U.S. Physical Therapy Stock

U.S. Physical Therapy, Inc., through its subsidiaries, engages in physical therapy clinics and industrial injury prevention services business.

The company operates outpatient physical therapy clinics that provide pre-and post-operative care for a variety of orthopedic-related disorders and sports-related injuries, treatment for neurological-related injuries and rehabilitation of injured workers.

The company also has a majority interest in businesses, which are leading providers of industrial injury prevention services. Services provided in this business include onsite injury prevention and rehabilitation, performance optimization, post-offer employment testing, functional capacity evaluations and ergonomic assessments. The majority of the industrial injury prevention services are contracted with and paid for directly by employers, including a number of Fortune 500 companies. Other clients include large insurers and their contractors. These services are performed through Industrial Sports Medicine Professionals, consisting of both physical therapists and specialized certified athletic trainers (ATCs).

Segments

Physical Therapy Operations segment

The physical therapy operations segment primarily operates through subsidiary clinic partnerships, in which the company generally owns a 1% general partnership interest in the Clinic Partnerships. The company’s limited partnership interests generally range from 65% to 75% (a range of 10%-99%) in the Clinic Partnerships. The managing therapist of each clinic owns, directly or indirectly, the remaining limited partnership interest in most of the clinics (hereinafter referred to as Clinic Partnerships). To a lesser extent, the company operates some clinics, through wholly-owned subsidiaries, under profit sharing arrangements with therapists (hereinafter referred to as Wholly-Owned Facilities).

The company continues to seek to attract for employment physical therapists who have established relationships with physicians and other referral sources by offering these therapists a competitive salary and incentives based on the profitability of the clinic that they manage. For multi-site clinic practices in which a controlling interest is acquired by the company, the prior owners typically continue on as employees to manage the clinic operations, retaining a non-controlling ownership interest in the clinics and receiving a competitive salary for managing the clinic operations. In addition, the company has developed satellite clinic facilities as part of existing Clinic Partnerships and Wholly-Owned Facilities, with the result that a substantial number of Clinic Partnerships and Wholly-Owned Facilities operate more than one clinic location. In 2023, the company intends to continue to acquire multi-clinic practices and to continue to develop outpatient physical therapy clinics as satellites in existing partnerships, along with increasing its patient volume through marketing and new programs.

Therapists at its clinics initially perform a comprehensive evaluation of each patient, which is then followed by a treatment plan specific to the injury as prescribed by the patient’s physician. The treatment plan may include a number of procedures, including therapeutic exercise, manual therapy techniques, ultrasound, electrical stimulation, hot packs, iontophoresis, education on management of daily life skills and home exercise programs. A clinic’s business primarily comes from referrals by local physicians. The principal sources of payment for the clinics’ services are managed care programs, commercial health insurance, Medicare/Medicaid and workers’ compensation insurance.

During the year ended December 31, 2022, the company sold five clinics and closed eleven clinics. On December 31, 2022, the company operated 640 clinics in 40 states. The company’s highest concentration of clinics are in the following states: Texas, Tennessee, Michigan, Virginia, Florida, Oregon, Maryland, Pennsylvania, Georgia, Arizona, Idaho, Missouri, Connecticut, South Carolina, and Alabama. In addition to its 640 clinics, on December 31, 2022, the company managed 40 physical therapy practices for unrelated physician groups and hospitals.

Clinics

Most of the company’s clinics are operated as Clinic Partnerships in which it owns the general partnership interest and a majority of the limited partnership interests. The managing healthcare practitioner of the clinics usually owns a portion of the limited partnership interests. As of December 31, 2022, through wholly owned subsidiaries, the company owned a 1% general partnership interest in all the Clinic Partnerships.

The company provides services at its clinics on an outpatient basis. Patients are usually treated for approximately one hour per day, two to three times a week, typically for two to six weeks. The company generally charges for treatment on a per procedure basis. Medicare patients are charged based on prescribed time increments and Medicare billing standards. In addition, the company’s clinics will develop, when appropriate, individual maintenance and self-management exercise programs to be continued after treatment. The company continually assesses the potential for developing new services and expanding the methods of providing its existing services in the most efficient manner while providing high quality patient care.

Marketing

The company focuses its marketing efforts primarily on physicians, including orthopedic surgeons, neurosurgeons, physiatrists, internal medicine physicians, podiatrists, occupational medicine physicians and general practitioners. In marketing to the physician community, it emphasizes its commitment to quality patient care and regular communication with physicians regarding patient progress.

Industrial Injury Prevention Services segment

Services provided in the Industrial Injury Prevention services segment include onsite injury prevention and rehabilitation, performance optimization, post offer employment testing, functional capacity evaluations, and ergonomic assessments. The majority of these services are contracted with and paid for directly by employers, including a number of Fortune 500 companies. Other clients include large insurers and their contractors. The company performs these services through Industrial Sports Medicine Professionals, consisting of both physical therapists and ATCs.

In March 2017, the company acquired a 55% interest in an initial industrial injury prevention services business. On April 30, 2018, the company acquired a 65% interest in another business in the industrial injury prevention sector and then it combined the two businesses. After the combination, the company owned a 59.45% interest in the combined business, Briotix Health, Limited Partnership (Briotix Health). On April 11, 2019, the company acquired 100% of a third provider of industrial injury prevention services. The acquired company specializes in delivering injury prevention and care, post offer employment testing, functional capacity evaluations and return-to-work services. It performs these services across a network in 45 states, including onsite at eleven client locations. The business was then combined with Briotix Health increasing the company’s ownership position in the partnership to approximately 76.0% On November 30, 2021, the company acquired an approximate 70.0% interest in a leading provider of industrial injury prevention services (IIP Acquisition).

Sources of Revenue

Industrial Injury Prevention Services

Services provided in the industrial injury prevention services segment include onsite injury prevention and rehabilitation, performance optimization, post offer employment testing, functional capacity evaluations, and ergonomic assessments. The majority of these services are contracted with and paid for directly by employers, including a number of Fortune 500 companies. Other clients include large insurers and their contractors. The company performs these services through Industrial Sports Medicine Professionals, consisting of both physical therapists and ATCs.

On November 30, 2021, the company acquired an approximate 70.0% interest in a leading provider of industrial injury prevention services (IIP Acquisition).

Physical Therapy Operations

Payor sources for physical therapy operations are primarily managed care programs, commercial health insurance, Medicare/Medicaid and workers’ compensation insurance. Commercial health insurance, Medicare and managed care programs generally provide coverage to patients utilizing the company’s clinics after payment by the patients of normal deductibles and co-insurance payments.

The company’s physical therapy business depends to a significant extent on its relationships with commercial health insurers, health maintenance organizations, preferred provider organizations and workers’ compensation insurers. In some geographical areas, the company’s clinics must be approved as providers by key health maintenance organizations and preferred provider plans to obtain payments.

Industrial Injury Prevention Services

Services provided in this business include onsite injury prevention and rehabilitation, performance optimization, post-offer employment testing, functional capacity evaluations and ergonomic assessments. The majority of these services are contracted with and paid for directly by employers, including a number of Fortune 500 companies. Other clients include large insurers and their contractors. These services are performed through Industrial Sports Medicine Professionals, consisting of both physical therapists and ATCs.

Regulation and Healthcare Reform

Various federal and state laws regulate financial relationships involving providers of healthcare services. These laws include Section 1128B(b) of the Social Security Act (42 U.S. C. § 1320a-7b[b]) (the Fraud and Abuse Law), under which civil and criminal penalties can be imposed upon persons who, among other things, offer, solicit, pay or receive remuneration in return for the referral of patients for the rendering of any item or service for which payment may be made, in whole or in part, by a Federal health care program (including Medicare and Medicaid); or (ii) purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing, ordering any good, facility, service, or item for which payment may be made, in whole or in part, by a Federal health care program (including Medicare and Medicaid).

The company rents clinic space for some of its clinics from referring physicians and has taken the steps that it is necessary to ensure that all leases comply to the extent possible and applicable, with the space rental Safe Harbor to the Fraud and Abuse Law.

The company and its clinics are subject to federal and state laws prohibiting entities and individuals from knowingly and willfully making claims to Medicare, Medicaid and other governmental programs and third party payors that contain false or fraudulent information. The federal False Claims Act encourages private individuals to file suits on behalf of the government against healthcare providers, such as it.

History

U.S. Physical Therapy, Inc. was founded in 1990.