Columbia Physical Therapy, Inc. v. Benton Franklin Orthopedic Associates, PLLC

Summary

The Washington Supreme Court considered whether a physician-owned professional limited liability company violated the corporate practice of medicine doctrine, the Professional Service Corporation Act, the antirebate statute, and the Consumer Protection Act by employing physical therapists and referring patients to them. The court held that physical therapy falls within the statutory practice of medicine and that the company's employment of physical therapists did not violate the corporate practice doctrine or the PSCA. It also held that the physician-members and physical therapists did not violate the antirebate statute, but affirmed denial of summary judgment on the CPA claim because the alleged referral practices could constitute unfair or deceptive acts.

Holdings

1. A business entity may not employ licensed health care professionals absent legislative authorization, but the Professional Service Corporation Act provides authorization for BFOA to employ physical therapists because physical therapy is included within the statutory practice of medicine.
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 employees of a lawful firm are not unearned as to owners who themselves practice as part of that firm.
4. BFOA was not entitled to summary judgment on Columbia's Consumer Protection Act claim because evidence that physicians told patients they had to use BFOA's physical therapists, or pointed to BFOA's facility in response to referral questions, could constitute unfair or deceptive acts or practices.

Questions Presented

1. Whether BFOA's employment of physical therapists violated Washington's corporate practice of medicine doctrine.
2. Whether BFOA's employment of physical therapists violated the Professional Service Corporation Act.
3. Whether BFOA's physician-members and physical therapists violated Washington's antirebate statute by receiving or paying profits associated with patient referrals.
4. Whether the alleged statements and conduct directing patients to BFOA's physical therapists could constitute unfair or deceptive acts or practices under the Consumer Protection Act.

Disposition

affirmed