Washington state doctors, physical therapists battle over referrals

Physicians worry that a lawsuit will hurt competition and continuity of care.

By Amy Lynn Sorrel, AMNews staff. March 3, 2008.

A legal dispute in Washington state has doctors worried that their ability to employ other licensed medical professionals -- and ultimately compete in health care -- may be compromised.

The owner of a physical therapy group is suing an orthopedic practice, saying the doctors are profiting illegally from referrals they make to physical therapists who work for them. Columbia Physical Therapy also claims that state law prohibits Benton Franklin Orthopedic Associates in Kennewick, Wash., from hiring physical therapists at all. Both sides are asking the Washington Court of Appeals to clarify the issue. Judges have yet to decide whether to accept the case.

The Washington State Medical Assn. disputes Columbia's legal interpretation. Tim Layton, the association's director of legal affairs, said state law "permits [doctors] to employ other providers and to make a profit from those employees for providing their services. It's been going on for years and helps make the practice of medicine more efficient because within one particular group, you can have a number of professionals providing services to patients."

The WSMA, with the American Medical Association/State Medical Societies Litigation Center, is helping Benton Franklin Orthopedic with financial and legal resources. Doctors say the legal threat is aimed at cutting competition from physician practices.

"This litigation must not be allowed to infringe on physicians' freedom to determine how their practice can provide optimal care," said AMA Board Trustee Cyril M. Hetsko, MD. "Undermining this prerogative would inhibit innovation and fair competition." It also would restrict patient choice and continuity of care.