U.S. Physical Therapy (NYSE:USPH) is pursuing growth through clinic openings, acquisitions and a newer hospital-alliance strategy that Chief Executive Officer Chris Reading said could expand patient volumes and improve reimbursement.
Speaking at an investor event, Reading said the company operates in 45 states with just under 800 locations focused primarily on orthopedic and musculoskeletal care, including treatment for sprains, fractures, dislocations, joint replacements and post-surgical rehabilitation. About one-third of its business comes from Medicare, while most of the remaining revenue comes from commercial payers. Workers’ compensation represents roughly 10% of revenue, he said.
Partnership Model Supports Acquisitions
Unlike some larger, private-equity-backed competitors, U.S. Physical Therapy operates through local partnerships, Reading said. The company has approximately 120 partnerships across its clinic base, and local partners retain ownership stakes while managing daily operations. In a recently completed acquisition of 10 to 12 clinics in the central U.S., for example, the local partners retained a 35% equity interest, he said.
Reading said the company provides centralized support for functions including payer contracting, technology, regulatory compliance, billing oversight and other administrative needs, while care delivery remains locally managed. The approach is intended to allow clinician-owners to devote more time to growth, recruiting and local operations.
The company generally retains local brands after acquisitions rather than converting them to the U.S. Physical Therapy name. Reading said the strategy is designed to avoid disruption and preserve employees and patient relationships. Billing and collection operations may remain local initially, although the company can provide centralized billing support where needed.
Reading said the company’s blended average net reimbursement was $107.59 per visit in the most recent quarter. Visits per clinic per day have increased sequentially in 14 of the past 16 quarters, he said, while noting that the business typically experiences seasonal variation, with the first quarter generally slower and the second quarter among its busiest periods.
Hospital Alliance With NYU Langone
Reading highlighted a 10-year relationship with NYU Langone as a major component of the company’s hospital-alliance initiative. U.S. Physical Therapy entered the New York market more than a year ago and has expanded to 60 locations in the region through a large partnership, he said.
Under the NYU Langone arrangement, the clinics have been incorporated into the hospital system’s ambulatory network. Reading said U.S. Physical Therapy acts as a contracted provider, using its employees and facilities while receiving a flat per-visit payment from NYU Langone regardless of payer type.
“We’re able to bill at their rate,” Reading said in response to an analyst question, adding that the facilities effectively become contracted clinics under the NYU Langone network.
He said the arrangement provides higher reimbursement, protection against clinical employee-cost escalation and reimbursement for clinical staff costs. It is also exclusive, according to Reading, with future growth under the arrangement expected to occur with NYU Langone during the agreement term.
Reading said NYU Langone had limited outpatient physical therapy infrastructure before the alliance and previously referred substantially more physical therapy volume outside its system than U.S. Physical Therapy handled across its New York network. The company added 120,000 visits in New York last year without NYU Langone referrals, he said, and expects the hospital relationship to support further growth.
Management has assembled a team to pursue similar hospital arrangements in other markets where the company already has a sizable presence, Reading said.
Injury Prevention Adds Diversification
The company’s injury-prevention business, launched in 2017 through an investment in Denver-based Briotix, has grown to about $120 million in revenue and more than $20 million in EBITDA, Reading said. The segment now accounts for approximately 15% of company revenue and has margins that are roughly double those of the physical therapy business on the company’s reported basis.
The unit works with employers to address musculoskeletal health and injury prevention. Reading said its clients include auto manufacturers and more than 600 Costco warehouse locations, where its staff visit high-risk work areas and engage with employees.
Reading said U.S. Physical Therapy had approximately $220 million in debt in its latest reported period and expects EBITDA of more than $100 million for the year. The company renewed its banking agreement last year, he said, and has capital available for acquisitions and organic expansion. It also pays a quarterly dividend and used a $25 million board authorization primarily for share repurchases in the first quarter, buying shares at roughly $62 to $63 apiece, according to Reading.
About U.S. Physical Therapy (NYSE:USPH)
U.S. Physical Therapy, Inc (NYSE: USPH) is a leading owner and operator of outpatient physical therapy clinics across the United States. The company delivers rehabilitative care to patients recovering from orthopedic injuries, neurological disorders and chronic conditions. Its core services include one-on-one physical therapy sessions, aquatic therapy, occupational therapy, massage therapy and sports medicine programs designed to restore mobility and enhance quality of life.
In addition to traditional rehabilitation services, U.S.
