Role of PBMs in Physical Therapy: Echos from Pharmaceutical Industry Part II SBMs

In last week’s post, we detailed PBMs, the concerns, the scrutiny, and the way employers and governmental agencies are fighting back. We level set PBMs in terms of their definition and approach. In this week’s post, we will shift to physical therapy and also shift to their name Specialty Benefit Manager’s (SBMs) and how these middlemen work and how their tactics echo PBMs and how we should leverage those great counteroffensives in our own #physicaltherapy battles against them.

SBM’s have carved out significant roles in managing physical therapy benefits, creating a landscape that is challenging for both providers and patients. The combined effects of SBMs have been to limit access, decrease reimbursement, create networks through FOMO and pressure, and invent hoops and ladders in the form of pre-authorization and other administrative burdens. The SBMs in physical and occupational therapy, chiropractic, and DME generally play in group health (e.g. OptumHealth, AIM, Evicore) or worker’s comp (MedRisk ,Align, OneCall) but typically not both.However, these cousins clearly share their own best practices and technicques for making our @physicaltherapy clinics suffer through lower payments and higher costs.

These organizations claim to streamline services and control costs. However, their involvement often leads to increased complexity and cost, much like their counterparts in the pharmaceutical industry.

The High Cost of SBMs Interventions

SBMs were originally designed to act as intermediaries between insurers and providers ostensibly to negotiate better prices and manage physical therapy referrals and cost, however, their role has become a source of significant controversy. Here’s why their scrutiny in pharma is echoed in physical therapy:

1. Increased Cost. SBMs add an extra layer of administration and profit margin, driving up the cost of services. In pharma, this means higher drug prices; in physical therapy, it translates to inflated costs for treatments and equipment while also reimbursing providers lower reimbursement. They create incredible margins by playing in the middle which is often rewarded by their ability to save the payor/insurer amounts that are reduced from traditional fee schedules. By way of simple example, a SBM might pay a naive PT practice $65, pocket $15 for themselves and show the payor a savings of $10 or 10% from the fee schedule $100.
2. 2. Reduced Acces. By controlling which providers and services are covered, SBMs limit patient access to necessary care. This gatekeeping can delay treatments, which is particularly detrimental in physical therapy, where timely intervention is crucial.

3. Complex Authorizations PBMs impose stringent pre-authorization requirements, creating administrative burdens for providers. These hurdles often lead to delays in care, impacting patient outcomes. These requirements fall far outside market and typical practices, disrupting PT practices administrative flow and thus adding additional cost. They pay less and cost more-a punitive double whammy for providers.

4. Opaque Pricing. The lack of transparency in PBM operations obscures the true cost of services. Patients and providers are left in the dark about the pricing structures, leading to unexpected expenses and financial strain. The worker’s comp SBMs are particularly evasive with high variability within and across local and vast geographies. State’swork comp fee schedules are varied but they take lack of transparency to a new level, often introducing various ways to avoid paying mandated fee schedules by forming distinct managed care entities, extensive utilization review or both.

5. Profit-Driven Motives created by consolidation and valuations: Ultimately, PBMs operate on absurd profit motive driven in part by their own industry’s consolidation, over zealous valuations and their expected returns. Many have been driven to bankruptcy not by their business practices but by their excessive debt loads through acquisition. Their financial interests mostly conflict with the goal of providing affordable, accessible care, whether it’s medication in the pharmaceutical sector or physical therapy services.

The Impact on Employees and Patients

Employees and patients bear the brunt of the costs introduced by PBMs. In the context of physical therapy, this manifests as:

• Higher Out-of-Pocket Expenses: Patients often face increased co-pays and out-of-pocket costs due to imposed pricing structures.
• - Delayed Treatment: Administrative barriers and authorization requirements can delay necessary care, prolonging recovery and exacerbating health issues.
• - Limited Provider Choices: PBM networks restrict patient choice, forcing them to see in-network providers who may not be their preferred or most convenient options.

Looking Forward

The scrutiny PBMs face in the pharmaceutical industry is well-deserved and highlights the need for reform across all areas they touch, including physical therapy SBMs. By understanding and addressing these issues, we can advocate for a system that prioritizes patient care over profit and intrusive business practices.

Like our pharma counterparts, we can adopt and steal their techniques-by exposing SBMs flaws, overzealous technics, and competing interests. It has taken years for Pharma PBM’s to be exposed, my hope is that our #physicaltherapy profession can coalesce, organize, and expose their ways more aggressively and sooner as we have taken their punches for years.

By shedding light on the parallels between PBMs in pharma and physical therapy, we can drive conversations that lead to meaningful change. Let’s continue to champion our patients’ needs and strive for a healthcare system that truly works for everyone.

Thoughts

@physicaltherapy In last week’s post, we detailed PBMs, the concerns, the scrutiny, and the way employers and governmental agencies are fighting back. We level set PBMs in terms of their definition and approach. In this week’s post, we will shift to physical therapy and also shift to their name Specialty Benefit Manager’s (SBMs) and how these middlemen work and how their tactics echo PBMs and how we should leverage those great counteroffensives in our own #physicaltherapy battles against them.

SBM’s have carved out significant roles in managing physical therapy benefits, creating a landscape that is challenging for both providers and patients. The combined effects of SBMs have been to limit access, decrease reimbursement, create networks through FOMO and pressure, and invent hoops and ladders in the form of pre-authorization and other administrative burdens. The SBMs in physical and occupational therapy, chiropractic, and DME generally play in group health (e.g. OptumHealth, AIM, Evicore) or worker’s comp (MedRisk ,Align, OneCall) but typically not both.However, these cousins clearly share their own best practices and technicques for making our @physicaltherapy clinics suffer through lower payments and higher costs.

These organizations claim to streamline services and control costs. However, their involvement often leads to increased complexity and cost, much like their counterparts in the pharmaceutical industry.

The High Cost of SBMs Interventions

SBMs were originally designed to act as intermediaries between insurers and providers ostensibly to negotiate better prices and manage physical therapy referrals and cost, however, their role has become a source of significant controversy. Here’s why their scrutiny in pharma is echoed in physical therapy:

1. Increased Cost. SBMs add an extra layer of administration and profit margin, driving up the cost of services. In pharma, this means higher drug prices; in physical therapy, it translates to inflated costs for treatments and equipment while also reimbursing providers lower reimbursement. They create incredible margins by playing in the middle which is often rewarded by their ability to save the payor/insurer amounts that are reduced from traditional fee schedules. By way of simple example, a SBM might pay a naive PT practice $65, pocket $15 for themselves and show the payor a savings of $10 or 10% from the fee schedule $100.
2. .
3. 2. Reduced Acces. By controlling which providers and services are covered, SBMs limit patient access to necessary care. This gatekeeping can delay treatments, which is particularly detrimental in physical therapy, where timely intervention is crucial.

3. Complex Authorizations PBMs impose stringent pre-authorization requirements, creating administrative burdens for providers. These hurdles often lead to delays in care, impacting patient outcomes. These requirements fall far outside market and typical practices, disrupting PT practices administrative flow and thus adding additional cost. They pay less and cost more-a punitive double whammy for providers.

4. Opaque Pricing. The lack of transparency in PBM operations obscures the true cost of services. Patients and providers are left in the dark about the pricing structures, leading to unexpected expenses and financial strain. The worker’s comp SBMs are particularly evasive with high variability within and across local and vast geographies. State’swork comp fee schedules are varied but they take lack of transparency to a new level, often introducing various ways to avoid paying mandated fee schedules by forming distinct managed care entities, extensive utilization review or both.

5. Profit-Driven Motives created by consolidation and valuations: Ultimately, PBMs operate on absurd profit motive driven in part by their own industry’s consolidation, over zealous valuations and their expected returns. Many have been driven to bankruptcy not by their business practices but by their excessive debt loads through acquisition. Their financial interests mostly conflict with the goal of providing affordable, accessible care, whether it’s medication in the pharmaceutical sector or physical therapy services.

The Impact on Employees and Patients

Employees and patients bear the brunt of the costs introduced by PBMs. In the context of physical therapy, this manifests as:

• Higher Out-of-Pocket Expenses: Patients often face increased co-pays and out-of-pocket costs due to imposed pricing structures.
• - Delayed Treatment: Administrative barriers and authorization requirements can delay necessary care, prolonging recovery and exacerbating health issues.
• - Limited Provider Choices: PBM networks restrict patient choice, forcing them to see in-network providers who may not be their preferred or most convenient options.

Looking Forward

The scrutiny PBMs face in the pharmaceutical industry is well-deserved and highlights the need for reform across all areas they touch, including physical therapy SBMs. By understanding and addressing these issues, we can advocate for a system that prioritizes patient care over profit and intrusive business practices.

Like our pharma counterparts, we can adopt and steal their techniques-by exposing SBMs flaws, overzealous technics, and competing interests. It has taken years for Pharma PBM’s to be exposed, my hope is that our #physicaltherapy profession can coalesce, organize, and expose their ways more aggressively and sooner as we have taken their punches for years.

By shedding light on the parallels between PBMs in pharma and physical therapy, we can drive conversations that lead to meaningful change. Let’s continue to champion our patients’ needs and strive for a healthcare system that truly works for everyone.

Thoughts

LarryBenz