"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, March 10, 2011

California Kickbacks

What makes California different?

What is it about the physical therapists in California that puts them in the national spotlight? Is California larger than everybody else? Does California have more physical therapists?

Not according to Dave Powers, Chairman of the California Private Practice Section.

California has therapist leaders that are more committed, more serious and better informed about their rights under the law than many states. They are, incidentally, paying personally to fund the fight against California kickbacks to physicians.

According to Mr. Powers, "We've dug deep into our pockets - this stuff isn't cheap."

The 2003 Moscone-Knox Act is California's version of the professional corporations act that prevents physical therapists from working for physicians, chiropractors, podiatrists or other professions.

Professional corporation acts exist in every state to prevent undue influence over professional behavior by non-professionals. Only physicians can own physician practices and only lawyers can own law practices.

For instance, physicians are not allowed to own physical therapists' practices, according to the Moscone-Knox Professional Corporations Act in California.

Professional Corporation Acts are legal vehicles that prevent improper influence of professional decisions by non-professionals.

Professional corporation acts are relatively new to physical therapists' collective consciousness according to Peter McMenamin, PT. Mr. McMenamin first wrote about this issue in the December 2001 issue of IMPACT, the magazine of the Private Practice Section of the APTA.

Mr. McMenamin studied the issue in his own state of Illinois. He found that Professional Corporations Acts range from Strong to Weak in different states. Physicians and attorneys tend to have Strong versions of the law. Physical therapists and Occupational Therapists practice acts tend to have Weak versions of the law to protect the practice of physical therapy from ownership by non-professionals, like in Mr. McMenamin's home state of Illinois.

Dave Powers met Peter McMenamin a few years ago during a seminar when Mr. McMenamin advised his audience to examine their states' Professional Corporations Act to see if their existing laws were Strong or Weak.

It turns out that California has a Strong law protecting physical therapists.

The September 2010 California Legislative Council decision upholding the California Physical Therapists' Association view of Moscone-Knox affirms that physical therapists are prevented from being hired by non-professionals, including physicians, chiropractors and podiatrists.

In February 2011, Mary Hayashi (D-Hayward) sought to overturn the Moscone-Knox law as it applies to physical therapists with AB 783, a new law that specifically allows physical therapists to work for podiatrists and physicians.

The Quality Issue

PTManager.com has re-posted a patient testimonial from the StopPOPTs.org website of a POPTs patient testimonial.

The patient talks about a physician directing his patient to his own therapy center ostensibly for better communication and oversight. Yet, in her own words, the physician was never in the physician-owned physical therapy clinic.

However compelling this patients' testimony about the poor quality of her physical therapy at the physician's clinic, I believe the patient's message detracts from the central issue facing California physical therapists - cost.

The Cost Issue

It's not about quality, its about cost.

Peter McMenamin says in Exclusive Physical Therapist Ownership of Physical Therapist Services: Economic Foundations for Professional Autonomy :
"...the POPTs issue got sidetracked into issues of ethics and restraint of trade becasue the issue was never analyzed within the historical context of autonomy as practicved by other professions."
Money will resonate the loudest in Sacramento where the state Assembly meets March 23rd, 2011 and Mary Hayashi's AB 783 will be 'fast tracked" to ensure passage.

If the Assembly passes AB 783 it will go to the California Senate where oddsmakers place it at 50-50.

Jeff Worrell of PT Talker.com interviews Paul Gaspar, DPT of Doctors of Physical Therapy in San Diego, California about AB 783.

California has a $25 billion dollar deficit that state lawmakers need to cut. The story that California physicians are receiving kickbacks from owning and referring patients to physical therapy clinics is attracting attention in Sacramento, and from national news organizations.

Overuse of surgery and inappropriate diagnostic imaging litter the headlines of internet blogs and newspaper headlines

You can support the California Private Practice Section (CPPS) in its fight against Hayashi and the physicians' efforts by signing this petition.


  1. I admit (as a licensed Calif. PT) to not reading this law, or even being aware of the ongoing conflict.

    But this, and some of the reading about issues that I've done recently, leaves me in a bit of a quandary. PTs, PTAs and aides have always been employed by institutions other than PTs or PT corporations (i.e. hospitals, SNFs) and I can't wrap my mind around where we, and the Practice Act, fit into these situations.

    Perhaps it's that I've focused so much on patient care, that the business and the full extent of the legal side has been left to others.

    I don't know if it is so much that I'm posting this in order to ask for clarification, or I'm continuing the work on slogging through the legalities in my mind.

  2. Thank you for your perspective, Doug.

    I hope you get it all sorted out (good luck since both sides will cite cost and patient access to support our respective positions).

    Bottom line, I think you have to look at your own skills and outcomes and ask the question: "Who is more qualified to treat most musculoskeletal problems? You or the MD?

    Do uncomplicated ankle sprains need the orthopedic surgeon? Does simple lower back pain need the family practice doc? No and no.

    Why, you ask, would a physician with 12 years of education in surgical technique argue they
    are proficient in rehabilitation?

    Volume. They need the money.

    Why doesn't that same argument hold against private practice PTs? It does.

    But, who is more qualified to treat non-surgical musculoskeletal problems? If it's not you then who?

  3. I am a medical student. My wife is pursuing her DPT. We have a wonderful weight loss and exercise clinic that we have run together for four years. Despite our crazy schedules, we have built a great practice and have strong interpersonal relationships with our clients. Our dream is to expand our services as our education and training mature to include sports medicine and physical therapy. However, as a result of this controversy, I have recently become aware of some of the regulations involving practice. While I am not sure that I fully appreciate the implications of the laws, my wife and I are concerned that we may not legally be able to work together in the same office caring for the same patients. I would be grateful for a more informed perspective on the matter. From a patient care perspective, our differing skill sets have been fantastic compliment for our clients. I certainly hope that we will be able to build the kind of integrated practice that we have both imagined and been working towards.

  4. Physicians and Physical Therapists CAN work together in California - just not in an employer-employee relationship.

    Set up as an Independant Contractor (IRS Form 1099) and have the Physical Therapist bill all of their services using their provider number (NPI or whatever).

    Individually, physicians often have good intentions when starting practice.

    But, the perverse incentives of fee-for-service reimbursement eventually distort those good intentions, especially when viewed in the aggregate.

    Thank you for your comment. I'd be curious to hear about some Physician-PT arrangements where the billing is independent of the physicians' decision making.

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