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Structure of the Physical Therapy Benefit in a Typical Blue Cross Blue Shield Preferred Provider Organization Plan Available in the Individual Insurance Market in 2011

Robert W. Sandstrom, Jedd Lehman, Lee Hahn, Andrew Ballard

Abstract

Background The Affordable Care Act of 2010 establishes American Health Benefit Exchanges. The benefit design of insurance plans in state health insurance exchanges will be based on the structure of existing small-employer–sponsored plans.

Objective The purpose of this study was to describe the structure of the physical therapy benefit in a typical Blue Cross Blue Shield (BCBS) preferred provider organization (PPO) health insurance plan available in the individual insurance market in 2011.

Design A cross-sectional survey design was used.

Methods The physical therapy benefit within 39 BCBS PPO plans in 2011 was studied for a standard consumer with a standard budget. First, whether physical therapy was a benefit in the plan was determined. If so, then the structure of the benefit was described in terms of whether the physical therapy benefit was a stand-alone benefit or part of a combined-discipline benefit and whether a visit or financial limit was placed on the physical therapy benefit.

Results Physical therapy was included in all BCBS plans that were studied. Ninety-three percent of plans combined physical therapy with other disciplines. Two thirds of plans placed a limit on the number of visits covered.

Limitations The results of the study are limited to 1 standard consumer, 1 association of insurance companies, 1 form of insurance (a PPO), and 1 PPO plan in each of the 39 states that were studied.

Conclusions Physical therapy is a covered benefit in a typical BCBS PPO health insurance plan. Physical therapy most often is combined with other therapy disciplines, and the number of covered visits is limited in two thirds of plans.

In 2011, 48.6 million Americans, or 15.7% of the population, did not have health insurance.1 Uninsured people are more likely to be adults, to have low or moderate income, to live in a family in which at least 1 member is employed, to be of minority status, and to be 19 to 25 years old.2,3 The Congress passed the Patient Protection and Affordable Care Act, more commonly known as the Affordable Care Act (ACA), in an effort to close the health care coverage gaps in insurance for American citizens and legal residents.4 The ACA addresses lack of health insurance by expanding Medicaid eligibility, eliminating preexisting conditions exclusions and annual or lifetime benefit limitations from insurance contracts, requiring people to purchase insurance or pay a penalty (the “individual mandate”), creating subsidies to help people afford insurance, and establishing health insurance exchanges (American Health Benefit Exchanges) as a marketplace for comparing products and purchasing insurance.5,6

Health insurance exchanges are intended to improve access to health insurance by providing a marketplace for private health insurance plans and to assist uninsured people in obtaining subsidies for health insurance.79 Health insurance exchanges are to be established in each state or as a regional consortium of states. If a state chooses not to develop a health insurance exchange, the federal government will establish a health insurance exchange in that state. As of December 2012, 17 states had been given conditional approval for a state-run exchange, 7 states had requested a state-federal partnership to establish an exchange, 23 states had opted for a federally run exchange, and 3 states had not determined their type of exchange.7 The ACA requirements for state health insurance exchanges include the establishment of a Web portal through which consumers can access coverage options, a toll-free telephone number for consumer assistance, a process for screening eligibility and enrolling people in public health insurance programs, online calculators to help consumers understand costs and benefits. Grants are provided to states to educate the public, promote enrollment and referrals, manage complaints and questions, and hire navigators to help educate consumers.4 Health insurance exchange plans are targeted to insure people who and small companies that do not qualify for Medicaid and have been historically unable to afford or purchase health insurance plans.

Physical therapy is an important health care service for Americans. The reimbursement structure of the benefit in health insurance plans is important to the use of physical therapy services.1013 In 2009, it was estimated that 3.1% of the US population accessed office-based physical therapy services, occupational therapy services, or both at a mean cost of $1,381 per patient.14 Fifty-four percent of the therapy expenditures for patients less than 65 years of age were funded by private insurance. The national expenditure on office-based occupational therapy or physical therapy services for people 18 to 64 years of age totaled $10.2 billion. In 2012, the American Physical Therapy Association Board of Directors expressed concerns about the design of the structure of insurance plan benefit for physical therapy.15 Specifically, the concerns included “escalating out-of-pocket payment requirements, combining physical therapy benefit limits with those of other disciplines reporting the same or similar Current Procedural Terminology (CPT) codes, and denial of services based on visit limits and utilization management guidelines that are arbitrary or inappropriate.”

The structure of the physical therapy benefit varies by insurer. Physical therapy is a mandatory benefit in Medicare and is an optional benefit in state Medicaid plans. In Medicare, outpatient physical therapy must meet the definition of “skilled” services and is subject to an annual financial limitation; in 2013, the cap for combined physical therapy and speech therapy was $1,900.16 As of 2010, 36 states included physical therapy in their Medicaid plans.17 Thirteen states that include physical therapy in Medicaid require a copayment by the patient.

Physical therapy is a common, but not universally available, benefit in employer-sponsored insurance plans. A 2011 US Department of Labor (DOL) study showed that 70% of employment-based, private insurance plans stated that physical therapy was covered.18 The DOL study was based on data obtained from a representative sample of 3,200 private-sector employer health insurance plan documents during the 2008 and 2009 Bureau of Labor Statistics National Compensation Surveys. Of these plans, nearly all of them placed limits on physical therapy benefits. Common limits were 20, 30, or 60 visits per year. This limit often included occupational therapy and speech therapy. Fifty-five percent of plan beneficiaries were required to make a copayment at each visit (median copayment of $20).

According to the ACA, habilitation and rehabilitation services are essential benefits to be included in American Health Benefit Exchanges.19 The structure of physical therapy within the rehabilitation benefit has yet to be defined. In designing the benefit structure of the health insurance exchange plans, the US Department of Health and Human Services has committed to “balance comprehensiveness, affordability, and state flexibility” in its decisions. A “benchmark typical employer plan” based on individual and small-group insurance plans in the state is to be used to construct a model benefit structure for health insurance exchange plans. State exchanges are expected to significantly reform the individual and small-group insurance market. The benefit structure of these plans will affect how people access and pay for health care, including physical therapy. The DOL study of employment-based insurance plans was intended to help define the rehabilitation benefit for the developing health exchange insurance plans.18 The purpose of this study was to describe the structure of the physical therapy benefit in a typical Blue Cross Blue Shield (BCBS) preferred provider organization (PPO) health insurance plan available in the individual insurance market.

Method

Data Source

The data for this study were obtained from BCBS insurance plans marketed in 2011. Blue Cross Blue Shield is a national association of 38 nonprofit insurance companies that operate by state.20 Blue Cross Blue Shield pioneered “prepaid” medical plans in the United States, and collectively the association covers 100 million Americans. Today, BCBS offers a variety of types of health insurance and is the largest provider of private health insurance in the United States.21 The state organization and large scope of BCBS plans made them a good choice for a cross-sectional study of individual and small-group health insurance plans.

Procedure

The procedure that we used is shown in Figure 1. The first step was to develop a standard consumer seeking to purchase a health insurance plan. The standard consumer that we developed for the study was a fictitious 55-year-old man who did not smoke. His birth date was established as January 1, 1956. We selected the age of 55 because it is the median age of purchasers of individual health insurance plans. The 2009 data from America's Health Insurance Plans showed that 40% of single and 53% of family policies were purchased by people who were 45 to 64 years old.22 A 55-year-old person is also a common consumer of physical therapy, as the percentage of working-age people who are more than 45 years old (4.7%) and are using office-based therapy is nearly twice as high as that of people who are 18 to 44 years old (2.5%).14 When an insurance company's quote calculator asked for a name, we used the name John Doe. To standardize the location of the client's home, we used the address of each state capitol as the consumer's residence.

Figure 1.

Methods used for data collection.

The second step was to identify a standard insurance plan to study. Our aim was to examine the physical therapy benefit within a PPO plan, the most common form of private health insurance.23 The fictitious client was given a standard amount of money to use to purchase a policy on the basis of the 2009 data from America's Health Insurance Plans (ie, data on the cost of individual health insurance).22 From these data, the mean monthly premium was determined to be $275, with a standard deviation of $72. Next, a PPO plan with a cost closest to the average monthly premium and within the standard deviation was selected. We excluded any PPO plans that included a health savings account.

The third step was data collection, which was conducted in 2 phases. Before collecting the data, we divided the 50 states and the District of Columbia into 3 groups and assigned the groups to individual investigators (A.B., L.H., and J.L.). Each investigator accessed the company's website and, using information about our standard consumer and insurance plan, made an online inquiry about purchasing health insurance. If a PPO plan was available within the standard budget, information about the plan benefits was obtained from the company's website. If information was not available on the company's website, the investigator contacted a customer service representative of the plan to gather the information.

The following questions were used to determine the amount and extent of physical therapy coverage within the chosen PPO plan. Is physical therapy a covered benefit? A “yes” response to this question resulted in 3 additional questions. Is physical therapy a stand-alone benefit or part of a combined-discipline benefit? A stand-alone physical therapy benefit is coverage of physical therapy independent of other disciplines. A combined-discipline benefit means that physical therapy is included as a plan benefit with 1 or more other disciplines, such as occupational therapy or speech therapy. What is the annual visit limit for physical therapy coverage? An insurance contract can limit the number of visits covered by the plan. We wanted to know if this type of limitation was present and, if so, the number of visits that would be covered. What is the annual cost limit for physical therapy coverage? As with a visit limit, an insurance contract can limit the dollar amount covered by the plan. We wanted to know if this type of limitation was present and, if so, the dollar amount of the financial limitation.

We first performed a pilot study involving only the states in the Midwest census region to determine whether enough data could be collected to warrant a national study. From this pilot study it was determined that sufficient data could be extracted to conduct a nationwide study following all previously described parameters and consumer characteristics.

Data Analysis

The frequency of results was calculated for each research question. The number of plans that included physical therapy was determined. For plans with physical therapy as a benefit, the number of plans with a stand-alone benefit or a combined-discipline benefit (structure of the benefit) was determined. Finally, whether a plan had a limit on the annual number of visits or annual costs was noted. Results were classified by census region to identify regional differences in therapy benefit coverage.

Results

We were able to obtain information on 39 of the potential 51 state plans (including the District of Columbia). Five states did not offer PPO plans: Delaware, Minnesota, New Jersey, New York, and North Dakota. In 3 states, the premium costs of the plans exceeded the national average cost and range of costs used in the present study: Massachusetts, New Hampshire, and Rhode Island. Four of the potential state plans were not retrieved because of an inability to gather information via the website or telephone contact: Colorado, Louisiana, Nevada, and Wyoming. We were able to survey at least 75% of states in the South, West, and Midwest census regions. We surveyed 44% of states in the Northeast census region. The distribution of plans by census region and the average premium and deductible for the selected plans are shown in Table 1. A map of the US census regions is shown in Figure 2.24

Table 1.

Coverage of Physical Therapy in a Standard Blue Cross Blue Shield Individual Insurance Plan in 2011

Is Physical Therapy a Covered Benefit?

Physical therapy was a covered benefit in all 39 insurance plans that we studied.

Is Physical Therapy a Stand-Alone Benefit or Combined With Other Disciplines?

We were able to gather data from 31 of the 39 surveyed plans to answer this question. We were unable to gather this information from 8 plans via the website or telephone contact. In 29 of the studied plans, physical therapy was combined with other disciplines or procedures (Tab. 2). Only 2 plans (both in Midwestern US states) had a stand-alone physical therapy benefit. In 18 of the 29 plans (62%), the Medicare combination of therapy disciplines (physical therapy, occupational therapy, and speech therapy) was used (Tab. 3). In 4 plans, physical therapy and occupational therapy were combined in 1 benefit structure. Other disciplines represented in various combinations were chiropractic, respiratory therapy, pulmonary rehabilitation, cardiac rehabilitation, and massage therapy. In 2 plans, a procedure (spinal manipulation) was identified with the physical therapy benefit.

Table 2.

Number of Plans With a Stand-Alone or Combined Structure for the Physical Therapy Benefit by Census Region in 2011

Table 3.

Composition of the Physical Therapy Benefit in a Combined Structure by Census Region in 2011 (n=29)a

In 4 of the 5 Midwest plans with a combined-discipline benefit, the Medicare therapy benefit structure or a therapy benefit structure limited to occupational therapy and physical therapy was used. In the West census region, the Medicare therapy benefit structure was used in 5 of the 6 plans, and the therapy benefit was limited to physical therapy and occupational therapy in 1 plan. In the South census region, physical therapy was combined with occupational therapy and speech therapy in 9 of the 15 plans. The plans in the Northeast census region had a structure similar to the Medicare rehabilitation benefit structure but also included chiropractic and pulmonary rehabilitation.

Is There an Annual Visit Limit for Physical Therapy Coverage, and Is There an Annual Cost Limit on the Physical Therapy Benefit?

An annual limit on the number of therapy visits was common; about two thirds of the plans had an annual limit on the number of visits (Tab. 4). The average visit limit was 21.5 visits per year. The annual visit limit was as few as 12 visits and as many as 30 visits. The annual number of allowed visits was smaller for plans in the Midwest. An annual financial cap was rare in these plans; only 1 of the studied plans in the Midwest had an annual financial cap ($3,000) on therapy services. About one third of the plans did not have a separate visit or dollar limit in the therapy benefit.

Table 4.

Limits on Physical Therapy Coverage in a Standard Individual Insurance Plan in 2011

The median number of allowed visits was largest in the West census region (24 visits). The smallest median number of allowed visits was 17.5—in the Midwest. About one third of the plans in the South census region had no annual visit or dollar limit in the therapy benefit. Seventy percent of the plans in the West and Midwest census regions had a limit, usually in the form of a limit on allowed visits.

Discussion

The purpose of the present study was to conduct a nationwide survey of the structure of a typical physical therapy benefit within a PPO plan available in the individual insurance market. The results of the present study provide a baseline description of the structure of the physical therapy benefit before the development and marketing of American Health Benefit Exchanges. Physical therapy was a benefit in all of the BCBS PPO plans that we studied. In contrast, the DOL study showed that 30% of employer-based insurance plans did not state that physical therapy was covered.18

We found only 2 BCBS insurance plans that established physical therapy as a stand-alone benefit. Physical therapy was commonly combined with other disciplines in the benefit structure of the BCBS PPO plans. The most common benefit structure in the BCBS PPO plans that we studied was similar to the rehabilitation benefit structure in the Medicare program (ie, physical therapy, occupational therapy, and speech therapy in a combined rehabilitation benefit). In a few cases, chiropractic was included with physical therapy in the benefit structure. It was interesting to find the inclusion of cardiac and pulmonary rehabilitation in some benefit structures. These programs were commonly multidisciplinary and might include occupations not included in a traditional rehabilitation benefit. Combining disciplines in a benefit becomes more important when the effects of visit or dollar limits are considered.

Both the present study and the DOL study18 showed that a limit on the annual number of covered physical therapy visits was a common feature of private insurance plans. Two thirds of BCBS individual insurance plans in the present study placed a limit on visits. The DOL study showed that 68 of 70 insurance plans that included physical therapy as a benefit subsequently limited the annual number of visits.18 An annual cap on visits limits the financial responsibility (risk) of an insurance company for high therapy costs. Medicare does not limit visits (except for the documentation of medical necessity) but instead imposes an annual financial cap on therapy services. Only 1 plan in the present study had a financial cap.

Although insurance status is known to be associated with access to physical therapists,12,2530 its relationship to the use of physical therapy (eg, number of visits) is less clear. Machlin et al12 reported that people living in metropolitan areas and the Northeast and Midwest had more physical therapy visits than people living in rural areas or the West census region. However, these researchers could not find a relationship between age or insurance status and the number of therapy visits per episode of care. Freburger and Holmes found that Medicare supplemental insurance was positively associated with more physical therapist visits but that participation in managed care plans had no effect on the number of visits for older adults dwelling in the community.26

The Medical Expenditure Panel Survey provided comparative data to help us interpret the effect of a visit limit on the use of physical therapy.31 In 2008, the median number of visits for a person accessing therapy services from an occupational therapist or a physical therapist in an office-based setting was 7.31 Three in four patients reported using fewer than 12 visits of office-based physical therapy or occupational therapy in a year. This number of visits is well within the typical insurance plan annual visit limit for therapy services, as reported for many plans in both the DOL study18 and the present study (it does not include other therapy visits in the case of a combined-discipline benefit). However, the largest number of office-based physical therapy and occupational therapy visits for a patient in 2009 was 124. This number of visits exceeds the typical insurance plan annual visit limit, as reported in both studies. In these cases, the typical visit limit transfers the cost of the therapy care to the patient. It is not possible from the Medical Expenditure Panel Survey summary data to determine the reasons for the variability in people's use of office-based therapy services. For example, different practice patterns of therapists and conditions of patients can affect use. Further work is needed to better understand the service needs and characteristics of people who require physical therapy.

Limitations and Future Research

The findings of the present study are limited to 1 standard consumer, 1 national association of insurance companies, and 1 form of insurance (a PPO). We did not investigate family policies, policies for women, or policies for people of different ages. The findings are also limited to 1 PPO plan in each state. Many BCBS insurance companies offered several different individual insurance plans, including different PPOs, in their markets. It appeared that the major differences between the plans were various levels of out-of-pocket expenses and premiums. However, we did not measure differences between plans in terms of the structure of the physical therapy benefit. We also did not study the health maintenance organization and high-deductible forms of insurance to determine their physical therapy benefit structures. We did not study copayments as a form of cost sharing or control of the use of therapy services. It is possible that several of the plans that we studied implemented copayments in addition to the other cost- or risk-sharing mechanisms that we did explore. Further research is needed to understand the effects of these plans and cost-sharing requirements on access to, cost of, and quality of physical therapy care.

Information from 39 states was represented in the data that we obtained from America's Health Insurance Plans to determine the average premium for our standard client.9 States from each census region were represented, and the annual premiums were relatively consistent across the regions. We were limited because all states did not offer a PPO plan, all states did not offer a plan within the budgeted price structure, or we could not obtain all of the information about the physical therapy benefit. To compensate for these limitations, we followed the previously defined parameters and excluded from the study states that did not fall within the defined ranges.

The present study provides baseline information about the physical therapy benefit in the individual insurance market before reforms of this market, as implemented in accordance with the ACA. Further study of the physical therapy benefit structure in American Health Benefit Exchanges as they develop over the next 18 months is warranted.

Conclusion

Physical therapy was a covered benefit in the 39 BCBS individual insurance plans that we studied. In 18 of these 39 plans (46%), physical therapy was included in a combined-discipline benefit with occupational therapy and speech therapy. Twenty-seven of the 39 plans (69%) placed a visit or dollar limit on the therapy benefit. Twenty-six plans placed a limit on the annual number of covered visits, and 1 plan placed a limit on the annual dollar amount.

Footnotes

  • All authors provided concept/idea/research design and writing. Dr Lehman, Dr Hahn, and Dr Ballard provided data collection and analysis. Dr Sandstrom provided project management and consultation (including review of manuscript before submission).

  • The study purpose and design were discussed with the Creighton University Institutional Review Board for Protection of Human Research Subjects, and the study was determined to be an exempt project.

  • Received May 16, 2012.
  • Accepted April 25, 2013.

References

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