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The Complete Guide to Physical Therapy Credentialing for New Owners

Establishing a new physical therapy practice can be a daunting task, especially when it comes to navigating the complexities of physical therapy credentialing. This procedure is essential for building relationships with payers, establishing credibility within the healthcare network, and ensuring a steady flow of patients with insurance coverage. This article provides a comprehensive guide, outlining the steps new physical therapy owners need to take to successfully complete the credentialing process.

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Understanding Physical Therapy Credentialing

Physical therapy credentialing is a meticulous process in which insurance payers evaluate a provider's education, training, and professional history before contracting with them. This process is not to be confused with "contracting with payers," which is a different aspect of establishing a working relationship with insurance companies.

The credentialing process is a critical step for physical therapy owners intending to start their practice. It allows them to treat patients and be recognized by insurance companies, thereby establishing credibility within the healthcare network.

Why Physical Therapy Credentialing Matters

Physical therapy credentialing matters because it helps establish trust and legitimacy. It's a process that validates your qualifications, skills, and experience. It's also a requirement for contracting with insurance companies and receiving in-network status.

Insurance companies require PTs to go through the credentialing process to ensure that they meet their standards for providing care. This process involves verifying your education, licensing, and other credentials. Without proper credentialing, PTs can't bill insurance companies for their services.

The Difference Between Credentialing and Contracting With Payers

It's important to understand the difference between credentialing and contracting with payers.

Credentialing is the process of verifying a PT's qualifications and experience. It involves a thorough review of the PT's education, licenses, certifications, and more. This process is critical for establishing credibility with insurance companies and patients.

In contrast, contracting involves establishing a formal agreement with insurance companies. This agreement outlines the terms and conditions of the PT's relationship with the insurance company, including reimbursement rates, billing procedures, and more. Contracting is necessary for PTs to considered "in-network" with insurance companies. When contracting the owner will sign an agreed upon fee schedule for reimbursement.

The Role of National Provider Identifier (NPI) in Credentialing

The National Provider Identifier (NPI) plays a significant role in the credentialing process. It's a unique 10-digit identification number issued by the United States Department of Health and Human Services (HHS to healthcare providers in the United States. This number is used by healthcare providers for billing and other administrative purposes.

There are two types of NPI numbers: Individual NPI (Type 1) and Organizational NPI (Type 2).

Individual NPI (Type 1): This is assigned to individual healthcare providers (e.g., physical therapists).

Organizational NPI (Type 2): This is assigned to organizations, like a physical therapy practice. If you're planning to set up a group practice, it's advisable to apply for a Type 2 NPI.

Understanding the Council for Affordable Quality Healthcare (CAQH) Profile

The Council for Affordable Quality Healthcare (CAQH) ProView® is a free, web-based resource that allows providers to self-report their professional and practice information for credentialing purposes.

Many insurance payers require providers to have a CAQH profile. The profile stores necessary information like education, work history, licenses, certifications, and malpractice insurance data. This streamlines the credentialing process as the information is readily available for payers to access.

What Documentation Do I Need?

  • Up-to-date curriculum vitae (CV)

  • NPI number (Type 1 or Type 2)

  • Proof of malpractice insurance

  • State License

  • PT Diploma

  • Tax ID/ Employer Identification Number (EIN) W-9 that is associated with the new Tax ID Number

  • Business checking account

  • Proof of physical location (e.g., a signed lease or mortgage)

  • Clinic phone number

  • Proof of professional liability

How to Credential and Physical Therapist

  1. Create a CAQH Account

  2. Find the payers provider enrollment web page. Example:

  3. Gather necessary documents (listed above)

  4. Complete participation sign-up steps online

What to Do If You Hire New Therapists

When you hire new therapists, whether they're fresh out of school or transitioning from another clinic, it's crucial to start the credentialing process as early as possible. For therapists already credentialed with payers, you simply need to notify the payer to add them to your group. The process usually involves filling out a one-page form that takes a few weeks to process.

If the therapist is a recent graduate, you should allow 30-90 days for the credentialing process. Some payers may require the therapist to have a supervising PT until their credentialing is finalized.

Navigating Medicare Credentialing

Medicare credentialing can be slightly different from other payers. Unlike other insurance companies, you can't start the Medicare credentialing process until you open your practice and start seeing patients. Expect a site visit from Medicare as part of the credentialing process.

The Medicare credentialing process requires a site visit to combat fraud. Once your practice is operational, you can apply for Medicare credentialing, which typically takes about 90 days to process.

Prior to enrolling in Medicare managed plans, you must have obtained your Medicare group PTAN (provider number). You will then need to visit the respective Payers' websites to finalize any additional credentialing or registration requirements.

The Benefits of Outsourcing Physical Therapy Credentialing

The credentialing process can be time-consuming and complex. That's why many PT clinic owners often choose to outsource this process to experienced service providers. By doing so, they can focus more on patient care and other aspects of their practice.

Outsourcing the credentialing process can bring several benefits, including saving time and effort, ensuring compliance with payer requirements, optimizing reimbursements, and receiving specialized advice.


Physical therapy credentialing is a crucial process for new PT owners, allowing them to establish relationships with payers, gain in-network status (by contracting), and ultimately, ensure the financial sustainability of their practice. While the process can be complex and time-consuming, understanding the steps involved can make it more manageable. By being proactive, organized, and patient, new PT owners can successfully navigate the credentialing process and set their practice up for success.

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