Analysis of California Assembly Bill 1000

On October 7, 2013, Governor Brown signed AB 1000 (Consumer Direct Access to Physical Therapist Services: Professional Corporations) into law which is also known informally as the “direct access law.” Effective January 1, 2014, patients may directly seek physical therapist treatment under provisions of the new law.
The debate about direct access and its impact on patient care has been the focus of the media and legislative discussions statewide. Now that AB 1000 is law, it is important to understand its implementation, how it impacts employment of physical therapists and other health care professionals, and a physical therapist’s obligations when initiate treatment without a referral or medical diagnosis.
The Moscone-Knox Professional Corporations Act
Apart from codifying direct access within the scope of a licensed physical therapist practice, AB 1000 made significant changes to the Moscone-Knox Professional Corporations Act. To better understand the significance of the changes, we must consider the history of the statute.
From 1990 to 2010, there was debate and some confusion about whether physical therapists could serve as employees of professional medical, podiatric, chiropractic corporations or whether the Moscone-Knox Act prohibited physical therapists from providing services for such corporations.
On September 29, 2010, in Legislative Counsel Opinion #1021592, the Legislative Counsel addressed the issue, stating that:

    • Because Section 13401.5 of the Corporations Code did not list physical therapists as a licensee that could provide services for a medical corporation, a physical therapist was prohibited from providing services as an employee of a medical corporation.
    • A physical therapist who provides services under this scenario could be subject to license discipline by the Physical Therapy Board.
    • Both a medical corporation and a physical therapist that violate the Moscone-Knox Act are guilty of aiding and abetting a violation of the Medical Practice Act, as well.

The reasoning of the Legislative Counsel was based upon the types of health care practitioners expressly listed in each type of professional corporation authorized by the Moscone-Knox Act. Physical therapists were not listed in Section 13401.5 as possible shareholders, officers, or employees of medical corporations, and hence were not authorized to provide professional services for medical, podiatric, and chiropractic corporations.
In addition, on November 3, 2010, the Physical Therapy Board rescinded its 1990 resolution which had previously authorized the concept of a physical therapy general corporation that could be owned by anyone.
AB 1000 Amendments to the Moscone-Knox Act
AB 1000 changed subsections of Section 13401.5 of the Moscone-Knox Act discussed above that set forth who can provide services as an employee of a medical corporation and many other types of professional corporations. The amended Section 13401.5(a) regarding medical corporations now provides that “licensed physical therapists” may be “shareholders, officers, directors, or professional employees.”
AB 1000 also added subdivision (p) to Section 13401.5 which describes who may provide services, own, or serve as officers of a physical therapy corporation (this section did not exist under the law before AB 1000).
And to alleviate any doubt about any type of licensed health care provide rendering services as an employee of certain types of healthcare provider professional corporations, the new Section 13401.5 states:
Any person duly licensed under Division 2 (commencing with Section 500) of the Business and Professions Code, the Chiropractic Act, or the Osteopathic Act may be employed to render professional services by a professional corporation designated in this section.
AB 1000 also added a 14-point font written disclosure of financial interest and patient choice in Section 2406.5 of the Business and Professions Code:

(a) When a physician and surgeon, podiatrist, or other referring practitioner refers a patient to receive services by a physical therapist employed by a professional corporation as defined in Section 13401 of the Corporations Code, the referring practitioner shall comply with Article 6 (commencing with Section 650) of Chapter 1, and shall provide notice of the following to the patient, orally and in writing, in at least 14-point type and signed by the patient:

(1) That the patient may seek physical therapy treatment services from a physical therapy provider of his or her choice who may not necessarily be employed by the medical or podiatry corporation.
(2) If the patient chooses to be treated by an employed physical therapist, any financial interest the referring practitioner has in the corporation.

AB 1000 clearly expands the ability of healthcare professional corporations to employ other types of licensees. It does not prohibit or restrict this from the former law. Further, it specifies more clearly who can and cannot be involved with each type of corporation listed in Section 13041.5.
Direct Access Provisions of AB 1000
The public debate over the benefits of direct access to patient care has been settled in large part by AB 1000. But what does a physical therapist have to do if a patient directly accesses him or her?
AB 1000 added Section 2620.1 to the Business and Professions Code. When someone directly initiates treatment with a physical therapist and the treatment is “within the scope of practice of physical therapists,” this section requires the physical therapist to:

    • Refer the patient to doctor, osteopathic doctor, dentist, podiatrist, or chiropractor if the physical therapist:
      • has reason to believe that the patient has signs or symptoms of a condition that requires treatment beyond the scope of practice of a physical therapist; or
      • the patient is not progressing toward documented treatment goals as demonstrated by objective, measurable, or functional improvement;
    • Disclose any financial interest the physical therapist has in treating the patient or in the physical therapy corporation;
    • Notify the patient’s physician, with the patient’s authorization, that the physical therapist is treating the patient;
    • Stop treating the patient beyond 45 calendar days or 12 visits, whichever occurs first, unless the physical therapist obtains approval of the physical therapist’s plan of care (by dated written signature) from a physician, osteopathic physician, or podiatrist. And such approval shall involve “an in-person patient examination and evaluation of the patient’s condition” and/or testing. This section does not apply to physical therapists providing wellness physical therapy services or if the patient has a diagnosis from a licensed diagnostician.
    • Provide a specified notice to the patient orally and in writing in at least 14 point font and signed by the patient.

In addition to these requirements of the new Section 2620.1, AB 1000 added a new provision to the Physical Therapy Act that makes violating section 2620.1 and its requirements grounds for license discipline.
Like almost all new pieces of legislation, there is much more to AB 1000 than meets the eye. Physical therapists are encouraged to seek legal counsel with any questions about how AB 1000 impacts their practice, their employment, or the immediate initiation of treatment.