POPTS Battle Continues with Proposed Rule Change
POPTS Battle Continues with Proposed Rule Change

Jay Jone, Executive Director Southern Physical Rehab Network
A 2004 ruling by South Carolina's attorney general has rekindled an ongoing debate between private practice physical therapists and physician-owned physical therapy services (POPTS) in Alabama. After years of efforts by the Alabama Board of Physical Therapy to have self-referrals by POPTS declared a "conflict of interest," the board has again proposed an amendment to rule 700-X-3-.02 that would prohibit a physical therapist from accepting a referral from a physician with whom the therapist shares a financial interest. The proposed rule states that to do so would constitute "unprofessional conduct."

The battle over POPTS has been going on since the early 1990s. After a number of unsuccessful legislative efforts to control physical therapy self-referrals since then, the Alabama Board submitted another "anti-referral conflict of interest" rule on June 20, 2006, following the issuance of the South Carolina attorney general's opinion. According to Alabama Assistant Attorney General Stephen Dodd, that opinion stated that an "anti-fee splitting" statute enacted by the South Carolina Legislature in 1998 — because it included a reference to "wages" rather than just "fees" or "commissions" — could be enforced to prevent POPTS employment activities there.

Wiley Christian, chairman of the Alabama Board of Physical Therapy, said the board has continued to get complaints from licensees about the situation. "In this case, it was brought to us as a proliferation of an existing problem," Christian said. "Until something is done, it will keep rearing its ugly head."

On September 19th, the board held a meeting at which both sides presented their arguments. Topics revolved around issues related to conflict of interest problems, loss of consumer choice, and the possibility of overutilization causing economic harm to consumers. "We wanted that final meeting," Christian said, "to determine whether or not we should proceed." After hearing from all involved, the board voted unanimously in favor of the amendment. At this point, the rule change goes to the legislature, where a final decision will be made.

Conflict of Interest

Proponents of the proposed ruling say the issue is basically a financial one because physical therapists in Alabama rely 100 percent on referrals from physicians for their business. "We rely on the physician to make referrals to us, so if they open their own [PT] clinics, those referrals go away completely," said Jay Jones, executive director of Southern Physical Rehab Network. "That can jeopardize private practice entrepreneurs."

David Morris, PT, MS, PhD, president of the Alabama Physical Therapy Association and an associate professor in UAB's department of physical therapy, said this conflict of interest could also compromise the best interest of the patients in POPTS clinics, but Jason Biddy and Bill Huber of Orthopaedic Specialists of Alabama disagree. Huber, director of rehab, said throughout his 30-year physical therapy career he has been involved with POPTS practices in some way. "I feel this is one of the best opportunities for physical therapists, to be part of an integrated team and to have a close working relationship with physicians," he said. "Another advantage is the greater effectiveness and efficiency in treating patients." Biddy, vice president and chief operating officer, said they get positive feedback from their patients. "They tell us they enjoy being just minutes away from the physician who did their surgery," he said.

Loss of Consumer Choice

Huber disagrees with the argument raised by the Alabama Board of Physical Therapy that POPTS have eliminated the opportunity for their patients to go to other clinics. "If it's more convenient for the patient to go to another clinic for therapy, we go out of our way to find one. We're not eliminating that option," he said.

Morris believes the consumer's right to choose a physical therapist is limited by POPTS. "Since no other option is offered, patients may not recognize a loss of choice even exists. Observation of the fiduciary responsibility between the physician and patient is vital to preserving both consumer choice and the autonomous practice of the physical therapist."

Biddy said there are still markets outside of POPTS practices where physical therapists can be successful. "A lot of therapists oppose the rule change because our doctors refer to them on a regular basis," he said. "We have patients from a number of markets where we have no PT services, so we refer to private practice physical therapists in those areas."


Harm to Consumers

Morris cites studies by health policy researchers that demonstrate overutilization arising from the conflict of interest in physical therapy referrals. He said a study in the Journal of the American Medical Association documented greater utilization of physical therapy services by the POPTS. A Florida study found the POPTS physical therapy facilities average 62 percent more visits per full-time equivalent licensed physical therapist than do non-POPTS facilities. "These services rendered an average of 50 percent more visits per year than their private practice counterparts," Morris said. "These facts illustrate an economic and financial impact to consumers."

POPTS supporters say their arrangement results in lower costs because cost-conscious physicians control the frequency and duration of treatments. "We have benchmarks that we use to measure in our profession and our referral of care numbers are below the benchmark because we get patients in and out," Huber said. "The board thinks that because we're in a physician's office there could be overutilization. We actually have underutilization because our arrangement creates a better situation for the patient. With our team approach, we can better adjust the treatment plan such as setting up a home treatment program."

Making the Decision

Biddy said unprofessional behavior can result in practices on both sides of the issue, and opponents of the ruling feel that the proposed change punishes all POPTS, not just the wrongdoers. "We have plenty of checks and balances on us in our profession," he said. "Identify the practices that are doing wrong and punish them. Don't create a rule to punish us all."

Christian said it is not the board's wish to harm anyone. "However, in assessing the potential harm that may affect the public and the practice of physical therapy, a tough and difficult decision has to be made," he said. "There is no logical motive to alienate the referral relationship of physicians and the state of Alabama. Physical therapists respect and admire the contributions of physicians and seek to enjoy healthy professional and personal relationships whenever possible."

October 2006

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