Columbia Physical Therapy, Inc., P.S. v. Benton Franklin Orthopedic Associates, P.L.L.C., 168 Wash. 2d 421

Summary

The Washington Supreme Court held that Benton Franklin Orthopedic Associates was authorized to employ physical therapists under the Professional Service Corporation Act and therefore did not violate the corporate practice of medicine doctrine or that Act. The court also held that the firm's physician-members were not barred by the antirebate statute from receiving profits generated by physical therapists employed by the same firm. The court affirmed summary judgment for BFOA on the corporate-practice, PSCA, and antirebate claims and upheld denial of summary judgment on the Consumer Protection Act claim.

Holdings

1. The corporate practice of medicine doctrine generally prohibits a business entity from employing health care professionals to practice their licensed professions absent legislative authorization, but BFOA's employment of physical therapists was legislatively authorized by the Professional Service Corporation Act.
2. BFOA's employment of physical therapists did not violate the PSCA because physical therapy falls within the practice of medicine, the professional service for which BFOA's physician-members were licensed.
3. The physician-members and physical therapists did not violate Washington's antirebate statute because profits from professional services rendered by firm employees are not unearned as to owners who practice as part of the same firm.
4. BFOA was not entitled to summary judgment on Columbia's CPA claim because evidence that physicians told patients they had to use BFOA's physical therapists, or directed patients there without clarification, could constitute unfair or deceptive acts or practices.

Questions Presented

1. Whether BFOA violated the corporate practice of medicine doctrine by employing licensed physical therapists.
2. Whether BFOA's employment of physical therapists violated the Professional Service Corporation Act, chapter 18.100 RCW.
3. Whether BFOA's physician-members and physical therapists violated Washington's antirebate statute through referrals and receipt of profits.
4. Whether the evidence that BFOA physicians directed or required patients to use BFOA's physical therapists supported a Consumer Protection Act claim sufficient to defeat summary judgment.

Disposition

other