How to start a physical therapy practice

This guide takes an outpatient physical therapy practice from the license to the first evaluations: exams, the PT Compact, direct access, Medicare enrollment and plan of care rules, and the federal referral laws. The most useful finding: Medicare counts a therapist as in private practice only if the office is "owned, leased, or rented by the practice and used for the exclusive purpose of operating the practice," so a borrowed corner of a gym can fail before the first claim is sent.

By Niomi AscotUpdated October 3, 202616 min read

License: A state PT license: a CAPTE-accredited degree, the NPTE and, in many states, a law exam
Texas direct access: Up to 30 consecutive calendar days without a referral since November 1, 2025, if the PT meets the board's conditions
Medicare enrollment fee: None for PTs in private practice, who enroll on the CMS-855I or CMS-855B
PTA services under Medicare: Paid at 85% of the usual amount
Offices with employees, 2023: 52,058 PT, OT, speech and audiology offices in one Census code
Texas facility registration: Repealed effective September 1, 2019

What a physical therapy practice sells, and the models

A practice sells an episode of care: an evaluation, a written plan, then a run of treatment visits. Texas puts the order into rule: “Physical therapy treatment may not be provided prior to the completion of an evaluation of the patient’s condition by a PT,” and “The PT must develop a written plan of care, based on his evaluation, for each patient” (Texas Board of Physical Therapy Examiners rules).

The models founders choose between:

An insurance-based outpatient clinic. Orthopedic and sports work billed to commercial plans, Medicare Part B and workers’ compensation. Medicare has its own definition of a therapist in private practice (below).
A cash-based or hybrid practice. Few or no insurer contracts. Self-pay patients are generally owed a good faith estimate, and a bill “at least $400 more than the estimate” can be disputed (CMS). Medicare patients still need careful handling, because physical therapists do not appear in Medicare’s definition of practitioners who may opt out through private contracts (42 CFR 405.400). Ask a health care attorney before offering Medicare patients a cash arrangement.
Mobile or in-home PT. Medicare lets a therapist in private practice treat “in his or her private practice office space, or in the patient’s home” (42 CFR 410.60).
A niche practice. Pelvic health, vestibular or performance work, where patients search by condition.
Physician-owned PT. Physical therapy is a “designated health service” under the Stark law, which shapes any practice a referring physician invests in (see referrals below).

The Census Bureau’s County Business Patterns counted 52,058 establishments with paid staff in 2023 under NAICS 621340, a code that combines physical, occupational and speech therapists and audiologists, with 466,903 employees and $22.91 billion in payroll (Census CBP 2023). Most are small: 56.8% had fewer than five employees. Another 108,936 businesses in the same group had no employees, with $4.65 billion in receipts (Census Nonemployer Statistics 2023), many of them solo contract and mobile therapists.

The outlook

BLS figures published through O*NET:

Occupation	Employed, 2024	Median pay, 2025	Projected growth, 2024 to 2034	Openings, 2024 to 2034
Physical therapists	267,200	$49.40 an hour, $102,760 a year	Much faster than average (7% or higher)	13,200
Physical therapist assistants	111,500	$32.88 an hour, $68,380 a year	Much faster than average (7% or higher)	19,800

Four policy shifts favor a new practice:

Direct access everywhere. APTA: “As of July 1, 2025, all 50 states, the District of Columbia, and the U.S. Virgin Islands have either provisional or unrestricted direct access to physical therapist services” (APTA).
Payers dropping referral rules. From June 17, 2025, Aetna “will no longer require a referral or signed plan of care for physical therapy,” which APTA says reaches “over 26 million Americans” (APTA on Aetna).
No Medicare cap. “There’s no limit on how much Medicare pays for your medically necessary outpatient therapy services in one calendar year” (Medicare.gov).
Medicare telehealth, for now. CMS says PTs may furnish Medicare telehealth through December 31, 2027 under the Consolidated Appropriations Act, 2026 (CMS therapy services).

Licensing and certification

The national path

No federal PT license exists; every state licenses therapists and assistants. The path has four parts:

An accredited degree. CAPTE “grants specialized accreditation status to qualified entry-level education programs for physical therapists and physical therapist assistants” and is recognized by the US Department of Education (CAPTE).
The NPTE. FSBPT calls the National Physical Therapy Examination “an essential part of the licensing process,” and “Each licensing authority has its own eligibility criteria for licensure and for taking the National Physical Therapy Examination” (FSBPT).
A state law exam in many states, including Texas, Florida and California.
The PT Compact for work across state lines. It “allows eligible licensed physical therapists to practice and licensed physical therapist assistants to work in a Compact state, other than their home state, without going through the usual process for licensure in the remote state.” You need an unencumbered home-state license, must “Be free of disciplinary action for at least two years,” and your home state must be an active member; “There is a $45 Commission fee and a state fee charged for each Compact Privilege” (PT Compact flyer). Check the member map before planning around it; California, Florida and New York were not confirmed as members for this guide.

Four states side by side

State	Agency	License	Key requirements, as the agency states them
Texas	Texas Board of Physical Therapy Examiners	PT or PTA license; no facility registration since 2019	Board jurisprudence exam, NPTE with Texas as the jurisdiction (six attempts at most), fingerprint background check. PT application $190 as of October 2026
Florida	Board of Physical Therapy, Department of Health	PT or PTA license; clinic license only if not practitioner-owned	CAPTE-approved degree, NPTE, Florida Laws and Rules exam; “Florida does not have reciprocity with any state.” Board fee $180 as of October 2026
California	Physical Therapy Board of California	PT or PTA license	CAL-JAM law module since July 1, 2024; license “generally issued within 45 days” once the file is complete. Check current fees with the board
New York	State Education Department, Office of the Professions	PT license; a professional service corporation or PLLC for the practice	“no exemption for a general business corporation” to practice physical therapy, “even if all principals or shareholders are licensed physical therapists”

Texas: 30 days of direct access, with conditions

The Texas board’s May 2026 rule book shows 22 TAC 322.1 as amended effective November 1, 2025: “A PT may evaluate without referral,” and “A PT may treat a patient for an injury or condition without a referral for not more than 30 consecutive calendar days if the PT: (i) has been licensed to practice physical therapy for at least one year; (ii) is covered by professional liability insurance in the minimum amount of $100,000 per claim and $300,000 aggregate per year; and (iii) either: (I) possesses a doctoral degree in physical therapy” from an accredited program, “or (II) has completed at least 30 CCUs in the area of differential diagnosis.” Before treating without a referral the PT “must obtain a signed disclosure on a form prescribed by the board,” and past the limit “must obtain a referral” from a physician, dentist, chiropractor, podiatrist, physician assistant or advanced nurse practitioner (Texas PT rules).

Licensure needs “a successfully completed board jurisprudence exam,” transcripts and “a criminal history record report from the Department of Public Safety and the Federal Bureau of Investigation obtained through fingerprinting.” Fees as of October 2026: PT application $190, PTA $125, PT renewal $248, temporary license $80, compact privilege $50. Texas also stopped registering clinics: chapter 347 on facility registration was “repealed effective September 1, 2019,” after the Sunset Commission recommended the state “discontinue the unnecessary registration of physical and occupational therapy facilities” (Texas Sunset Commission).

Two conduct rules shape the business. The board disciplines a PT for paying or accepting “any remuneration … for receiving or soliciting patients or patronage, regardless of source of reimbursement,” unless the arrangement is acceptable under the federal Anti-Kickback Statute, and for “advertising in a manner which is false, misleading, or deceptive.” The phrase “regardless of source of reimbursement” means the Texas rule reaches cash patients too.

Florida: exams, permits and the clinic exemption

Florida’s board lists “$180.00 Application and Licensing Fee,” plus “$485.00 NPTE fee and $65.00 Florida Laws and Rules Exam fee to FSBPT,” and “Applicants who have failed the NPTE three times must complete remediation training” (Florida Board of Physical Therapy). A new graduate’s temporary permit needs the law exam, “Proof of medical malpractice insurance” and direct supervision by a licensed PT, and lasts six months from graduation. There is no reciprocity: Florida endorses the NPTE instead (Florida board FAQ).

Direct access runs 30 days; beyond that, for a condition “not previously assessed by a practitioner of record, the physical therapist shall have a practitioner of record review and sign the plan” (Florida Statutes 486.021). Ownership matters too. The Health Care Clinic Act exempts a physical therapy practice “wholly owned by one or more licensed health care practitioners” when an owner supervises the business (Florida Statutes 400.9905), so bringing in a lay investor can trigger a clinic license from the Agency for Health Care Administration. Ask AHCA or a health care attorney before selling equity.

California and New York

California’s board regulated “approximately 27,990 licensed PTs and 7,833 PTAs” in fiscal 2020/2021, and AB 1000 lets a patient start treatment without a diagnosis “for up to 45 calendar days or 12 visits, whichever occurs first,” after which a physician must examine the patient in person and sign the plan of care (California background paper). The law exam became “the CAL-JAM (Jurisprudence Assessment Module)” on July 1, 2024 (PTBC applicants). California’s ownership rules for PT corporations were not verified for this guide; confirm them with a California health care attorney.

New York uses physical therapy as its own example of corporate practice: “Since a general business corporation acts through its employees, no employee of a general business corporation may offer physical therapy services to the public.” Licensees may form a professional service corporation, “in which all shareholders must be licensees of one profession,” or a PLLC, and “Section 6509-a specifically prohibits fee splitting” in physical therapy (NYSED). A lay investor or a percentage-of-revenue management fee does not fit that text.

This guide is not legal advice. Where it says a rule was not verified, ask a health care attorney licensed in your state.

Medicare: enrollment, private practice and the plan of care

Enrollment. CMS lists “Occupational or physical therapists in private practice” on the CMS-855I and “Physical or occupational therapy groups in private practice” on the CMS-855B, and non-physician practitioners and organizations “don’t pay a Medicare enrollment application fee” (CMS enrollment booklet). CMS makes “unannounced site visits,” and “An inspector’s inability to perform a site visit may result in denial of your Medicare enrollment application,” so the office must be open and signed when you apply. After approval you have “90 days” to decide whether to participate; a non-participating provider “can’t charge patients more than the limiting charge, 115% of the Medicare Physician Fee Schedule amount.” Report a change of ownership or location “within 30 days.”

Private practice. The therapist must practice “as an individual, in one of the following practice types: a solo practice, partnership, or group practice; or as an employee of one of these,” and office space “must be owned, leased, or rented by the practice and used for the exclusive purpose of operating the practice” (42 CFR 410.60). A PTA may work “under the general supervision of the physical therapist in private practice,” an unenrolled PT needs direct supervision, and “All services not performed personally by the therapist must be performed by employees of the practice.” State rules can be stricter.

The plan of care. Medicare pays for therapy given while the patient is “under the care of a physician” and “under a written plan of treatment.” The plan “is established before treatment is begun” and “prescribes the type, amount, frequency, and duration” of therapy with “the diagnosis and anticipated goals” (42 CFR 410.61). A physician, NP, clinical nurse specialist or PA “who has knowledge of the case” signs the certification, unless a written order is on file and the plan reached that practitioner “within 30 days of completion of the initial evaluation.” “Recertification is required at least every 90 days,” and the rule does not require a referral to begin outpatient PT (42 CFR 424.24).

Referrals, Stark and the Anti-Kickback Statute

Under Stark, if a physician or a family member “has a financial relationship with an entity,” the physician “may not make a referral to the entity for the furnishing of designated health services” payable by Medicare. “Physical therapy services” are on that list, with an “In-office ancillary services” exception for group practices (42 U.S.C. 1395nn). A surgeon who wants a stake in your clinic is a question for a health care attorney first.

The Anti-Kickback Statute makes it a felony to knowingly and willfully pay or receive “any remuneration (including any kickback, bribe, or rebate)” for federal program referrals, punishable by a fine “not more than $100,000 or imprisoned for not more than 10 years, or both” (42 U.S.C. 1320a-7b). Paying a gym, trainer or office per referred patient is the trap, and in Texas the board rule applies whoever pays for the care.

Setting up the business

Entity and EIN. The SBA says “LLCs protect you from personal liability in most instances,” but professional entity rules can override that: New York requires a professional service corporation or PLLC. The EIN is free from the IRS.

NPI and HIPAA. “All health care providers who are HIPAA-covered entities, whether individuals or organizations, must obtain an NPI” (CMS); each therapist takes an individual NPI and the practice an organizational one. A practice that bills insurance electronically “transmits any health information in electronic form in connection with a transaction covered by this subchapter” and is a covered entity (45 CFR 160.103).

Commercial credentialing. Most plans draw on DataSpring, formerly CAQH, whose portal holds “a single credentialing application” used across all 50 states (DataSpring). In the practices we work with, plan approvals take months, so applications go in while the lease is still being negotiated.

Insurance. Professional liability for every therapist (Texas direct access requires $100,000 per claim and $300,000 a year), plus general liability, property and cyber. For workers’ compensation, the California CSLB statement of the law applies it to employers with “only one employee,” and the New York Workers’ Compensation Board says “Virtually all employers in New York State must provide workers’ compensation coverage.”

Local permits. A city or county business license, a certificate of occupancy for clinic use, and access that works for patients on crutches.

Space, equipment and software

From the clinics we have seen open: treatment tables, an open gym floor and private rooms for evaluations and pelvic or manual work. For Medicare, the space has to be the practice’s alone. Equipment runs to exercise gear, parallel bars and modalities; Texas rules list “administration of therapeutic electric current” and “application of traction” among PT techniques.

Choose an EMR that tracks plans of care, certification and 90-day recertification dates, applies the KX and PTA modifiers, and sends visit reminders.

Pricing and money

Insurers and Medicare pay by billing code under each payer’s fee schedule; cash practices price per visit or per package. No current per-visit market price was found in an open source, and no startup cost with a stated method, so this guide quotes neither.

Medicare mechanics that change revenue:

PTA services. Claims for services “furnished in whole or in part by a physical therapist assistant must include the prescribed modifier” and “are paid an amount equal to 85 percent” of the usual amount (42 CFR 410.60). A staffing model built on assistants carries that rate cut.
The KX threshold. For 2026 it is “$2,480 for PT and SLP services combined,” and claims above it without the KX modifier “are denied” (CMS therapy services).
Patient share. The Part B deductible is “$283 in 2026” (CMS), and patients pay 20% after it.

Cash flow is the squeeze in year one: credentialing delays, payer payments that lag weeks behind visits, and patients who stop before the plan ends.

Hiring and safety

Only a PT evaluates and writes the plan. In Texas, “Treatment may not be provided by a PTA or aide until the plan of care has been established,” the PT reevaluates “at a minimum of once every 60 days” while a PTA or aide treats, and aides may not “write or sign any physical therapy documents in the permanent record” (Texas PT rules). Florida limits supervisors of temporary permittees: “A supervising physical therapist shall supervise only one permittee at any given time” and “must be licensed for a minimum of six months.”

Verify every license on the state board’s lookup before an offer. A clinic offering dry needling or wound care, where staff may contact blood, needs a written exposure control plan under OSHA’s bloodborne pathogens standard (29 CFR 1910.1030); whether dry needling sits within PT scope varies by state.

Finding the first patients

Referral relationships. Physicians and surgeons remain a main source, and APTA notes that “internal policies within some health systems and clinics still require physician referrals” (APTA direct access report). Build them with prompt plan-of-care letters, never payment.

Direct access patients. APTA’s report asks clinics: “Do patients in your community know they can see you without a referral?” Say your state’s rule on the site in one sentence: in Texas, 30 consecutive calendar days with the board’s signed disclosure; in Florida, 30 days; in California, 45 days or 12 visits. Florida also requires a capitalized 72-hour refund statement in any ad for a free or discounted PT service (Florida Statutes 456.062).

Google Business Profile. The clinic gets a profile, and each public-facing therapist may have one too: “Individual practitioners and departments within businesses … may have separate pages.” With several practitioners, “The organization should create a Business Profile for this location, separate from that of the practitioner” (Google Business Profile guidelines). Our Google Business Profile work sets up clinic and therapist profiles correctly from the start.

Local Services Ads. Google runs a Physical therapist category with the Google Verified badge, after provider and practice checks, state licenses, malpractice cover, a verified Business Profile and NPI verification (Google Local Services Ads requirements). Health care accounts receive phone calls only. Google began moving Local Services Ads into Google Ads in August 2026, starting with home services (Google Ads Help).

Search ads. LocaliQ’s median for Physical Therapy search campaigns from October 2024 to September 2025 was a 15.35% conversion rate (LocaliQ), a market median, not a forecast. Google Ads built on injuries and “physical therapy near me” reach patients who never get a referral.

Reviews. Google prohibits businesses that “selectively solicit positive reviews from customers” or offer incentives (Google contribution policy), so ask every discharged patient. Never confirm in a reply that the reviewer was a patient: the Office for Civil Rights says “Providers cannot disclose protected health information of their patients when responding to negative online reviews,” and one dental office paid “$23,000” over its replies (Mintz). Here is how a review routine runs.

Community. In the practices we work with, running clubs, school sports, gyms and senior centers fill the first months, with no payment per referral. The physical therapy marketing page covers what comes next.

What trips up new owners

Credentialing started too late. Medicare’s site visit and commercial approvals outlast most build-outs.
A shared room. Medicare’s private practice space must be the practice’s own, used for nothing else.
A PTA-heavy schedule priced at full rates. Medicare pays PTA services at 85%.
Missed recertifications. Every 90 days, or the claims fail.
Paying for referrals. A federal felony for program patients, and in Texas a board violation whoever pays.

Questions founders ask about starting a PT practice

What license do I need to open a physical therapy practice?

A state PT license, which means a CAPTE-accredited degree, a passing NPTE score and, in many states, a law exam such as Texas’s jurisprudence exam, Florida’s Laws and Rules exam or California’s CAL-JAM.

Can patients see me without a doctor’s referral?

Yes, in every state, within limits: Texas allows 30 consecutive calendar days for qualifying PTs with a signed disclosure, Florida 30 days and California 45 days or 12 visits. Medicare still requires a certified plan of care.

Can I treat patients in another state?

Yes, through the PT Compact if your home state is an active member: a $45 Commission fee plus a state fee per privilege, $50 in Texas. Otherwise apply for a license there; Florida licenses by endorsement of the NPTE and has no reciprocity.

Does Medicare charge a PT to enroll?

No. PTs in private practice and their groups enroll on the CMS-855I or CMS-855B without an application fee, though CMS may visit the office unannounced.

Can a physician invest in my PT practice?

Only with care: Stark bars a physician’s Medicare referrals to a PT entity he or she has a financial relationship with unless an exception applies, such as in-office ancillary services within a group. Have a health care attorney structure it.

Can a non-PT own a physical therapy practice?

Not in New York, which bars general business corporations even when every shareholder is a PT. In Florida a non-practitioner owner can bring AHCA clinic licensure; elsewhere ask a health care attorney.

Can I run a cash-only practice?

Yes for most patients, with a good faith estimate for each self-pay patient. Medicare patients are the exception to plan around, since PTs are not among the practitioners who may opt out; confirm your approach with counsel.

How much does it cost to start a PT practice?

We found no sourced figure, so we give none. Build the budget from quotes for the lease, tables and gym equipment, the EMR, insurance and the months of payroll before credentialing pays.

Sources

Checked on October 3, 2026. Rules and fees change, and many are set state by state or city by city: confirm the current requirements with the agency that issues them before you apply.

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