PHYSICAL · OCCUPATIONAL · SPEECH THERAPY
For physical therapy, occupational therapy, and speech-language pathology practices in California — solo clinicians, group practices, and pediatric or school-contract specialists. The therapy economics are different. Your CPA should know it.
WHAT THERAPY PRACTICES LIVE WITH
Therapy practices share a regulatory shape — Medicare CPT codes, the 8-minute rule, group treatment units — that most CPAs have never had to model. These are the six places that breaks.
Billable units depend on minutes per CPT code. Revenue projection and per-clinician productivity reporting both fall apart if minutes-to-units conversion isn't in the books.
Many speech and OT practices carry sizable district contracts paid on quarterly or end-of-year cycles. Cash flow looks great in March and terrible in August — without proper deferred-revenue treatment.
Pediatric pays differently than Medicare, which pays differently than commercial insurance. Per-payer net collection rates need their own line — most QuickBooks files lump them.
A therapist licensed in CA who treats a patient temporarily in NY creates licensure, malpractice, and state-tax exposure. Telehealth scaled this without the books catching up.
Most therapy practices misclassify at least one role. After AB 5 in California, the ABC test is unforgiving — and audits typically find years of back payroll tax + penalties.
AAC communication devices, exercise equipment, ultrasound, electrical stim — all qualify for §179 expensing or bonus depreciation, but the line between consumables and capitalized assets is where money is missed.
WHAT WE DO
Accounting, tax, and advisory — integrated for PT, OT, and SLP owners.
Monthly close that reflects how a therapy practice actually earns and spends — per payer, per clinician, per service line.
Federal + CA returns with the entity structure and elections that fit therapy practice economics.
Owner-level strategy for compensation, expansion, contractor decisions, and the transitions therapy owners face.
What you can expect
You work with a CPA, not an associate.
Scoped upfront and committed in writing.
Response within one business day.
Quarterly planning — not just at deadlines.
What we do
We work with Bay Area outpatient therapy practices on the financial side of running a multi-payer, multi-clinician operation — billing rules, contractor classification, and equipment tax.
Medicare, Medicaid, and private insurance reporting with payer-level aging analysis.
Unit calculation review, documentation standards, and audit-defensibility for therapy billing.
Therapist and aide classification under California ABC test, including 1099 risk review.
Tax planning for therapy equipment, modalities, and clinic build-outs.
Accounting structure for value-based contracts and outcomes-tied reimbursement.
Bookkeeping, payroll, monthly P&L with clinic-level detail, and year-end tax coordination.
Related services
Therapists serving California school districts under NPA contracts.
Explore →For practices that serve home-bound patients or staff home health agencies.
Explore →How we work with California healthcare practitioners across specialties.
Explore →Related insights
PT · OT · SLP
California PT, OT, and SLP practices face Medicare’s 8-minute rule, AB 5 contractor exposure, and teletherapy nexus. The tax moves owners actually need.
NPA
California NPAs face unique tax exposure: AB 5 contractor reclassification, deferred revenue on district contracts, and a brutal summer cash gap. A CPA-led play
Home Health
California home health agencies face PDGM billing complexity, AB 5 nurse classification exposure, surety bond amortization, and Medicare cost report requirement
Common Questions
Yes. The economics rhyme: minutes-to-units billing, Medicare CPT codes, the 8-minute rule, deferred school-contract revenue, and 1099 vs W-2 contractor questions show up in all three. We adapt the engagement to your specific service mix and payer set.
In California, licensed therapists generally need a Professional Corporation (PT Corporation, OT Corporation, or Speech-Language Pathology Corporation) when the entity practices the profession — including hiring other licensed therapists. The S-corp election is then layered on top once compensation hits the threshold where it pays for itself.
We apply the ABC test to every contractor relationship and document the analysis. Most pre-AB 5 contractor PTs/OTs/SLPs should now be W-2. We help reclassify cleanly — and if there's historical exposure, we coordinate with employment counsel on voluntary disclosure or quiet correction.
School contracts get deferred-revenue treatment so income is recognized in the period the service is delivered, not when the check clears. That smooths month-to-month margin and prevents the August "where did the cash go" surprise.
It simplifies billing but complicates reconciliation. We build a workflow that maps the billing-service reports to QuickBooks at the payer + clinician level so denials and adjustments don't hide in a single deposit line.
Yes. Single-use materials are direct costs; capitalized assets (AAC devices, gait trainers, hand-therapy equipment, modalities) are §179 or bonus depreciation candidates. We model the elections against your tax bracket each year.
An Invitation
A complimentary 30-minute review. We look at your practice specifically — payer mix, clinician structure, services, locations — and tell you honestly what we'd do.
Call directly: 925-320-0309 · ronak@milestonecpas.com
