All posts by Alexander A. Riccardi


Prior to the 1990’s, physicians and their immediate family members could legally own ancillary healthcare services, as well as physical therapy clinics. A common method of abuse was physician self-referral of patients to their own facilities for testing, imaging, and rehab, and often times these services were not indicated.  In order to control excess spending, Congress looked to prohibit this type of conflict of interest between physicians and health services they refer to. Legislation was drafted in order to prohibit this type of practice in what came to be known as the Stark Law. However, several exceptions were put in place for “in-house” services. Among these included X-ray imaging and physical therapy services.


PICO Question:  In patients being referred to outpatient physical therapy treatment, are services utilized at a higher rate if the referring physician has a financial interest in the facility compared to a physician referring to an independently owned facility?


Search Strategy: Pubmed, CINAHL, and Web of Science were searched with terms “Physical therapy” AND “Physician owned practice” OR “POPs.” Abstracts were screened for inclusion and exclusion criteria.

Inclusion Criteria:

-Patients referred by a physician  to outpatient physical therapy

-Patients receiving care in the United States

-Comparison of physician owned facilities to independently owned facilities used some metric of utilization of care including total cost, frequency of referral, total number of visits per patient,  or relative value units.

Exclusion Criteria:

-Articles published prior to 1990





Clinical Bottom Line:

-Consistent level 3 evidence that physician ownership of physical therapy clinics results in a higher percent of patients under that physician’s care being referred for PT.

-Consistent level 3 evidence that PT clinics with physician ownership result in increased visits per patient.

-Fairly consistent level 3 evidence that physician ownership of PT clinics results in increased cost to the healthcare system, but may bill less services per patient episode.

-Some level 3 evidence that services billed by physician owned clinics may consist of less one-on-one care with licensed physical therapists as measured in RVUs.



The articles published within this CAT have several large limitations which reduces the ability to generalize the data to the entire healthcare system.

  1.  4 out of 5 studies published by the same author
  2. Each study only looked at claims from one state
  3. Data from only 3 states were included among the 5 articles
  4. Only one insurance provider was looked at per article
  5.  3 of the 5 studies contained data that is not current
  6. Outcome measures were not tracked in any of the articles
  7. Statistical analysis was not performed.

Application and Significance of Research:

The articles revealed more total expenditures and higher cost to the healthcare system for rehabilitation services when a referring physician had a financial interest in a physical therapy clinic. As a profession, we can use this data to push for legislation that prohibits or limits physician self referrals, which would both control healthcare spending and give physical therapists more autonomy within our profession.


Heidi Ojha, PT, DPT, OCS, FAAOMPT; DPT Class of 2017.



Mitchell, J. M. (1992). Physician Ownership of Physical Therapy Services. Jama, 268(15), 2055. doi:10.1001/jama.1992.03490150107033
Mitchell, J. M., & Sass, T. R. (1995). Physician ownership of ancillary services: Indirect demand inducement or quality assurance? Journal of Health Economics,14(3), 263-289. doi:10.1016/0167-6296(95)00003-z
Mitchell, J. M., Reschovsky, J. D., Franzini, L., & Reicherter, E. A. (2015). 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,0(0). doi:10.1515/fhep-2015-0026
Mitchell, J. M., Reschovsky, J. D., & Reicherter, E. A. (2016). Use of Physical Therapy Following Total Knee Replacement Surgery: Implications of Orthopedic Surgeons’ Ownership of Physical Therapy Services. Health Services Research,51(5), 1838-1857. doi:10.1111/1475-6773.12465
Swedlow, A., Johnson, G., Smithline, N., & Milstein, A. (1992). Increased Costs and Rates of Use in the California Workers’ Compensation System as a Result of Self-Referral by Physicians. New England Journal of Medicine, 327(21), 1502-1506. doi:10.1056/nejm199211193272107