Physical therapy is quite common in workers’ compensation involving shoulder and knee tears as well as spinal injury cases (neck and back). While physical therapy can be a great tool for injured workers, employers should be concerned about the costs, which are often much higher in workers’ comp than in group health for the same physical therapy treatments. 

Sub-optimal utilization

Physical therapy costs can account for up to 50% of worker’s comp costs in the first 90 to 120 days of a claim. Medical treatment guidelines provide a framework for how many PT sessions a patient needs. However, these guidelines are often overlooked. Undeniably, overuse of physical therapy is a major contributor to elevated costs in workers’ compensation. In reality, self-funded employers are paying for therapy that’s not always helping injured employees return to work faster. At times, even when PT isn’t getting the job done, a doctors are recommending more PT rather than an alternative treatment.

End result – the utilization of physical medicine in workers’ comp is 268% that of group health and there is a price unit differential of 105%.

Over-utilization isn’t the only challenge in managing physical therapy costs. A significant portion of employer’s spend is also wasted on:

  • Ineffective PT
  • Member non-adherence
  • Excessive imaging and other services
  • Avoidable surgical procedures

Optimizing PT utilization in worker’s compensation

A more proactive approach to controlling utilization is needed over a more traditional ‘reactive’ model in practice today. From a financial perspective, employers can view this as a redistribution or reallocation of services.

Risk Stratification

Start by identifying the workers that will derive the most clinical benefit from these therapy services. This can be done by building a risk segmentation model that leverages multiple data feeds, and multiple risk and utilization indicators. By stratifying members according to their risk level, over-utilization can be avoided by eliminating unnecessary prescribing of services in low-risk workers; concordantly, a valuable investment is being made for long-term gain in a more complex, high- risk population. It is the difference between optimizing utilization versus merely controlling it.

Early warning system

Each member interaction with the healthcare system generates data. From these snapshots we are able to see the bigger picture of their healthcare journey. Research indicates that an initial referral for MRI rather than physical therapy increases the odds of surgery, injections, specialist, and emergency department visits – which often are unnecessary.

An early warning system build on machine learning models provide an opportunity to intercept the member in real-time when guidance is essential to improving the member’s outcome.

Network Quality

Dr. Brent James work at Intermountain has demonstrated that the best way to remove waste from health care delivery is to improve clinical outcomes and patients’ experience of care. In essence, quality of service is often the driver for containment of cost and utilization.

How should the quality be measured? Quality in this case refers to quantifiable measures around restoring function to the injured worker and reducing time off from work. In addition to range of motion, strength, return-to-work, these measures include adherence to evidence-based and outcomes-focused treatment. Unfortunately these measures have often been missing from traditional physical therapy programs in workers’ compensation.

Having a more comprehensive data set allows for a more complete and accurate view of the quality of therapy and provider performance for the employer.

Bundled payments

Bundled payment programs give providers a single target budget or price for an “episode” of care. These programs operate under the assumption that by setting a total cost target for an episode of care, providers are compelled to communicate with each other, coordinate care more efficiently and implement practices that improve quality and reduce the risk of complications. Various published studies suggest that bundled payment initiatives result in higher-quality care than traditional fee-for-service payments. These improvements include declines in readmissions, declines in need for post-acute care, and shorter hospital stays.

Sprite Health believes that a comprehensive approach to MSK financial management in workers compensation leads to the best possible outcomes for workers and employers. Our integrated MSK financial management solution merges traditionally disparate data into one platform; leverages predictive analytics, clinical expertise and plan administration capabilities to manage variation in care, reduce costs for employers and minimize unnecessary surgery and member discomfort.