Tuesday, April 19, 2005

"This Pricing is a Joke:" The $1275 Physical Therapy Session

A bizarre story about health care costs from the Miami Herald: A patient required hand physical therapy after a motor vehicle accident. She went to Palmetto General Hospital, owned by Tenet.
Because she was on a UnitedHealthCare policy which included a deductible and a 10% co-pay, she asked the hospital about how much a course of therapy would cost. After talking to at least one uncooperative functionary in the hospital's finance department, another told her the physical therapy would cost about $35 to $55 a session.
She first went for an evaluation and then had 11 additional sessions, the latter lasting around 45 minutes, sometimes one on one with a therapist, sometimes as part of a small group of patients with a therapist. So far, so good.
Then she started getting bills. For her first session, Palmetto General charged a whopping
$2713. With United's discount, this was reduced to a still whopping $1275. For her additional
sessions, charges ranged from $228 to $2454.
Palmetto General refused to respond to the Herald regarding the specifics of the case, but said "We support providing patients with meaningful information about the cost of health care."
UnitedHealthcare spokesman Roger Rollman also refused to respond directly about the case because of "privacy laws," (even though the patient had provided the Herald with her side of the story.) But Rollman did say "UnitedHealthcare strongly believes in transparency of hospital costs to the public."
Teri Bielefeld, the President of the Hand Rehabilitation Section of the American Physical Therapy Association responded to the story by saying, "my heart dropped. That's way out of range. That's incredible." She thought an evaluation session ought to cost around $200 and individual sessions around $50 per half an hour. Thus she thought "This pricing is a joke. Somebody needs to do something about it."
I'm not sure which is more amazing: that the hospital would charge thousands of dollars per
therapy session, or that UnitedHealthcare would be willing to pay these charges after a 50%
It is arguable that the major rationale for the rise of for-profit managed care organizations
like United was controlling costs. Such managed care organizations often have reputations for
being extremely tough on physician reimbursement, at least for cognitive and especially primary care services. This may be one reason that primary care physicians have an increasingly hard time just staying in businees, and why primary care is having an increasingly hard time attracting new trainees.
So why would a managed care organization with a reputation for fiscal toughness be willing to pay over a thousand dollars for a physical therapy session?


Anonymous said...

My dad was hospitalized in a Tenet hospital last year. The bill for the first 8 days of his ICU stay came to approximately $225,000, or $30,000 a day. No ventilator. 2 dialysis sessions. Medicare paid $7,000 for this.

Anonymous said...

First of all this article is very misleading and full of misinformation. I am a physical therapist but have no knowledge of the specifics of this case, but I can point out a few errors. First, managed care companies typically pay a fixed rate agreed upon by both parties (clinic and insurer) with the clinic responsible for obtaining a co-pay from the patient. Basically, no matter what the clinic bills the insurer, a fixed amount will be paid to the clinic. Second, clinics charge clients using CPT codes which have an amount based on what insurers pay within a defined area. This fee schedule is used by all clinics and is used to standardize bills made to insurers. Charges will will vary depending on the services that are provided. Regardless of this the clinic will submit the charges to the insurer but the insurer will pay the fixed amount. Third, this idiotic APTA spokesperson is the reason why PT services are so undervalued. She of all people should know that CPT codes are appropriate payment, if not undervalued for the skilled services we provide. Thanks again APTA, a useless orginization that represents another clueless small percentage of hard working PTs and PTAs.