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AARP Supports an End to ‘All in the Family’ PT Referrals

H2: Stark Law Support Lauded by APTA

By Debra Wood, RN, contributor

At a time when the country remains focused on reigning in health care costs, an exemption to the physician self-referral law--commonly referred to as the “Stark Law”--allowing physicians to prescribe physical therapy at in-office facilities, strikes many in the rehabilitation community as wrong. Now, the first consumer advocacy group, AARP, has joined the discussion, endorsing closure of the loophole to better serve patients, preserve Medicare resources and reduce health care spending.

“Self-referral and over utilization of certain services can expose patients to harmful effects,” said Ariel Gonzalez: self-referral for PT can be costlyAriel Gonzalez, director of federal health and family government affairs advocacy at AARP in Washington, D.C. “AARP is also concerned on a macro level about health care costs, and what we can do in a responsible manner to lower costs.”

AARP is opposed to physician self-referral for an array of services, such as radiation oncology and urological services, in addition to physical therapy.

The American Physical Therapy Association (APTA) and PTPN, a network of physical therapists in private practice, have long opposed the in-office exception.

“We’re very pleased about AARP being the first major consumer group to come out and say this should be closed,” said Mandy Frohlich, senior director of government affairs at APTA.

The exception allows physicians to own the physical therapy practice. APTA says physicians’ expansive use of the exception to include physical therapy services is outside the spirit of the law and undercuts the Stark Law’s purpose.

“APTA has always felt making a profit off referrals is an inappropriate business relationship, and we have suggested care could be coordinated between physicians and physical therapists without that profit scenario in play,” Mandy Frohlich: AARP and APTA support closing Stark Law loopholeFrohlich said. “When these relationships exist, it limits the choice of the patients and where they want to go and get their physical therapy. Many times physicians do not disclose that relationship.”

Jerry Connelly, Capitol Hill lobbyist for PTPN, described it as a “patient freedom of choice, cost and quality issue, which creates a market imbalance when the patient is directed or guided to go to an in-office therapist. Then, whether or not the care is medically necessary is complicated by the fact the physician is gaining monetary profit from the self-referral.”

Studies have shown the utilization is higher when the physician provides in-office therapy. A 2014 report from the U.S. Government Accountability Office (GAO) study showed that self-referring physicians, on average, referred patients for more PT services than physicians who did not self-refer, but they ordered fewer PT services per beneficiary.

PTPN observed that “it is possible that physicians who self-refer may utilize PT earlier because of the perverse incentive and the convenience. If so, lower utilization could occur because considerable evidence demonstrates that early intervention (condition acuity) results in the need for fewer services and number of visits in order to reach treatment goals.”

The GAO also found that in the year after physicians began to self-refer for PT, they did so at a higher rate than non-self-referring providers in the same specialty.

In July 2014, Mark Miller, PhD, executive director of the Medicare Payment Advisory Commission, presented evidence showing an association between physician self-referral and increased volume for a variety of services. He recommended establishing policies to limit the financial incentive to self-refer and reported that payment reform in the form of bundling and accountable care organizations should also reduce the practice.

The in-office ancillary services exception allows physicians to provide services, such as routine lab tests and X-rays, in the office, the idea being treatment could start immediately during the initial physician visit. Yet a 2008 MedPAC report found only 3 percent of outpatient therapy services were provided on the same day as the physician office visit.

The exception also increases health care costs. The Office of Management and Budget concluded that closing the loophole for therapy services would save more than $6 billion during a 10-year budget window.

Rep. Jackie Speier (D-Calif.) introduced the Protecting Integrity in Medicare Act in the last Congress and is expected to do so again in the incoming Congress. The bill number will change in 2015. The PT organizations will alert members to contact their Congressional representatives to voice support.

Pres. Obama has included closing the loophole in his past two budgets.

“We agree with the president that it would be a cost saver,” Gonzalez said. “We see closing the self-referral loophole as a responsible solution to help extend the life of the Medicare program.”

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