Physical Therapy Board votes to seek higher fee caps after DCA fiscal review

The Physical Therapy Board of California voted 4–0 on March 19 to pursue legislation raising the board’s statutory fee caps, a step board members said is needed after a data‑driven review of the board’s fund condition and projected costs.

Board President Dr. Karen Brandon introduced the motion asking the Legislature to amend Business and Professions Code §2688 and set new upper limits on several licensing fees, including a proposed PT application and renewal cap of $600. "I propose a PT application cap set at $600," Dr. Brandon said when reading the motion for the board.

Why it matters: Department of Consumer Affairs (DCA) fiscal staff told the board its fund condition is structurally imbalanced and projected to decline to levels the board judges unsustainable unless revenue flexibility is provided. Matt Nishamini, DCA senior fiscal adviser, said the board faces both direct processing costs and growing indirect charges — notably higher hourly costs billed by the Attorney General’s Office and by the Office of Administrative Hearings (OAH). "And we can't have that," Nishamini said as he described the model that showed reserves declining into yellow and red ranges under current law.

What the analysis found: DCA presented a driver‑based cost model that tallies staff time per licensing task, allocates indirect costs (state PR‑rata, operations, enforcement pass‑throughs), and projects multi‑year fund conditions. Staff estimated the current total cost to process a typical PT initial application at about $651 (direct plus indirect allocation), above the current statutory caps for application and initial licensing. The dashboard demonstrated that modest cap increases would reduce the board’s projected deficits and that substantially higher caps (for example, doubling existing caps) would more quickly restore multi‑year reserves — but also could push reserves above the statutory 24‑month ceiling unless fees were later adjusted in regulation.

Board debate and concerns: Members pressed staff on tradeoffs, including barrier‑to‑entry effects for applicants, differences between PT and PTA fee structures, and the timing required for regulatory changes if the Legislature grants higher caps. Staff emphasized that any fee amounts that would be charged to licensees are set later through the administrative (regulatory) process; raising statutory caps only authorizes the board to set higher fees if it chooses. The legislative change, if passed, would become effective per the statute’s timetable (examples shown assumed a Jan. 1, 2027 effective date), but actual fee amounts would be subject to a separate public regulatory process.

Public comment and stakeholder position: Stacy Defoe, executive director of the California Physical Therapy Association, said the association was neutral on the board seeking cap increases, acknowledged the board’s fiscal arguments and the need for stakeholder engagement during the later regulatory process: "We appreciate the conversation, the information … We also understand the barrier to entry conversation that was had. So we'll be watching to see how this goes," she told the board.

Formal action and next steps: The board passed the motion to pursue legislation to amend Business and Professions Code §2688 by roll call (Brandon, Armstrong, Caleiff, Samuel Q voting yes; McMillan absent). The motion also authorized the executive officer to confer with the legislator carrying the measure and to return with subsequent regulatory proposals if legislative authority is granted. Staff will prepare the formal legislative language and supporting justification, continue stakeholder outreach, and, if the Legislature approves higher caps, carry out the required regulatory rulemaking that would determine exact fee amounts and implementation timelines.

Context and constraints: DCA staff warned that indirect adjudication costs (AG and OAH) are largely outside the board’s control and have risen in recent years; the board may also pursue budget change proposals or augmentations for specific cost lines. Staff repeatedly noted the distinction between (a) obtaining legislative authority to raise caps and (b) using the administrative rulemaking process to actually increase the fees charged to licensees — the second step requires additional analysis, stakeholder engagement, and a public comment period.

What to expect next: Staff said they will draft and transmit proposed statutory language and the fiscal justification to the legislator identified to carry the board’s sunrise/sunset request; the board will continue stakeholder outreach and prepare the regulatory analyses that would be required if the Legislature grants authority to raise fee caps.

Provenance: The board introduced and discussed the fee‑cap recommendation beginning with the presentation from DCA senior fiscal adviser Matt Nishamini (transcript discussion and dashboard demonstration beginning with the agenda item introduction); the motion to seek legislative authority and the roll‑call vote occurred later in the same meeting.