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Medicare self-referral loopholes—the exception that allows physicians to refer patients for physical therapy and other services to a business that has a financial relationship with the referring provider—is once again in the legislative spotlight on Capitol Hill.

On April 6, the Promoting Integrity in Medicare Act (PIMA) was reintroduced in the US House of Representatives (HR 2066), in hopes of eliminating the exception to the federal law originally intended to prohibit self-referral. That law, known as the Stark law, does prohibit most self-referral practices, but it also contains language that allows physicians to self-refer for "patient convenience" or same-day treatments—known as in-office ancillary services. Unfortunately those exceptions also include services that are rarely provided on the same day—physical therapy, anatomic pathology, advanced imaging, and radiation oncology.

PIMA would eliminate this loophole not only as a way to ensure that the exception is used according to its original intent, but also to reduce overutilization and overall health care costs. According to 2016 estimates from the Congressional Budget Office, enacting the changes contained in PIMA would save Medicare an estimated $3.3 billion over 10 years, mostly due to what research points to as overuse of referrals among providers who can direct patients to services with a financial connection. The bill is sponsored by Rep Jackie Speier (D-CA), who introduced a similar bill in 2016.

APTA is a strong supporter of the legislation, and is a member of the Alliance for Integrity in Medicare (AIM), a coalition of professional groups opposed to the inclusion of the services they represent in the Stark exceptions. AIM isn't alone in the fight: in 2014, the American Association of Retired Persons (AARP) issued a statement in support of PIMA.

"Physical therapist services should never have been included as an exception to the Stark law," said Michael Hurlbut, APTA senior congressional affairs specialist. "Reasonable exceptions for services such as lab tests and x-rays would still be in place and could be performed during office visits—this legislation would simply correct an obvious problem in the law."

Find out more about this issue on APTA's self-referral webpage, and take action now by asking your legislators to close the self-referral loophole. Contact APTA advocacy staff for more information.


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