BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1000|
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THIRD READING
Bill No: AB 1000
Author: Wieckowski (D) and Maienschein (R)
Amended: 9/3/13 in Senate
Vote: 21
SENATE BUSINESS, PROF. & ECON. DEVELOP. COMM. : 8-0, 7/8/13
AYES: Lieu, Emmerson, Block, Corbett, Galgiani, Hill, Padilla,
Wyland
NO VOTE RECORDED: Hernandez, Yee
SENATE APPROPRIATIONS COMMITTEE : 6-0, 8/30/13
AYES: de Leon, Gaines, Hill, Lara, Padilla, Steinberg
NO VOTE RECORDED: Walters
ASSEMBLY FLOOR : 77-0, 5/29/13 - See last page for vote
SUBJECT : Physical therapists: direct access to services:
professional
corporations
SOURCE : California Physical Therapy Association
DIGEST : This bill allows patients to self-refer to a physical
therapist (PT) and receive treatment for 45 calendar days or 12
visits, whichever comes first, before being seen by a physician
and receiving sign off on the treatment plan initiated by a PT.
Also permits specified health professionals to be employed by a
medical corporation.
ANALYSIS :
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Existing law:
1. Establishes the Physical Therapy Act (PT Act), which is
enforced by the Physical Therapy Board of California (PTB),
to license and regulate the practice of PTs.
2. Defines 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 planning, instruction and
consultative services.
3. Provides that the practice of physical therapy includes the
promotion and maintenance of physical fitness to enhance the
bodily movement related health and wellness of individuals
through the use of physical therapy interventions.
4. Specifies that the use of roentgen rays and radioactive
materials, for diagnostic and therapeutic purposes, and the
use of electricity for surgical purposes, including
cauterization, are not authorized under the term "physical
therapy."
5. Indicates that a physical therapy license does not authorize
the diagnosis of disease.
6. Provides that an applicant for a physical therapy license
must be a graduate of a professional degree program of an
accredited postsecondary institution(s) approved by the PTB,
and must complete academic coursework and clinical internship
in physical therapy.
7. Permits a PT to perform tissue penetration for the purpose of
evaluating neuromuscular performance upon specified
authorization of a physician and surgeon, but prohibits the
PT from developing or making diagnostic or prognostic
interpretations from the data obtained.
8. Establishes the Moscone-Knox Professional Corporation Act
which regulates the formation and operation of professional
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corporations, and defines a professional corporation as a
corporation organized under the general corporation law, as
specified, or a corporation that is engaged in rendering
professional services in a single profession.
9. Specifies in the Moscone-Knox Professional Corporation Act
that certain licensed persons may be shareholders, officers,
directors or professional employees of professional
corporations controlled by licensed persons of a different
profession so long as the sum of all shares owned by those
certain licensed persons does not exceed 49% of the total
number of shares of the professional corporation, and so long
as the number of those certain licensed persons owning shares
in the professional corporation does not exceed the number of
persons licensed by the governmental agency regulating the
designated professional corporation.
10.Permits the payment or receipt of consideration for services
other than the referral of patients which is based on a
percentage of gross revenue or similar type of contractual
arrangement as long as the consideration is commensurate with
the value of the services rendered or with the fair rental
value of any premises or equipment leased or provided by the
recipient to the payer.
11.Prohibits a professional corporation from forming that may
violate any law or any applicable rules and regulations
relating to fee splitting, kickbacks or other similar
practices by physicians and surgeons or psychologists,
including, but not limited to Business and Professions Code
(BPC) Section 650. Also provides that a violation of any
such provision is grounds for the suspension or revocation of
the certificate of registration of the professional
corporation.
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 of the following to the patient orally and in writing,
in a least 14-point type and signed by the patient:
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A. That the patient may seek physical therapy treatment
services from a physical therapy provider of his/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.
2. Exempts a physician and surgeon, podiatrist or other
referring practitioner, who is in a medical group with a
healthcare service plan who exclusively contracts to provide
professional medical services for its enrollees, from
providing the aforementioned notice.
3. Permits a person to initiate physical therapy treatment
directly from a licensed PT if the treatment is within the
scope of practice of PTs 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/her
title, as specified, and shall disclose to the patient
any financial interest he/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
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podiatrist, and acting within his/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.
4. States that the 45 calendar day or 12 visit conditions do not
apply to a PT when he/she is only providing wellness physical
therapy services to a patient, as specified.
5. 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 nor does it restrict or alter
the scope of practice of any other health care professional.
6. States that nothing in this bill shall be construed to
require a health care service plan, insurer, workers'
compensation insurance plan, employer, or state program to
provide coverage for direct access to treatment by a PT.
7. Requires a PT to provide the following notice to a person
initiating physical therapy treatment services directly but
before providing those services, orally and in writing, in at
least 14-point type and signed by the patient:
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/her scope of practice, a dated signature on the physical
therapist's plan of care indicating approval of the physical
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therapist's plan of care and that an in-person patient
examination and evaluation was conducted by the physician and
surgeon or podiatrist."
8. States that violation of these provisions constitutes
unprofessional conduct.
9. 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, and does not limit employment by a professional
corporation to only those professions specifically
designated.
10.Adds licensed physical therapists to the list of health arts
practitioners who may be shareholders, officers or directors
of a medical corporation or a podiatric medical corporation.
11.Permits any person licensed under the BPC, the Chiropractic
Act, or the Osteopathic Act to be employed to render
professional services by a professional corporation, as
specified.
Background
The PT Act . The PT Act provides that a physical therapy license
does not authorize the diagnosis of disease. Additionally, the
PT Act indicates that a PT, upon specified authorization of a
physician and surgeon, may perform tissue penetration for the
purpose of evaluating neuromuscular performance as part of the
practice of physical therapy, provided that the PT is certified
by the PTB to perform the tissue penetration and evaluation and
the PT does not develop or make diagnostic or prognostic
interpretations of data produced. To obtain licensure, a
physical therapy applicant must be a graduate of a professional
degree program of an accredited postsecondary institution(s)
approved by the PTB, and must complete academic coursework and
clinical internship in physical therapy.
1965 Attorney General (AG) Opinion on diagnosis . To access
physical therapy treatment, an initial diagnosis for a medical
condition must be made by a physician and surgeon or another
practitioner who is authorized to diagnose. This current
practice was echoed by a 1965 AG Opinion which reviewed the
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validity of a statute that allowed a PT to conduct specified
methods of treatment but prohibits him/her from making a
diagnosis. The issue was whether this statute was invalid
because it was indefinite and uncertain. In upholding the
statute, the AG Opinion indicated that the practice of medicine
consists of three parts: diagnosis, prescription and treatment.
The AG Opinion pointed out that although it is impossible to
treat a bodily or mental condition without first ascertaining
the condition, this does not imply that the one rendering the
treatment must also have performed the diagnosis. However, the
AG Opinion was clear that a licensed PT is not authorized to
diagnose, and that the AG perceived no conflicts, ambiguities or
uncertainties in limiting the practice of licensed PT to
treating ailments diagnosed by those found to be qualified and
authorized by law to diagnose. Therefore, a licensed PT may
only treat an ailment basing his treatment upon a physician's
diagnosis.
Coverage of physical therapy services . The federal Medicare
Program covers physical therapy services but limits how much is
covered for medically-necessary outpatient physical therapy.
The outpatient therapy limits for 2011 were $1,870 for physical
therapy and speech language pathology combined. There are
certain exceptions to these limits if the services are medically
necessary. Medicare coverage for physical therapy requires that
a patient must be under the care of a physician, the services
must be furnished under a plan of care and the plan of care must
be certified/recertified periodically by a physician (usually
every 30 days).
Patient referrals . In 1989, the Ethics in Patient Referrals Act
(Stark Law) was enacted to prohibit referrals by a physician to
a clinical laboratory in which the physician had a financial
interest. A 1994 amendment included other services and
equipment such as physical therapy. 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.
In Office Ancillary Services (IOAS) exception . Despite the
statutory ban on receiving compensation for self-referral, there
are several studies that assert physicians have abused the IOAS
exception of the Ethics in Patient Referrals Act. The IOAS
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exception allows physicians to bill the Medicare program for
self-referred designated health services in many circumstances.
Although proponents of integrated clinical services models say
that the IOAS improves efficiency and continuity of care,
critics argue that the IOAS creates financial incentives for
physicians to increase the volume of ancillary services ordered.
Recent reports including the 2013 Kaiser Health Foundation
Recommendations, the Government Accountability Office Study and
a study cited in the 2013 Health Affairs Journal raised
questions about physicians' incentives to refer for profit.
This year, the Simpson-Bowles Federal Deficit Commission
recommended closing physician self-referral loopholes. Further,
in April 2013, President Obama's proposed budget recommended
banning payment for physician-owned physical therapy, imaging
and radiation therapy services due to information from the
Center for Medicare Services which cited ineffectiveness,
substandard care and the potential to save the nation $6.1
billion if the referral for profit practice is banned.
Billing practices . There have been concerns raised regarding
physicians who submitted improper billing for physical therapy
services. In 2002, the Office of Inspector General examined
Medicare payments for physical therapy services and submitted a
report to the United States Department of Health and Human
Services. The report indicated, "Based on a simple random
sample of 70 physical therapy line items billed by physicians
and rendered in the first 6 months of 2002, we found that 91
percent of physical therapy [services] billed by physicians and
allowed by Medicare did not meet program requirements, resulting
in $136 million in improper payments."
Professional corporations . A professional corporation is an
organization made up 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.
Existing law specifies which healing arts licensees may be
shareholders, officers, directors or professional employees of
professional corporations controlled by a differing profession
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so long as the sum of all shares owned by those licensed persons
does not exceed 49% of the total number of shares of the
professional corporation.
Medical corporations . 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 PT Board that the
designated professions in statute were not exhaustive, and that
therefore PTs could practice within a professional medical
corporation.
2010 Legislative Counsel Opinion on medical corporations'
employment of PTs . 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
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, PTs 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.
2011 Department of Consumer Affairs (DCA) Opinion on medical
corporations' employment of PTs . On February 28, 2011, DCA
issued an Opinion on the same issue and reached the same
conclusion as Legislative Counsel did in the 2010 Opinion.
Additionally, DCA pointed out that since naturopathic doctor
corporations includes PTs in the list of licensed
professionals who could serve as shareholders, directors,
officers or professional employees of a naturopathic
corporations, only naturopathic corporations are authorized to
employ PTs.
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Other states that provide direct physical therapy access .
Unlike California, there are several other states that allow for
patients to directly access physical therapy treatment.
According to the Federation of State PTBs, there are 17
jurisdictions that have unlimited direct access to physical
therapy, 30 jurisdictions with limited direct access and six
jurisdictions that have no direct access. Additionally, there
are states that require notification to physicians and surgeons
while providing direct access.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee:
Minor costs to update existing regulations by the PTB
(Physical Therapy Fund). The PTB indicates that it will need
to make minor updates to existing regulations, which can be
performed as part of ongoing updates to existing regulations
at minor additional cost.
No additional costs to Medi-Cal or California Public
Employees' Retirement System (CalPERS) health plans (various
funds). This bill specifically provides that "direct access"
to physical therapy services does not obligate health plans or
health insurers to provide coverage for such services.
Therefore, this bill will not require Medi-Cal managed care
plans or CalPERS health plans to pay for such services. In
addition, regulations governing Medi-Cal fee for service
require enrollees to gain prior authorization for physical
therapy services, which must also be prescribed by a licensed
health care practitioner.
Unknown costs to state agencies through the State Compensation
Insurance Fund (SCIF) (various funds). Like other employers
in the state, state agencies purchase insurance for
workplace-related injuries through the SCIF (referred to as
workers' compensation). This bill does not specifically
exempt the SCIF from providing coverage for direct access to
physical therapy services. In 2012, state agencies paid about
$12 million for physical therapy services under this system.
The extent to which additional services would be provided
under this bill is unknown, but even a modest increase in
demand for services could increase costs to state agencies by
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hundreds of thousands to millions of dollars annually.
SUPPORT : (Verified 8/30/13)
California Physical Therapy Association (source)
California Medical Association
California Orthopaedic Association
Mount St. Mary's College Doctor of Physical Therapy Program
OPPOSITION : (Verified 8/30/13)
California Association of Physician Groups
California Board of Chiropractic Examiners
California Chiropractic Association
Independent Physical Therapists of California
Physical Therapy Business Alliance
ARGUMENTS IN SUPPORT : According to the author, "Direct access
to physical therapist services will help streamline health care
delivery in California. In a time of severe physician shortage,
patients with chronic conditions will not be taking up valuable
time of or incurring the cost of seeing additional healthcare
providers." In addition, the author notes, "Clarification of
corporate practice is necessary to allow full employment
opportunities to licensed professionals by professional
corporations. This will provide certainty for health care
entrepreneurs who choose to use incorporation as the manner in
which they organize their business."
The bill's sponsor, the California Physical Therapy Association
(CPTA), writes that "CPTA continues to disagree with some
elements of the amended bill, in particular the corporate
employment issue and the required physician visit: however, on
the whole, AB 1000 represents an important step forward in
ensuring that patients can directly access physical therapist
services. Direct access to physical therapist services will
help streamline health care delivery in California?and would
grant the same rights to California patients that patients in
other states already enjoy."
The California Medical Association states, "AB 1000 is a common
sense measure that provides an appropriate amount of direct
access to consumers for physical therapists, protects patient
safety, preserves the status of patient care and protects the
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jobs of hundreds of health care practitioners."
The California Orthopaedic Association writes, "The bill will
address the issue of direct access to physical therapy treatment
services, and also clarify that any person licensed under the
Business and Professions Code, Osteopathic Act or Chiropractic
Act, may be employed by a professional corporation."
The Doctor of Physical Therapy Program at Mount St. Mary's
College points out, "At this moment graduates of California
physical therapy programs can move to 36 other states and
practice with direct access with no change in licensure
requirements. Graduates of California physical therapy programs
should be able to live in California and practice with direct
access."
ARGUMENTS IN OPPOSITION : The Independent Physical Therapists
of California state, "Our group is very concerned with access to
cost-effective health care and consumer protection. We are also
concerned with avoidable conflicts of interest in healthcare and
taxpayer protection, particularly when considering health care
expenditures are 18% of gross domestic product?It is not legal
for California medical corporations to employ physical
therapists. Nevertheless, our research indicates 200-250
physical therapists are currently employed by physician-owned
physical therapy services (POPTS) in California?If POPTS real
motive was to employ PTs in order to improve coordination of
care with physical therapists, then they would allow their
physical therapists to continue working at the same location in
a different legal business model without receiving financial
remuneration from their professional services."
The Physical Therapy Business Alliance states, "?it is widely
known that the proverbial health care 'train gets off the track'
rather quickly when patients with musculoskeletal conditions
initially access care via a physician who might be inclined to
order expensive tests, drugs, surgery, and imaging that patients
frequently may not need, instead of directly accessing lower
cost, high quality physical therapist services?We should not
underestimate the trickle down effects of agreeing to the
legalization of physician self-referral in California. It would
send the wrong signal during a pivotal time of health care
reform?Our point is not to suggest that direct access (and more
importantly, education to change consumer behavior) is not a
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priority?it very much is! However, pursuing it at any expense
(in this case, the legalization of physician self-referral)
makes little sense."
ASSEMBLY FLOOR : 77-0, 5/29/13
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown,
Buchanan, Ian Calderon, Campos, Chau, Chávez, Chesbro, Conway,
Cooley, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,
Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon,
Gorell, Gray, Grove, Hagman, Hall, Harkey, Roger Hernández,
Jones, Jones-Sawyer, Levine, Linder, Logue, Lowenthal,
Maienschein, Mansoor, Medina, Melendez, Mitchell, Morrell,
Mullin, Muratsuchi, Nazarian, Nestande, Olsen, Patterson,
Perea, V. Manuel Pérez, Quirk, Quirk-Silva, Rendon, Salas,
Skinner, Stone, Ting, Wagner, Waldron, Weber, Wieckowski,
Wilk, Williams, Yamada, John A. Pérez
NO VOTE RECORDED: Holden, Pan, Vacancy
MW:d 9/3/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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