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Getting less money from Medicare is making life tough for some therapists

Sunday, August 15, 1999

By Jan Ackerman, Post-Gazette Staff Writer

Even while studying to be a physical therapist, University of Pittsburgh student Jason Leadbetter is watching the bottom fall out of the job market he hopes to enter next year.

  Jason Leadbetter, a physical therapist intern, works on the leg of Jim Yee of Swissvale. (Lake Fong, Post-Gazette)

After enjoying several decades of growth and prosperity, physical therapists, occupational therapists and speech therapists are faced with cutbacks caused by the negotiating strength of health maintenance organizations and the expansion of managed care. But what has really sent the professions into a tailspin are new Medicare reimbursement restrictions that took effect in January.

"The market is squeezing down. It was kind of a rude awakening for me," Leadbetter, 30, of Potomac, Md., said during a break from his internship at the Center for Sports Medicine in Oakland where he is honing his physical therapy skills.

The regulations set new limitson what Medicare will pay for therapy services provided at home, in skilled nursing homes, and at outpatient rehabilitation centers that are not operated by hospitals.

"It turned around overnight. You can compare it to the decline of the steel industry," said Gail Neustadt, past president of the Pennsylvania Speech-Language-Hearing Association.

Neustadt, who operates two businesses in Upper St. Clair that provide therapists to nursing homes and geriatric centers, said she used to have to pay signing bonuses to lure therapists to come work or her. Now the market is glutted with job candidates.

The Medicare limits are squeezing in two ways, depressing the job market for therapists who work with the elderly and reducing rehabilitation services for some of the nation's most chronically ill patients.

"I think there will be a public backlash," Leadbetter predicted.

The regulations are the result of the Balanced Budget Act of 1997 which plans to slow the growth of Medicare spending, trimming an estimated $116 billion from what otherwise would be spent.

The act sets two reimbursement limits on out-patient therapy: $1,500 per year for combined physical therapy and speech-language pathology services and $1,500 per year for occupational therapy services. (The limits do not apply to outpatient therapy centers operated by hospitals.)

Since the caps went into effect eight months ago, therapists have seen their hours cut, their salaries reduced and their jobs eliminated. Newly hired therapists are finding the field less lucrative:lower pay, fewer vacation days and sometimes, no paid holidays.

"There is no question that it has had a huge impact," said Anthony Delitto, chairman of the department of physical therapy at Pitt. "Right now, jobs are very difficult to come by."

For at least 15 years, physical therapy, a career that involves improving the mobility and relieving the pain of patients suffering from injury or disease, has been a field where employees could pick their job.

At Pitt, which operates a highly rated physical therapy program, Delitto said hundreds of students apply for about 40 slots in the physical therapy department, a 24-month, 92-credit, masters program.

Until recently graduates could "write their own tickets," Delitto said, but May's class found itself in a different kind of job market.

Graduates had to fill out resumes and go on job interviews and sometimes not get the job they wanted. And starting salaries are dropping, from the high 30s to the mid-30s.

"There has been a clear-cut market adjustment," Delitto said.

The Bureau of Labor Statistics still lists physical therapy as a career with very good job opportunities, with high pay and fast-growing opportunities. U.S. News and World Report still lists it as a "hot job" with entry level salaries of about $39,000 and top salaries of about $65,000.

But Jennifer Hunt, a spokeswoman for the American Physical Therapy Association in Alexandria, Va., said, "We are no longer calling it the hot career that it once was....We are predicting a glut in the market by 2005."

Jim Potter, a spokesman for the American Speech-Hearing-Language Association in Rockville, Md., said nursing home stocks have plummeted and some nursing home systems around the nation are closing. His organization also is hearing anecdotal information about nursing homes refusing to take patients who have illnesses that would run up high Medicare expenses that may not be covered.

NovaCare Inc., a King of Prussia-based rehabilitation company that contracted for rehabilitation services in nursing homes around Pittsburgh, got out of long-term care services businesses because of the cutbacks. The stock is currently trading at less than $1.50 per share, down from its 52-week high of nearly $11.

Home Health Corp. of America, a King of Prussia company that provides health-care services to patients in their homes, filed for Chapter 11 bankruptcy protection in February, blaming the move on the new Medicare spending rules. And in March, Standard & Poor's issued a warning on the debt of most U.S. nursing homes.

Even greater than the economic impact, according to Potter, is the fact that many patients covered by Medicare may not be able to receive the treatment they need to recuperate.

He said $1,500 a year doesn't go very far for stroke victims, who frequently need both physical and speech therapy to recover motor and language skills.

"Patients have to choose between walking and talking," Potter said.

Said Pitt's Delitto: "I tell people, 'Pray you don't have a stroke. If you need the services of both, you only have half the money.' "

Potter said elderly patients in nursing homes often experience swallowing disorders and will aspirate, or take fluid into their lungs, if they don't have continuing therapy. "Essentially, you choke to death," Potter said.

The national organizations for all three therapy specialties are pushing to repeal the caps. Several pieces of legislation have been introduced that would allow for exemptions in certain circumstances.

The new Medicare regulations also will hamper the training of new therapists at universities, opponents contend. Medicare no longer will pay for the time that student interns like Leadbetter work with patients in internship programs.

Delitto of Pitt said this new regulation will make it more difficult for universities to line up student internship programs with private rehabilitation clinics.

"It will be difficult to get students the proper training. In turn, you will have less capable technicians," Delitto said.

Just three months after the new regulations were in place, physical therapists practicing at skilled nursing facilities and in home health care already were experiencing high unemployment and few hours of work, according to a survey conducted bythe American Physical Therapy Association.

Occupational therapists help people with disabilities to maintain daily living skills. But they can't afford to treat patients with complex medical conditions, such as Parkinson's disease or stroke under the $1,500 annual reimbursement limit, the American Occupational Therapy Association said.

Patricia Crist, chairwoman of the occupational therapy department at Duquesne University, said that to counter changes in the marketplace, the school is training occupational therapists for broader fields, such as community-based education and general wellness programs.

" We have to practice elsewhere," she said.

Leadbetter is approaching his upcoming job search with the same attitude.

"It will be one of those things where you will have to look a little harder," he said.

"We are being told that the pendulum has swung one way. Hopefully, things will even out."

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