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Sylvia McCandless, owner of McCandless Physical Therapy in Jackson, Miss., working with a patient.

An exemption in the Stark Laws that allows physicians to offer physical therapy services in their offices interferes with patient choice and is hurting private practice, some physical therapists say.

The main problem is that the Stark Laws cannot be enforced, said Steve Forbush, president of the Arkansas Physical Therapy Association.

"I believe there are so many diluting exemptions in the federal laws at this time that the Stark Laws do not have any clout on the state or national level and can't really be enforced," Forbush said. "We do have a rather strict corporate law that may supercede the Stark Laws in the corporate arena in Arkansas that I feel is not being enforced well enough at present, has not been really tested outside of the veterinary setting, and something that might be good to enforce more effectively."

Forbush has been a physical therapist for about 30 years. He worked in a private practice setting for himself from 1984-2001, then for others from 2001 until present. He no longer owns a private practice but performs through a personal faculty clinical service for the University of Central Arkansas, where he is employed as assistant professor of physical therapy.

Stark Laws are named for U.S. Congressman Pete Stark, who sponsored the legislation in the Omnibus Budget Reconciliation Act of 1989 which barred self-referrals for clinical laboratory services under the Medicare program, effective Jan. 1, 1992. This provision is now known as "Stark I." The law included exceptions to the ban in order to accommodate legitimate business arrangements. The Omnibus Budget Reconciliation Act of 1993, known as "Stark II," expanded the restriction to a range of additional health services and applied it to both Medicare and Medicaid. Passage of "Stark II" raised concerns among some provider groups, including physical therapists.

With the exemptions of rural practices and physician-owned services that are "need based," there is minimal effect of the Stark Laws on PT practice, Forbush said.

"However, if exemptions were not placed on the laws and the original intent of the laws continued, there could be great positive effect on the PT practices in this state and all other states," Forbush said. "Pete Stark has been asked to bring forth a 'Stark III' and I believe he has stated he will not go down that road again."

Sylvia McCandless, president of the Mississippi Physical Therapy Association, takes a stronger view.

"It's killing private practices," McCandless said, adding that her Jackson, Miss., practice is down about 30 percent. "It prevents the patient from having a choice about where they go. The Stark act was developed in the '70s when dentists and doctors had therapists in their offices. Now, there's a big push for physicians to have in-office therapy. A lot of times, the consumer is not aware that their physician is making money off these services. One profession should not own another."

The American Physical Therapy Association has been fighting the In-Office Ancillary Services Exemption for years. The exemption allows physicians to own and refer to the services that they own.

"The current loopholes in the Stark regulations allowing physicians to employ/own PT have had a devastating effect on the PT profession, as well as restricting patient choice and increasing healthcare costs," said Justin Elliott, associate director, State Government Affairs, for the American Physical Therapy Association in Alexandria, Va. "Some physicians have used the loopholes to exploit PT for their own profit."

Physicians and their legal representatives argue that providing PT to their patients is a legitimate right.

"Physicians ought to be able to employ a physical therapist for rehabilitation services," said Steve Keene, general counsel for the North Carolina Medical Society in Raleigh. "We think it's good for patient care. We would oppose any law that prevents physicians from employing physical therapists."

Little Rock medical malpractice legal team Duncan Firm, P.A., says on its Web site that it specializes in anti-kickback and Stark violations, but attorneys did not answer requests for interviews.

The American Physical Therapy Association issued a White Paper in 2007 that defines the issue:

"The term 'referral for profit,' in the context of physical therapy practice, describes a financial relationship in which a physician refers patients for physical therapy treatment and derives a financial benefit from the referral. In the most common referral-for-profit arrangements, physicians have an ownership interest in the physical therapy practice to which they refer, known as physician-owned physical therapy services, or POPTS.

"The American Physical Therapy Association has long held that POPTS present conflicts of interest for health care providers, diminishing patients' right to choose a physical therapist, and could subject patients to unnecessary inconvenience, expense and treatment. In a January 2005 position paper, APTA restated its longstanding opposition to POPTS and support for legislative and regulatory measures at the state and federal levels to ban the practice."

The APTA conducted a survey in February 2007 of members of its private practice section asking for feedback on their experience with POPTS. Letters and e-mails cited lots of patient choice and superfluous treatment issues, shoddy care and unqualified staff at POPTS establishments, as well as in overall loss of referrals for traditional private physical therapy clinics, according to the White Paper, which added that nearly six percent of the physical therapists who responded to a 2004 survey reported receiving threats of withheld referrals from physician-owned practices. More than 85 percent of the responding therapists said the threats were made to induce the sale of their practices to the physicians.

An in-office physical therapy service can add hundreds of thousands of dollars in annual revenue to a medical practice, and take business from private physical therapy practices, the APTA maintains.

"We are seeing abusive situations where physicians are using physical therapy to boost their profits, or where the patient really doesn't need the service," said Roshunda Drummond-Dye, associate director of federal regulatory affairs for the APTA. "We have been seeing a lot of abuse from a national standpoint. (The federal government is) hearing from occupational therapists, people in medical imaging, pathology and other areas. It is a growing problem. We've put forth several proposals to the federal government to take out physical therapy from the Stark Laws In-Office Ancillary Services Exception."

Forbush said the Arkansas Physical Therapy Association does not intend to do anything to enforce a law that has minimal clout or substance after all of the revisions.

"The Stark Laws really do not have any substance on a state level and are intended for national consideration," Forbush said. "State laws on fee-splitting and kickbacks (based on Stark Law ruling) are in place but also have many exemptions which make enforcement difficult. As mentioned earlier, the corporate laws in this state mention restrictions on the ownership of licensed individuals by corporations and have restrictions which might be better enforced. This would be an avenue of interest to any of the licensing board on the state level. I would expect any action taken would come from a licensure board as I believe has happened in the veterinary medicine field."

Tags:

Arkansas Physical Therapy Association, Mississippi Physical Therapy Association, Roshunda Drummond-Dye, Stark Laws, Steve Forbush, Sylvia McCandless

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