MedPAC Report Addresses In-office Ancillary Services Exception

APTA applauds policy option that would remove physical therapy services from in-office ancillary exception under self-referral law.

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ALEXANDRIA, VA, June 17, 2010 — In an effort to address the increase in physical therapy services, other therapeutic services, and radiation therapy provided in physicians' offices, and the costs associated with those increases, the Medicare Payment Advisory Commission (MedPAC) has identified a policy change that would limit physicians from referring patients for these services to facilities in which the physicians have a financial interest.

According to MedPAC's Report to the Congress: Aligning Incentives in Medicare, certain services provided by physicians have experienced rapid volume growth over the past 5 years, contributing to Medicare's growing financial burden on taxpayers and beneficiaries. The commission's report points to studies that have found physicians with a financial interest in physical therapy initiate therapy for patients with musculoskeletal injuries more frequently than other physicians and that physician-owned physical therapy clinics provide more visits per patient than non-physician-owned clinics. Moreover, says MedPAC, there is evidence that some diagnostic imaging and physical therapy services ordered by physicians are not clinically appropriate. Thus, MedPAC has identified a policy option to exclude physical therapy services—among other therapeutic services—from the exception under the Ethics in Patient Referral Act (also known as the Stark law) that currently allows physicians to "self refer" patients for ancillary services in which they have a financial relationship.

"We applaud and support MedPAC's policy option to remove physical therapy from the in-office ancillary services exception under the federal self-referral law," said American Physical Therapy Association President R. Scott Ward, PT, PhD. "The intent of the in-office ancillary exception is to enable physicians to make rapid diagnoses and initiate treatment during a patient's office visit. However, physical therapy services are rarely provided on the same day of an office visit. Therefore, it is not appropriate to include physical therapy services in this exception."

In its report, MedPAC acknowledges the concern that excluding certain services from the in-office ancillary exception would inconvenience patients by requiring them to receive care in hospitals. However, the commission says that physical therapists can deliver therapy in private practices, hospitals, and skilled nursing facilities (Part B) that are separate from physician groups.

Founded in 1921, the American Physical Therapy Association (APTA) represents more than 74,000 physical therapists, physical therapist assistants, and students of physical therapy nationwide. Its purpose is to improve the health and quality of life of individuals through the advancement of physical therapist practice, education, and research. For more information about APTA visit www.apta.org. Join us on Twitter (@APTAtweets) and Facebook.

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