State policymakers considered a broad range of issues in 2012 that affect orthopaedic surgeons. State-level priorities for the American Association of Orthopaedic Surgeons (AAOS) are determined through the Board of Councilors (BOC) Committee on State Legislative and Regulatory Issues. The committee also administers $300,000 per year in Health Policy Action Fund grants to support state orthopaedic society advocacy endeavors.

In 2012, state-level priorities for the AAOS included the following:

• preserving integrated clinical services such as in-office physical therapy and advanced imaging services
• influencing public payment system reforms
• reforming medical liability laws

This article reviews some of the most pressing issues of the year.

Integrated PT services—California
California nearly became the fourth state to implement policies that forbid physicians from employing physical therapists (PTs). In 2011, the AAOS helped to fund the California Orthopaedic Association’s (COA) effort to defend integrated physical therapy services with a substantial grant from the Health Policy Action Fund and also provided the COA with significant information and analytic resources. This legislative battle continued into the 2012 legislative session and has yet to be resolved.

The battle began in 2010, when the California Physical Therapy Association (CPTA) sought a nonbinding Legislative Counsel opinion through the request of a legislator. According to the opinion, because the California Corporations Code (CCC) does not specifically include PTs on the list of those who may be employed by a medical corporation, a PT 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.

In the 2011 legislative session, the COA, the California Medical Association, Kaiser Permanente, and the California Podiatric Medical Association introduced legislation to add physical and occupational therapists to the list of professionals who may be employed by physicians. The CPTA, which primarily represents independent PTs, strongly opposed the legislation, even though medical corporations have employed PTs and other licensed healthcare professionals also not listed in the CCC for decades.

The 2011 session culminated with the Governor putting a stay on any activity prohibiting the employment of PTs until the legislature could resolve the issue. The COA and other interested parties negotiated a legislative compromise that would have permitted a small number of visits to a PT without a physician referral but would have preserved the ability of physicians to employ PTs.

Unfortunately, that compromise proposal fell apart late in the 2012 session. The COA hopes that the dissolution of those talks will lead to legislation that permits physician employment of PTs but does not allow patients to visit PTs without a physician’s referral.

Direct access to physical therapy—Mississippi
The Mississippi legislature passed legislation to confirm that patients can only see PTs if they have a referral from another healthcare provider. Physician assistants and nurse practitioners were added to the list of providers who can make the referral.

Podiatric scope of practice—New York
Measures expanding the podiatric scope of practice have been proposed for several years. In 2012, the New York state legislature passed a scope of practice expansion that enables some—but not all—podiatrists to perform ankle surgery.

Under the legislation, podiatrists who seek a certificate in Reconstructive Rearfoot and Ankle Surgery from the American Board of Podiatric Surgery (ABPS) will be allowed to apply for privileges that include treating the ankle and soft tissue of the leg up to the knee. Reconstructive Rearfoot and Ankle Surgery certification from the ABPS is a rigorous standard, and podiatrists who are certified under this provision have demonstrated competence.

The only change in scope of practice for all other podiatrists licensed in the state was to grant authority to treat wounds contiguous to wounds the podiatrist is already treating on the foot. A link to a detailed analysis by the New York State Society of Orthopaedic Surgeons can be found in the online version of this article.

Major health reform—Massachusetts
The Massachusetts legislature passed “An Act Improving the Quality of Health Care and Reducing Costs through Increased Transparency, Efficiency, and Innovation”—more commonly referred to as “Chapter 224.” The 350-page bill makes a number of changes to the 2006 healthcare reform law, including adoption of a state-level accountable care organization (ACO) model that would implement a global payment structure for participating providers. The idea is that those participating providers who reduce costs will share in the savings achieved by lowering costs.

Under the legislation, the disincentive for high-cost providers is a corrective action plan, rather than more punitive measures—a fact that the Massachusetts Medical Society considers a favorable outcome. The legislation also includes adoption of the “Disclosure, Apology, and Offer” model of medical liability reform.

Concerns with the new law include onerous reporting requirements, uncertainty over the ACO provisions, and scope of practice expansions for physician assistants. The AAOS Health Policy Action Fund supported the Massachusetts Orthopaedic Association (MOA) with a $15,000 grant to analyze the MOA’s legal rights in negotiating with the ACOs.

Medicaid CCOs—Oregon
During the 2011 legislative session, Oregon legislators approved the creation of coordinated care organizations (CCOs)—an integrated care model with global payments—for the state’s Medicaid population. The plan for implementing this system passed during the 2012 legislative session.

Although the implementation plan called for 60 percent of Medicaid enrollees to transition to CCOs by January 2013, the state is ahead of schedule; more than 90 percent of beneficiaries are already enrolled in CCOs.

Although Medicaid patients make up a relatively small percentage of most orthopaedic surgeons’ case mix, the reform is significant because Gov. John Kitzhaber hopes to expand CCOs to serve all public employees. The public employees would have richer benefit packages than Medicaid beneficiaries, but the care they receive would be provided through CCOs that are paid on a shared savings model.

Medical liability reform—Hawaii
Over the past few years, the AAOS has provided more than $100,000 in Health Policy Action Fund grants to assist state orthopaedic societies with medical liability reform efforts. Although 2012 was somewhat quiet in terms of medical liability reform legislation, a handful of states—including Hawaii—saw action on this issue.

The new law creates a Medical Claims Conciliation Panel (MCCP) program. The MCCP is designed to review claims against healthcare providers before a lawsuit is filed. The process also enables the opposing parties to share information in a less expensive and more expedited manner than the traditional discovery process. The panel will then evaluate the merits of the claims to prevent frivolous or meritless suits from ever being filed.

For more information on state legislative activities and efforts by the AAOS to support issues on the state level, visit the state activities section of the AAOS government relations website, www.aaos.org/dc

Ashlen Strong was the manager of state government relations in the AAOS office of government relations.