Assembly Bill Puts Profits Before Patients

California Physical Therapy Association opposes AB 783, which represents an inherent conflict of interest for physicians

Mar 01, 2011, 13:22 ET from California Physical Therapy Association

SACRAMENTO, Calif., March 1, 2011 /PRNewswire/ -- The California Physical Therapy Association (CPTA) strongly opposes Assembly Bill 783, which would legalize the employment of physical therapists by medical and podiatric medical corporations and allow physicians to refer to themselves for the primary benefit of increasing profits to physicians.

AB 783, introduced by Assembly Member Hayashi (D-Hayward), amends Section 2406 of the Business and Professions Code and Section 13401.5 of the Corporations Code by adding licensed physical therapists to the list of healing arts practitioners who may be shareholders, officers, directors or professional employees of medical or podiatric medical corporations. Under this legislation, medical corporations can, in effect, control the point of access to physical therapy services and then refer patients only to themselves. Introduction of this bill comes after the September 2010 California Legislative Counsel opinion stating it is illegal for physical therapists to be employed by a medical corporation.

"This poses an inherent conflict of interest by establishing a self-referral for profit situation and removes consumer choice," said Dr. James Syms, PT, President of CPTA. "Furthermore, studies show that self-referrals by physicians to services in which they have an ownership interest result in unnecessary and inadequate care and higher costs for both consumers and payers. This is particularly disturbing in light of California's current budget crisis."

In 2006, the Office of Inspector General provided a report to the Department of Health and Human Services that showed when a physician orders and directs physical therapy services, 91 percent of the time the care is below professional standards and considered unnecessary and fraudulent under the Medicare program.

Additionally, a study of California's workers' compensation system summarized in the New England Journal of Medicine in 1992 indicated physical therapy was initiated 2.3 times more often by physicians in self-referral arrangements.

"Contrary to AB 783 supporters' claims, this bill isn't about saving jobs," stressed CPTA Executive Director, Stacy DeFoe. "This bill is about cementing the practice by physicians of owning physical therapy clinics and employing physical therapists to reap substantial income from excessive billing for the substandard delivery of physical therapist services."

"Ironically," noted Syms, "for years, physicians in California have opposed the corporate practice of medicine but, with this legislation, have no problem with medical corporations employing other medical professionals such as physical therapists."

CPTA is the largest voice for the physical therapy profession in the state of California and the third largest physical therapy association in the world. CPTA is a chapter of the American Physical Therapy Association, representing more than 77,000 physical therapists and physical therapist assistants nationwide.

SOURCE California Physical Therapy Association