There may be a opportunities for California physical therapists to purchase their employer physical therapy clinics for pennies on the dollar after a new ruling by the State of California Legislative Counsel found that physician-owned physical therapy clinics (POPTs) are illegal in California.
This ruling developed from stalled 2009 legislation put forth by podiatrists to add physical therapists to the list of professionals allowed to be employed in medical practices.
Physical therapists are currently NOT on the list and, as a result, the recent Legislative Counsel ruling determined that their participation in these businesses is illegal.
"The existing California Corporations Code does not specifically include physical therapists on the list of those who may be shareholders, officers, directors, or professional employees of medical, podiatric or chiropractic corporations.According to the California Physical Therapists' Association (CPTA) employee physical therapists have three options:
In 2009, Assembly Bill (AB) 1152 was brought forward by the California Podiatric Medical Association to determine the legality of podiatrists owning a physical therapy practice.
They were later joined by the California Medical Association and California Chiropractic Association.
Assembly Bill 1152 would have amended Section 2406 of the Business and Professions Code and Section 13401.5 of the Corporations Code to add licensed physical therapists to the list of healing art practitioners who may be shareholders, officers, directors, or professional employees of medical, podiatric or chiropractic corporations.
CPTA strongly opposed AB 1152 because the legislation would have made it legal for medical, podiatric and chiropractic corporations to employ physical therapists.
In effect, under this legislation, these corporations could control the point of access to physical therapist services and then refer patients only to themselves.
This type of arrangement poses an inherent conflict of interest and removes choice for the consumer.
On July 13, 2009 the members of the Senate Business Professions and Economic Development Committee understood the potential conflict and did not pass the bill.
The opinion from Legislative Counsel confirms that, because the California Corporations Code does not specifically include physical therapists on the list of those who may be employed by a medical corporation, a physical therapist is prohibited from providing physical therapy services as an employee of a medical corporation and may be subject to discipline by the Physical Therapy Board of California for doing so."
- Buy out the practice
- Become an independent contractor
- Find new empoyment
As an independent physical therapist involved in Government Affairs in Florida I watch events like the California decision with keen interest.
Is this way the right way?
Does the California decision improve their position compared to the position of physical therapists in South Carolina?
Is the California approach better than the approach taken in Washington state?