Bill Passes CA Assembly Which Would Legalize Medical 'Kickbacks' According to Independent Physical Therapists of California (iPT of CA)

Share Article

iPT Opposes AB 1000 as Bill of Political Expediency, Running Counter to the Recommendations of President Obama, Simpson-Bowles Deficit Commission, and Federal Health Care Experts

We were told by CPTA that if we do not submit to a trade which sells out the patients of California it will be political suicide for CPTA.

California's Moscone-Knox Professional Corporation Act was enacted in 1968 and has stood the test of time assuring that professional corporations were only owned by people who were qualified/licensed in that specific profession. It meant that decisions regarding the provision and management of those services were under the control of the respective profession and has served as an important prelude to protecting California consumers. According to Dr. Paul Gaspar, physical therapist and President of the Independent Physical Therapists of California, that protection may be in jeopardy in the near future because a bill which would 'gut' the Moscone Knox Act,California Assembly Bill 1000 (AB 1000), recently passed the Assembly 77-0. He adds that AB 1000, authored by Assembly Members Bob Wieckowski and Brian Maienschien, would allow any health care professional corporation to employ any health care professional listed under California's Professional Corporations Code. Of particular concern is that physicians would be allowed to employ physical therapists and other practitioners and profit from writing patients prescriptions for their services, a practice known as self-referral for profit.

Dr. Gaspar notes that the California Medical Association (CMA) has sponsored legislation each of the last four years to legalize self-referral for profit, which he claims is obviously an avoidable conflict of interest. In 2009-2010 legislative session, AB 1152 (Anderson) was soundly defeated in the Senate Business and Professions Committee. In the 2011-2012 session, AB 783 (Hayashi) was defeated twice in the same committee, killing the bill.

In April 2013, with an eye on controlling rising medical costs and implementing the Patient Protection and Affordable Care Act (PPACA),President Obama's 2014 budget recommended banning Medicare payment for physician self-referral to physical therapy, imaging, radiation, and radiation oncology services they own. His budget projected a cost savings of $6.1 billion if this policy was implemented. Similarly, in April 2013, the Simpson-Bowles Bipartisan Federal Deficit Commission recommended narrowing the ancillary services self-referral loopholes in the Federal Anti-kickback Statutes, known as the Stark Laws. Their recommendations was made specifically under a section entitled, "Reducing Medicare Fraud and Abuse." Lastly, in April 2013, the Bipartisan Policy Center (BPC), chaired by Former Senators Tom Daschle and Bill Frist, MD, recommended closing the in-office ancillary service loopholes, which allow physicians to self-refer for profit in their report entitled "A Bipartisan Rx for Patient-Centered Care and System-wide Cost Containment." Dr. Gaspar points to the fact that the three aforementioned independent reports were made following many thousands of hours and months of study by expert health care policy staff at the Center for Medicare Services, Congress, and in the private sector. iPT congratulates these experts on their recommendations, which were based on strong evidence and which, if enacted, would curtail widespread national fraud and abuse occurring when physicians refer patients to their own physical therapy and other services for profit incentives. iPT also notes that California is in the fortunate position of already having strong law preventing referral for profit- the Moscone-Knox law.

Consequently, iPT of California opposes AB 1000 and is very disappointed that the California Physical Therapy Association (CPTA) sponsors the bill, as evidenced by the California legislature's website on May 8, 2013 ( According to Dr. Jeff Fairley, Public Policy Director for iPT, CPTA has previously opposed and killed all prior physician self-referral bills introduced by the CMA, citing evidence that those business arrangements subject consumers to fraud and abuse, as well as subjecting patients to substandard care. He clarifies, "This year, CPTA is sponsoring AB 1000 because it concedes the referral for profit issue, but allows physical therapists a limited ability to treat patients without a doctor's prescription." According to Dr. Fairley, "We physical therapists are being pressured and told that we have no choice but to sponsor this bill which legalizes substandard care. We were told by CPTA that if we do not submit to a trade, which sells out the patients of California, it will be political suicide for CPTA."

Despite that pressure, according to Dr. Fairley, hundreds of individual physical therapists surveyed in CPTA's Private Practice Group, San Joaquin District, San Diego District, and the iPT of California seem very concerned about legalizing referral for profit 'kickbacks'. The results of all surveys showed that practicing physical therapists oppose AB 1000 by a wide margin. Nevertheless, he claims practicing physical therapists and patients may have little say in AB 1000 according to iPT. Dr. Fairley senses, "This deal was cooked up by powerful special interests with minimal regard for consumers and patients or the effect on working physical therapists. In the real world, the negatives of referral for profit abuse far outweigh the positives of limited patient direct access to physical therapy, which we already have in California. Why should California run counter to the experts on health care policy and open the floodgates for heath care fraud and abuse?"

AB 1000 is headed for the Senate Business and Professions Committee within the next month. That committee is chaired by Senator Ted Lieu. Also serving on the committee are Senators Bill Emmerson, Cathleen Galgiani, Jerry Hill, Marty Block, Mark Wyland, Alex Padilla, Ellen Corbett, Leland Yee, and Ed Hernandez.

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Dr. Jeff Fairley, DPT, OCS, FAAOMPT
Independent Physical Therapists of California
Email >
Visit website