March 6, 2023 | Net Health

4 min read

Part B in the ALF/Home: How to Set Up a Group Practice

Have you ever considered how you might go about delivering rehabilitation services in the home or in an assisted living facility?

Setting up a group practice is one way of doing this. It can be as simple as two therapists setting up a business together, or as complex as a company with multiple locations employing dozens of therapists.

Regardless of its size, therapists within the group practice utilize the same personnel. But, they either divide the income in a manner previously agreed upon by the group or, as usually exists in larger entities, therapists act as employees of the owners of the company who may or may not be therapists themselves.

If you’re interested in setting up a group practice in order to provide rehab services to homes, which may include residential homes within assisted living facilities (ALFs) or senior living communities, consider the following steps:

Do Your Homework

A group practice may consist of providers who engage in either the same discipline or multiple disciplines, such as physical therapy, occupational therapy and/or speech-language pathology.

Group practices can also include providers from different specialties, such as rehabilitation, medical care and/or chiropractic care.

Whether you have established a brand new group practice looking to specialize in rehabilitation in the home or an existing group practice seeking to develop a new service line, the first thing we recommend doing is reviewing your state laws.

State governments set rules for businesses operating in their states, cities and counties. States also have the authority to develop regulations about healthcare services and professionals practicing in the state. These regulations are in addition to regulations and rules set forth by federal and private payers.

It is also prudent to check the availability of payer networks in your area. Do they understand what “outpatient therapy in the home” is?

Many payers have the preconceived notion that when therapy is delivered in the home, then it is home health services. Therefore, you must be licensed as a home health agency provider. You may have to do some education with them before attempting to bill for services.

Become Medicare-Certified

Are you planning to treat older adults in your home-based group practice? If your business plan includes working in assisted and independent living communities, the answer to this question is a resounding yes.

Assuming this is the case, the next step in the process is to become Medicare-certified.

Physical therapists, occupational therapists and speech-language pathologists who treat Medicare beneficiaries must be enrolled in the Medicare program1,2,3 and submit claims for those covered services to Medicare.

A group practice is a “supplier” of services within the Medicare program. So, a new group practice should start the process by obtaining a Type 2 National Provider Identifier (NPI).

The next step is to complete a Medicare Enrollment Application. CMS provides an online application portal that speeds up the process of becoming certified. Group practices complete a CMS-855B form. Reviewing the paper application form prior to completing the application in PECOS is recommended. 

Group practices do not have a set of Medicare conditions of participation under which they will be surveyed. However, a group practice and each therapist within the group will receive a site visit from the Medicare Administrative Contractor (MAC) when newly enrolling to validate that the practice is real and operational.5

Practice Administration Considerations


Each physical therapist, occupational therapist and speech-language pathologist in the group practice must complete a CMS-855I (if they have not already) to be enrolled in the Medicare program.  The CMS-855R should also be completed to reassign Medicare payments to the group practice.


Services delivered by therapist assistants require direct supervision.6 Therefore, if the business model is to deliver services within the home, and never in a clinic, the business plan would not include therapist assistants.


Group practices bill on the CMS-1500 form or CMS-837P.  Each service is linked to the provider’s specific NPI.  The CPT7 codes are used to define skilled services. Claims are paid using the Medicare physician fee schedule for skilled services delivered.

When it comes to providing rehabilitation services, there is no regulation that tells you where it must be delivered. Providing services in a person’s home can be attractive to patients, rewarding for therapists, and a successful business model.

How-To Guide for Part B in the ALF/Home

Advice for Rehab Consultants Seeking to Expand Their Service Options

Access Ebook

1American Physical Therapy Association.  Busting Payment Myths Part 7: ‘Participating’ vs. ‘Nonparticipating’ Medicare Status and Medicare Advantage.  Retrieved from:  Lower costs with assignments.  Retrieved from:
3Social Security Act.   Agreements with Providers of Services; Enrollment Processes.  Retrieved from:
4Provider Enrollment, Chain, and Ownership System (PECOS).
542 CFR 424.518 – Screening levels for Medicare providers and suppliers.
642 CFR 484.4.  Centers for Medicare and Medicaid Services, Internet Only Manual, Benefits Policy Manual.  Chapter 15 – Covered Medical and Other Health Services.  Section 230.1.C
7 American Medical Association, CPT® Overview and Code Approval, 2021.

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