Insurance Drives Physical Therapists out of Business

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Many Physical Therapy practices in New York, including Hands-On Care Physical Therapy and Physiocare Physical Therapy, resist major cuts in reimbursement for Physical Therapy announced by HIP/EMBLEM insurance. Hands-On and Physiocare spokesperson suggested that these rate cuts may threaten private practice Physical Therapy in New York state.

...Anthony Watchon president of HIP doubled his salary to $4.79 million

HIP/EMBLEM insurance announced to its Physical Therapy participating providers a 20% reduction in reimbursement rates to be in effect May 1, 2009. Physical Therapists who do not agree with the reduction have the choice to leave the provider panel. Dr. Kostopoulos, spokesperson for Hands-On and Physiocare suggested that: "It appears that such a decrease in reimbursement serves to offset HIP's deficit for the new salaries to its officers". The New York Sun on 4/22/2008 reported that: "...Anthony Watchon president of HIP doubled his salary to $4.79 million". The same paper reported that $4.79 million is enough to provide healthcare for 12 months to nearly 1,400 people at $3,500 each. The newspaper stated: "This is just a foretaste of what will happen if the state allows it to convert to for-profit corporation".

HIP, in their letter to providers, mentioned that such reduction brings HIP rates to current industry rates. Physical Therapists though, from Hands-On and PhysioCare, contradict this statement, alleging that HIP has already been amongst the insurance companies with the lowest reimbursement rates to Physical Therapy and other medical services and add that if this reduction comes into effect, it will trigger further reductions by many other insurance companies in New York state, leading to the extinction of private practice physical therapy.

Dr. Kostopoulos further added that this reduction in reimbursement to Physical Therapy services will lead to a significant compromise of the quality of service of patients. "Simply," he said, "physical therapists will have to see many more patients per hour to accommodate for this change in reimbursement which will lead to a substandard service".

When HIP/GHI sought approval for the change to "for profit status", they released to their members the following statement: "Conversion to for-profit status will not affect service to our members, their access to doctors, their benefits, or the levels of service that they currently receive. Over time, as new products and services are introduced, members should see greater flexibility in types of coverage, more choice in benefit plans, and more customer-driven innovations that improve access to care". "It is obvious," Dr Kostopoulos said, "that this promise has been broken because with such low reimbursement rates the level of service to the members will definitely be affected".

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Dimitrios Kostopoulos

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