There is a federal law that prohibits physicians from referring Medicare patients to entities in which they have a financial interest—a practice known as "self-referral." However, this law — known as the Stark law—also includes a loophole that excludes physical therapy services from this important patient protection. Thanks to this exception, physicians can steer patients to physical therapy services that help their own bottom line, even when that facility may not be what the patient would prefer.

Why It Matters

Research has found that physicians with a financial interest in physical therapy initiated therapy for patients with musculoskeletal injuries more frequently than other physicians, and physical therapy clinics with physician ownership provided more visits per patient than nonphysician-owned clinics. This is inappropriate utilization. It erodes patient trust in the health care system and drives up costs.

Our Position

APTA supports legislation and regulatory changes that would exclude physical therapy services from the in-office ancillary services exception under the Stark law.