Cost of physical therapy varies widely from state-to-state

(Press-News.org) New Haven, Conn. — Physical therapy (PT) is used in the management of many medical conditions. But variation in rates paid by commercial insurers can contribute to high out-of-pocket costs, leading some patients to underuse or stop PT altogether. For many people, that means potentially poor rehabilitation outcomes.

In a new study, Yale researchers evaluated commercial payer-negotiated rates for outpatient PT services at a cross-section of hospitals across the United States. They found that costs for PT vary substantially based on location and insurance status.

“PT is used in the management of many acute and chronic medical conditions, but greater cost exposure may reduce use of PT services, contributing to suboptimal patient outcomes and increased use of other health care services,” said Joshua Skydel, clinical fellow at Yale School of Medicine (YSM) and corresponding author of the study.

“Additional research is required to evaluate the impact of prices on direct costs, utilization, and outcomes for patients referred to PT.”

The study, co-authored by Joseph Ross, professor of medicine (general medicine) at YSM, appears as a research letter in the journal JAMA Internal Medicine.

Substantial variation PT is ubiquitous in health care across the U.S. Physicians often refer patients to PT for acute musculoskeletal injuries, after surgery, and for chronic medical conditions such as osteoarthritis. Evidence suggests PT is a component of cost-effective care that improves patient function and reduces complications that lead to the need for other health care services.

However, many Americans are either uninsured or underinsured, with restrictions on coverage and payment for many medical services. It isn’t known how extensively such restrictions may affect coverage of PT services, but increased costs may influence patients’ willingness to participate in PT recommended for their acute or chronic medical conditions.

For this study, the researchers sought to understand the costs of PT services in the U.S. They used data from Turquoise Health, a platform that gathers data on health care prices that hospitals are required to disclose under federal regulations, to estimate the cost of PT services to commercial insurers and to patients paying cash for services.

The researchers focused on 10 hospital-based outpatient PT services, including common evaluation and management services and supervised exercise interventions supporting functional rehabilitation. Many of these PT services are among the highest volume services billed to Medicare annually.

The researchers compared list, cash, and commercial prices for outpatient PT across the U.S. They also compared prices for rural and urban health care facilities, after adjusting for geographic differences in health care prices. The data included rates for PT services from 1,666 unique hospitals in the U.S.

Affordable and fair care Through their methods, the researchers found that there was substantial variation — with median rates for evaluation services ranging from $151 to $215, for example — in the prices that commercial insurers pay for common PT services. Prices vary between hospitals to a greater degree than within hospitals, and commercial prices are generally lower than prices for patients paying cash. They also found that prices tend to be lower in rural areas of the U.S. than in urban areas.

“If you are a patient that is referred to PT, the cost of your care can differ substantially based on your location, your insurance plan, and whether you pay cash for your health care services,” Skydel said. “This may influence how patients engage with longitudinal PT for many medical conditions and has potential implications for downstream health outcomes.”

The research letter describes a brief study; more work is needed to identify factors associated with price variation, to determine actual direct costs to patients, and to explore associations between PT costs, utilization, and outcomes, the researchers said.  

“Physical therapy plays a key role in the management and treatment of many diseases,” said Ross, also professor of public health (health policy and management) at Yale School of Public Health. “Our hope is that characterizing the widespread variation in prices for these services can help to ensure that care is affordable and fair for patients.”

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