How Insurance Companies Stifle Competition

If you are a new Physical therapy practice in Massachusetts, beware.  Most likely, you will be unable to get insurance credentialing.  This will mean you will be unable to take insurance, people will need to pay out of pocket and you will not be successful.  Sounds crazy unbelievable, right?

Unfortunately, it is true.  Insurance companies especially Fallon and Tufts have put a quota on the number of ancillary and support service providers in a given area.  I have wracked my brain as to the  rationale to this policy.  Do they think if they let all be credentialed it will ruin the neighborhood?  Or do they think if they admit all into the club, ancillary services will pop up like Dunkin Donuts ( for all non Massachusetts residents, Dunkin Donuts is just about on every corner)? That there will be a physical therapy  or optometrist practice on every corner?

The fact of the matter is, if you look at the number of physical therapy practices in a given designated area, you will generally find that  many practices are owned by the same company.  Therefore, the amount of actually owners are cut substantially.  However, the insurance companies only count the total number of sites.  This type of policy limits the scope, speciality and availability of practices to the consumer.

It is not a cost controlling mechanism.  The same amount of of ancillary services reimbursement will exist whether there are five or twenty five practices.  It is based on the number of consumers seeking services.  The insurers cost is not increased.

Credentialing everyone will not flood the market.  Successful practices are built on available resources, location, expertise, referrals and reputation.  The market will help to regulate the success and failure of businesses.  The market should be the controlling factor not the insurance companies.  It is not fair to create  a policy similar to wanting Red Sox season tickets.  I think there is a 25 yr waiting list as tickets are passed to families.  Practices will often include their credentialing as part of the selling offer.

Insurance companies should not have the ability to limit services to control the market.  By controlling the market, they stifle competition.  This is so Boston like with its history of big bosses and mobsters.  Where is the evidence based data that shows by limiting the number of ancillary practices, consumers are happier, cost is contained and the community benefits?  I can’t find it.