Thought leaders at outpatient physical therapy clinics on both coasts brainstormed about the trends they see taking shape in the industry throughout 2015. Among those trends are an increasing scarcity of small practices and the rebellion of PTs and patients against utilization management companies.

In all, seven predictions were made by three clinicians who brainstormed about areas of physical therapy practice they felt were most critical. The clinicians are Sturdy McKee, MPT, CEO, at San Francisco Sport and Spine Physical Therapy; Tim Richardson, DPT at Fyzical Physical Therapy (more than 30 locations throughout the US); and Josh Bailey, DPT at Rehab Associates of Central Virginia.

From left to right: Sturdy McKee, Tim Richardson, Josh Bailey.

From left to right: Sturdy McKee, Tim Richardson, Josh Bailey.

As part of an industry overview, McKee notes that the physical therapy industry is consolidating and becoming more complicated. He says, “On the whole, physical therapists should work to become more consistent and organized in proving their efficiency.”

The seven predictions are as follows:

1) Consolidation will force independent PTs to be at the top of their “referral management game.” Consolidation will put pressure on physicians to join hospitals, ACOs, and larger networks, which will impact how and when physicians rear to independent physical therapy practice. In 2015, PTs will need to be prepared with a strong referral strategy.

2) Small practices will become increasingly rare. The days of small independent practices are not completely gone, but small practices will become more rare in the coming years. Independent physical therapy practices must create a unique value proposition that is dramatically better than the big systems and appealing to a significant number of “decision-makers.”

3) PQRS penalties will force more PTs to use an EMR. In 2015, the reality of PQRS penalties will force more PTs to seek an EMR partner. It’s critical for practice prosperity that PTs choose the right one. Specifically, practices need to choose a partner who makes PQRS easier to navigate—not harder.

4) ICD-10 will have less technical impact on physical therapy providers than FLR or PQRS—but will still impact cash flow. In the coming year, ICD-10 will have less of a technical impact on PTs than other programs. That being said, ICD-10 will throw marginal payors into chaos, which will likely result in slower payments. Again, it’s important for PTs to choose the right partner on the EMR/practice management side and nail their billing and collections processes to ease the shift to ICD-10.

5) Utilization management companies (ie, ASH) will face a rebellion from PTs and patients (and maybe even employers). Providers are becoming savvy to the actual value (or lack of value) that utilization management companies present. This will drive providers out of network in 2015 and cause payors to look for a better solution for cost management.

6) PTs will feel pressure to adopt standardized functional outcomes from a growing number of payors. Outcomes measures from providers will eventually be required by a majority of decision-makers who are at financial risk. They will expect providers to share risk, manage that risk, and prove value.

Therefore, PTs need to master their clinical and financial outcomes data to negotiate future contracts. The questions become “What will be the outcomes tool?” and “What will the risk sharing look like?” Proactive physical therapy groups can guide those decisions and lead them. If PTs sit back and wait, others will make that decision for them, and they will be stuck with what makes sense to the others, not to them.

7) Billing and revenue cycle management (RCM) will only get more complex to manage. It must be done accurately, efficiently, and effectively. RCM is a tactical task—not strategic. Outsource it to the experts.

McKee says there are several things therapists can and should do to prepare for these anticipated industry changes.

“Many of these trends to watch for are payment-reform related. But, there are tangible solutions and resources to help meet the challenges associated with how those trends might play out,” McKee says.

“For example, with industry consolidation (predictions No 1 and No 2), there is an inevitable shift from volume to value, particularly for those practices who do not wish to consolidate. This is an opportunity for PTs, if they can deliver measurable value, to drive down total costs and improve healthy outcomes,” McKee adds.

As the industry consolidates, PT practices must deliver value and will need to create meaningful relationships with powerful decision-makers, such as ACOs, self-insured businesses, and more individual healthcare consumers, according to McKee.

“Industry shifts are certain as we move forward into 2015, and while they may bring unwelcome difficulties, anticipating and embracing these changes will help our practices to thrive and evolve in the long run,” McKee adds.