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Outpatient home therapy: An untapped market for therapists

Rehab Regs, January 1, 2005

To some, home therapy is a niche market for existing facilities to add to their list of services. To others, it is their entire function as rehab providers. Either way, there is a growing need for therapists to treat patients in their own homes, which, according to Medicare regulations, is different from the services provided by home health agencies.

Home therapy refers to services rendered to patients who need outpatient therapy in their homes. Home health, however, usually refers to a federally mandated Medicare and Medicaid program that provides skilled-care services in homes or alternative community settings.

Get a handle on the ins and outs of providing home therapy and how you can begin offering it to patients in your area.

There are a variety of reasons for which patients needing rehab would want or need treatment in their homes rather than in outpatient facilities. These scenarios could include the following:

At first glance, billing for outpatient therapy provided in the home doesn't seem much different from billing for services rendered in an outpatient facility.

"All rules and regulations that apply to outpatient rehab facilities also apply in a person's home," says Rick Gawenda, PT, director of rehabilitation for Detroit Receiving Hospital in Michigan. Just remember that if you operate in a private practice, you must change the code in form locator 24B (place of service) to 00-12, the code for home, when you fill out the CMS 1500 form.

You may think that without overhead such as rent and other expenses, you can keep more of what you earn. But you also need to consider that the reimbursement is the same whether you see patients in your facility or you use up a tank of gas and an extra hour of your time driving to and from their homes. You will not receive reimbursement for transportation costs or additional time related to seeing patients at their homes.

It is true that in a corporate facility, a therapist may evaluate and treat 20 patients a day. However, if you provide home therapy as an individual therapist, you may need to only see a fraction of these patients to receive the same financial return.

"We have no overhead and no middlemen," says Peter R. Kovacek, MSA, PT, president of In Home Rehab, LLC, in Harper Woods, MI. "A typical PT with us would see four patients and [his or her] income at the end of the day would be more than if [he or she] had a typical job as a therapist."

But Gawenda and other experts caution that just like any other practice, there's more to consider than Medicare reimbursement. You will also need to answer the following questions:

When determining if home therapy is an option, consider the following factors:

First contemplate the geography of the area you serve or plan to serve. If you are located in an urban area where you could provide rehab to many clients within a short distance, you may find that you spend minimal time traveling and little money on gas.

In many cases, however, the patients who are most in need of home therapy are those who are geographically spread out. A therapist needs to consider both of these scenarios and how each relates to his or her location.

Unless you are adding a home-therapy component to an existing outpatient rehab facility, you will not have a building that clients can visit. Therefore, you will have to make yourself accessible in other ways.

"You need to do a little front-end marketing to the physicians, because most people who need [skilled care] at home end up [under a home health agency plan of care]," says Frances J. Fowler, president of Fowler Health Affiliates, Inc., in Atlanta.

So if a physician has a patient who seems to be doing well but can't quite make it to an outpatient facility, make sure you present your home therapy services as an option. Likewise, if you feel that your patients have improved to the point where they can make it to an outpatient facility, consider referring them to one you feel would benefit them.

"If, after an evaluation, a therapist felt that the patient needed [to receive rehab] at an outpatient clinic due to equipment needs or safety issues, that therapist should find a clinic for [him or her]," says Gawenda. "It's what's best for the patient, not what's best for the therapist financially."

In addition, other clients will come to you from a peer-to-peer referral. "Therapists know therapists-we're a very close-knit group," Kovacek says. He says that a therapist might offer these services to a patient by saying, "It seems like it's difficult for you to get here-would it be better for someone to come and work with you at your home?"

Distinguishing yourself and your services from home care is another important clarification. To receive reimbursed home care, patients must meet homebound requirements and receive care from a home health agency under Medicare Part A. To receive home therapy, however, a patient does not have to qualify for home care under Medicare. It is important that potential clients know this.

As with an outpatient facility, you can choose to do your billing in-house or to outsource it. At Kovacek's practice, which contracts with more than 20 therapists, both physical and occupational therapists turn in their documentation to the central office, and then the facility outsources the actual billing. But before he sends those bills out, Kovacek makes sure to check them for accuracy-what he calls a "100% review in real time."

"Every bill and every [clinical] note is reviewed every day," he says. "If there's a problem with a note, we discuss it with the therapist before the bill goes out."

You will also need to decide whether home therapy is something you would like to offer as an individual therapist or whether you would like to create a business that provides this service to a larger group of clients. The latter option requires either hiring or contracting with additional therapists.

In Kovacek's practice, each therapist is a partner and earns money according to how many clients he or she sees rather than a fixed wage. "PTs and OTs should not be employees," says Kovacek. "Everyone owns [his or her] own practice."

Although some states allow direct access to therapy for patients, Medicare still requires a physician referral. It's important, especially if you work with an aging population, that you develop positive relationships with your patients' primary care doctors. If your patients don't have physicians, encourage them to find one, says Kovacek.

Before embarking on any home therapy endeavor, take the time to research all of the factors that could make or break your entrance into the world of home therapy.

"The actual complexities are no different from a bricks and mortar [practice]," says Kovacek. "But the way you analyze your business might be different."

So if you make sound decisions based on the type of rehab you want to provide, your geographic location, and the needs of the patients you plan to serve, you may not become a millionaire, but you can make money as an in-home therapy provider. "While you won't touch as much [money], you can keep more of it at the end of the day," says Kovacek.

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