"Physical therapy is not a subspecialty of the medical profession and physical therapists are not medical doctors; we are a separate profession that provides a unique service that physicians are unable and untrained to provide."

Letter to the AMA from the APTA, Dec 2009

Thursday, December 23, 2010

Physical Therapy Abuse by Miami Physician

I have two boys: seven and nine years old. When they start getting too fussy, I "separate" them and send one boy outside and the other boy to a friends' house. That seems to prevent the inevitable conflict.

Physicians and physical therapists involved in Medicare fraud seem to invite similar negative results.

This recent (Dec. 22, 2010) Wall Street Journal article highlights the dangers of physician-owned physical therapy (POPTS) as well as outright fraud by self-employed physical therapists.

This map, created by journalists at the Wall Street Journal (WSJ), show physical therapy billing "hotspots" in the USA: Miami, Houston and New York City.

The WSJ article goes on to describe physicians in Miami and Houston billing for physical therapy services and a physical therapist in New York billing $2.5 million to Medicare in a single year.

Maybe we should separate physicians and physical therapists?

One solution is to outlaw physician ownership of entities to which they self-refer (eg: physical therapy, clinical laboratories, imaging centers, etc). This only seems reasonable to most people.

variation in physical therapists' Medicare charges

The situation in medicine and physical therapy is that 1% of the providers give the other 99% of us a bad name. The opposite situation exists in politics where 99% of the politicians give the rest of them a bad name:)

The Federal government figured out the self-referral situation in 1989 (Starke I) and extended the anti self-referral rule to Medicare in 1993.

But, concerns that government was intruding too far into medicine and legitimate business arrangements allowed doctors to apply "exceptions" for in-office physical therapy services in 2005.

This Rock-n-Roll doctor took $1.8 million in Medicare in 2008, much of it from physical therapy, shake-n-bake treatments he prescribed for his patients.

The treatments were not done by physical therapists but by "office girls" that he "trained" himself. Medicare caved-in to POPT physician pressure when they wrote Federal licensure requirements:
"Qualified personnel may or may not be licensed as therapists but meet all of the requirements for therapists with the exception of licensure."
Medicare doctor and rolls-royce
Another solution is to step-up anti-fraud efforts.

However, Recovery Audit Contractors (RAC) audits of providers find that inpatient hopitals, not Nigerians or Rock-n-Roll Doctors, are the largest source of cash to the RAC revenue generation scheme.

Inpatient hospitals are likely targets, not because of outright fraud, but because the system is too complicated, medical billing too technical and billing errors the result of mistakes not crime.

Who commits most of the crime in Medicare fraud?

It's not providers. It's not even fancy rock-n-roll doctors.

60% of healthcare fraud is due to the pharmaceutical industry and insurance companies.

IndustryRecovery(millions)Per Cent
Healthcare Provider$2,122.2538.8%

My kids don't know when to separate themselves so I do it for them and we keep peace in the family. How can we keep "peace" in our adversarial Federal healthcare system?

If we can't separate physicians and physical therapists then what about removing the requirement for the physicians' signature on the physical therapists' Plan of Care?

Isn't that the source of the conflict?


  1. I just read this WSF article this weekend. I hadn't made the connection at the time I was reading it that the fraud was under the a POPTS practice. I agree that POPTS are bad for business, bad for medicare, bad for patients, and bad for the profession, however I took the article slightly differently. The practitioner in question (if I'm not mistaken) was bribing managers of halfway houses to come in a let the clients "sit" and fill up the clinic. Making it appear busy, perhaps performing "shake-and-bake" Tx to them that they didn't need. Bottom line is that I thought your POPT connection was a little strong for the given article. I love your blog, insights etc. Would love to know your thoughts in case I read it to lightly.

  2. Joanna,

    I have several friends who run POPTs clinics. They are hardworking, principled and caring people. They provide good physical therapy. The problem isn't with physical therapists who work for POPTs. The problem isn't even with the doctors who own POPTs. Both of these groups are responding rationally to a set of incentives presented to them (some call these "perverse" incentives).

    The fact that POPTs are bad public policy is what tarnishes the work of these otherwise excellent providers.

    Physical therapists and physicians relationships are less collegial and more adversarial due to the ability of physicians to "own" physical therapy.

    I used this one particularly egregious example of a POPTs physician to make my point that profiting from the work of physical therapists pushes physicians down a slippery slope that good intentions and good medicine cannot correct.

    I'm sure many physicians would argue that they do provide good medicine despite owning profitable "ancillary" services that they can refer to...

    Accumulating evidence indicates, however, that these profitable arrangements only serve to improve physician practice revenues.

    I would suggest that any owner of a medical service - physical therapy private practice or POPTs clinic - has the obligation to show that their outcomes are superior to the less expensive alternative.

    Thank you for your comment

  3. Hi Tim, Enjoy your blogs and am presently chewing away at the email self-study course.

    I don't think POPTS invite any more fraud and abuse than a privately owned PT practice, or a hospital owned PT practice. Before anyone goes crazy, hear me out.

    The incentive to profit is the driver behind most fraud. People do not commit fraud out of a sense of charity or duty to anyone else. They unarguably defer against their fiduciary duty to others in committing that fraud.

    I run a POPTS clinic, and they recruited and hired me because of my philosophy toward patient visits, and patient care. I was attracted here for one reason. They expressed a desire to develop a PT practice that involved plowing revenues back into the practice in order to help people more. They are in the process of designing and building an addition to the building for a therapy pool and more equipment.

    They do not encourage any particular number of PT visits... (This would be counter to my philosophy and I would have to seek another situation if it were the case) and if I see a patient for an evaluation and it is a one time visit they appreciate me saving the patient money.

    The fraud incentive is as large in private practice. You do not eliminate fraud and theft by limiting opportunities for people to do good things. You eliminate fraud and theft by eliminating charlatans and thieves, putting them in jail, rescinding licenses, revoking certifications.

  4. Hi Leon,

    Thank you for commenting.

    Would you say your example is typical or are you an exception to what is typical in physical therapist-run POPTs clinics?


  5. I hate to say that I believe that question could be asked of any private practice PT out there in a PT owned clinic. We can all find an example of someone who committed fraud and theft, acted unethically. Are those of us who do things the right way the exception? I hope we're not. The physician/owners need to not be directly involved in the day to day operations in the PT clinic. The number of PT visits needs to be up to the PT, and the patient obviously. Should things change, "I was looking for a job when you met me... I'll be looking for one when I say goodbye."


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Consistent with the American Physical Therapy Association Vision Statement for Physical Therapy 2020, the American Physical Therapy Association supports exclusive physical therapist ownership and operation of physical therapy services.