To Outsource or Not to Outsource Your Physical Therapy Service Line Management?

Human Resources

In many cases, the PT management company actually employs the entire staff for the service line. If you already have PT in your practice, this means the employees will transition from your employment to another company. After the contract is signed, some of the employees will get paychecks and benefits from your practice and be subject to your practice’s policies, while others will not. Having 2 different employers in the same practice can have an impact on employee morale and satisfaction. Find out during the proposal process if the company’s typical model is based on the company’s or the practice’s employment of the professional and support staff.             

Obtain the following information from the management company if it is to be the employer:

1.  Titles and compensation ranges for each position

2.  Description of all bonuses and incentive structures

3.  Paid time off (PTO) policies and accrual rates

4.  Paid holidays

5.  Details of employee benefits, such as employee out-of-pocket premiums for individual and family health care coverage, availability of vision and dental coverage, and investment and match for retirement or 401(k) plans.

6.  Human resources (HR) support. Describe how employees get needed support from human resources, such as questions about benefits, FMLA (Family Medical Leave Act), HR policies, and other issues.

7.  Results of any employee satisfaction surveys completed in the last 2 years

8.  Nonrecruitment. In what ways will the professional staff’s careers be affected by this partnership? Will the professional staff have to sign employment agreements? If so, please provide a sample. Will there be covenants not to compete for the professional staff?

9.  Provide a schematic on how you typically cover professional staff vacation and family leave.

10. Does your organization provide accredited continuing education for professional staff or do you send staff to state and national meetings and courses to maintain their CEU (continuing education units) requirement?

11. Do you provide annual regulatory training, such as HIPAA (Health Insurance Portability and Accountability Act) training, for all staff or is the practice responsible for that?

12. Professional liability coverage for the therapists.

Initially, the company may say they are open to doing it either way and you may proceed with the process without answers to these questions. If at any point, you explore a situation in which the employer is not the practice, you must get answers to these questions before agreeing to anything. Number 8 above is extremely important. Many PT management companies will include a nonrecruitment clause in their contracts so that neither party can recruit therapists from the engagement. Depending on how the clause is written, you may not be able to legally hire therapists who were with you for years before the management agreement at the conclusion of the contract. Individual therapists can find themselves very limited in where they can work in the community depending on a covenant not to compete. And while covenants not to compete and nonrecruitment clauses may be generalized as “indefensible,” it is expensive, time-consuming, and exhausting to get one rendered as such after the fact.

Operations

Operational compatibility is essential to a smooth transition or start-up. As part of your RFP, let the candidate companies know which electronic medical record (EMR) and electronic practice management (EPM) systems you use and ask about their experience level with those. Ask if it is expected that PT will operate on the practice’s EMR and EPM systems or if the company will be having PT operate on separate systems. If the company will be implementing different systems, find out which one and then do an accounting of the costs for interface, training, and other compatibility elements.

Inquire as to each candidate company’s standard operations policies and procedures as well as the operational and productivity standards the company maintains. For example, ask for a range of how many patients a physical therapist should be able to see (including documentation) in an 8-hour day? If you already have a PT service line, compare the company’s productivity standards to what your therapists are currently doing. Of the many enhancements a therapy management company can bring, an increase in productivity is essential. Request a description of productivity incentive programs for the professional staff so that you can determine if you are comfortable with them. By the same token, ask if the company has a comprehensive compliance program including procedures and policies.

Any outsourcing agreements will be subject to operational and contractual compliance elements such as HIPAA, business associates agreement, and all other applicable regulations through state, federal, and payor entities. Ask each candidate company about its compliance program.