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medicare physician fee physical therapy cut

Recently, Centers for Medicare and Medicaid Services (CMS), moved forward with an 8% fee cut. This fee cut will affect physicians and several other medical professionals.


The most profound effect will be on physical therapy and people that need care the most.

Imagine you had the ability to fix one issue with U.S healthcare, what would it be?

I know, there are many to choose from, do your best, which would you pick?

While you are thinking about your answer, allow me to share mine. I would without a doubt, separate “health” insurance from the practice of medicine.

Before I elaborate, let’s call these insurance companies what they are: third-party payers. They are for profit corporations and their responsibility is fiduciary. Their beneficiaries are shareholders, not plan holders.

(You can listen to this podcast episode, where I shared the brief history of third-party payers — it starts around the 6 minute mark.)

What is Medicare?

In 1960, the United States population was around 180 million.  Of those, 16,559,580 were 65 years old or older. And, more than half did not have health coverage.

Medicine was evolving and innovating at a blistering pace. Innovation is not cheap. The potential financial burden of hospitalization or serious health events were debilitating.

Over the years, various U.S presidents such as Teddy Roosevelt, Henry Truman, and John F. Kennedy tried to pass forms of national health plans. They were unsuccessful. It wasn’t until 1965 that Lyndon B. Johnson was finally able to make Medicare law.

In 1966, millions of American seniors enrolled in Medicare. For the next 54 years, Medicare has continued to evolve, grow, and bloat. In 2019, there are over 60 million people enrolled in Medicare. 

A complicated evolution

Medical costs and health spending has increased over 30x over the last 50 years. This is in part due to natural growth of the economy and cost of living. That’s a very small part. Pharmacological advancements, technology adoption, and clinician specialization is expensive. Those are all par of the equation. The biggest driver of health and medical costs have been third-party payers.

“Health” insurance

As medicine continued to evolve and improve, so did the business of healthcare. Hospitals became more efficient and robust. Procedures became more specialized. Use of technology became standard operating procedure. Prescription of expensive medication became second nature. This saved many lives, and helped many people. It also started to change how medicine was practiced, and paid for.

rising insurance premiums

Year after year premiums for “health” insurance, aka third-party payers began to rise. Expensive procedures, tests, and medications became more common. Someone had to pay. Many thought health insurance covered their medical expenses. In reality, they mitigated some costs while further muddying medical care and the business of healthcare.

Context matters

It’s important to understand some of the health and medical historical context. This is a complicated topic, which is why many never delve into it. It’s not an accident. The more complex the less desire to engage.

I implore you to engage.

Now, having some historical context, let’s go over why the 8% Medicare physician fee cut is a big problem.

Setting the tone

Medicare is the unofficial benchmark that many, if not all, third-party payers eventually follow. When Medicare recommends reimbursement amounts, you can expect similar from third-party payers. Often, third-party payers will reimburse even less than Medicare. In other words, your premiums will continue to go up. Medical costs will continue to go up. Hospitals will charge more, to make up for getting less. Clinicians get paid less.  Insurance companies will keep more.

Race to the bottom

Are you seeing a problematic thread here? Financial implications are driving medical decisions. For too long insurance companies have been dictating clinical care. From limiting clinical visits to provider constraints, third-party payers do whatever they can to maximize their profits. Again, after-all they are FOR PROFIT companies. Now, with Medicare cutting reimbursement by 8%, expect a negative impact snowball effect.

The physical therapy industry

You may be thinking that medical professionals make a lot of money and 8% isn’t a big deal. While there are some medical professionals that earn a lot, they are the exception, not the standard. They are usually specialists, and have their own challenges.

This Medicare fee cut will most impact physical therapists and their patients. By the way, average salary for a physical therapist is $68,000. Many are coming out of school with over $100,000 in student loans.

But this is not even about the physical therapists. This is about the Medicare age population that will first feel this impact. The three biggest issues effecting American seniors is falls, inactivity, and the opioid epidemic. All three issues, and many more, are treated effectively by physical therapists. Even more so, seeing a physical therapists LOWERS the financial burden on the healthcare system.

By cutting Medicare reimbursement American seniors will have LESS options. Many physical therapists will not be able to cover costs of excepting Medicare. And then, when many, if not all, third-party payers follow with similar cuts, less physical therapists will accept insurance.

No easy answer

This is a frustrating medical system. It’s all at once amazingly innovative, life-altering, and mind numbingly complicated. Currently, U.S healthcare is largely based on reactive medicine. Wait for something to happen, then deal with it.

We opened Recharge because we had enough.

We did not want third-party payers without medical experience dictating our clinical practice. We created something unique and special with Recharge. But, as of now there is only one Recharge. There are thousands of skilled physical therapists in the United States; and, millions of people that could be living healthier lives if they saw one of those physical therapists.

Instead of making it easier for American’s to see a physical therapist, lawmakers are making it more challenging.

Your health should not be dictated by governments or corporations.

You are in control, unless you don’t take control.

Change will take time. It always does.

Make it happen.

Reach out to your representatives and share your concerns.








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