Will the FTC Slow Down the Current Medical Merger Mania????

Many of us remember the merger mania in healthcare that occurred in the 1990’s, and how the push toward consolidation that started with hospitals trickled down to the private practice  therapy sector. If we fast forward to 2014, it is readily apparent that the “urge to merge” is back.  We see local hospitals in a merger frenzy, and local MDs leaving private practice to become hospital employees. I have more and more therapists contacting me about practice sales. Yet, a strong but dominant voice, namely the Federal Trade Commission, is beginning to weigh in on the topic. Citing antitrust laws, particularly the Clayton Antitrust Act of 2014, they have successfully blocked some deals using antitrust enforcement as a powerful tool to dampen  conglomeration fever.

Hospitals say they are acquiring other hospitals and physician groups to comply with provisions
of the Affordable Care Act and take advantage of incentives that encourage hospitals and doctors to integrate their operations and collaborate to control costs and improve care.
 The concern is that hospitals that face less competition can charge substantially higher prices, which according to Martin Gaynor, Director of the FTC’s Bureau of Economics could be as high as 40-50%.  In the last two years the FTC intervened and blocked hospital mergers in Albany Georgia, Toledo Ohio and Rockford Illinois. Although the decisions are currently being appealed, the message is strong. “Vague promises and aspirations that an acquisition will reduce costs and improve care are not sufficient” said Julie Brill, a member of the FTC.

When hospitals and doctors join forces, their goal is not just to control costs or improve care, but to “get increased leverage” in negotiations with health insurance companies and employers, according to
  Ms. Feinstein, Director of the Bureau of Competition at the FTC. “They say they need better rates so they will have more money to invest in their facilities.When you strip that down, it’s basically just saying, ‘We want a price increase.’ Even if the price increase is motivated by a desire to invest more in the business, that’s problematic. That incentive to invest may not be there if you don’t have competition as a spur to innovation — if you’re not worried about losing business to the hospital down the street.”

Look back to the first merger mania in the 1990’s particularly the state of Massachusetts, which let its two most prominent hospitals — Massachusetts General Hospital and Brigham and Women’s Hospital, merge into   as Partners HealthCare. Investigations by the state attorney general’s office of that state have documented that the merger gave the hospitals enormous market leverage to drive up health care costs in the Boston area by demanding high reimbursements from insurers that were unrelated to the quality or complexity of care delivered. Twenty years later, the current Massachusetts Attorney General,  Martha Coakley is trying to rein in the hospitals with a negotiated agreement that would at least slow the increases in Partners’ prices and limit the number of physician practices it can acquire.

What’s the take away for therapy practices?? Carefully examine your “urge to merge” or be acquired, probably the second most important decision of your professional career. Make sure your motivation is not based on panic, and that you are not being re-active rather than pro-active. As hard as it is to bring a merger to fruition, it is harder still to undo!


Thoughts on the Ice Bucket Challenge

There is no denying that the ice bucket challenge continues to be an unqualified success, despite the naysayers who have negated and criticized it from many angles – waste of water, and more of an exercise in raising awareness of one’s own craziness, altruism, “slacktivism” and/or attractiveness in a wet T-shirt.

Here’s why I am so happy it has taken off.  Back in the day (30 plus years ago), I was one of the first OTs to consult with  the MDA ( Muscular Dystrophy Association), and provided services to children and adults  with  many neuromuscular diseases. I was always hardest hit by the people with  ALS. The decline in function, and decrease in strength was steady, apparent and ongoing. The impact on families was huge. Living rooms became makeshift bedrooms to accommodate hospital beds, hoyer lifts and the like. Spouses became caretakers, while secretly mourning the loss of their spouse as they knew them. Looking back, the challenges as an OT were paramount. With the  physical and functional decline so swift and non forgiving, I was constantly challenged to think on the spot, make immediate accommodations, re-purposing and intuitive adaptations to the environment.  All in the hope of making the moment, or the day more tolerable for the family and patient.  What worked one day didn’t the next as the disease ran its course.  My feelings of inadequacy and frustration matched the family’s feelings of desperation and isolation, yet in a way it was OT at its finest.

The Ice Bucket Challenge is raising public awareness of ALS  in addition to raising money for research on the disease. Like most fundraising, the efforts will focus more on the cure while families and therapists focus on making day to day living as tolerable as possible. ALS is classified as an “orphan disease”, since fewer than 200,000 people get the diagnosis annually. Generally that means there is less research and clinical trials for treatment.  ALS has never been and never will be  as profitable a target for pharmaceutical companies to invest millions of dollars in as they do with  more prevalent diseases ( ie cancer, arthritis etc.).

The New York Times reports that in the last few weeks, ALSA has received $13.3 million and welcomed 260,000 new donors.  While the President of the Association Barbara Newhouse says she appreciates the monetary aspect of the Ice Bucket Challenge, she says, “the visibility that this disease is getting as a result of the challenge is truly invaluable.” Monetary donations coupled with social-media-friendly stunts build awareness and encourage others to give in a way that quietly donating cash does not. That’s what that silly tub of cold water does; audiences get a little entertainment, which helps the viralness of the cause and encourages donations. It also strives to make people want to learn more about the disease, and what organizations like the ALS Association are doing to fight it and provide assistance to those living with it.”

Practice owners who work with neuromuscular conditions may want to jump on this bandwagon- a twin win situation, and what I call “cause –related” marketing. It can be  great publicity for your practice and a great way to help raise money and awareness.  ALS is not only an incurable disease, it is an underfunded one as well.



A Shift in the Healthcare Dollar Pie

By my second lecture, I have taught my students about the healthcare dollar pie and its 3 pieces:

Piece 1 for the patient or consumer
Piece 2 for the service/medical provider
Piece 3 for the insurer/payor

I always tell them how the size of the pieces shift over time reflecting the cycles within healthcare delivery. Most of my students were not even born when patients got a big piece of the pie – that is, when patients received the services they needed for the amount of time that they needed them, all without pre-authorization! Many students can barely remember when the piece for the medical provider was big- when doctors were “rich” and therapists could become financially successful. My students do learn about the big piece of the pie that the insurers are eating, how well their stocks are doing, how much their CEOs are making, and how big their pended/denied departments are. And just in time for this fall’s lecture, the pie is shifting again, and in the wrong direction.

Yesterday, I received a letter from my insurance company (BCBS), informing me, as is required by law, that they are seeking a 17% increase in the premium for the new policy I got in January 2015. This both shocked and bothered me on many levels. Year one and the insurers are already taking “affordable” out of the Affordable Health Care Act. More disturbing is that this insurance company has systematically been lowering the fees paid to private practitioners –lowering the fee, eliminating CPT codes and time/ modality based payment in favor for flat fee methodology and bundling. While they systematic deny therapists a rate increase, even one based on cost of living and instead are lowering fees or canceling contracts, they claim they need a 17% increase in part because of the rising costs of medical care, a new pool of customers, and new providers.

I am beginning to no longer see the 3 pieces of the healthcare dollar pie. Instead, slowly it is becoming one pie solely for the insurers and payors, with 2 crumbs, one for providers and the other for patients.

Table of Contents- Starting a Professional Private Practice




Business Plan …pg.17-18
Insurance Information …pg.19-20
The Place of Business …pg.21-23
Contracting With Insurance Carriers – Medicare Enrollment, Plan- Lock out
The Perfect Storm: Cash based versus Insurance …pg.24-25
Financial Considerations – Budgeting, Securing a Loan …pg.26-33
HIPAA/ FERPA Compliance …pg.34-37

6. STEP SIX – MARKETING …pg.38-41

APPENDIX …pg.47-67


Why Are There So Few Adult OT Private Practices?

Re-printed from the Advance POV blog

Published January 29, 2014 8:41 AM by Iris Kimberg

Thanks to everyone following my blog  I have already received many fantastic questions to answer for several weeks to come. This one really struck a chord:

Question:  Why do you think there are so few OT practices that treat adults, and so many that treat children??? Is there not a market for adult services in OT private practices???


I have often asked this myself – well over 60% of the OTs I consult with are pediatric private practitioners, and only a few work with adults. I think the answers lies in the cyclical nature  of therapy services. Like  everything else, there is a life cycle of therapy services – back in the 80’s healthcare, especially in rehabilitation  was adult driven. Private practices (mostly PT because very few OTs dabbled in private practice then outside of hand therapists) treated adults, there was no managed care, and very little was done in pediatrics.

Fast forward to the 90’s when 2 things happened:

1) Managed care rolled out across the country from West to East in part due to billing/therapy treatment abuses of the system by those providing  rehabilitation services
2) Parents of children with special needs woke up and began demanding the services their children were entitled to under Federal law PL 94-142, its expanded version, PL 99-457, and PL 105-17 (in 2004)

These two scenarios lead the cycle shift in therapy services from adult driven care to pediatric care. There was a significant increase in OTs developing private practices to serve the demands of the pediatric community nationwide starting in the 90’s and continuing fr the next 20 years. Guess what cycle watchers – it should come as not new news to pediatric practices, that the cycle is shifting again. Funding for pediatrics is declining and at the same time, baby boomers are living longer, and demanding to live better. This points to a very ripe opportunity for OTs to offer adult driven services. Right now, certified hand therapists who have always offered adult services will continue to do so, and there are some OT private practices who specialize in niche offering like low vision rehabilitation, drivers rehab, home modification services, vestibular rehab etc.

The time is  now for additional OTs to enter the world of private practice and succeed. The cycle is in your favor, the ACA is already addressing habilitative services in addition to rehabilitation services as an essential health benefit, more and more elderly want to stay and live in their homes, every day 10,000 people in the USA become baby boomers. Opportunity is definitely knocking – it is up to you to answer the call!

For the next few weeks, I will be opening this blog up for questions which may be answered in subsequent blogs.  My goal is to help therapists understand the business end of therapy provision through many lenses and achieve the success that they want for the mutual benefit of themselves and their patients.

Questions relating to the following topics can be submitted to me at infonytherapy@aol.com

  • Finances/ Billing
  • Legal  and Risk Management Considerations
  • Strategic Marketing and Business Communication
  • Day to Day Operational Issues
  • Ethical Considerations
  • Long Term Growth and Development

I look forward to hearing from many of you in the weeks to come!

Using Inbound Marketing For Your Practice

Chances are if you are reading this column, that you and I have developed a relationship, though we may not have met in person. That is because over the years, I have been developing relationships with therapists and creating trust through content via inbound marketing techniques. These same techniques that I have used to gain your trust, you can use to gain the trust of consumers in the hope they will become your clients when the need arises. The internet affords all of us the vehicle to meet new prospects and build trust without having to resort to cold calling, which has a notoriously low success rate in bringing in new clients. Inbound marketing focuses on creating quality content that pulls people toward your practice and services you offer. By aligning the content you publish with your niche areas of expertise, you automatically attract inbound traffic that you can then convert, close, and work with over time.

Creating trust through content means that a great way to start a conversation is by continually publishing some type of educational/meaningful content to your website. Your article choices, blog posts and opinions will begin to engage website visitors, FB fans and LinkedIn connections well before they may actually contact you for services or make referrals to you. What this means is that instead of spending time talking on the phone trying to make contacts, you are instead allowing consumers to get to know you and learn from your experiences. Professional services will always be relationship based, and consumers look to educate themselves before selecting a service provider. Sharing knowledge is an effective way to gain trust quickly – if you are still reading this, this is a live example of what I am talking about!

Become a magnet, attracting those who need your services by owning your space and your niche, and becoming the “go to” person for a particular skill and bolstering this by your targeted content. This is when you are educating “early stage” prospects who may contact you at some point down the road. No doubt there will be consumers who may look to you for content and information, and never take the relationship to the second stage, but others will, and you will be ready when they do. Using words that are “calls to action”, such as ready to get started? helps to move the relationship along to the point where you are contacted. Consumers that have been reading your material and learning to trust you will contact you when they are ready to start or need your services. You want to make sure they have an easy way to move into this stage of the relationship so keep your “contact us” form easy to fill out, and your telephone number/ personal email address readily visible to use. ( Case in point – are you still reading? Have I moved you to action to contact me so we can work on the targeted content for your practice’s website??)

There are no true substitutes for a personal meeting, and gaining the trust of your clients and referral sources in the traditional sense, so I would not be concerned that it is becoming obsolete. But in this age of the internet as a primary source of information in healthcare, content marketing and online nurturing is becoming more and more important as a tool to utilize in forming solid long term relationships.

Iris Kimberg, MS PT, OTR, has worked in the non-clinical aspect of therapy for the past 30 years. She is the founder of New York Therapy Guide (http://www.nytherapyguide.com), a site dedicated to the growth, viability and success of therapists in the private sector. Iris now enjoys sharing her expertise with others in the field through workshops, webinars and private consultations. She can be reached at infonytherapy@aol.com.

The Under Utilized Buy in- Buy Out Option

When the older  TV doctor Marcus Welby MD, took on the younger, dashing Steve Kiley MD as a partner, beside being a rating coup, he probably orchestrated  the first televised  buy in to a medical  practice  ( sorry readers born after 1970, you may have to Google them). Many physician medical groups are set up to potentially allow other physicians  to become partners  (or buy in) to  the medical group if both sides are amenable, over a period of time. This affords the older physician to ability have a balanced  lifestyle, a  contributor to the generation of revenue for the practice, a built in colleague, someone to share overhead expenses, and the right person who can pay them to own a portion, and then buy them out upon retirement.

There are  many established, well seasoned  therapists in private practice that  do not  have an exit strategy, built in or otherwise in their practice model, and an outright sale to a third party may be difficult to bring to fruition. Likewise, many younger therapists are on the fence about taking the plunge into private practice because of economic concerns, the competitive market place and the lack of access to start up funds to build or buy an existing practice outright.  The buy in may be a viable, workable option for both parties. It is never too late for any private practice to do some restructuring and offer a buy in option ( either for existing staff or a therapist new to the practice).  It is never too early for any therapist seeking employment in a private practice to inquire whether a buy in option does, or potentially could, exist.

Structuring the Buy In – There are many ways the buy in can be structured. The basics typically include multifaceted mutual decisions, including  what the buy in price is, which requires a practice valuation by the primary owner. Ownership  price should include, at a minimum, the value of the practices’ furniture, fixtures and equipment ( FFE) allocable to the equity interest being purchased by the new owner – for example, 30% of the FFE if the new owner is purchasing a 30% interest in the practice.   The buy in price will be a percentage of the total value, usually divided equally among all of the partners. Thus, if there are already two partners, you would be the third partner, and the total practice value would be divided by 3 to determine your buy-in amount.  Group practices have different cultures that influence how the ownership is divided. The price should also account for the new owner’s pro-rata interest in the practice’s accounts receivable (AR). The practice can either require the new equity owner to purchase the value of the AR allocable to the equity interest it is purchasing or allocate the existing collectible accounts receivable directly to the existing owners, payable to them over a pre determined period of  time ( ie.12-24 months).

Realistically it almost always  make the most sense for the  buy-in  to occur over several years. If  the buy-in is structured over 3 years, every year a  third of the total buy-in price is paid until. you become an equal partner with the others in the group. Additionally, buy-ins spanning several years are often structured as deductions from your annual salary. So if the buy-in payment is $50,000 for each year, instead of paying cash, your salary would be reduced by $50,000 each year.

If you are paying the amount of the buy-in during a period of time, the agreement should specify the interest rate, frequency, and duration of your payments.

As an equity shareholder you will also be responsible for buying out the share of any partner leaving the group. The buy-out structure is equally important, and often times what is called a  force buy-sell. If someone leaves for any reason (retirement, death, moving ) the remaining shareholder(s) is obligated to buy that party out. The buy-out is typically paid over time and, for tax purposes, usually part of it is structured as a combination  of stock  and deferred compensation.

In addition to consulting with the right attorney and accountant, it is equally important that the therapist on both side of the equation are a good fit. A brilliantly crafted contract will be meaningless if there is not first a sound compatibility on practice standards,and  ideas for growth and development between the parties.

We now offer a user friendly formularized excel spread sheet to help determine how to structure the buy in schedule so that it is doable for both parties



Table of Contents – When a column becomes a body of work

TABLE OF CONTENTS- 76 columns. 76 actionable ideas. Purchase the book now!

Introduction 4
Make it Your Business 5-6
The Shape of Things to Come 6-7
What’s Your Marketing Plan Going to Be 8-9
Independent Contractors vs. Employees 9-10
Can You Replicate Success in Another Location 9-11
Choosing the Legal Structure for Your Practice 12-13
Evaluating Your Position in Managed Care Contracts 14-15
The Fiscally Fit Practice Part I and II 15-18
Protecting Your “Ship” from Mutiny 18-19
Everything You Need to Know about Coding Part I and II 20-23
Preparing to Sell Your Practice 24-25
Applying Stark Law in Your Practice 25-26
Practicing as a Partnership 27-28
Location, Location, Location 29-30
Your Moral Compass 31-32
Opening Your Own Contract Agency.32-33
Medicare Part B Exceptions 33-34
Understanding the Medicare Cap 35-36
Handling No Shows and Cancellation 37-38
Intellectual Property and Copyrights 38-40
Trademarks 101 40-41
Beyond Your Website, Succeed Online 42-43
Global Fees/Flat Fee Methodology, We Must Say No 43-44
Participating IN CMS’s QM Reporting 45-46
Practice Management Software Options Available 46-47
Practice Vital Signs to Be Aware Of 48
Risk Management When Offering Related Services in Your Practice 49-50
NPI Numbers – What You Need to Know 50-51
Understanding Your Malpractice and General Liabilities Insurance Policies 52-53
Value Purchasing Part I and II 53-56
Planning For a Crisis – The Need for a Continuity of Operations Plan 56-57
Private Practice Questions and Answers 58-59
Business Communications Strategies Part I and II 60-63
Managing In Hard Economic Times 63-64
Health Insurance for the Self Employed 65-66
Private Practice – a Family Matter 66-67
Retirement Plans for the Self Employed 67-68
Keeping Employee Records – What You Need to Know Part I and II 69-72
Maintaining Financial Health in Your Practice 73-74
The Need for a Policy and Procedure Manual 74-75
How We Are Shaping OT’s Personna 75-76
Compliance with Marketing and Advertising Plans 76-77
If Disney Ran Your Practice 77-78
Are OT’s Ready to Embrace Direct Access 79-80
Healthcare Reform and Private Practice 80-81
What the New ICD-10 Means to You 82-83
Pursuing a More Perfect Practice 84-85
Plan for Summer 2013 Now 85-86
Whys OTs Need a National Directory to Reach Consumers 86-87
Strategic Alliances in Healthcare – Lessons Learned from the Wizard of Oz 88-89
Patient Satisfaction Takes Center Stage in the Healthcare Arena 89-90
The New Look of Competition.91-92

Table of Contents – Practice Analysis and Strategies for Success



TO KEEP IN MIND……………………………………………..5





TIPS FOR RETAINING STAFF……………………………………………………………..14-15






CONCLUSION……………………………………………………………………………… 36


What Makes Running A Peds Practice So Different Than One for Adults

It was my privilege to  be the co-author of this article (published in the October 2012 edition of IMPACT, the Private Practice Magazine of the APTA) with Stacy Mentz, PT, DPT, PCS.

Therapists opening a pediatric practice or transitioning from adults to pediatrics should be aware of the unique challenges and demands unique to this niche market.  These include the overlap with other disciplines, the potential for long term care, the maze of funding sources, the inclusion of family in the treatment process, and the physical demands that are placed on the body.

Children are not just little adults, even when treating a straight orthopedic injury.  Children seen in pediatric practice have challenges affecting their ability to develop at the same rate and quality as their peers.  This may include those with straight orthopedic challenges but usually the majority of the caseload are children that will have a  “lifetime” diagnosis such as cerebral palsy, autism or Down Syndrome.

Because this population has more neurologically driven needs, contending simultaneously with changes that occur as any child chronologically ages, and changes that occur as a result of their diagnosis, many children are seen by multiple disciplines.  This includes PT, OT and ST.
PT and OT particularly have overlap and blurring of services and treatment approaches.  That makes it essential for good documentation to occur justifying the need for both services by differentiating what the focus of each discipline is.   Communication is key – it is easy for parents to get confused by the disciplines, and who does what, and you have to factor in time (and this is time consuming) to make sure you talk to all your colleagues if you are sharing in the care of a child. Practices that offers multiple disciplines makes cross-disciplinary communication easier and more efficient.

Children seen, often have challenges that will affect them across the lifespan and are often seen for long periods of time.  This allows therapists to develop a relationship with the families that can go beyond what is considered ‘normal’ for a therapy relationship.  As a therapist you often become involved in the dynamics of the family relationship.  While this can result in improved care for the child, sometimes a therapist can stay too long, leading to burn out. Suggesting a change in therapist may become appropriate; generally children are able to handle this transition easier than their adult family members.A different therapist can provide new eyes into a child, and see possibilities that the previous therapist wasn’t able to see because of the length of time they had worked together.  It also gives a child a chance to generalize their skills out.  Challenges can be that the child has a great relationship with the therapist and they know how to work together.  As one family has said though, ‘the fact that my child can walk can’t be a secret between the two of you forever!’

With regards to pediatric therapy, there are multiple funding sources which any clinician in pediatrics must explore and understand.  Therapy funding for children may fall under IDEA parts B and/or C, which provide federal regulations for state funding of services.  Each state has different eligibility requirements and criteria that need to be met.  In addition because of the potential for overlap of funding sources, many providers will claim to be the ‘payor of last resort’ and/or will deny treatment if other sources are providing treatment due to ‘duplication of services’.  With regards to insurance companies, many companies will only provide services for injuries and not ongoing services which can be a challenge for a family that has a child with needs that will span a lifetime.  Often insurance companies will fund rehabilitation for an injury and not for an ongoing process. The Affordable Care Act recently upheld by the Supreme Court will now add a new opportunities for coverage for children, especially those with pre-existing conditions and long term conditions.  Pediatric therapists need to stay up to speed on this as the new regulations unfold in order to best advocate for the children.


IDEA parts B and C cover funding for children under age 3 for early start services and children ages 3 and older that qualify for educationally based services.  Both provisions have their own set of unique challenges; early start services specify that they need to be provided in the natural environment which is generally the home or daycare or out in the community (not in a clinic setting) and educational services need to be provided at the school or educational facility. In addition to potentially having clinic space available for children, you often have to be able to provide home based and school based care as well, which changes your overhead costs and your business model (this can be a positive, and great way to expand services when you are ready to do so).  If you are seeing children in your clinic, and you have an adult based population currently, you may want to consider creating a separate area for treatment because the equipment tends to be different (i.e. toys) and the approach to treatment has the potential for more noise (i.e. singing, musical toys) that may be disrupting to your other clients.

While the focus of your treatment is on that child’s specific needs, because they are dependent on their family, you are also spending time and energy educating the family or the primary caregivers of the child. There always needs to be carryover of training and skills because the child spends the majority of its day outside of physical therapy, and consistent repetition is how they learn.  Factoring in if, how or when to bill for this time spent with the family can be very perplexing and complicated. If the caregiver is also the parent, we know it is often hard to get a child to do for a parent, what they will easily do for someone else.  Time often needs to be spent with the family to figure out strategies for carryover, and in general how to fit in the demands that are added to the household because oftentimes there is  ‘homework’ from each service provider.  It can also be a challenge because many times parents become dependent on the therapists and weaning off of services or discharging services can be challenging.

Despite the challenges that arise from running a pediatric practice, there is also the opportunity on a professional level to be part of the most rewarding experiences as you unlock the potential in each child, and make a lifelong impact in both the lives of the child and family member.

Iris Kimberg MS PT OTR NYTherapyguide
Stacy Menz PT DPT PSC  owner of Starfish
Therapy in San Francisco, California