APTA Responds to Medscape Business of Medicine Article on Physician Self-Referral

August 18, 2014

Dear Editor:

The American Physical Therapy Association (APTA) is disappointed that your article, "9 Ancillary Services That Can Boost Practice Revenue," seems to promote the practice of physician-owned services (provided by separate and distinct professions, such as physical therapy) for boosting revenue. In an era when policy makers, providers, and patients are all looking for ways to bring down health care costs, it appears that your article is advocating the opposite approach by encouraging referrals for the purpose of profit.

Respected policy organizations, researchers, and budget analysts continue to provide evidence that show the abusive financial impact of self-referral. The Office of Management and Budget concluded that closing the loophole on physician self-referral for certain services under Medicare would provide savings of just over $6 billion over the 10-year budget window, providing further evidence that these self-referral arrangements may lead to overutilization of Medicare services and should be addressed by Congress. In fact, the president has twice called on Congress to eliminate the loophole as part of his annual budget submission.

APTA supports excluding physical therapy services from the in-office ancillary services (IOAS) exception under the physician self-referral prohibition (the Stark self-referral law). This law prohibits a physician from making referrals for certain designated health services payable by Medicare to an entity with which he or she, or an immediate family member, has a financial relationship -- unless an exception applies for same-day services. The spirit of the IOAS exception was intended for the delivery of services that could be quickly administered for patient convenience, such as routine lab tests or x-rays. The expansive use of the IOAS exception by physicians in a manner not originally contemplated by the law undercuts the purpose of the law and substantially increases costs to the Medicare program and its beneficiaries. Physical therapy is not a same-day service. Your own article points that out when referencing the fact that physical therapy is often provided in multiple follow-up visits.

APTA's foremost goal is to see patients continue to receive the highest-quality, most appropriate care while protecting limited Medicare resources. Closing the self-referral loophole will ensure that both goals are met without hurting true interdisciplinary collaboration.


Paul A. Rockar Jr, PT, DPT, MS
American Physical Therapy Association