Published 9/1/2016
Cary B. Edgar, JD; Michael Baer, MSPT

Updating the Case for POPTS

Recent reports support cost-effectiveness
Since 2012, several studies have been published showing that physical therapy (PT) provided within a physician practice may result in lower utilization and costs than PT provided in private therapy practices. Data from these studies support the claims that physician-owned physical therapy services (POPTS) do not result in overuse or excessive costs.

GAO study
At the request of Congress, the U.S. General Accounting Office (GAO) analyzed Medicare data from 2004 through 2010 to determine whether POPTS resulted in higher costs than PT in other settings. The GAO report, published in 2014, found the following:

  • The average number of PT procedures per 1,000 patients treated in POPTS clinics generally remained the same from 2004 through 2010, while the number of procedures per 1,000 patients treated by other PT providers grew by 41 percent.
  • During the same period, total Medicare expenditures for POPTS increased by only 10 percent while expenditures for patients treated by other PT providers increased by 57 percent.
  • PT providers in physician groups averaged fewer PT procedures per patient than other PT providers.

The GAO concluded that PT provided outside of physician groups (non–self-referred services) was the primary driver of a substantial increase in PT utilization and expenditures. These results differed from the GAO's prior studies on self-referral of other Medicare services—namely, advanced imaging, anatomic pathology, and intensity-modulated radiation therapy—in which it found that self-referred services and expenditures grew faster than non–self-referred services and expenditures.

The GAO also noted that "self-referring orthopedic surgeons, on average, generally referred fewer PT services than non–self-referring orthopedic surgeons." This contrasted with findings that family practice and internal medicine physicians who provided PT in their practices referred more PT services than their non–self-referring counterparts.

The GAO stated that a potential reason for this difference is that non–self-referred PT services can be performed by providers who can directly influence the amount, duration, and frequency of PT services.

In other words, therapists in private practice and other settings outside of physician groups largely influence the amount of PT delivered and have used that influence to increase PT visits, procedures, and costs at a much higher rate than physicians and therapists providing PT within a physician group.

Beattie study
In January 2013, the Journal of Occupational Rehabilitation published a study partially funded by the American Physical Therapy Association (APTA). The retrospective database study focused on the healthcare setting and the delivery of physical rehabilitation services for workers' compensation claims from 2009 through 2011 and covered more than 70,000 patients. Practice settings were classified as physician office, corporate physical therapy clinic, occupational medicine clinic, hospital-based outpatient clinic, or private physical therapy practice. More than half of the patients in the study received care in private physical therapy practices.

This study found that POPTS averaged about 10.5 visits and 42.7 procedures per patient. Private PT practices averaged about 12.2 visits and 51.4 procedures per patient—16.3 percent more visits and 22.2 percent more procedures per patient than POPTS. Similarly, corporate PT clinics averaged 13.1 visits and 66.8 procedures per patient, which represents 25 percent more visits and 56.3 percent more procedures than POPTS. Occupational medicine and hospital-based clinics averaged fewer visits and procedures that POPTS.

Mitchell studies
Two recent studies sponsored by the APTA's research foundation have been published online ahead of print. The first study reviewed data from treatment of patients with low back pain who were covered by Blue Cross Blue Shield of Texas. Like the GAO and Beattie studies, it found that POPTS see patients for fewer procedures per episode than private PT practices. More specifically, this study found that PT provided within physician groups averaged 27 percent fewer visits per episode, 34 percent fewer procedures per episode, and 9 percent fewer procedures per visit. However, according to the authors, total spending on back-related care was 35 percent higher for self-referred episodes compared to their non–self-referred counterparts.

The second study focused on PT received by patients who underwent total knee replacements (TKR). This study found that POPTS averaged 49 procedures per episode while other PT providers averaged more than 55 procedures per episode, representing a 12 percent difference. However, the authors also claimed that POPTS-treated TKR patients had more (average 8.3) PT visits.

In both studies, the authors claimed that the PT delivered in private practices was more "intensive" and therefore more skilled than PT delivered within physician groups, which resulted in the additional costs. Nonetheless, it appears from these studies that, as compared to private PT practices, PT delivered within integrated physician groups averages fewer procedures per visit and per episode, which could result in lower costs per episode.

Exemplary care is being delivered through physician groups on a collaborative and cost-effective basis. The American Association of Orthopaedic Surgeons (AAOS) has an online position statement, advocacy toolkit, and other materials to help orthopaedic surgeons respond to attacks on POPTS by the APTA and its state chapters.

Carey B. Edgar, JD, is a founder and principal of PT Management Support Systems LLC, a company that helps orthopaedic groups and other healthcare organizations develop and manage their physical, occupational, and hand therapy programs. He can be reached at cedgar@pt-management.com

Michael Baer, MSPT is a physical therapist with Rebound Orthopedics & Neurosurgery in Vancouver, Wash.


  1. U.S. Government Accountability Office: Medicare Physical Therapy: Self-Referring Providers Generally Referred More Beneficiaries but Fewer Services per Beneficiary. GAO-14-270: Published: Apr 30, 2014. Publicly Released: Jun 2, 2014.
  2. Beattie PF, Nelson RM, Basile K: Differences among Health Care Settings in Utilization and Type of Physical Rehabilitation Administered to Patients Receiving Workers' Compensation for Musculoskeletal Disorders. J Occupational Rehab 2013;23(3):347–360. doi:10.1007/s10926-012-9412-y.
  3. Mitchell JM, Reschovsky JD, Franzini L, Reicherter EA: Physician Self-Referral of Physical Therapy Services for Patients with Low Back Pain: Implications for Use, Types of Treatments Received and Expenditures. Forum for Health Economics and Policy. ISSN (Online) 1558-9544, ISSN (Print) 2194-6191, DOI: 10.1515/fhep-2015-0026, July 2015 (2015).
  4. Mitchell JM, Reschovsky JD, Reicherter EA: Use of Physical Therapy Following Total Knee Replacement Surgery: Implications of Orthopedic Surgeons Ownership of Physical Therapy Services. Health Services Research (2016). doi: 10.1111/1475-6773.12465
  5. AAOS Position Statement on Physician-Owned Physical Therapy
  6. AAOS Advocacy on Physician-Owned Physical Therapy