Published 5/1/2010
Melissa Young

Washington state court upholds POPTS

AAOS filed amicus brief supporting appeal

In a unanimous opinion, the Supreme Court of the State of Washington ruled March 18, 2010, that physician-owned physical therapy services (POPTS) do not violate Washington state law. The American Academy of Orthopaedic Surgeons was an amicus curiae (or “friend of the court”) in Columbia Physical Therapy, Inc. v. Benton Franklin Orthopedic Associates, P.L.L.C., et al. and filed a brief in support of the orthopaedic practice group and individual orthopaedic surgeons named as defendants.

Columbia Physical Therapy, the plaintiff in this suit, argued unsuccessfully that Washington statutes prohibited orthopaedic practices from employing PTs because physicians and PTs were licensed under separate sections of the state code. In addition, Columbia argued that these two professions are authorized by code to operate as separate professional corporations.

The state Supreme Court declined to be bound by this argument, holding instead that the “broad definition of medicine readily encompasses all acts constituting the statutory definition of the practice of physical therapy. The physical therapy licensing statute simply permits nonphysicians to engage in a limited practice of medicine without liability for the unauthorized practice of medicine.” Therefore, the Court found that the employment of PTs by physicians does not go beyond the practice of medicine.

The court also addressed whether the profits gained by the practice group from the referral of patients to their own PTs violated the state’s anti-rebate statute. The anti-rebate statute “prohibits both paying and receiving anything of value, including profits, in return for a referral of patients,” the court said. Any profits earned from professional services provided by employees are not “unearned” by the owners of the physician practice group, as long as those owners also practice within the group. In the case of Benton Franklin’s orthopaedic surgeons, all of the owners also practiced in the group and, therefore, were not in violation of the anti-rebate statute.

This ruling comes as a blow to the American Physical Therapy Association (APTA), which has a national agenda to push physical therapy as a profession completely separate from the physician’s domain. APTA has consistently sought to end POPTS on a state-by-state basis, whether by statutory amendment or challenging the legitimacy of such arrangements through litigation. AAOS continues to resist these efforts through advocacy campaigns and amicus curiae participation in appeals.