Physical Therapy Referral for Profit Arrangements create a potential conflict of interest in which the best interest of the patient may be compromised for financial gain when physicians own physical therapy practices. For example, the physician may refer the patient for physical therapy services that are not needed - or unnecessarily lengthen the period of treatment. There is additionally the issue of self-referral to physical therapy services offered within the physician\'s office suite. This practice limits the patient\'s right to choose his or her physical therapist. The patient may be unaware of this loss in choice because there are no other options offered. Observation of the fiduciary responsibility between the physician and patient is vital to preserving patient choice. Health policy researchers have provided data demonstrating specific harms from conflict of interest in physical therapy referrals to physician owned services. These studies indicate that physical therapy referral for profit arrangements have a significant adverse economic impact on patients and third-party payers. In a study examining the costs and rates of use in California Workers\' Compensation system, it was reported that physical therapy was initiated 2.3 times more often by physicians in self-referral relationships than by those referring to independent practices. Another study documented higher utilization rates and higher costs associated with services provided in joint venture clinics, rendering on average about 50 percent more visits per year than their counterparts who did not own physical therapy services. Real and potential conflicts of interest among physicians with financial interests in entities to which they refer were recognized by members of Congress in the 1980s. The correlation between financial ties and increased utilization was the impetus for Congress to enact the “Stark I” law in 1989, preventing Medicare from paying for clinical laboratory services if the referring physician had a financial interest in the facility. In 1993, Congress enacted the “Stark II” law, which expanded the list of services to which the laws applies to include physical therapy services. Specifically, the law states that if a physician or a member of a physician’s immediate family has a financial relationship with a health care entity, the physician may not make referrals to that entity for the furnishing of designated health services (including physical therapy services) under the Medicare program, unless an exception applies. After the law was enacted, the Health Care Financing Administration (now the Centers for Medicare and Medicaid Services) issued final regulations implementing the law on January 4, 2001. Unfortunately, bowing to physician interests, the agency wrote rules that enable physicians to structure their practices in order to furnish physical therapy in their offices (so-called “incident to” services) without violating the law. Affirm your opposition to physician-owned physical therapy arrangements based upon the inherent conflicts of interest existing within these situations, the loss of the patient\'s right to choice of provider, and the identified increased cost to society resulting from physician-owned physical therapy services.

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