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Medicare “Direct Access” – A Trojan Horse for Physical Therapy’s Expanding S

Legislation has been reintroduced in the U.S. House and Senate that has the potential to allow physical therapists to prescribe and provide orthotic and prosthetic services directly to Medicare beneficiaries, assuming O&P services are included in a particular state’s physical therapy practice act. This bill could lead to the ability of PTs to prescribe and provide O&P care in such a state without any involvement, supervision, or coordination by a physician. But in order for this to occur, Congress must first decide whether Medicare should eliminate the current requirement to obtain a physician’s referral before physical therapists can provide physical therapy services to patients.

This proposal has been skillfully named “PT Direct Access” by physical therapy proponents, but it could just as accurately be described as “PT self-referral.” If a “direct access” bill does, in fact, make it through Congress and into a possible Medicare bill this fall, the implications to professional O&P care in some states, and eventually nationally, could be far reaching for many years to come.

What is Direct Access?

The Medicare direct access legislation discussed in this article would remove the current Medicare requirement for a physician’s prescription to provide a course of physical therapy. Direct access, as a concept, has been in existence in various forms for many years. Direct access proponents claim that thirty-nine states currently allow some form of direct access to physical therapy services without a physician’s prescription. However, according to the American Academy of Orthopedic Surgeons, only two states have unrestricted direct access laws that truly permit physical therapists to provide PT services without a physician’s involvement or prescription.

Under many of the state direct access laws, physicians prescribe a course of physical therapy before patients see the therapist. And, of course, direct access does not guarantee payment. In addition to Medicare, many private health insurance companies require that patients obtain a physician’s prescription for physical therapy in order to receive payment.

The effort to permit physical therapists to have direct access to patients has been in play since the early 1990’s. A 1994 study by Jean Mitchell, Ph.D., of Georgetown University, and Gregory de Lissovoy, Ph.D., MPH, of Johns Hopkins University used data from Blue Cross and Blue Shield of Maryland to study the cost-effectiveness of direct access. They found that the costs incurred for physical therapy visits were 123% higher when patients were first seen by a physician than when they went to a physical therapist directly. The study also showed that physician referral episodes generated 67% more physical therapy claims and 60% more office visits than did episodes when the patient went directly to the physical therapist without a physician referral. Opponents of direct access point to this one study, which is over ten years old and focused on only one state, as weak evidence that direct access is cost-effective. The study itself was retrospective and did not account for the medical complexity of patients in the two settings, and may explain the difference in overall cost between patients who chose direct access over physician referrals.

MedPAC Examines Direct Access

Legislative efforts by proponents of PT Direct Access culminated in December 2003 when the Medicare Modernization Act of 2003 required that the Medicare Payment Advisory Commission, or MedPAC, conduct a study within one year of enactment on the feasibility and advisability of Medicare allowing direct access to outpatient physical therapy. The MedPAC report was issued in early 2005 and cast doubt on the viability of the direct access concept. The report clearly concluded that “physician requirements help ensure beneficiaries receive medically appropriate care.”

The full report is available at: (PDF).

MedPAC serves as a quasi-governmental entity that studies Medicare payment issues and publishes reports to Congress that recommend payment policy changes. MedPAC’s recommendations are non-binding, but are routinely used as a basis for Congress to consider changes to the Medicare program.

MedPAC considered the direct access issue publicly at its December 2004 meeting. It previewed its conclusions during Commission discussion, indicating that elimination of the physician referral and review requirements would set a bad precedent for other Medicare services that have similar coverage requirements for physician referrals or orders. Such referrals are required for home health care, skilled nursing facility stays, durable medical equipment, orthotics and prosthetics, medical supplies, outpatient drugs, oxygen, and occupational therapy.

Supporters of direct access often assert that beneficiaries do not have adequate access to physical therapy services, particularly in rural areas, but the data cited by MedPAC appears to quell that argument. MedPAC found no evidence of limited access to physical therapy services throughout the country. MedPAC also considered the complex medical conditions underlying many patients in need of physical therapy, stating that “[b]eneficiaries often have multiple medical conditions and physicians can consider their broad medical care needs.” Using this rationale, MedPAC contended that the physician as “gatekeeper” also prevented unnecessary care or therapy services that were marginally beneficial, thus saving Medicare money and improving patient care.

Rather than MedPAC’s endorsing physical therapy direct access, it actually questioned the efficacy of physical therapy services in the elder population altogether. It recommended that evidence-based practice guidelines would help establish when and for how long beneficiaries would typically benefit from physical therapy services, thereby reducing the amount of inappropriate or medically unnecessary care. The Commission encouraged the physical therapy profession to help research and develop this body of evidence and “use it to establish credible guidelines for outpatient physical therapy services furnished to older patients.”

MedPAC reports are usually given significant weight by Congress, but since the report is not binding, the door is still open for legislation on direct access.

New Direct Access Legislation Gains Support in Congress

Legislation introduced in March 2005 promises to amplify the charge for direct access in Congress despite the MedPAC report’s blows to the prospects for direct access. The “Medicare Patient Access to Physical Therapy Act of 2005” is very similar to the bill introduced in the previous Congress and would allow physical therapists to prescribe and bill Medicare for their services within their state-defined scope of practice without a physician’s referral.

In the Senate, the Medicare Patient Access to Physical Therapy Act is sponsored by Senator Blanche Lincoln (D-AR), a member of the Senate Finance Committee, which has jurisdiction over the Medicare program. The House bill is sponsored by Congresswoman Melissa Hart (R-PA), who is a member of the House Ways and Means Committee, which also oversees Medicare. At the time of this writing, the Senate bill had eight cosponsors and the House bill had 78 cosponsors, indicating that the physical therapy trade association is lobbying hard on this legislation.

This new bill takes on greater significance this year with the prospect of a Medicare bill looming in the fall of 2005. The recently-passed budget agreement contained “reconciliation instructions” that mandate legislative changes to entitlement programs such as Medicare and Medicaid. This development, coupled with heavy pressure from therapy groups to extend the moratorium on the annual $1500 per patient caps on outpatient physical and speech therapy and occupational therapy has the potential to result in passage of a compromise Medicare package that may include some version of the direct access legislation. With both sponsors of the bill on the committees with jurisdiction over Medicare, they will be in a position to exert significant influence over the contents of the final Medicare bill, assuming such legislation is enacted.

Effect of the Direct Access Legislation on O&P Care

How PT Direct Access legislation impacts the future of O&P care is the subject of significant disagreement. The legislation, if passed, would define physical therapy services according to state scope of practice laws and, therefore, if state law includes O&P care in its PT scope of practice, a PT would be able to provide O&P care without a physician’s order. The counter-argument, which the PT trade association currently asserts, is that O&P care is an entirely separate Medicare benefit and that, even if the legislation passes, O&P care will continue to require a physician order.

In terms of the bill’s potential impact on the O&P field specifically, the direct access legislation amends the Medicare definition of “outpatient physical therapy services” to permit a “qualified physical therapist” to furnish physical therapy services without the involvement of a physician. The legislation also amends the definition of “outpatient physical therapy services” to exclude any services that fall outside of a state’s scope of practice law.

Although stated in the negative (i.e., excluding services that are outside state scope of practice laws), the legislation’s incorporation of state scope of practice laws arguably establishes that the definition of “outpatient physical therapy services” for Medicare purposes includes any service authorized by a state’s PT practice act. Under this interpretation, if orthotics and prosthetics are included in a given state’s practice act, then they will be considered “outpatient physical therapy services” under Medicare law and a PT may provide and be paid for O&P care without physician involvement.

In contrast, the PT trade association currently asserts that physical therapy and O&P care are statutorily separate Medicare benefits and, because Medicare program instructions require that a physician “order” (or prescription) be on file in order for the DMERCs to issue payment on O&P claims, the direct access legislation is a non-issue for the O&P community. Under this interpretation, the legislation permits physical therapists to self-prescribe physical therapy, but such therapists would need a physician’s written order (or, in certain circumstances, the order of a nurse practitioner, clinical nurse specialist, or physician assistant) to furnish O&P care. SeeProgram Integrity Manual § 5.1. As a result of this argument, some O&P organizations that previously opposed direct access legislation have recently taken more neutral positions on the newly-introduced bill. Other organizations, such as NAAOP, continue to oppose direct access, not only for the potential negative impact it could have on the future of O&P, but also because of the belief that it is not in the interests of Medicare beneficiaries generally and could balloon Medicare spending for physical therapy services.

If the direct access legislation is enacted, then the future of O&P care will be substantially impacted by which one of the above arguments carries the day. Again, Medicare program guidance currently states that O&P care is only covered if furnished pursuant to the order of a physician or, in certain circumstances, the order of a nurse practitioner, clinical nurse specialist, or physician assistant. See Program Integrity Manual § 5.1. If the bill passes and is interpreted to include O&P care when such care is authorized by a given state’s scope of practice law, then this will trump any manual provisions requiring that PTs obtain a written order for O&P care (statutory language takes precedence over program instructions when a conflict arises).

However, even if the legislation is enacted but is not interpreted to include O&P care, it nevertheless lays the foundation for physical therapists to self-prescribe O&P care. Because the requirement of a physician’s order is found in program instructions rather than statute or regulation, it likely can be amended without Congressional action or notice and comment rulemaking. We believe it likely that, if PTs are granted the autonomy to self-prescribe physical therapy services, they will soon argue that Medicare program instructions should be amended to exempt physical therapists from the requirement that O&P care requires a written order from a physician. Once Congress has legislated that PTs do not require a physician order to furnish physical therapy services, it will be difficult to convince CMS that a physician order is necessary for a physical therapist to provide O&P care.

Direct Access Legislation Could Circumvent the Negotiated Rulemaking Process

The government has long recognized that there is an increased likelihood of abuse in the O&P field when such services are provided by unqualified practitioners. See Medicare Orthotics, OIG Report No. OEI-02-95-00380 (Oct. 1997). But the impact of the Medicare Patient Access to Physical Therapy Act could have the consequence of doing an “end-run” around the very issue that stalemated the O&P Negotiated Rulemaking Committee in 2003.

Section 427 of the Benefits Improvement and Protection Act of 2000, or BIPA, addressed the issue of which providers were considered “qualified” to provide the full range of O&P care by providing that Medicare would only pay for prosthetics and custom-fabricated orthotics if furnished by a “qualified practitioner.” BIPA limited the definition of “qualified practitioner” to physicians, certified orthotists and prosthetists, and “qualified” physical and occupational therapists.

BIPA also created a negotiated rulemaking process to assist the Centers for Medicare and Medicaid Services (CMS) with drafting the regulations interpreting Section 427. Between October 2002 and July 2003, CMS convened approximately eight two-day meetings where representatives of over 20 O&P-related organizations met and discussed, among other things, who should be considered “qualified” to provide professional O&P care (as opposed to “off-the-shelf” orthotics which are routinely provided by therapists and others with minimal training). In the end, the Negotiated Rulemaking Committee deadlocked without consensus on the matter of whether physical and occupational therapists should be permitted to provide O&P care solely based on state scope of practice law. CMS is currently developing a regulation that will interpret Section 427 of BIPA but little is known about the path that CMS will propose in terms of whom is considered “qualified” to provide comprehensive O&P care. However, the PT Direct Access legislation renders this point moot, since it arguably takes the further step of providing that, not only can PTs provide O&P care when permitted under state scope of practice laws, but they can do so without a physician prescription.

Furthermore, the PT Direct Access bill contains an explicit definition of the term “qualified physical therapist” and commits this definition to statutory language. The definition is extremely expansive, essentially grandfathering-in the vast majority of PTs. If this bill were to be enacted as is, or if this particular provision were to be stripped out of the direct access bill and included in a broader Medicare package, it would potentially establish in the Medicare statute that virtually all PTs are “qualified” for purposes of BIPA Section 427. This would explicitly authorize virtually all PTs to be paid by Medicare for the provision of comprehensive O&P care, and would completely circumvent the Section 427 regulation scheduled to be released later this year.

Political Future of Direct Access Legislation is Uncertain

The battle over direct access in Congress will likely center on the asserted efficacy, cost-effectiveness, and rationale for allowing enhanced access to traditional and physical therapy services, not on the impact that this bill will have on O&P. Under a strict interpretation of the legislation, the bill does not specifically or explicitly authorize physical therapists to self-prescribe O&P care. As a result, the bill’s potential impact on O&P will not likely be a major issue debated on the House or Senate floor. Thus, many in the O&P field will likely be unaware of the potential impact that physical therapy direct access may have on O&P practitioners and patients.

The advocates in favor of direct access are many. They are well-funded and organized at both the state and federal levels. They are in the process of gearing up for a massive push this summer and fall to include direct access provisions such as the Medicare Patient Access to Physical Therapy Act included in a final Medicare bill. Compounding these efforts is the real prospect of state legislatures actively supporting an expanded PT scope of practice to include O&P care.

Though not through the “castle walls” of Congress yet, the Medicare direct access bill could potentially be a Trojan horse for physical therapists to self-prescribe and self-provide O&P care for Medicare patients.

This article was prepared by Peter W. Thomas, JD, General Counsel to the National Association for the Advancement of Orthotics and Prosthetics, Adam H. Greene, JD, MPH, Associate, Powers, Pyles, Sutter and Verville, PC, and Dustin W.C. May, Legislative Director, Powers, Pyles, Sutter and Verville, PC

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