Study of Physician Owned Physical Therapy Services

Physical Therapy Consulting
December 5, 2014
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A recently issued GAO study found that orthopaedic surgeons who provide physician-owned physical therapy referred patients for fewer PT services than orthopaedic surgeons who do not have PT.

The U.S. General Accounting Office (GAO) studied whether physicians who have a financial interest in physical therapy (PT) services (self-referrers) refer more PT than physicians who do not have a financial interest in PT (non-self-referrers). This study was conducted in response to concerns that the increase in physician owned physical therapy has resulted in unnecessary care and costs.

The GAO analyzed Medicare statistics for 2004-2010 and focused on three measures-(1) the total number of patients referred for PT, (2) total PT services in terms of procedures, and (3) PT expenditures. The GAO concluded that:

  • Self-referring physicians generally referred more individual patients for PT, but referred fewer PT services (procedures) per patient compared with non-self-referring physicians
  • PT referrals by family practitioners, internists and orthopaedic surgeons increased the year after they began to self-refer at a higher rate than non-self-referring physicians of the same specialty; however, the difference for orthopaedic surgeons was only 4% which was significantly lower than the other two physician groups
  • While non-self-referred PT services grew by about 41%, self-referred PT services remained essentially constant
  • The number of individual patients who received self-referred PT services increased only 12%, while the number of patients who received non-self-referred PT services increased nearly 44%
  • Total expenditures for non-self-referred PT increased by 57%, while expenditures for self-referred PT increased only 10%
  • Orthopaedic surgeons with PT generally referred patients for fewer PT services than orthopaedic surgeons who did not have ancillary PT

The GAO showed that PT services and expenditures increased considerably from 2004 to 2010, but noted that the primary driver of these increases was growth in non-self referred PT rather than physician-owned PT. The GAO pointed out that these findings for PT differed from its finding on other self-referred services, such as imaging, in which self-referred services and expenditures grew faster than non-self-referred services and expenditures. The GAO concluded that one potential reason for this difference is that non-self referred PT is provided by therapists who can directly influence the amount, duration and frequency of PT. In other words, the GAO pointed directly to increased PT services by therapists in private practice as the primary driver of the overall increase in PT services and expenditures.

This is one of the most thorough studies of PT referral and utilization patterns ever conducted. The GAO’s findings should help put to rest the arguments that physician-owned PT results in overutilization and increased expenditures and can be used to counter any legislative efforts at the federal or state level to bar or otherwise restrict physician-owned PT.

Link to this GAO Study →