BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                AB 1000
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        ASSEMBLY THIRD READING
        AB 1000 (Wieckowski and Maienschein)
        As Amended  May 8, 2013
        Majority vote 

         BUSINESS & PROFESSIONS  12-0    APPROPRIATIONS      16-0        
         
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        |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      |
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         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.









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        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.









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        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  








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          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  








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          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,  








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             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  








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             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  








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             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 


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