How to pick a quality rehabilitation agency.

Some guidelines to avoid going astray 

"Therapy services can turn your nursing home into a veritable gold mine."

How often have you heard a rehabilitation agency's representative tell you this during a presentation? If this boast rings in your ears frequently, then the red flags should be flying high. Nine times out of 10 you have discovered fools' gold.

If the rehab agency has conducted a patient chart review and you are sure their figures are accurate, then congratulations, your facility is on the financial road to heaven. But, if the words "patient chart review" have yet to be uttered, then it's more likely the agency is trying desperately to find someone -- anyone -- to work with.

But don't be put off. Therapy providers are generally honest and supply excellent therapy services. One way to lower those red flags is to put the rehab agency to the therapy litmus test by posing the following questions:

Can the rehab agency offer you flexibility in billing arrangements?

The recent recession and the continued tight economy forces both nursing homes and rehab agencies to place the cost of therapy services close to the top, if not #1, on their list of concerns. Remember though, there is not one universal billing system to fit all nursing homes. It requires individual analysis of your patient mix -- private, Medicare and Medicaid -- to determine which billing arrangement you should select.

"I like to see a rehab agency propose several flexible billing packages and support for those packages," says Garret Falcone, executive director at Keswick, a Baltimore facility that provides nursing home, assisted living and day care services. "Our current rehab agency will support our billing at no extra charge."

Billing arrangements come in three broad options, with details tailored to individual needs. They are: therapy company bills the facility; therapy company bills appropriate payors; or a combination of these.

When the therapy company bills the facility, it is the facility's responsibility to bill appropriate payors (Medicare Part A or Part B or private insurance carriers). This system lets the facility capture overhead costs from Medicare which will boost your interim rate. It is also easier to find a therapy company, since most prefer this billing system. On the down side, the facility needs additional business office personnel, assumes the risk of loss from bad debts and rejected claims, and may see cash flow restricted.

These disadvantages are turned into advantages when the therapy company assumes billing responsibility. However, since this system does not permit rehab agencies to recoup overhead costs when billing Medicare, you will find it more difficult to secure an agency willing to contract under these conditions.

Using a combination billing system, the rehab agency and the facility split the responsibility for billing Medicare Part A and Part B. This system offers the advantages of being able to capture overhead costs, although the facility must request use of the "gross-up" accounting method which can require cumbersome information gathering. Other advantages include minimal additional business office effort, no risk of loss on Part B, and no Medicaid recovery of Part B revenue. Still, this system is not as profitable as when the facility bills the appropriate payors.

According to John Flowers, a CPA with Wolpoff & Company in Baltimore, nursing homes "won't make a lot of money from therapy, particularly if the state pays directly for Medicare Part B. In 99 percent of circumstances the nursing home should hope to break even."

There goes that elusive gold mine. A rehab agency that knows its business will encourage you to talk with your accountant before making any decision about billing options.

Can the rehab agency provide all three therapy disciplines: speech, physical and occupational?

Some rehab agencies don't find it profitable to provide all three therapy disciplines and will use subcontractors for one or more disciplines. Be wary of an agency that tries to convince you that subcontractors will provide the same quality of work as their own staff will.

Who are the personnel that will provide your therapy services?

Therapy is a person-oriented service industry that relies on the interpersonal as well as professional skills of its therapists. Disgruntled residents complaining about the way they were treated by a therapist can be an unnecessary headache for administrators, and more than likely will have you searching for a new rehab agency.

Says Falcone from Keswick, "No matter how tremendous the agency, it's the person they put in here that matters."

Before making a final selection on a rehab agency, Falcone likes to meet the therapists that will work at Keswick. He finds out up front how willing the agency is to change therapists if there is a personality conflict. Some administrators also like to keep therapists' resumes on file.

Subcontractors can be a source of problems because quality of care can be compromised and loyalty to the rehab agency or the facility may be lacking. At Henning & Cole Therapy Associates, Baltimore's leading provider of rehab services, one subcontractor almost caused the company to lose a number of contracts because she was trying to service too many facilities. Now the only subcontractor Henning & Cole uses is an ex-employee whose credentials and abilities they trust.

Can the rehab agency provide consistent staffing?

This is particularly crucial in a high-volume facility where a therapist is required to be part of a multidisciplinary team whose goal is to achieve a resident's successful discharge to the home environment. You should ask what type of back-up support will be available during therapists' vacations and illnesses, and how quickly can staff begin intervention for a new therapy patient? Ideally, treatment should begin close to 24 hours after therapy is ordered, and certainly under 48 hours.

How many facilities does the rehab agency serve in your local area?

An agency that serves a number of different facilities can provide you with a varied pool of specialists to call on for difficult or unusual cases. In addition, a rehab agency's references from these facilities should be their best testimonial. Your red flag should be creeping up if the agency is hesitant about providing such references.

Keswick's Falcone considers the agency's credentials and references the number one factor when he is selecting a rehab agency. "I want to know how they do at other places. Who is happy with them and who is unhappy. I never go with a company that is just starting up."

Are they certified by Medicare as a rehab agency?

While certification is not a requirement for a rehab provider, without it the billing dilemma surfaces again. An uncertified agency cannot bill Medicare, so one billing option is lost to you. Medicare certification holds agencies to certain standards, too. Medicare officials can conduct spot checks and on-site visits, review patient charts and scrutinize the agency's quality control procedures.

Does the rehab agency have good quality assurance and quality improvement programs?

At Henning & Cole, there are four quality systems in place: 1) peer review conducted by department heads that assesses the quality of care given and the quality of documentation kept; 2) patient chart review conducted by the contract coordinator; 3) timeliness of intervention, usually within 24 hours, checked on a continuous basis; and 4) a weekly check by transcription personnel to determine if any therapists have missed initial evaluations or reevaluations.

Is all therapy equipment supplied by the rehab agency?

Equipment ownership has an up and a down side for a nursing home. It costs approximately $20,000 to $25,000 to outfit a therapy department with equipment such as ultrasound, matt tables, parallel bars, exercise weights and equipment, and whirlpools. In these cash-strapped days, most facilities are opting for the agency to provide that equipment.

The advantages of this choice are numerous: there is no capital outlay in equipping a therapy department; equipment repair, replacement, annual maintenance and calibration is the agency's responsibility; specialized equipment can be brought in as needed and not left idle waiting for the next special case. On the other hand, when the rehab agency departs, so too does all the equipment.

Are the agency's therapists members of their professional organizations and the local chapter of a nursing home organization?

There is no decree that requires such memberships, but they provide a good benchmark for gauging therapists' knowledge of, and interest in, the latest issues and trends affecting the industry. Memberships also keep the rehab agency aware of new regulations and laws in the constantly changing health care legislation arena.

Is in-service training included in the contract?

In-service is a fringe benefit that some rehab agencies are more willing to provide than others. This training covers a wide array of subjects from those required by the state, such as lifting techniques and correct body mechanics, to education on splint pressure areas or what therapy is all about.

There will, of course, be questions pertinent to your facility that have not been addressed here, but which do need to be asked. When the answers to those and the above questions are factored into your therapy equation, your short list of therapy providers should be whittled down to one obvious choice. In short, a rehabilitation agency should provide your facility with the therapy services you need and a business relationship you can work with.

Chris Moore, PT, is the contract services coordinator for Baltimore-based Henning & Cole Therapy Associates and has been involved in health care for over 16 years. He is active in the Association of Nonprofit Nursing Home Administrators and the Health Facility Association of Maryland.