The following letter from the Physical Therapy Board in California is apparently on its way to PT’s working illegally as employees in physician offices.  This issue has been covered extensively.

Dear PT:

The Physical Therapy Board of California (Board) recently became aware that the employment of physical therapists in a medical corporation, formed under the Moscone-Knox Professional Corporations Act, is a violation of Corporations Code section 13401.5.  This new understanding has prompted creating the enclosed Summary of Facts Related to the Practice of Physical Therapy by Corporations, and mailing of this letter, to ensure licensees regulated by the Board are also informed of this provision of law.  Additionally, the Board has recognized as a separate issue, some physical therapy corporations organized as general corporations are not in compliance with the obligation imposed on all corporations providing professional services by Moscone-Knox, which may also create employment issues for professional employees of these corporations.

The Physical Therapy Practice Act (Act) was enacted by the legislature in 1953.  The Act created the Physical Therapy Board of California [then the Physical Therapy Examining Committee] in Business and Professions Code (B&P Code) section 2600, – of that chapter;- B&P Code §2602.1 of the Act; states, “Protection of the public shall be the highest priority for the Physical Therapy Board of California in exercising its licensing, regulatory, and disciplinary functions.  Whenever the protection of the public is inconsistent with other interest sought to be promoted, the protection of the public shall be paramount.”

The mandate of the legislature is to enact laws.  It is the mandate of the Board to enforce the laws enacted by the legislature.  As a result, the Board must enforce Corporations Code section 13401.5 which excludes physical therapists as one of the professions authorized to be a shareholder, officer, director or employee of a medical corporation.  The Board’s directive is supported by the two legal opinions enclosed with this letter, 1) September 29, 2010 California Legislative Counsel Opinion; and, 2) Legal opinion issued by the legal office of the Department of Consumer Affairs on February 28, 2011.  Furthermore, the Board must ensure all corporations offering physical therapy services, as well as all PTBC licensees employed by such corporations, are in compliance with applicable provisions of Moscone-Knox.

This letter and the enclosed Summary of Facts Related to the Practice of Physical Therapy by Corporations are intended to ensure licensees are knowledgeable of this recent clarification of the law and to aide in making informed decisions regarding employment. Receipt of this letter should not be taken as indication the Board is currently investigating you or your license; or, is currently planning enforcement action against you or your license.  Nevertheless, each recipient of this letter should be aware the Board has received a complaint pertaining to his/her employment situation and are advised to thoroughly review this material.

If after reviewing the enclosed information, you find you are in an unlawful employment arrangement and require time to come into compliance please notify the Board by September 1, 2011 of your compliance plan.  Since it is not the intent of the Board for licensees to be unemployed, or the public’s access to healthcare professionals to be limited, the Board will consider each plan submitted and will authorize time for implementation of any plan deemed to be reasonable. However, you should be aware; it you are unlawfully employed and do not respond with a plan of compliance, it will constitute cause for enforcement action.

Please do not hesitate to contact the Board office if you have any questions or concerns regarding employment and compliance with section 13402.5 of the Corporations Code and the Board’s obligation to enforce the law; however, be aware the Board and its staff cannot provide you with legal advice and will not be able to create your compliance plan for you.  The Board hopes you find this informative; and, if necessary, gives you the opportunity to come into compliance with the law.

Sincerely,

Physical Therapy Board of California