Everything a Physical Therapy Practice Needs

Every physical therapist and physical therapist assistant needs a license, or a compact privilege, in the state where the patient is located when care is delivered. A new license usually means a school transcript, your National Physical Therapy Examination score sent from the Federation of State Boards of Physical Therapy through its score transfer service, verifications of every license you have held, and, in many states, a jurisprudence exam on that state's practice act.

The Physical Therapy Compact adds a faster route for therapists who already hold a license in a member state. Instead of a second license, you purchase a compact privilege for each remote member state you want to practice in. The privilege is tied to your home state license: you keep your home license current, and you meet continuing competence requirements for that license only. The compact covers both PTs and PTAs. The compact's current status is shown below.

To be eligible, member boards look for an active license in a member home state, no active encumbrance on any license, and no adverse action in the past two years. Some remote states also require their own jurisprudence exam before you can buy a privilege there. A compact privilege is not a license, and it does not cover your home state, where you still need a full license. If you move to a state outside the compact, your privileges end.

According to the American Physical Therapy Association, all 50 states, the District of Columbia and the U.S. Virgin Islands allow some form of direct access to physical therapists, so a patient can be evaluated and often treated without a physician referral. The details differ a great deal. Some states limit direct access to certain patients or situations, others allow it with provisions such as a limit on visits or days before a referral is needed, and others place no such limit.

Direct access under your state practice act is a separate question from what a payer requires. Medicare still requires a physician or nonphysician practitioner to certify the therapy plan of care, and many commercial and Medicaid plans have their own referral or authorization rules. We check both before you take on a self-referred patient, so a visit your state allows is not a visit your payer refuses to pay.

Most outpatient therapists bill Medicare as physical therapists in private practice, either individually or as part of a group with each therapist's billing reassigned to it. Commercial plans, Medicare Advantage plans and Medicaid managed care plans each credential separately, and many rely on your CAQH ProView profile being complete and attested.

Physical therapists cannot opt out of Medicare. CMS lists physical therapists among the professionals who are not eligible to opt out, which matters if you plan to run a cash-based practice and still see patients on Medicare. We explain how that plays out in the section on practice models below.

Most physical therapy treatment codes are timed in 15-minute units, and Medicare counts them by total timed minutes for the day. One unit needs at least 8 minutes; two units need at least 23; three need at least 38, and so on in 15-minute steps. When several timed services are performed on the same day, the total timed minutes cap the number of units, and any service performed for 15 minutes or more is billed for at least one unit. The note must record the total timed minutes. Untimed codes, such as evaluations, are billed as one unit no matter how long they take.

Every therapy line carries the GP modifier to tie it to a physical therapy plan of care. When a physical therapist assistant furnishes a service in whole or in part, the CQ modifier is added alongside GP, and Medicare pays that service at 85 percent of the fee schedule amount. Since 2025, physical therapists in private practice may supervise PTAs under general supervision for Medicare, rather than direct supervision.

Medicare no longer caps outpatient therapy, but it keeps a yearly threshold that physical therapy and speech-language pathology share. Claims above it must carry the KX modifier, which is your attestation that the services are medically necessary and justified by the documentation in the record. Claims above the threshold without the KX modifier are denied, and a separate, higher threshold can trigger targeted medical review. This year's amounts are in the note at the end of this section.

Medicare pays for outpatient therapy only under a plan of care that a physician or nonphysician practitioner has certified. The initial certification is timely when it is signed and dated within 30 days of the first treatment, which includes the evaluation. A certification covers the length of the plan or 90 calendar days from the first treatment, whichever is less, and a recertification is needed when the plan is significantly changed or treatment continues beyond the certified period.

Since 2025, Medicare accepts an exception to the signature for the initial certification when a signed and dated order or referral from the patient's physician or practitioner is on file and you have documented that you sent the plan of care to that physician or practitioner within 30 days of the initial evaluation. Late certifications can still be accepted when they include the reason for the delay, but delays invite denials, so we track every plan from the day it is written.

Many therapists run cash-based or hybrid practices: out of network with commercial plans, membership or package pricing, wellness and performance services, and superbills for patients who file their own claims. Whether a commercial plan's members can pay you directly depends on whether you are in that plan's network and what your contract says, so we review each contract before you change your model.

Medicare is different. Because physical therapists cannot opt out of Medicare, a therapist cannot sign a private contract with a Medicare patient for covered therapy the way an opted-out physician can. What you can do with Medicare patients depends on whether you are enrolled, whether the service is covered, and what notices the patient has signed. We work through those rules with you and set up your pricing, payments and superbills so the cash side of the practice holds up.

Therapy claims are reviewed against the record. Medicare expects documentation of the evaluation, the certified plan, daily treatment notes showing timed minutes and the services provided, and progress reports. Spending above the targeted medical review threshold can be selected for review, so we check notes against claims before they go out.

Your practice also handles protected health information every day, often through a home exercise app, a scheduling tool and a billing system. We run your HIPAA security risk assessment, write your policies, train your staff and collect business associate agreements from every vendor that touches patient data.