California SB 543 is Signed Into Law

It's official.  Good ol' Gov. Jerry Brown couldn't sign this bill fast enough to clear off some space on his desk.  In a message from the California Physical Therapy Association:

On Monday October 3, Governor Jerry Brown signed into law SB 543 a bill that prevents the Physical Therapy Board of California from enforcing the law pertaining to physical therapists that are employed by medical, chiropractic and podiatric corporations.

The impact: POPTS will continue in CA without flinching until 2013.  Then a sunset provision takes effect and this bill will have to be re-heard.   Unless Medicare breaks out some sweeping changes in the federal law, this issue (as far as the PT Board is concerned) is now very much a non issue.

And The CA POPTS Winner By TKO is.........

The California Medical Association (CMA) is on the brink of dealing the California PT private practice effort to stop POPTS (physician owned physical therapy service) a deathblow.  CMA's funding and support of senate president Darrell Steinberg has landed them a piece of legislature (SB 543) on the desk of Governor Jerry Brown's desk that will prevent the PT Board of California from being able to take action against the PT's that are working in Medical, Chiropractic, and Podiatric Corporations.  It easily passed through the senate with a vote of 32-5 earlier today.
If signed into law, it will make the Board's interpretation of the Moscone Knox Act irrelevant.  Even though the Board feels physical therapists are working illegally for these corporations, they may very well find themselves powerless to do anything about it.
For all the fanfare the Private Practice Special Interest Group of California raised for their stalling of AB 783 (which would have flatly made these medical corporations legal by all accounts in California), they ultimately lost the fight by knockout to SB 543.  The submission of a bill that voids the Board's authority on this entire issue was brutally clever, and obviously caught the PT lobbying group with their guard down.  If passed, the anti-POPTS issue becomes about as dead as disco over night.
I have mixed emotions about this matter.  For one, I have gained a healthy respect for the power of the CMA in this state and their ability not to simply support and pass a bill, but to fund and pass an entire idea.  They wanted POPTS to stay, and worked on multiple pieces of legislation and multiple congressman/ women to make it happen.
With regard to the PT effort, maybe it is time the PT world starts admitting that going head to head with the AMA is not a great solution to many of these issues.  I'm seeing a prize fight that offers up a Heavy Weight vs. a Middle Weight.  Do PT's think they can out maneuver the CMA/ AMA?  Out spend them?  Do they think PT's have more influence in the healthcare debate then doctors do?  We might be able to slip in a jab here and there, but the probability of a knockout punch on any of the major issues of direct access, POPTS, fair representation in the ACO discussion, and equal reimbursement amongst providers is slim at best.  
If the PT leadership cannot change its tact slightly to work towards thoughtful and meaningful compromise, as other states have on some of these issues, I fear PT's are doomed to see very little change in the coming years in the state of California, and maybe even see things get worse.   By drawing lines in the sand and taking an all or nothing stance on issues such as direct access and POPTS we ultimately leave ourselves open to stark defeat.  This same flavor of politics is being played out in our nation's capital as we speak, and look how effective that has been over the past couple years!?
Hopefully this significant defeat will serve as a beacon that it is time to re-think the physical therapy position and really focus on the most important issue on the table, REIMBURSEMENT.  By doing so, PT's can make sure they don't repeat their POPTS battle mistakes when entering the political ring for that title fight.  

The Answer: Why PT Board CA Backs-Off

Based on this August 30, 2011 report from NBC LA, I think I understand why the PT Board of CA changed its tune so quickly.

The California Medical Association and its legislative allies in Sacramento have triggered a state audit of a regulatory agency that, they say, is too cozy with independent practitioners in the lucrative physical therapy trade.

On April 23, the Assembly's Joint Legislative Audit Committee voted 12-2 in favor of a five-month examination of the Physical Therapy Board of California, the watchdog agency responsible for overseeing "PT" clinics and practitioners across the state.

To see the entire article, click on link below.

http://www.nbclosangeles.com/news/politics/Physical-Therapy-Group-Audited-by-State-128717163.html

You can only guess if this audit had anything to do with slowing down the Board on enforcing action against POPTS clinics, but my guess is this is what put the brakes on things.  Of course, the whining about this matter couldn't be louder from the PT world as noted by most of the comments on this story.  For a detailed build up to this point, please read my previous blog dated 8/31/11 on this topic.

Insight on PT Board Backing-Off POPTS Enforcement with Commentary on the Private Practice Special Interest Group of CA

As of August 25, 2011 the Board has backed off enforcing their July 2011 interpretation of the Moscone-Knox Act.  As with most good stories, there is more than meets the eye with this one.  A timeline will help clarify the Board's recent position change.

Business arrangements between MD's and PT's that were deemed completely legal by the California Physical Therapy Association in 1990, magically became taboo in 2010 when the California Private Practice Special Interest Group stumbled upon a piece of legislature from 1968 that provided a loop hole to move the anti-POPTS movement forward.  They quickly lobbied to change the code of the California Practice Act and made way for its recent interpretation of the Moscone-Knox Professional Corporation Act which is what AB 783 was intended to amend, making it legal for medical corporations to employ PT's.  AB 783 was subsequently hung up in a state senate subcommittee in June 2011, that effectively killed the bill through 2012.   A victory for the CAPTA.

May 2011, the following letter was sent to the Audit Committee at the California State Capital regarding the actions of the CA PT Board from Mary Hayashi, congresswoman and author of AB 783.  Apparently there might be a few problems with how the Board and the Private Practice Section have been interfacing, how the Board has been adjudicating this process, and if public funds have been used appropriately by the PT Board members.     

July 20, 2011 despite this letter, the Board pushed the button (by the urging of the Private Practice Section) and sent out 155 letters to therapists that had been reported to them by "the public", otherwise known as, competing out-patient therapists.  

August 3, 2011 at their quarterly board meeting, the Physical Therapy Licensing Board (PTBC) had a change of heart.  They heard testimony from the Department of Consumer Affairs, the California Orthopaedic Association, the California Physical Therapy Association, and the California Private Practice Group.  The two former groups pressed the Board to hold off on enforcement of Moscone-Knox Act.  Paul Gaspar and Jim Dagostino, both PT's speaking on behalf of the Private Practice section urged immediate action continue to proceed against POPTS clinics.

August 25, 2011 the Board sent out letters to those POPTS therapists who had submitted compliance plans informing them that they were suspending enforcement of all pending cases until additional legislative time passes to clarify the existing law.  A total reversal of their July position and a clear defeat for the private practice group.  

Why did the Board change course?  Take a look at this timeline and draw your own conclusions.  But I think their actions make it clear that the PT Board realizes there are more than a few holes in their case and want to hold off on getting hammered in court as things stand currently.  Especially if you consider that the Board's big push to enforce the Moscone Knox Act was based on two factors.  One, they had to change the PT practice act that had been in effect for over 20 years to accommodate enforcement procedures by the Board.  Second, the entire basis of their legal argument was based on one or two legal opinions, which don't necessarily have any jurisdiction on the Board or its members.  Specifically:

• Lawyers on the CMA (California Medical Association) have pointed out that this move was based on the opinion paper by Legislative Counsel which isn't binding to the board or its licensees.  
• Unenforceable underground regulation is the term that was used by CMA lawyers to define the CA Boards move to change the practice act in order to enforce their "new" interpretation of Moscone Knox.  This term does not seem to be one that would hold up in court if proved to be true.
• For the entire CMA argument, see my previous blog: CMA Responds to CPTA POPTS Mandates.  Although this letter was dated December 2010, it clearly was a shot across the Board's bow letting them know enforcement of Moscone-Knox, based on an opinion paper, was definitely going to be challenged in court.

• And to put a cherry on top of this story, an email was sent out to orthopedic section members on August 29, 2011 from the CA Private Practice Group Board of Directors stating that due to the actions of Mary Hayashi, the key proponent of AB 783, and her recent inquiry into the PT Boards actions, they want to try to organize a recall of the congresswoman!  Are you kidding me?  
• Shouldn't the private practice section be focusing on clearing themselves of the accusations made in the May 2011 inquiry and focus on the strength of their legal argument (as well as start raising funds for the impending legal battle) instead of going off on yet another emotional rant regarding this issue?   This type of back biting, reactionary politics is unsightly and ineffective at best.  It begs the question: Can the CAPTA afford to waste time, money, and effort on a cause like recalling a political opponent when its Board has misfired this badly over the span of one month?  
• One final point that I hope does not get lost in the minutia of this story.  For all those involved in the POPTS debate both in California and nationally, it should not be overlooked that AB 783 and the surrounding legal debate is serious legislation that has the potential to effect the lives of thousands of therapists not only in California, but the entire United States when you consider how it will be used for precedent in other states.  It should be treated as such by our elected PT representatives.  
• A question for my colleagues.  Why would the private practice section feel the need to go down the recall road (a day after they realized the Board was backing off enforcing their anti-POPTS position) when they successfully defeated this congresswoman and her bill just a few months ago?   Recall her!?  Going in this direction would appear to only muddy the water, making it more difficult to appreciate the good work they just recently accomplished.   
• The Private Practice Section of CA might need to be reminded that they are representing a group of educated professionals in this debate.  Their arguments and actions should be based on fact and merit, and regardless of what tactics are being used on the other side of the isle, conduct themselves with dignity at all times.  If they are deemed to be on the right side of this legal matter, their voice will eventually be heard.   With this in mind, my sincere hope is that they start conducting themselves accordingly.  

CA PT Board Backs Off POPTS Enforcement on California PT's

If you are one those people that thought September 1, 2011 was going to be the end of POPTS (Physician Owned Physical Therapy Service) clinics in California, you probably lost sleep on the eve of the Rapture too.  Allow me to be the one to break it to you, September 1 has as much to do with the end of POPTS as the Rapture did with the end of the world.  
For those of you that have been following this blog, you know that I direct a POPTS clinic and submitted my compliance plan to the board several weeks ago (see blog dated 7/27/11).   Today, I received their response letter and what did it say.....

On August 3, 2011 the Board adopted a motion to suspend enforcement of all pending cases relating to alleged violations of the Moscone Knox Professional Corporations Act.  The Board took this action in order to afford the Legislature time to clarify the existing law.  Accordingly, the Board will take no further action until the Legislature has had an opportunity to take appropriate legislative action to address the issue.

They go on to later state they will continue to monitor the issue, place it on future meeting agendas, but will not be seeking additional compliance plans at this time and no further action is required by individuals working in a POPTS structure.   In other words, it's business as usual..... indefinitely.  Imagine that!?  The home run that the CA Private Practice Section has been so busy patting themselves on the back for over the past 2 months, is really just a long fly ball to right field.

Revision of CMA Response Post

I last reported that California Medical Association (CMA) had responded to the CA PT Board and posted a letter that was taken from the stoppopts.org site.  After further review, it was noted the letter was dated December 10, 2010.  So it wasn't exactly current, nor was it in response to the latest letters sent out to California POPTS PT's.
In any case, the CMA's website has stated in their July 22 legislative update that both AB 783 and SB 924 (PT direct access) are on the top of their agenda once the legislative summer recess ends on August 15.  All bills that are going to be passed will need to be through the legislative process by September 9.  So it should be a busy end of the summer.  It will be interesting to see what happens as the CMA and PTBCA continue to duke it out.

For those interested, the CMA verbiage regarding these two bills is listed below.

AB 783 (Hayashi) is the technical fix that codifies into law the longstanding practice that allows for medical corporations to hire certain allied health practitioners, most notably physical therapists. Thought the bill received zero “no” votes in the Assembly, it did not receive the votes to pass out of Senate Business & Professions (B&P) Committee. After the failure of SB 924 (Walters), a bill that would have allowed physical therapists direct access to patients without a prior diagnosis, Senate B&P tried to take another bite at the apple by asking for AB 783to be amended to include direct access in order to receive the support of the Chair, Senator Curren Price. The committee heard testimony from all of the providers in support of the bill, and hundreds of physical therapists asking to keep their jobs. The California Physical Therapy Association (CPTA) testified in opposition, arguing that this bill brought a competitive disadvantage to physical therapy small business owners. An equal number of physical therapists testified in opposition as well. The discussion quickly disintegrated into a debate about direct access, with the CPTA arguing that it would it was necessary to equalize competition. Senators Correa, Vargas and Wyland all voted in favor of AB 783 and spoke to remind the committee that the bill before them was not about scope of practice, but was closing a loophole in corporate code. Still, the bill was 2 votes shy and failed to pass out of committee.

Letter from the CA PT Board.

Yes, the CA Board for PT found me with the help of an old employee of mine.  He fingered me and 3 other therapists in my practice.  I of course can't prove it, but you know when you know.  Given that he took it upon himself to personally call one of my therapists a month ago during business hours to let her know that "she was working illegally and should quit her job or face repercussions."  I think my deduction is justified.  This idiot in the same conversation had the gall to ask her if she would consider working for him!  God help us if this is where we are going.  Hi, I'm going to report you to the board and then presume you'd consider working for me since you will be out of a job!   The logic is staggering.  It is however, the kind of story that makes you feel all warm and fuzzy inside doesn't it?
That being said, I can't say I was surprised.  This individual's character is exactly the kind of disappointment I highlighted in my last post.  And the CAPTA pretty much empowered him to do it.  It leaves the kind of taste in your mouth that makes you not want to ever give another penny to the APTA.  And in case you were wondering, I've been a member since I was a student, for over 14 years.
Nevertheless, life is going on.  I am in the process of submitting my "plan" to become compliant with the assistance of a lawyer or two.  I can't really get into specifics at this time, but all I can say to my whistle blowing adversary, there is a significant chance NOTHING is going to change for 2011 as I work on complying.  And if plan A doesn't pan out, there are plans B and C behind doors numbered two and three.  So I hope he doesn't get his hopes up just yet that a moving van will be backing up to my front door any time soon.  
As he and many other out patient PT's are going to find, many of these clinics are not going to vanish.  Many groups will arrange rent back agreements to satisfy leases, possibly even arrangements to handle billing services (all of which is completely legal) and as a result, will continue to carry on healthy referral relationships with their ex-employers.  Who knows, they might even grow.... but how?  Can you imagine that the docs might be a little vengeful against their neighbors that forced them to dump their PT clinics?  Maybe they wouldn't be disappointed, seeing those smaller clinics in the community that lobbied against them, continue to struggle given that they have hurt their own practices.  If you think I'm far off, ask Paul Gaspar how many referrals he is getting now a days from his neighboring docs after being the primary whistle blower for the CAPTA on the AB 783 debate. They aren't exactly wrapping their arms around him for his good work in Sacramento.  At this point, shouldn't we all know there is policy and then there is reality.  We shall see which one has a bigger impact on the field of PT.
Given how this thing is playing out and how this is being handled, it strikes a chord in me that makes me want to work even harder to put characters like my snitching ex-employee out of business.  I will look forward to checking in on him in about a year to see how much different his bottom line looks when this all shakes out.  Stay tuned, as I will fill you in first hand as this process unfolds over the upcoming months.

CA PT Board posts a deadline

• Physical therapists working for POPTS in California have been given a deadline of September 1, 2011 to submit a "plan" for compliance to the board.  All physical therapists working for a POPTS should either find new employment or submit your compliance timeline prior to this date or face penalties regarding your PT license.  A letter was sent out to 155 therapists on 7/22/11 that had been reported to the board for being involved with a POPTS.   A copy of the letter can be viewed at the following link:  stoppopts.org.
• It should be noted that the board is not doing a systematic review of all clinics in California, nor is it sending this letter out to all its licensees, which in my opinion would be the correct thing to do.  If they were to do so they could immediately take out the excuse "I didn't know" from every therapist in the state that is working for a POPTS and hasten their ability to have their new ordinance take effect.  Isn't that what they are shooting for anyway?  More importantly, from a governance standpoint, they would be taking control of this issue in a clear voice, instead of letting the private practice special interest group be their mouthpiece.  
• To get a feel for what I am referring to, see: http://cppsig.com.  The amount of rhetoric that has come from this group regarding the topic of AB 783 has been unparalleled to any other debated issue I've seen come down the pipe in my twelve years as a therapist.  Note, they are the entity that has lobbied to stop POPTS over the past 2+ years.
• Please note, at this time, the board has chosen to send out these letters to only therapists that have been reported to be in violation of current California law by either the public or other therapists.  Who do you think the vast majority of these "complaints" have come from?  Yes, your guess is probably the same as mine; the complaints are coming from the same disgruntled private practice PT's that feel they are loosing business from their accused brethren.  
• As a matter of fact, all POPTS PT's that testified in front of the state congress at the beginning of the summer in support of AB 783 were all conveniently added to this list of 155 by the special interest PT group sitting across the isle from them.  So much for first amendment rights!?  If you don't believe me, ask a person who went and testified what they found in their mailbox this week.  
• As a result of how this matter is being handled, it has turned into a campaign of back biting and betrayal amongst our own profession.  PT's snitching on PT's in hopes of putting competing clinics out of business to better their own practice.  A very unifying message.  Bravo.  I'm sure the doctors couldn't be happier as they watch us rip the unity of the CAPTA apart.
• A final note.  For those of you that have participated in this noble practice of reporting other PT's to the board, if you think this is going to solve your problems, please review the reimbursement rates of your major insurance contracts before you breathe a sigh of relief.  The reality is: they aren't going to get any prettier in the coming months, with or without a POPTS around the corner, and that is the real anchor around your neck whether you want to admit it or not.  

Are POPTS really dead?

I am frequently reading the word fair in articles referring to the landscape of out patient physical therapy practice and the matter of POPTS; as in "It isn't fair that POPTS exist and monopolize patient referrals."  Since when has business ever been fair?  The defeat of AB 783 has been purported to be the great equalizer in California out patient physical therapy.  It is supposed to once and for all put a stop to physicians employing physical therapists and thereby, leveling the playing field by eliminating POPTS and referral for profit in the state of California.... hooray!  Well I have news for those of you that think this is the case.  As with most complicated issues, it just isn't that simple.

• First off, let's review the history of this matter.   Business arrangements between MD's and PT's that were deemed completely legal by the California Physical Therapy Association in 1990, magically became taboo two years ago when the California Private Practice Special Interest Group stumbled upon a piece of legislature from 1968 that provided a loop hole to move the anti-POPTS movement forward.  They quickly lobbied to change the code of the California Practice Act and made way for its recent interpretation of the Moscone-Knox Professional Corporation Act which is what AB 783 was intended to amend, making it legal for medical corporations to employ PT's.  For those readers that might not know, AB 783 was hung up in a state senate subcommittee in June that effectively killed the bill through 2012.   
• 2010 The PT Board voted unanimously that they can independently enforce this matter on its licensed members.
• Now that there is no impediment to their interpretation of The Moscone-Knox Act, and the Board can threaten the licenses of its members, POPTS should be finished due to the fact that medical corporations can't employ PT's and if they do their PT's loose their licenses, right?  Maybe.  At least that has been the backbone for the rhetoric published over the past month. 

First the PT Board of CA has to defend why this was deemed to NOT be a problem since 1968 until about two years ago.  If they can make that argument in court, there has been little mention about how they are going to address the fact that physician groups have taken out leases, purchased practices, and made significant capital investment on PT departments over the past 20 years based on the LEGAL interpretation that has been on the books since Stark II re-opened the door for this type of business practice in the early 90's.  If AB 783 is to be enforced via the California PT board, there surely will be law suits to follow that address the financial losses that will result from its enforcement.    These cases will not be heard overnight, and this litigation will surely slow the implementation of any such enforcement.  That could take many months to even years for its impact to be significantly felt in the PT community.   So let's slow down a little before we raise the victory flag and pat ourselves on the back.  The PT board to date (7/19/11) is still taking the matter under review, which means currently there is no official change in the business of out patient PT from a legal standpoint in California, regardless of what is being shouted from the bleachers of the private practice special interest group in California.
And if that isn't fair enough, let us not forget there is more than ample wiggle room in the laws of California business structure to create contract scenarios and even PT corporations that can provide services to medical groups.  These arrangements could effectively hold many referral patterns in place while the next shoe drops (see ACO in future blogs), all of which will be be completely legal. This fight is far from over my friends, and even if this battle is won, we are about to get an ACO wake up call in Southern California that will literally make all this minutia irrelevant in the very near future.