BILL ANALYSIS Ó AB 1000 Page 1 ASSEMBLY THIRD READING AB 1000 (Wieckowski and Maienschein) As Amended May 8, 2013 Majority vote BUSINESS & PROFESSIONS 12-0 APPROPRIATIONS 16-0 ----------------------------------------------------------------- |Ayes:|Gordon, Jones, Bocanegra, |Ayes:|Gatto, Harkey, Bigelow, | | |Campos, Dickinson, | |Bocanegra, Bradford, Ian | | |Eggman, Hagman, Holden, | |Calderon, Campos, | | |Maienschein, Mullin, | |Donnelly, Eggman, Hall, | | |Skinner, Ting | |Ammiano, Linder, Pan, | | | | |Quirk, Wagner, Weber | ----------------------------------------------------------------- SUMMARY : This bill allows patients to access physical therapy services without a referral for 45 calendar days or 12 visits, whichever comes first, after which the patient must receive an in-person examination from a physician and surgeon or podiatrist, who also must sign off on the physical therapist's plan of care; expands the types of licensed professionals permitted to work for a professional corporation, and permits a licensed physical therapist (PT) to be a shareholder, officer, or director of a medical and podiatric professional corporation, as specified. Specifically, this bill : 1)Requires a physician and surgeon, podiatrist, or other referring practitioner who refers a patient to receive services by a PT employed by a professional corporation to comply with existing law regarding financial arrangements for referrals, and requires the referring practitioner to provide notice to the patient, orally and in writing, in a least 14-point type and signed by the patient of the following: a) That the patient may seek physical therapy treatment services from a physical therapy provider of his or her choice who may not necessarily be employed by the medical or podiatry corporation; and, b) If the patient chooses to be treated by an employed PT, any financial interest the referring practitioner has in the corporation. AB 1000 Page 2 2)Permits a person to initiate physical therapy treatment directly from a licensed PT if the treatment is within the PT's scope of practice and all of the following conditions are met: a) If, at any time, the PT has reason to believe that the patient has signs or symptoms of a condition that requires treatment beyond the scope of practice of a PT, or the patient is not progressing toward documented treatment goals as demonstrated by objective, measurable or functional improvement, the PT shall refer the patient to a physician and surgeon, dentist, podiatrist, or chiropractor, as appropriate; b) The PT shall comply with laws relating to his or her title, as specified, and shall disclose to the patient any financial interest he or she has in treating the patient and, if working in a physical therapy corporation, shall comply with existing law regarding financial arrangements for referrals, as specified; c) With the patient's written authorization, the PT shall notify the patient's physician and surgeon, if any, that the PT is treating the patient; and, d) The PT shall not continue treating the patient beyond 45 calendar days or 12 visits, whichever occurs first, without receiving, from a physician and surgeon or a podiatrist, and acting within his or her scope of practice, a dated signature on the PT's plan of care indicating approval. Approval of the PT's plan of care shall include an in-person patient examination and evaluation of the patient's condition and, if indicated, testing by the physician and surgeon or podiatrist. 3)States that the 45 calendar day or 12 visit conditions do not apply to a PT when he or she is only providing wellness physical therapy services to a patient, as specified. 4)Clarifies that this bill does not expand or modify the scope of practice for PTs, including the prohibition on a physical therapist diagnosing a disease. 5)States that this bill does not require a health care service plan or insurer to provide coverage for services rendered to a patient who directly accessed the services of a PT. AB 1000 Page 3 6)Requires a PT to provide the following notice orally and in writing, in at least 14-point type and signed by the patient, to a person initiating physical therapy treatment services directly but before providing those services: "Direct Physical Therapy Treatment Services "You are receiving direct physical therapy treatment services from an individual who is a physical therapist licensed by the Physical Therapy Board of California. "Under California law, you may continue to receive direct physical therapy treatment services for a period of up to 45 calendar days or 12 visits, whichever occurs first, after which time a physical therapist may continue providing you with physical therapy treatment only after receiving, from a person holding a physician and surgeon's certificate issued by the Medical Board of California or by the Osteopathic Medical Board of California, or from a person holding a certificate to practice podiatric medicine from the California Board of Podiatric Medicine and acting within his or her scope of practice, a dated signature on the physical therapist's plan of care indicating approval of the physical therapist's plan of care and that an in-person patient examination and evaluation was conducted by the physician and surgeon or podiatrist. "____________________________ Patient's Signature/Date" 7)States that violation of these provisions constitutes unprofessional conduct. 8)States that existing law which provides for the types of licensees a professional corporation may employ as shareholders, officers, directors, or a professional employee, as specified, does not limit employment by a professional corporation to only those professions specifically designated. 9)Permits any person licensed under the Business and Professions Code (BPC), the Chiropractic Act, or the Osteopathic Act to be employed to render professional services by a professional corporation, as specified. 10)Permits a licensed PT to be a shareholder, officer, or director AB 1000 Page 4 of a medical and podiatric professional corporation, as specified. 11)Makes technical and conforming changes. 12)Makes legislative findings and declarations. FISCAL EFFECT : According to the Assembly Appropriations Committee: 1)Potentially significant costs to the state as well as to other employers and their insurers, including the State Compensation Insurance Fund (SCIF), for worker's compensation claims. These costs are difficult to project, but direct referral to PTs could increase costs for worker's compensation for state employees well in excess of $150,000. In addition, this bill specifies it does not require direct access to PT to be covered by a health insurers or plans. There are instances where an enrollee or insured self-refers outside a health plan's gatekeeper system and, depending on the circumstances, an enrollee could be reimbursed. 2)Potential minor, absorbable fee-supported special fund enforcement costs to the Physical Therapy Board of California. COMMENTS : 1)Purpose of this bill . This bill would allow consumers to have direct access without physician referral to a PT for treatment for up to 45 calendar days or 12 visits, whichever comes first. It also authorizes the creation of a professional physical therapy corporation, and generally permits any healing arts licensee to be a shareholder, officer, director, or professional employee of an authorized professional corporation. AB 1000 aims to represent the reconciled interests of certain physician, orthopedic physician, and physical therapist groups as they relate to direct access to physical therapy and employment in professional corporations. This bill is sponsored by the California Physical Therapy Association. 2)The practice of physical therapy . The Act defines the practice of physical therapy as "the art and science of physical or corrective rehabilitation or of physical or corrective treatment of any bodily or mental condition of any person by the use of the physical, chemical, and other properties of heat, light, water, electricity, sound, massage, and active, passive, and resistive exercise, and shall include physical therapy evaluation, treatment AB 1000 Page 5 planning, instruction and consultative services." Physical therapy also includes the promotion and maintenance of physical fitness to enhance the bodily movement related health and wellness. A PT may evaluate, plan treatment, instruct and consult, but may not diagnose. To obtain a California license, a PT applicant must complete an accredited four-to-six-year college program which includes studies in basic medical sciences and biology, as well as clinical experience. The curriculum focuses on the evaluation and treatment of the heart, lungs, muscles, bones, and the nervous system. A PT applicant must pass both a national physical therapy examination and a California examination on physical therapy laws and regulations to be eligible for licensure. There are currently 26,000 licensed PTs in California. a) Access to physical therapy in California . A PT may work with a patient directly to "promote and maintain physical fitness," but a PT must have a doctor's diagnosis and referral to "perform tissue penetration for the purpose of evaluating neuromuscular performance," on a patient, which is essentially the heart of physical therapy practice. This interpretation of law is based on a 1965 Attorney General Opinion. Medicare covers physical therapy services and requires that a patient be under the care of a physician. Medicare also requires that the services be furnished pursuant to a plan of care, and that the plan be certified and recertified periodically by a physician (usually every 30 days). b) Direct access to physical therapy in other states. According to the Federation of State Physical Therapy Boards (FSPTB), there are 17 jurisdictions that have unlimited direct access to physical therapy, 30 jurisdictions with limited direct access and 6 jurisdictions that have no direct access. Kansas is an example of limited direct access, permitting PTs to evaluate and treat patients for no more than 30 consecutive calendar days without a referral to a physician or other specified health care provider. This bill would make California a limited direct access state, allowing patients to visit a PT for 45 days or 12 visits, whichever comes first, AB 1000 Page 6 before requiring an in-person examination by a physician. The rationale for limited direct access is that any condition serious enough that it cannot be resolved within 45 days or 12 visits warrants examination and possible diagnosis by a physician to rule out more serious problems. 3)Professional corporations . A professional corporation is an organization made up primarily of individuals of the same trade or profession. The Moscone-Knox Professional Corporations Act of 1968 authorized the formation of professional corporations to obtain certain benefits of the corporate form of doing business, such as limited legal liability. At that time, only medical, law and dental professional corporations were envisioned. There are now 15 authorized healing arts professional corporations. Current law specifies which healing arts licensees may be shareholders, officers, directors or professional employees of professional corporations controlled by a differing profession so long as the sum of all shares owned by those differently licensed persons does not exceed 49% of the total number of shares of the professional corporation. For example, a professional medical corporation may have up to 49% of its shares owned by any of 11 different healing arts professions (such as registered nurses or acupuncturists) as long as at least 51% of shares are owned by licensed physicians. This bill would also authorize the creation of a PT corporation, allow any person licensed under BPC, the Chiropractic Act, or the Osteopathic Act to be employed to render professional services under the 16 authorized types of professional corporations, and permit a PT to be a shareholder, officer, or director of a medical and podiatric professional corporation. a) Medical corporations' employment of PTs . PTs are not currently included in the list of healing arts professionals authorized to be shareholders, officers, directors or professional employees of medical corporations. Prior to 2010, PTs worked in medical corporations under guidance from the Physical Therapy Board that the professions designated in statute were not exhaustive, and that therefore PTs could practice within a professional medical corporation. However, on September 29, 2010, Legislative Counsel issued a written opinion that PTs could not work in a medical corporation because they were not specifically included among the permissible healing arts licensees under the Moscone-Knox AB 1000 Page 7 Act. Legislative Counsel viewed medical corporations' employment of PTs as related to the ban on the corporate practice of medicine, which was intended to protect the public from inappropriate corporate influence over professional health care decision-making. The opinion further indicated that since the Act provides that it is unprofessional conduct to violate, attempt to violate, aid, abet, or conspire to violate any provisions of the Act itself, the Moscone-Knox Act, or any related regulations, physical therapists employed by medical corporations could be subject to discipline by PTB. In the same manner, since a medical corporation is not authorized to employ PTs to provide physical therapy services, a medical corporation doing so would be unlawfully engaging in the practice of physical therapy. On February 28, 2011, the Department of Consumer Affairs (DCA) issued an opinion on the same issue and reached the same conclusion as the Legislative Counsel. SB 543 (Steinberg and Price) of 2012 enacted a stopgap measure to temporarily allow continued employment of PTs by medical corporations until a legislative fix could be attained. SB 543 prohibited PTB, until January 1, 2013, from disciplining any PT for providing physical therapy services as a professional employee of a medical corporation, podiatric medical corporation or chiropractic corporation. However, no PTs have been disciplined since January 1, 2013 for such a violation due to lack of PTB resources. b) Prohibitions on self-referral . California has banned healing arts professionals from receiving compensation for referring patients for health care services since the early 1990s. These provisions were enacted to ensure medical professionals make judgments about rendering services uninfluenced by their own financial interests, as well as to protect consumers from fraud or unnecessary and excessive health care expenses. Current law permits the payment or receipt of consideration for services other than the referral of patients as long as the consideration is based on a percentage of gross revenue or similar type of contractual arrangement and is commensurate with the value of the services rendered. For example, a AB 1000 Page 8 physician may own a medical corporation and employ a PT. The physician may refer patients to that PT and receive payment for the PT's services as an owner of a corporation, but the payment must be based on the value of the PT's care, not for the referral of the patient to the PT. This bill reaffirms that all healthcare providers must adhere to existing law barring compensation for referral, and requires a referring provider to disclose any financial relationship he or she may have in making a referral to a particular PT. Analysis Prepared by : Sarah Huchel / B.,P. & C.P. / (916) 319-3301 FN: 0000867