Money, Money, Money
In my November 20th post I touched on the topic of COTA salaries. If you've had a chance to read this blog and the replies to this post, you'll see that a former regional manager gave the actual reimbursement rates of several codes for Medicare B. Knowing the actual reimbursement rates made me pull out my calculator and total up some numbers. The results I got might be as scary to you as they were to me.
In my calculation I've assumed a COTA works an eight hour day with 90% productivity. This gives a total of 432 minutes of treatment per day. I took the reimbursement rate for all codes and came up with an average of $26.19 per unit, with each unit equal to 15 minutes. With four units per hour, in an eight hour day at 90%, it is possible to generate 28.8 units. (Note: Some codes pay higher, some codes pay a bit less, but there is less than $2 difference between all codes.) This means that every day a COTA provides treatment at a 90% productivity standard, the revenue they generate for the company they work for totals $754.27! Calculate this to a weekly number and this figure comes out to $3,771.36. On a yearly number (based on 52 weeks) that figure comes out to $196,110.72!
Calculating the high average COTA salary rate of $18 per hour and including the benefits cost of 30%, this comes out to $23.40 per hour. Based on a 40 hour work week (52 X 40 = 2080) the annual cost for employing a full time COTA would be $48,672. This leaves a yearly profit for the company totaling $147,438.72!
Now, there are many variables to my calculations. Use of the eight minute rule means less treatment time but the same reimbursement rate. Dovetailing and concurrent treatments can increase the productivity numbers. However, these are not the norm so my figures do show a true average profit range for the company. Even decreasing the productivity rate to 80% still shows a yearly profit of $125,648.64. So what happens to all this profit? A quote from the same reply, "It is standard practice for companies to offer all levels of management (facility based up through VP) financial incentives to exceed revenue expectations. Many formulas are based on % over target for % of one's annual salary. It is a method they usually refer to as a way to 'reward' efficiency."
In other words, the more your supervisor pushes you for higher productivity, the bigger incentive bonus they are bound to receive. If you are part of the upper management team this may seem OK to you. However, the big question I ask is did you really earn this yearly bonus? My answer is a big NO. In my eyes, the people who generated this profit should be rewarded with the bonuses. Wouldn't it be nice to get even a 10% bonus on all the revenue you generate in a year?
All these calculations, however, bring me back to our basic ethical concerns. If COTAs are pushed to be so productive and generate all this revenue for a company, are our patients really getting all the therapy they need to rehabilitate properly? Again I stress that it is our patients that should be the biggest concern in therapy, not generating profits. Without our patients, there is no revenue.
Until next time, I hope all your thoughts are good,
Tim