Wow, Debbie, I've never heard of actually withholding treatment because of physical therapy involvement. Around here, PT is suggested for almost any reason, and after the THERAPIST evaluates the need-based treatment, either they or Medicare decide whether to cover. What you have experienced scares me - not for myself because I can't take even a couple of steps without my cane, but for others like yourself who have shown both willingness and desire to invest the time and effort to become as healthy and independent as possible.
My P.T. went to cash-only at the beginning of the year because Medicare cut its reimbursement too low for her to sustain her practice. So now I pay out-of-pocket because I want to retain her (as opposed to going to a different therapist). Here, the therapist has the last word about whether they can help the person (the doctor cannot require PT). I am so sorry that you have been put in this position. I thought the physicians' vow to do no harm meant just that.