Open for Business

How much does it cost to open a physical therapy private practice?

By Olajide Kolawole, PT

The short answer to this question is it depends. You need to ask yourself a series of questions as part of your planning.

What kind of private practice will you have?

Ask Yourself:

  • Will I be running a solo practice or will I need a staff?
  • Do I plan to have a clinic? The cost will vary based on location and whether urban, suburban, or rural.
  • Will I need to purchase or lease equipment? How much room will be needed to house the equipment? Depending on the type of practice, you might begin with minimal equipment in one small room and add more equipment and space as the practice grows.
  • Should I purchase a franchise? Usually purchasing a franchise means a large payment upfront.
  • Should I open a cash-based practice? Some physical therapy private practitioners are changing to a cash-based practice due to declined reimbursements. To open a cash-based practice, you need to research the market and ensure that there is a need for cash-based.

What about the cost of electronic medical records?

A small clinic can start with one of the free electronic medical records (EMRs) available and progress to a more comprehensive one later.

What do I need to know about insurance registration?

In areas saturated with physical therapy clinics, it can be more difficult to get on a provider’s list as compared to areas with fewer clinics. If you are starting in-home care for a geriatric population, it would be easier to be a Medicare, Medicaid, or Tricare provider than to carry any private insurance.

Some may think that you cannot apply to be a Medicare provider until you have a physical office address to use for the application. However, you can apply to Medicare as a home care practitioner and later transition to an outpatient clinic setting.

Should you outsource some of the work involved in setting up a private practice?

Ask yourself: Should I do some or all of the preparatory work myself with the help of a mentor, or should I outsource these tasks to a consultant? The more you outsource, of course, the higher the cost to open a clinic. Market analysis will help to pinpoint the best location and whether you should buy or rent a space.

Applying to insurance companies for provider status can be tedious. There are companies that can help you apply to the insurance companies of your choice. You can do this process by yourself depending on how adventurous you are and how much you are willing to spend. The process of filling out different applications with numerous follow-up calls is time consuming.

What other areas do you need to consider when opening a practice?

  • Business registration (varies by state)
  • Accounting and billing
  • Business plan, policies, and procedures

Can you start a physical therapy private practice with a few hundred dollars?

Now for some good news: The answer is yes. Again, it all depends on your interest. A physical therapist who starts a private practice in home care, for example, has none of the overhead costs associated with a clinic, just the cost of transportation. Therefore, this type of practice can be easily started. With in-home physical therapy practice, all you need is yourself and your treatment bag, which should include basic assessment tools (available on the APTA website).

At last year’s APTA annual conference, I spoke with a physical therapist in private practice who rents a small space in an assisted living facility and provides therapy independent of the facility. In this situation, everyone benefits. The facility saves money on transportation for the patients, and the physical therapist saves on overhead costs.

The websites for the American Physical Therapy Association (APTA) and Private Practice Section are good resources for the prospective clinician looking forward to getting into private practice.


Olajide Kolawole

Olajide Kolawole, PT, PhD, is the owner of Kebe Cares Physical Therapy. He can be reached at ola@kebecaresphysicaltherapy.com.