What a physical therapy business must be licensed for

What to take away

The approval layers, by name

Most owners think of the license as one document. It is four, held by different parties, renewed on different cycles.

The licensing and compliance guide shows how these layers fit into one compliance file. This page names each license, registration and permit and what it covers.

Clinician licenses

Your state physical therapy board issues the physical therapist license and the physical therapist assistant license or certification. Every treating clinician needs a current one. Aides may need a separate registration or permit, depending on the state.

Verify each license on the board's public lookup and print the verification page with the date. That printout is your evidence if a payer audits.

Supervision rules for assistants and aides vary by state. Some require on-site supervision, others allow a therapist available by phone. Ask the board for the rule's citation, not a summary.

The hiring and training guide covers how to settle supervision rules before you write a job description.

Entity registrations

Your business needs a formation document from the secretary of state. That is usually articles of incorporation for a professional corporation or articles of organization for a professional limited liability company. The IRS issues an employer identification number through Form SS-4. Your state revenue department issues a tax registration for withholding, unemployment insurance and any taxable retail sales.

Some states also require a professional corporation or professional limited liability company structure for clinical practices. Ask your accountant which forms your state permits and whether ownership is restricted to licensed clinicians. Some states allow outside ownership, others do not.

The IRS publishes the current EIN application process and the forms your entity files. Confirm your filing cycle with your CPA, not with another owner.

Payer enrollment

Medicare enrollment runs through the CMS Provider Enrollment, Chain and Ownership System, known as PECOS. A group practice files Form CMS-855B, and each physical therapist files Form CMS-855I. If the therapist reassigns billing rights to the group, file Form CMS-855R. You need an active enrollment record before you can bill Medicare for any visit.

Commercial payers run their own credentialing. Many use CAQH ProView to collect clinician data. Timelines vary, and most take sixty to ninety days for a new practice. Ask each payer for its current timeline in writing.

State Medicaid enrollment is separate from Medicare. Apply through your state Medicaid agency or its provider enrollment portal. Recredentialing happens on a set cycle, usually every three years for commercial payers. A lapsed recredentialing date stops claims without warning.

For Medicare documentation requirements, start with the CMS compliance tips for physical therapists in private practice. The CMS therapy services page covers coding and billing rules.

Occupancy and premises permits

Your city or county issues a certificate of occupancy for the space. A clinic use may or may not fit the existing occupancy class. Ask the building department before you sign a lease. Many jurisdictions also require a local business license or tax receipt.

Fire authorities inspect for exit routes, extinguisher placement and occupancy load. Some jurisdictions also require a health department inspection for outpatient therapy locations.

Accessibility conditions apply to the entrance, the route to treatment areas and the restroom. The Justice Department's ADA guide for small businesses explains the principles. Have an accessibility professional walk the space rather than self-certify.

Direct access and referral rules

Some states allow evaluation and treatment without a physician referral, with limits on visit count or treatment days. Others require a referral from the first visit.

Your state board sets the rule. Your payers set a second rule on top of it. A payer may require a referral even where the state does not. Ask each payer whether it accepts treatment without a referral, which services need prior authorization, and how many visits are covered before an extension is required.

The operations and workflow guide shows where each check sits in the booking sequence. The pricing and profit guide explains why a visit outside an authorization is a cost rather than revenue.

What owners assume, and what to check instead

Advertising claims

Your board's advertising rules and state consumer protection law bound what you may say about credentials, specialties and outcomes. Check every claim against the board's rules before a directory listing goes live.

The marketing and growth guide covers what a listing should and should not contain.

Common questions

Is there one license that covers a physical therapy clinic?

No. Clinician licenses, entity registrations, payer enrollments and premises permits are separate approvals held by different parties. A practice needs all four before it can bill and treat legally.

Who checks that the licenses stay current?

One named person in the practice, on a calendar. Renewal dates, recredentialing cycles and payer policy changes run on their own schedules and will not remind you.

Can I rely on what another owner in my state told me?

Use it to learn which questions to ask, not as the answer. Their setting, payers and hire dates differ from yours, and rules change between renewal cycles.