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South Carolina Court Decides Key Health Care Case

Physical therapists win in employment lawsuit

September 20, 2016

The South Carolina Supreme Court has decided a case with great significance in the health care industry. The court overturned a ban on physicians employing physical therapists and gave guidance regarding how state agencies make rules.

In 2006, the court ruled in Sloan v. SC Board of Physical Therapy Examiners. (I represented physicians who employed physical therapists).  In a 3-2 ruling, the court determined that a "physical therapist employed  by a physician who refers patients to the therapist is, in essence, dividing, transferring, or assigning" fees. The court said that was a violation of law.

The September 17, 2016 ruling in Joseph v. South Carolina Department of Labor, Licensing and Regulation (2016) reversed the Sloan decision and adopted the position we argued in 2006. The court wrote, in part:

"The underpinning of Sloan is the assumption that physicians who refer patients to physical therapists under their employ will act in bad faith or be mired in a conflict of interest because of the financial remuneration they receive from the provision of such service. We choose to make no such assumption concerning our brothers and sisters in the medical profession....

We now recognize that the interpretation in Sloan creates an absurd situation by strictly prohibiting physician-PT employment relationship without considering the resulting ethical implications or patient well being."

Physical therapy professionals are calling it a victory, saying that their constitutional rights to equal protection and due process have been restored. What's more, the courts decision is being hailed as victory for physicians and patients. 

Attorney Jimmy Long is a litigator who represents professionals across the state before various licensing boards and courts. A certified mediator since 1998, much of his law practice is focused on disputes within to the health care industry.