parent company. Ask for a list of officers, board of directors, managers, and perhaps an organization chart with titles and names. Because you are looking to partner with the company, it might be good to ask for managerial turnover rates in the last few years. PT is a professional health care service, so take note of the number of licensed therapists the company has in leadership positions. If you were partnering with a medical organization, you would certainly want physicians in leadership positions, and this is no different. Determine if the company is publicly traded or privately held. You may also consider requesting the company’s last few annual reports to learn more.
Exclusivity
Some PT management companies have their own facilities and are partnering with practices in the same market despite the seemingly inherent conflict. As part of your RFP, ask the company to include the names of practices, their specialties, and site locations where it already has a presence as well as a list of its own (independent of a physician practice) locations in the state or region. Future plans are important here too; if the company does not currently have a presence in the region, what commitment will it make to exclusivity or noncompete?
