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Starting a Physical Therapy Clinic

Starting a Physical Therapy Clinic: The Right Way

How to Start a Physical Therapy Clinic

Starting a physical therapy clinic doesn’t have to be stressful. With careful planning and preparation, you can operate a successful business that becomes a vital part of the local community. However, there is a right way to do things and a wrong way, but in the end owning a physical therapy clinic is a challenging, but immensely rewarding experience. Read on to learn how you can get started with your physical therapy clinic.

Have a Plan

No business succeeds without a plan and starting a physical therapy business is no different. It doesn’t have to be complicated but having goals and a general direction is key. Knowing those goals and defining how you will reach them is crucial.

Laying out a plan for 12-18 months, to begin with, is a good idea. Start off your venture with a clear idea of where your business currently is and each step on the path to the future you want to attain.

When creating a business plan for your physical therapy clinic, you should look at several factors. Conducting market research is vital during this process. Besides goals, a business plan often includes values, financing, sales, operations, hiring plans, and market assumptions. Here are some things to consider.

Understand the Market in the Area

  • Know who your patients are.
  • Who do those potential patients seek care from now?
  • Why are they seeking care?
  • Who are the major referring entities?
  • How can you make patients come seek care from you?
  • What is the need for physical therapy in your area?
  • Investigate the competition.

You can conduct market research in a couple of ways. First, there are business software programs that make starting a physical therapy business easier. Usually, this software builds in research and analysis. Information resources can provide most of your answers. The internet is an excellent source for this type of information. Also, some companies sell all kinds of data such as studies, client lists, credit reports, and more.

It’s better to do your own research. Looking at published resources or conducting interviews with actual consumers helps you gather critical information on what possible patients for your business like and don’t like. Using social media to collect intelligence on your competition is also a great idea. Google analytics can run statistics that represent your website visitors to further assist your research and planning.

Develop a marketing strategy that uses digital and printed marketing materials. Television and radio ads can also provide great coverage for your business. Make it simple for physicians’ offices to set up appointments from their own office to have their patients come to you.

Choosing a Space for Your Physical Therapy Clinic

Randomly selecting a business space is not a good idea. When researching and planning, it’s critical that you understand what direct access services your state allows. While it is generally legal for patients to receive evaluations and treatment from any licensed physical therapist with no prescription, each state is different.

Look at how many other physical therapy clinics are in the area. Is there a service gap that your business can fill? Look at the demographics of the area during your research phase to see how many people reside and work there. It’s also important to understand how to become a preferred provider in a location, too.

Is the building you want to use for your business accessible by public transportation, foot, or car? Will people see your signage from the surrounding streets? You must also make sure the building and bathrooms are accessible to all patients. Parking is also a vital factor as many people visiting your business have injuries. Also, look at square footage and rent structure.

Securing Funding

To obtain the necessary funding, a sound business plan is critical. Funding can come from various sources like friends, banks, Angel Investors, and family members. Securing funding from a bank is a drawn-out process, and the institution may require you to modify your business plan. There is also a lot of paperwork, so there is a waiting process with bank financing.

Purchasing Equipment

During the planning phase, you should also create a capital budget to use for equipment purchases. You’ll need therapeutic modalities for patient treatment such as cryotherapy, ultrasound, TENS, and more. Other vital equipment for a physical therapy clinic is treatment tables, computer equipment, and exercise equipment.

Buying the most expensive equipment may be tempting, but it will cause you to accrue a significant amount of debt. When you first start your clinic, its best to choose equipment that is priced well and works well for your practice. A good suggestion is to approach other physical therapy clinics for sale as you can often find excellent deals on the equipment that they are selling.

It’s even possible to purchase all equipment necessary to open a clinic for under $8,000 if you focus on being creative and efficient with your purchasing process. Remember, the internet makes price comparison easy thus allowing you to save money.

Research is the key to saving money. Also, utilize your network to find equipment and supplies for the best prices. It’s more important to help your patients get better than to spend extravagant amounts of money on fancy equipment.

Insurance-Based or Cash-Based

It’s important for you to research the positives and negatives of using insurance companies or cash-only services. Entering into insurance contracts is usually better. With these contracts, you need only to collect co-payments. One negative is the fact that insurance companies frequently reduce reimbursement rates leaving Physical Therapists with decreasing salaries.

Starting a physical therapy clinic requires difficult choices like what payments to accept. Some clinics believe that only accepting cash for services is a survival tactic for the continually changing healthcare market. Often, patients can take receipts from these services and receive reimbursements from their insurance companies. Even one incorrectly filed code can cause increased costs and claim denials.

However, insurance-based practices are usually more convenient for the patient. Needing to file for insurance reimbursements is a hassle that many want to avoid. Apex EDI’s proprietary claim process allows you to offer the convenience of insurance-based services to your customers while reducing the difficulties involved on the business end. It also focuses on getting you paid as quickly as possible.

We offer three ways to improve the insurance claim process: Practice Accelerator, Apex One Touch, and Apex API. Benefits include low fees, claim status reporting and searching, customized reports, unlimited claim support and customer service, online claim history, and more. Outsourcing your billing also saves you money associated with patient billing and hiring staff to do it. Apex makes the process of accepting insurance as easy as accepting cash payments only––making it a win-win for you and your clients.

Billing for your Physical Therapy Practice

Medical billing is an essential part of running any insurance-based medical business. It presents a standardized format for determining how much certain services and procedures cost. The coding and billing process is often filled with errors that can negatively impact insurers, providers, and patients.

Thankfully with Apex EDI this is a thing of the past, we make it easy to file physical therapy claims to insurance companies. As a national clearinghouse, our claims service uses cutting edge technology to make sure your claims process is as seamless as possible, meaning you get reimbursed for services sooner. Our software was created to help you focus on your physical therapy business and patient care while we file the associated paperwork.

The Physical Therapy Software easily integrates with your system whether it uses electronic claims or practice management computer software. An efficient claims process makes starting a physical therapy clinic that much easier.

Physical Therapy Credentialing Requirements

Credentialing can be a nightmare for medical businesses and individuals. Requirements for physical therapy credentialing vary from state to state and from insurance company to insurance company. Credentialing companies specialize in credentialing and make the process less stressful. They complete your applications and offer additional services so that you can focus on your patients.

Their expertise and knowledge of the guidelines save you the headache of days of paperwork. They also help with obtaining your NPI or National Provider Identifier. They will even remind you when you must re-credential. There’s no need for you to turn patients away because you’re not credentialed through their insurance provider.

Starting Solo or as a Group

There are several things to consider when thinking about credentialing with insurance panels. You must decide if you want a group or solo practice. It is easier to start as a group practice than it is to begin as a solo practice and then decide that you want to change later to a group practice.

You may want to decide whether to specialize in a specific niche at this time. Here’s a white paper that discusses how you can finding your niche. Sometimes generalizing is a mistake. When niching down, you target a specific client with specific needs. Think of the type of physical therapy that you enjoy. Who are the patients that you enjoy working with? Does your experience highlight one niche?

Adding a Provider

Beginning the paperwork for credentialing before a new provider is scheduled to begin at your physical therapy clinic avoids delays with paperwork. If they are already credentialed then you only have to fill out a short form and submit. Often the wait is just a few weeks.

With a new provider, there is a minimum waiting period of 30-90 days if there is no co-signer. Since each payer has different guidelines they may not be able to treat patients until the paperwork is resolved. Medicare is one of the few payers that allows you to bill claims retroactively. Always be sure to ask if the payer will allow retroactive billing to avoid losing out on income.

January Has Credentialing Delays

Every January, there is an open enrollment period for new patients with payers. They also update their policies during this timeframe. It’s vital to remember that credentialing delays are inevitable.

CAQH Profile

This entity is a database of Universal Providers. Mainly, it works the same as credentialing software. The CAQH retains your important profile information. At times payers want to access your profile information instead of completing the paperwork.


Medicare will come visit the site of your clinic. You must receive a Medicare group provider number or PTAN before enrolling with their managed plans. To complete credentialing, you are required to visit each payer’s website; Medicare, Medicare Railroad, and Medicare Managed Care.

Hiring Staff

Hiring the right staff is also vital to your success as a physical therapist. Tell old colleagues or college classmates that you’re looking for other qualified therapists. A receptionist or secretary is also a key employee. They can help with billing, scheduling, and answering phones. If you hire other physical therapists, they must be recognized as experts.

If your practice is busy enough, hiring an office manager might be a sound investment. An office manager can take over managerial tasks. They must be a friendly face for the customers and should be able to handle business efficiently.

The people that you hire should share your vision, mission, and goals or you won’t provide the best services to your patients. Your clinic should stand out in the community as a great place to choose for therapy. Employees that are late to work and have terrible customer service should not have a place on your team. You are running a business, so you must treat every aspect professionally. Which brings us to the next point.

Don’t Forget You’re Running a Business

It’s easy to focus on the patient aspect of your clinic, but don’t forget the business side. Depending on what roles your employees fill, you can most likely delegate most of these tasks. Someone has to market the practice’s services, manage the staff, ensure that you follow national and local regulations, and order supplies. Most of the time it should fall to you to manage the overall operations of your business.

When starting a physical therapy clinic, remember that the patient always comes first. Physical therapists should really enjoy doing their work and helping people heal. Though any business venture is intimidating and sometimes scary to begin, it’s an adventure with a satisfying end for yourself, your patients, and your staff.

You can become a role model and leader in your community for many people. Careful planning helps to reduce the stress of starting up a new business. Remember to research the market in your area and lay out a careful business plan with goals and values. You must know what direction your business is going in to successfully open a physical therapy clinic and more importantly remember you can’t go at it alone. Schedule a call with Apex EDI today to learn how we can help you tackle the insurance side of your physical therapy practice so you are set up for success going forward.

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Orem, Utah 84097
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