How to start a physical therapy private practice

Start a PT private practice by defining the rehabilitation services and setting you can support, verifying professional and business requirements, planning finances against realistic capacity, and preparing evaluation, records, payment, and scheduling workflows. Pediatric and adult services should have distinct scope and access information, written and tested before promotion.

A lease, an NPI, or a website alone does not establish readiness to provide the advertised care. This guide covers the service, direct access and payment, licensure, the premises, Medicare, the budget and capacity, responsibilities, referrals, a launch test and the first month.

What are the steps to start a physical therapy private practice?

Define the service before the space, confirm access and payment rules before the website, and test before promoting. The sequence below follows the sections of this guide.

1. Define the service and population. Record the offering, competence, equipment, space, setting and limits, separately for adults and children.
2. Separate access from payment. Note what your state allows without a referral and what each payer requires.
3. Confirm licensure. Hold a license in each state where you practice, or a PT Compact privilege where one is issued.
4. Set up the business and payers. Structure, registration, EIN, insurance, NPI, Medicare enrollment and plan applications.
5. Test the premises. Check space, equipment, access and privacy against the actual offering before any build-out.
6. Budget and map capacity. Separate startup and monthly costs, then map working time into appointments and the work around them.
7. Assign responsibilities. Give clinical fit to the clinician and every administrative step an owner.
8. Build referral routes, test, then open. Publish accurate information, run test inquiries and review the first month.

What PT services and population should a new practice focus on?

Focus on the services the clinicians are competent and equipped to deliver, for a defined population, in the setting you actually have. Record the actual offering, clinician competence, equipment, space, setting, and limits. Adult orthopedic, neurological, mobility, pelvic health, and other services may require different resources and coordination. Pediatric services need their own population and setting review. Do not advertise specialties solely because patients search for them.

Board certification is one way a clinician’s depth in an area is recognized: ABPTS certifies specialists in 10 areas, including orthopedics, neurology, pediatrics, geriatrics, sports, and pelvic and women’s health, with certification good for 10 years.⁠⁵ A specialty label on a website should rest on the training, experience and equipment of the person who provides it, whatever credential that person holds.

Add what the clinic cannot provide where it helps route inquiries accurately. The adult service page guide and the pediatric service page guide show how to publish the statement, and families meet the same subject on pages like DrSensory’s guide to physical therapy.

How is a pediatric PT service different to plan?

It has its own population, setting, scheduling and coordination questions. For children under three, IDEA Part C early intervention includes physical therapy, and a free appropriate public education must be available to eligible children from 3 through 21, so a family may already have a public program involved.⁠^6,7 Decide which ages you serve, whether caregivers take part in sessions, which appointment windows children can actually attend and how the practice coordinates with school or early intervention services without deciding their eligibility.

Do patients need a physician referral to see a PT in private practice?

Not for access in most cases, but payment can still require one, so treat the two separately. Do not build the launch around a blanket referral slogan. ChoosePT, APTA’s consumer site, states that in every state and the District of Columbia a person can see a physical therapist without a physician’s referral, while noting that certain insurance plans may still require one and some states limit the duration or type of treatment without it.⁠¹ APTA’s state-by-state summary makes the same point: all 50 states, the District of Columbia and the U.S. Virgin Islands provide some form of direct access, and the provisions and limitations differ.⁠² Verify the current jurisdiction and arrangement before publishing your process.

Medicare is the clearest example of payment rules that sit on top of access. Outpatient PT is covered when a physician or NPP certifies the plan of care, with the initial certification due within 30 calendar days of the first treatment day, including the evaluation, and recertification at least every 90 calendar days.⁠³ Since January 1, 2025, a signed and dated order or referral can substitute for the signature on an initial plan the physician or NPP has not returned within 30 days.⁠³

Create separate records for professional authorization, payer enrollment or contract status, service-fit review, and patient-specific administrative readiness. For applicable Medicare work, consult current CMS enrollment resources and the relevant outpatient documentation process.⁠⁸ An identifier does not establish payer approval: CMS states that an NPI does not ensure a provider is licensed or credentialed and does not enroll anyone in a health plan.⁠⁹

Do Medicare Advantage and commercial plans follow Medicare’s rules?

Not automatically, and each one needs its own check. Medicare.gov explains that Medicare Advantage plans are offered by private companies as an alternative to Original Medicare, and that in many cases members can only use clinicians in the plan’s network.⁠¹⁰ A PT enrolled in Medicare can therefore still be out of network for a patient’s Medicare Advantage plan, and a commercial plan can require a referral even where state law does not.⁠¹ Record each plan’s referral, authorization and network rules separately; the payment explanation guide has plain-language wording for patients.

What licenses does a physical therapy private practice need?

A state license for each PT in each state where they practice, issued by that state’s licensing authority. FSBPT notes that each licensing authority sets its own eligibility criteria for licensure and for the National Physical Therapy Examination, which is an essential part of the licensing process.⁠¹¹ Medicare likewise requires a PT in private practice to be legally authorized by the state in which they practice and to practice within that license.⁠⁴

Can a PT practice see patients in other states through the PT Compact?

Yes, in member states that issue privileges, once you hold one. The compact’s map listed 38 member states actively issuing and accepting compact privileges in October 2026, with 3 more enacted but not yet issuing.⁠¹² To apply, you need a valid license in a member home state and no active encumbrances or disciplinary actions in the past two years, and each privilege costs a $45 commission fee plus the state’s fee, for totals from $45 in Arizona, Connecticut and Pennsylvania to $309 in the District of Columbia.⁠¹³ Some states also require a jurisprudence exam before the privilege is issued.⁠¹³

How do you set up the business and payer side of a PT practice?

Register the business, get the EIN, buy insurance and start payer enrollment early, because each step has its own lead time. The SBA notes that the structure affects taxes, liability and paperwork, that registration usually costs less than $300 depending on the state and structure, and that professional liability insurance covers losses from malpractice, errors and negligence.⁠¹⁴ The IRS issues the EIN online for free; form any LLC or corporation with the secretary of state first.⁠¹⁵ State law can limit the structure: California does not let an LLC render professional services and provides for a physical therapy corporation instead.⁠^16,17,18

Medicare enrollment runs through PECOS and your Medicare Administrative Contractor after you have an NPI, and physical therapists are on CMS’s list of providers who cannot opt out of Medicare.⁠^8,19 A participating PT accepts the Medicare fee schedule amount as payment, with Medicare paying 80 percent and the patient 20 percent; a nonparticipating therapist is paid 95 percent of the fee schedule amount.⁠²⁰ The credentialing guide covers commercial plans, Medicaid and the status labels to track.

What does Medicare require of a PT in private practice?

To bill Medicare directly, a PT in private practice must be legally authorized by the state, practice on a regular basis in a solo practice, partnership or group, or as an employee of one, and bill only for services in the practice’s office space or the patient’s home.⁠⁴ Office space must be owned, leased or rented by the practice and used for the exclusive purpose of operating it.⁠⁴ A PTA may work under the PT’s general supervision, a PT who is not enrolled must be directly supervised, and services a PTA furnishes in whole or in part are paid at 85 percent of the amount otherwise paid.⁠⁴

For 2026, the KX modifier threshold is $2,480 for PT and SLP services combined: once a patient’s services for the year pass it, claims must carry the modifier confirming medical necessity as documented in the record, and claims over the threshold without it are denied.⁠²¹ CMS also reports that Congress extended PTs’ ability to furnish Medicare telehealth services through December 31, 2027.⁠²¹

How do you choose a location for a physical therapy practice?

Choose premises that fit the care the practice actually delivers, and check them against that care first. Consider treatment and evaluation space, equipment, privacy, arrival access, cleaning, storage, emergency procedures, and the intended population. Verify what can actually be delivered before committing to an expensive build-out.

A pediatric service may need appropriate caregiver arrangements and usable child appointment windows. An adult service may need verified mobility access, transportation-related arrival information, and private communication for sensitive requests. Do not label the setting accessible without checking relevant features.

ADA.gov states that private medical offices are covered by Title III as places of public accommodation, that existing facilities must remove architectural barriers where readily achievable, and that a provider generally cannot refuse a patient for lack of accessible equipment.⁠²² It describes an accessible exam table as one that adjusts down to about 17 to 19 inches from the floor, which is worth checking for every treatment table you buy.⁠²² If the practice bills Medicare, the space also has to be used exclusively for the practice.⁠⁴

How do you plan equipment for a new PT clinic?

Buy for the service statement, not for a future service. List each item against the evaluation or treatment it supports, the population that uses it and the space it needs, and get quotes that state delivery, installation, warranty and service terms. Treatment tables are a good test: ADA.gov describes a table that lowers to about 17 to 19 inches from the floor as a good option for patients who use wheelchairs.⁠²² Plan cleaning between patients, storage for items that move to home visits, and a replacement budget for anything that wears out, and leave purchases for a planned service until that service is ready to offer.

If the practice provides another setting, describe it accurately. An outpatient clinic is not interchangeable with home health or inpatient rehabilitation. Medicare lets a PT in private practice bill for services in the patient’s home, excluding hospitals and skilled nursing facilities, so a home-visit service needs its own description, travel plan and equipment list.⁠⁴

How do you plan a PT practice budget and opening capacity?

Separate one-time costs from monthly ones, then map clinician time into the work it actually contains before forecasting visits. Separate startup equipment and deposits from monthly operating costs and variable service expenses. Include administration, records, insurance, systems, and owner compensation. Use actual quotes and a slower-than-expected collection scenario.

Map the clinician’s working time into patient appointments, preparation, documentation, coordination, and other duties. A full working week is not a full week of bookable care. If the clinic opens with evaluation availability but limited follow-up capacity, explain and resolve that mismatch before broad promotion.

Cash arrives after the visit, so the plan has to carry costs until collections start. Medicare cannot pay a clean electronic claim before the 14th day after it arrives, and must pay or deny it within 30 days.⁠²³ Use the startup budget worksheet to connect the financial model to the schedule.

Who handles clinical and administrative responsibilities in a new PT practice?

The qualified clinician owns clinical fit, and every administrative step has a named owner and a backup. Assign the clinical-fit decision to the qualified clinician. Define who handles records, payer questions, appointment offers, and questions outside front-desk competence. Prepare appropriate procedures and review them for the actual service and jurisdiction.

Postoperative or discharge requests may require clinical information and timing review. Reception staff should not interpret instructions or decide a safe delay. A public inquiry must not imply that submitted details confirm clinical acceptance or an urgent appointment.

Separate pediatric representative verification from adult support-person involvement. HHS explains that a parent is usually the personal representative of a minor child, while an adult’s personal representative is someone with legal authority to make health care decisions for them.⁠²⁴ Address adult patients directly, as ADA.gov advises for appointments, and explain supported communication routes where available.⁠²²

A practice that transmits health information electronically in a HIPAA standard transaction is a covered entity, and it needs a written business associate agreement with any vendor, such as a record-system or cloud provider, that handles client information for it.⁠^25,26 The intake call script and new patient email templates cover the first contact.

How do you build the first referral and public-information routes?

Publish one accurate description of the service and send it only to contacts whose patients match it. Use an accurate service sheet and website page describing the population, service, setting, access, clinician qualifications, and inquiry process. Choose professional contacts whose patient needs match the actual offering.

Do not promise pain elimination, recovery by a fixed date, avoidance of surgery, or insurance coverage. Do not offer benefits linked to referrals: for Medicare and Medicaid business, OIG explains that the Anti-Kickback Statute makes it a crime to knowingly and willfully pay remuneration, which includes anything of value, to induce or reward referrals.⁠²⁷

The adult PT growth guide and pediatric PT guide provide different discovery pathways, and the adult referral guide covers discharge handoffs from hospitals and physicians.

How do you test a PT practice launch before promotion?

Run four administrative scenarios end to end and fix every step that fails before buying traffic. Run administrative scenarios for a self-inquiry, an appropriate professional referral, an out-of-scope request, and a person with practical access needs. Check the page, contact route, owner, necessary review, payment explanation, and appointment offer.

1. A self-referred adult. Someone with knee pain asks whether they need a referral. Does the answer separate your state’s access rule from their plan’s rules?
2. A postoperative referral. A surgeon’s office sends a referral with a timing instruction. Does it reach the PT for review before anyone promises a date?
3. An out-of-scope request. Someone asks for a service the practice does not provide. Does the response explain the limit and suggest where to ask?
4. A practical access need. A caller uses a wheelchair and asks about parking and the treatment table. Can staff answer from verified facts?

What should a new PT practice review in its first month?

Review requests, mismatches, appointments offered and the work it took, and fix the first broken step. Review requests received, service mismatches, reviews pending, usable appointments offered, bookings, attendance, and administrative workload. Keep small samples visible and avoid drawing universal conclusions from a few contacts.

Correct the first broken step rather than assuming more promotion is the solution. Define the offering, verify the requirements, and complete the startup budget. Test the full inquiry route before announcing openings.

Sources

1. American Physical Therapy Association. Physician Referral Not Needed: You Can See a Physical Therapist First (ChoosePT; revised March 23, 2026). “In every U.S. state and the District of Columbia, you can go straight to a physical therapist without a physician’s referral. This is called direct access”; “Certain insurance plans may still require a referral. Some states may limit the duration or type of treatment that can be provided without one.” Checked October 8, 2026.
2. American Physical Therapy Association. Levels of Patient Access to Physical Therapists Services in the U.S. (Direct Access by State; resource dated September 4, 2024, data current as of July 2025). “While all 50 states, the District of Columbia and the U.S. Virgin Islands, provide some form of direct access to physical therapist services, the specific provisions and limitations differ across jurisdictions.” Checked October 8, 2026.
3. Centers for Medicare & Medicaid Services. Complying with Outpatient Rehabilitation Therapy Documentation Requirements (MLN Fact Sheet MLN905365, September 2025). Outpatient PT, OT and SLP services are covered when the “Physician or NPP certifies the treatment plan, also called the plan of care (POC)”; “The physician or NPP certifies the initial POC with a dated signature or verbal order within 30 calendar days from the first day of treatment, including evaluation”; recertification comes “at least every 90 calendar days after treatment starts”; from January 1, 2025, a physician’s or NPP’s dated signature on the order or referral may substitute for a signature on the initial POC that has not been returned within 30 calendar days of the initial evaluation. Checked October 8, 2026.
4. Code of Federal Regulations. 42 CFR 410.60, Outpatient physical therapy services: Conditions. eCFR text, current as of October 6, 2026. A PT in private practice must “Engage in the private practice of physical therapy on a regular basis 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 “Bill Medicare only for services furnished in his or her private practice office space, or in the patient’s home”; “When services are furnished in private practice office space, that space must be owned, leased, or rented by the practice and used for the exclusive purpose of operating the practice”; “Physical therapy services may be performed by a physical therapist assistant under the general supervision of the physical therapist in private practice; services performed by an unenrolled physical therapist must be under the direct supervision of the physical therapist”; claims for services furnished in whole or in part by a PTA are paid “an amount equal to 85 percent of the amount of payment otherwise applicable for the service.” Checked October 8, 2026.
5. American Board of Physical Therapy Specialties. APTA Specialist Certification. “With 10 specialized areas recognized by ABPTS”: Cardiovascular & Pulmonary, Clinical Electrophysiology, Oncology, Pelvic and Women’s Health, Wound Management, Geriatrics, Neurology, Orthopaedics, Pediatrics and Sports; “Your certification is good for 10 years.” Checked October 8, 2026.
6. Code of Federal Regulations. 34 CFR 303.13, Early intervention services (IDEA Part C). eCFR text, current as of the September 29, 2026 issue. The types of early intervention services include occupational therapy, physical therapy and speech-language pathology services; physical therapy “includes services to address the promotion of sensorimotor function,” including “Screening, evaluation, and assessment of children to identify movement dysfunction.” Checked October 8, 2026.
7. Code of Federal Regulations. 34 CFR 300.101, Free appropriate public education (FAPE) (IDEA Part B). eCFR text, current as of the September 29, 2026 issue. “A free appropriate public education must be available to all children residing in the State between the ages of 3 and 21, inclusive.” Checked October 8, 2026.
8. Centers for Medicare & Medicaid Services. Become a Medicare Provider or Supplier (page last modified June 2, 2026). The four steps: “Get an NPI”; “Complete the Medicare Enrollment Application” in PECOS; “Pay the Medicare Application Fee, if applicable”; “Work With Your MAC.” A change in ownership, an adverse legal action or a change in practice location is reported within 30 days; “You must report all other changes within 90 days.” Checked October 8, 2026.
9. Centers for Medicare & Medicaid Services. NPI Fact Sheet (December 2024). Type 1 NPIs are “For individual health care providers, such as physicians, nurse practitioners and sole proprietors. Individuals are only eligible for one NPI”; Type 2 are “For health care organizations”; “An individual who is a health care provider and is incorporated, can obtain an NPI for themselves (Type 1) and an NPI for their corporation or LLC (Type 2)”; “Having an NPI does not: Ensure a provider is licensed or credentialed; Guarantee payment by a health plan; Enroll a provider in a health plan”; “you must report any changes to the information provided for your NPI within 30 days of the change”; “A provider or supplier will not receive payment from Medicare until it is properly certified and enrolled in the Medicare program.” Checked October 8, 2026.
10. Medicare.gov. Your coverage options. “There are 2 main ways to get your Medicare coverage – Original Medicare and Medicare Advantage”; with Original Medicare, “You can see any doctor or hospital that takes Medicare, anywhere in the U.S.”; with Medicare Advantage, “You join a Medicare-approved plan from a private company that offers an alternative to Original Medicare” and “In many cases, you can only use doctors who are in the plan’s network.” Checked October 8, 2026.
11. Federation of State Boards of Physical Therapy. Exam Candidates. “Each licensing authority has its own eligibility criteria for licensure and for taking the National Physical Therapy Examination (NPTE)”; “The National Physical Therapy Examination (NPTE®) for PTs and PTAs is an essential part of the licensing process.” Checked October 8, 2026.
12. Physical Therapy Compact Commission. PT Compact Map. Lists 38 “Member States Actively Issuing and Accepting Compact Privileges,” 3 states with “Enacted Legislation” that are “Not Yet Issuing or Accepting Compact Privileges,” 2 with legislation introduced and 10 non-member states. Checked October 8, 2026.
13. Physical Therapy Compact Commission. PT Compact Process & Requirements. Eligibility: “Hold a valid PT or PTA license in your home state (must be a compact member)”; “No active encumbrances or disciplinary actions in the past two years”; “Each state has different fees and may require passing a jurisprudence exam.” The fee table lists 38 jurisdictions; each PT privilege costs the $45 commission fee plus the state’s fee, for totals from $45 (Arizona, Connecticut and Pennsylvania) to $309 (District of Columbia). Checked October 8, 2026.
14. U.S. Small Business Administration. Launch your business. “Your business structure affects how much you pay in taxes, your ability to raise money, the paperwork you need to file, and your personal liability”; “members of an LLC are considered self-employed and must pay self-employment tax contributions towards Medicare and Social Security”; “In most cases, the total cost to register your business will be less than $300, but fees vary depending on your state and business structure”; “It’s free to apply for an EIN”; a physical location should conform “to local zoning requirements,” and “zoning ordinances can still apply even to home-based businesses”; “The licenses and permits you need from the state, county, or city will depend on your business activities and business location”; “Some licenses and permits expire after a set period of time”; “The federal government requires every business with employees to have the following”: workers’ compensation, unemployment and disability insurance, and “Laws requiring insurance vary by state”; professional liability insurance “protects against financial loss as a result of malpractice, errors, and negligence”; “As soon as you start accepting or spending money as your business, you should open a business bank account”; “Business banking offers limited personal liability protection by keeping your business funds separate from your personal funds.” Checked October 8, 2026.
15. Internal Revenue Service. Get an employer identification number (page last reviewed or updated August 19, 2026). “Use this tool to get an EIN directly from the IRS in minutes for free”; “You never have to pay a fee for an EIN”; “If you are creating a corporation or LLC, form your entity through the secretary of state before you apply for an EIN.” Checked October 8, 2026.
16. California Legislative Information. California Corporations Code §17701.04. Subdivision (e): “Nothing in this title shall be construed to permit a domestic or foreign limited liability company to render professional services, as defined in subdivision (a) of Section 13401 and in Section 13401.3, in this state.” Checked October 8, 2026.
17. California Legislative Information. California Corporations Code §13401. “‘Professional services’ means any type of professional services that may be lawfully rendered only pursuant to a license, certification, or registration authorized by the Business and Professions Code, the Chiropractic Act, or the Osteopathic Act.” Checked October 8, 2026.
18. California Legislative Information. California Corporations Code §13401.5. Designates, among others, a “Speech-language pathology corporation,” a “Physical therapy corporation” and an “Occupational therapy corporation,” and lists the other licensed persons who may hold shares in each, “so long as the sum of all shares owned by those licensed persons does not exceed 49 percent of the total number of shares.” Checked October 8, 2026.
19. Centers for Medicare & Medicaid Services. Manage Your Enrollment (page last modified March 4, 2026). “Physicians and practitioners who see Medicare patients but don’t want to enroll in the Medicare program must opt-out of Medicare”; “If you don’t see Medicare patients, you don’t have to enroll in or opt-out of Medicare”; the list of “Providers NOT Eligible to Opt Out” includes “Occupational therapists,” “Physical therapists” and “Qualified speech language pathologists.” Checked October 8, 2026.
20. Centers for Medicare & Medicaid Services. Medicare Benefit Policy Manual, Chapter 15 (Rev. 13889, issued July 30, 2026), §230.4.C, Assignment. Therapists in private practice “have the option of accepting assignment (participating) or not accepting assignment (nonparticipating)”; “If physicians/NPPs, or TPPs accept assignment (are participating), they must accept the Medicare Physician Fee Schedule amount as payment. Medicare pays 80% and the patient is responsible for 20%. In contrast, if they do not accept assignment, Medicare will only pay 95% of the fee schedule amount.” Checked October 8, 2026.
21. Centers for Medicare & Medicaid Services. Therapy Services (page last modified March 10, 2026). The law keeps the former therapy cap amounts “as thresholds above which claims must include the KX modifier as a confirmation that services are medically necessary as justified by appropriate documentation in the medical record,” with “one amount for PT and SLP services combined and a separate amount for OT services”; “For CY 2026 this KX modifier threshold amount is: $2,480 for PT and SLP services combined, and $2,480 for OT services”; “Claims for services over the KX modifier threshold amounts without the KX modifier are denied”; section 6209 of the Consolidated Appropriations Act, 2026 “extended the ability of PTs, OTs, and SLPs to furnish Telehealth Services … through December 31, 2027”; for PT and OT services furnished in whole or in part by PTAs and OTAs, “Payment for these services is at 85 percent of the otherwise applicable PFS payment amount/rate for the service, effective January 1, 2022.” Checked October 8, 2026.
22. U.S. Department of Justice, Civil Rights Division. Access to Medical Care for Individuals with Mobility Disabilities (ADA.gov; last updated June 26, 2020). “Private hospitals or medical offices are covered by Title III of the ADA as places of public accommodation”; Section 504 covers those that receive federal financial assistance, “which can include Medicare and Medicaid reimbursements”; “Under Title III, existing facilities are required to remove architectural barriers where such removal is readily achievable”; asked whether a provider can turn away a patient for lack of accessible medical equipment, it answers “Generally no”; a good option is “a table that adjusts down to the level of a wheelchair, approximately 17-19 inches from the floor”; “You should always address the patient directly, not the companion”; “The receptionist should ask each individual who calls to make an appointment if the individual will need any assistance at the examination because of a disability.” Checked October 8, 2026.
23. Centers for Medicare & Medicaid Services. Medicare Claims Processing Manual, Chapter 1, General Billing Requirements (Rev. 13725, issued April 10, 2026), §§80.2.1.1–80.2.1.2. “‘Clean’ claims must be paid or denied within the applicable number of days from their receipt date,” 30 days for claims received from October 1, 1993; the payment floor “establishes a waiting period during which time the contractor may not pay, issue, mail, or otherwise finalize the initial determination on a clean claim,” with the earliest payment on the “14th day for HIPAA-compliant EMC” and the “29th day for paper.” Checked October 8, 2026.
24. U.S. Department of Health and Human Services, Office for Civil Rights. Personal Representatives (HIPAA Privacy Rule guidance, 45 CFR 164.502(g); content last reviewed January 5, 2024). For an adult, the personal representative is “A person with legal authority to make health care decisions on behalf of the individual,” such as a health care power of attorney or a court-appointed legal guardian; “In most cases under the Rule, a parent, guardian, or other person acting in loco parentis (collectively, ‘parent’) is the personal representative of the minor child”; the exceptions “generally track the ability of certain minors to obtain specified health care without parental consent under State or other laws.” Checked October 8, 2026.
25. U.S. Department of Health and Human Services, Office for Civil Rights. Covered Entities and Business Associates (content last reviewed August 21, 2024). Health care providers are covered entities “but only if they transmit any information in an electronic form in connection with a transaction for which HHS has adopted a standard”; “If a covered entity engages a business associate to help it carry out its health care activities and functions, the covered entity must have a written business associate contract or other arrangement with the business associate.” Checked October 8, 2026.
26. U.S. Department of Health and Human Services, Office for Civil Rights. Business Associates (content last reviewed July 30, 2026). Examples of business associates include a “Cloud service provider engaged to create, receive, maintain, or transmit electronic PHI (ePHI)” and an “IT contractor or vendor (e.g., EHR vendor, Managed Services Provider) that provides maintenance and/or support services” for systems holding ePHI; “A business associate is also directly liable for complying with certain provisions of the HIPAA Rules.” Checked October 8, 2026.
27. U.S. Department of Health and Human Services, Office of Inspector General. Fraud & Abuse Laws (A Roadmap for New Physicians). “The AKS is a criminal law that prohibits the knowing and willful payment of ‘remuneration’ to induce or reward patient referrals or the generation of business involving any item or service payable by the Federal health care programs”; “Remuneration includes anything of value and can take many forms besides cash”; “in the Federal health care programs, paying for referrals is a crime.” Checked October 8, 2026.

Medical disclaimer. This page is for general educational purposes and does not constitute medical advice, diagnosis, or treatment. It is general guidance on starting and running a therapy practice, not legal, tax, compliance, billing or financial advice. Its numerical examples are hypothetical, not DrSensory data or industry benchmarks.