Guides
How to start a physical therapy business in 10 stages
How to start a physical therapy business in 10 stages: what each stage covers, the gate it must pass, and the three numbers to watch in the first ninety days.
How to start a physical therapy business is a sequence, not a list of tasks you can do in any order. The stages below are that sequence, and each one ends with a gate you have to pass before the next begins.
What to take away
- Opening a practice is a sequence with gates, and most delays come from doing the stages in parallel and discovering that one of them was a prerequisite.
- The slowest items are the ones you do not controlstate approvals, payer credentialing, and the lease. Start those first and build everything else behind them.
- The schedule template, the cancellation policy and the intake forms must exist before the first patient books, not after.
- The first ninety days are a test of the referral relationship and the calendar, not of the marketing.
The order of work
Each stage below ends with a gate: a thing that must be true before the next stage starts, and a dated document you could show a lender, a payer or a lawyer if asked. Write the gate down and do not move until it is met.
Startup stages and their gates
- Choose practice modelone-page description
- Confirm board standingdated file
- Form entity and taxnumbers issued
- Payer worktracking sheet
- Spacemove-in after credentialing
- Operating systemdry run passed
- Feesquotable schedule
- Choose the practice model. In-network, cash, hybrid, mobile or contract. This decides everything downstream, from the software you need to the size of the front desk. If you have not settled it, the startup and market guide on this site walks through the four questions that fix it. Gate: a one-page description of who refers, who pays, who treats and where.
- Confirm your own standing with the state physical therapy board. Read the state practice act, then the board's license application and its rules on practice-location registration, supervision of assistants and aides, and whether patients may be seen without a referral. Get the answers from the board's own publications or in writing from its staff; the licensing and compliance questions to settle are listed on this site. Gate: a dated file of board answers, plus a copy of the license application or renewal you filed.
- Form the entity, register for tax and carry insurance. The usual choices are the sole proprietorship, the limited liability company and the S corporation, and the trade-offs turn on personal liability, self-employment tax and how much paperwork you want; some states require a professional corporation or a PLLC instead. The IRS starting a business page covers structure, the employer identification number and the federal filings; the state has its own list. An accountant who works with clinics will know which entity choices interact with payer enrollment, and an insurance broker will place the professional liability coverage every clinician needs, plus general liability for the space and workers' compensation once you have employees. Payers and landlords commonly ask for a certificate of insurance before they will contract or sign. Gate: entity formed, tax numbers issued, business bank account open, and a certificate of insurance in hand.
- Start payer work if the model includes insurance. Credentialing and contracting with each payer has a lead time you do not control, and it is the item that most often pushes back the first insurance payment. You will need a National Provider Identifier for yourself and, if the practice bills as an organization, for the practice; Medicare enrollment is filed through PECOS on the CMS-855B application; many commercial payers also expect a CAQH ProView profile. The SBA business guide is useful for the general launch checklist, but nothing in it prepares you for how long a payer takes. Ask each payer for its timeline in writing. Gate: applications submitted and a tracking sheet with expected dates.
- Secure the space and the equipment. Lease terms, build-out, accessibility of the entrance and treatment areas, tables, equipment and the private space where an evaluation can be done with the door closed. Get the rent per square foot and the total monthly obligation in writing before you sign, and have an attorney read the personal-guarantee and termination clauses. Gate: a move-in date that is later than the credentialing dates you were given.
- Build the operating system. Software with a schedule template, the intake forms (referral source and history, consent to treat, and the acknowledgment of the notice of privacy practices), the cancellation and no-show policy with its notice window stated in writing, the documentation template, and the process for checking eligibility and authorization before a visit is booked. Scheduling-only tools and full practice-management systems both exist, and platforms such as WebPT and Jane sit in that comparison; the choice usually turns on whether you bill insurance from the same system. The daily operations and workflow guide covers what that system needs to do. Gate: a dry run where a colleague books, attends and pays for a fictitious visit end to end.
- Set the fees and the payer split. A cash evaluation and a treatment visit each need a price the front desk can quote, and the share of the calendar you give to each payer sets how much of that price you keep. The pricing and profit guide explains the arithmetic. Gate: a fee schedule the front desk can quote without calling you.
- Hire, if you are hiring. A second therapist, a front desk, an assistant. Onboarding takes weeks and the person needs to be trained on your system, not the last clinic's. See hiring and training your first clinical staff. Gate: each hire has a written role and a start date that precedes opening.
- Open the referral conversations. Physicians, surgeons, discharge planners, athletic programs, whoever your model depends on. This is a relationship, not an announcement, and it starts before the doors open. Gate: a list of named referrers who have said they will send a patient.
- Open, then watch the calendar. The first ninety days are covered below.
What must be true before the next stage
What must be true
| Stage | Gate | What breaks if you skip it |
|---|---|---|
| Model | One-page description | Software bought for the wrong workflow |
| Board answers | Dated file | Supervision or referral rules discovered after opening |
| Entity and tax | Numbers issued | Payer applications rejected for missing identifiers |
| Payer work | Tracking sheet | Opening date set before you can bill |
| Space | Move-in after credentialing | Rent paid on an empty clinic |
| Operating system | Dry run passed | Front desk improvises the policy |
| Fees | Quotable schedule | Every price is a phone call to the owner |
| Hires | Written roles | Training happens on live patients |
| Referrers | Named list | An empty first month |
The first ninety days
Three numbers tell you whether the model is working.
First ninety days: three numbers
- New evaluations per weekby referral source
- Visits completed vs plannedplan of care
- Cancellation and no-show ratepolicy enforcement
- New evaluations per week, by referral source. This is the referral relationship reporting back to you. If a source that promised patients has sent none, call them; the fault is often a form or a fax number.
- Visits completed against visits planned. This is the plan of care surviving contact with real lives. If patients drop out at the same point in the plan, the problem is usually the policy or the scheduling, not the patient.
- Cancellation and no-show rate. If it is high, the policy is not being explained at intake or not being enforced.
Marketing in the first ninety days is mostly making sure the directory listings are correct and the phone is answered. The marketing and growth guide covers what to do once the calendar has proved it can hold patients.
Two things to check with the payer, not with a colleague
Where you bill Medicare, the coding, modifier and documentation rules are published on the CMS therapy services page and are updated there. That is where you confirm the codes you bill most often — 97161 through 97163 for the evaluation, 97110 for therapeutic exercise, 97140 for manual therapy — and the modifiers that travel with them, such as the -GP modifier that identifies therapy services furnished under a plan of care. Commercial payers each have their own policy. A colleague's summary of either is a summary of what was true at their clinic on the day they read it. Read the current version yourself, and note the date.
Common questions
Can I open before credentialing is complete?
You can open the door. Whether you can bill a given payer for a visit delivered before its approval date is the payer's rule, and the honest answer is to ask the payer in writing. Many owners open cash-only or with a limited payer set and add the rest as approvals arrive.
What is the single most common cause of a late opening?
A lease signed before the payer and state timelines were known. Rent starts on the lease date; revenue starts on the approval date.
Do I need a front desk person on day one?
Someone has to answer the phone, check eligibility and enforce the cancellation policy while the therapist is in a treatment slot. If that person is you, the calendar has one fewer treatment slot every time the phone rings. Decide which of those costs more.
