What documents do I need to sell my physical therapy practice?
A buyer of a physical therapy practice asks for three years of tax returns and monthly P&Ls, a normalized EBITDA with owner add-backs, payer mix, AR aging by payer, a referral breakdown, the real-estate lease, licenses, Medicare enrollment, and a redacted therapist roster.
Raw patient charts stay out. The buyer’s own request list controls. Have counsel review the cut. This page is not a template.
Physical-therapy-practice sale document index (definition). The numbered evidence file behind one clinic sale.
It proves normalized EBITDA matches the books, Medicare enrollment is in the room as a fact, and named patients wait for confirmatory diligence.
A generic company-sale checklist is not this index.
The index, sourced, not a vendor list
Mihama Acquisitions’ 18-month checklist for preparing a PT practice for sale (April 2026, retrieved 2026-10-13) covers the last-three-months pack: three years of tax returns and profit-and-loss statements, AR aging by payer, a referral-source breakdown, a redacted employee roster, payer mix as a percentage of billings and collections, location-by-location EBITDA when there is more than one site, and leases. It does not publish a file count. Acquisition Stars’ guide on buying a physical therapy practice (retrieved 2026-10-13) adds Medicare enrollment, payer contracts, therapist employment agreements, visit volume by therapist, equipment inventory, and state licensing. The general company-sale version of this index is what should be in a sell-side data room index. A physical-therapy-practice sale adds payer mix, production by therapist, the real-estate lease, licenses, and Medicare enrollment, and it keeps named patients out until confirmatory diligence. When several groups bid, isolate each buyer’s questions with how to keep buyers from seeing each other’s questions in a data room.
| Put this | Why it is in the index | Where the norm is written |
|---|---|---|
| Three years of tax returns and monthly P&Ls | The earnings the price is built on, month by month. | Mihama, April 2026: three years of tax returns and P&Ls |
| Normalized EBITDA with owner add-backs | Corporate buyers underwrite adjusted earnings, not tax-return profit. | Mihama, April 2026: document every add-back |
| Payer mix as a percentage of billings and collections | Whether collections hold if Medicare or one commercial plan moves. | Mihama: payer mix as a percentage of gross billings and collections |
| AR aging by payer | Aged receivables are a proxy for billing health. | Mihama: current accounts receivable aging report by payer |
| Referral source breakdown | Whether volume stays if a referring physician does not follow the sale. | Mihama: referral source breakdown by physician and channel |
| Production by therapist | Whether revenue stays if a producing owner steps back. | Acquisition Stars: visit volume by therapist |
| Real-estate lease and assignment rights | The clinic has to stay in the building after close. | Mihama: copies of all leases with key terms highlighted |
| Licenses and corporate documents | Who is licensed to practice, and what entity conveys. | Mihama legal due diligence: licensure records and corporate documents |
| Medicare enrollment | A Medicare billing number is not sold or transferred like other assets. List the facts; this page is not a procedure. | 42 CFR 424.550(a), title 42 as of 9 October 2026 |
| Redacted therapist roster and associate agreements | Who stays, who can walk, who is key-person risk. Names can wait. | Mihama: employee roster with tenure, role, and compensation (names can be redacted) |
| Equipment list | What the buyer is actually buying on the floor. | Acquisition Stars: equipment inventory and condition |
First-look, after exclusivity, keep out
First-look is what an NDA’d bidder sees with the normalized package. After exclusivity is confirmatory sampling. Keep-out is what does not belong in the open tree. 42 CFR 424.550(a) (eCFR, title 42 as of 9 October 2026, retrieved 2026-10-13) prohibits a provider or supplier from selling its Medicare billing number or privileges to any individual or entity, or allowing another individual or entity to use its Medicare billing number. For suppliers not covered by part 489, 424.550(c) says any change in ownership or control must be reported on the enrollment application within 30 days, and a change of ownership that also changes the tax identification number generally requires a new enrollment application from the new owner. 42 CFR 424.516(d) requires physicians, nonphysician practitioners, and their organizations to report a change of ownership within 30 days. Have counsel review. This page is not a procedure.
| Folder | First-look | After exclusivity | Keep out |
|---|---|---|---|
| Financials | Three years of tax returns and monthly P&Ls, a normalized EBITDA with add-back support, location EBITDA if there is more than one site | Monthly P&Ls, add-back support in Excel | A PDF of bank statements the quality-of-earnings has to unwind |
| Payer mix | Mix as a percentage of billings and collections; AR aging by payer | A sampled claims set for confirmatory testing | Named patient-level receivables |
| Referrals and production | Anonymized referral bands by physician and channel | A sampled named set for confirmatory testing | The ID-swap key, and a raw practice-management dump |
| Premises | Lease summary and remaining term | Lease, assignment consent, equipment list | A hoped-for assignment that is not in hand |
| People | Org chart, role list, redacted roster | Associate agreements | Employee SSNs in the open tree |
| Licenses and Medicare | License list; that a Medicare billing number is on file, as a fact | Enrollment documents, as the buyer requests | A claim that the data-room vendor transfers the billing number |
| Patients | Closed | A sampled named set through advisors, if counsel signs off | Raw patient charts. 45 CFR 164.502 and APTA Standard 1.2. |
45 CFR 164.501 (eCFR, title 45 as of 9 October 2026, retrieved 2026-10-13) defines health care operations to include the sale, transfer, merger, or consolidation of all or part of the covered entity with another covered entity, or an entity that following such activity will become a covered entity, and due diligence related to such activity. 45 CFR 164.502(a)(5)(ii)(B)(2)(iv) excepts that disclosure from the sale-of-protected-health-information prohibition. 164.502(b) still requires the minimum necessary. 164.514 is how to de-identify. First-look still keeps named charts out. The APTA Code of Ethics for the Physical Therapy Profession, Standard 1.2 (effective 1 January 2026, retrieved 2026-10-13), says physical therapists and physical therapist assistants shall protect patients’ and clients’ confidential information and not disclose it except as authorized by the patient or client or as permitted or required by law. Have counsel review. See What is Cashpian?, and pricing.
FAQ
Who decides the final document list?
The buyer's own diligence request list.
Mihama and Acquisition Stars publish checklists, not a file count.
Have counsel review the cut. This page is not a template.
When do patient charts go in?
They do not, in first-look.
Named charts wait for confirmatory diligence.
45 CFR 164.502 requires the minimum necessary, and 164.514 is how to de-identify.
Have counsel review.
Why do buyers ask for Medicare enrollment?
Because a Medicare billing number is not sold or transferred like other assets.
42 CFR 424.550 says so.
Have counsel review. This page is not a procedure.
How does this index differ from a general company sale?
Payer mix, production by therapist, the real-estate lease, licenses, and Medicare enrollment sit here.
Named patients wait, the way named customers wait in a company sale.
Sources
- Mihama Acquisitions, How to Prepare Your PT Practice for Sale: An 18-Month Checklist, April 2026, retrieved 2026-10-13. Three years of tax and P&Ls. AR aging by payer. Referral breakdown. Redacted roster. Payer mix. Location EBITDA. Leases.
- Mihama Acquisitions, Legal Due Diligence in Physical Therapy Practice M&A, retrieved 2026-10-13. Licensure. Corporate documents. Payer contracts. Employment agreements. Leases.
- Acquisition Stars, Buying a Physical Therapy Practice, retrieved 2026-10-13. Medicare enrollment. Payer contracts. Therapist employment agreements. Visit volume by therapist. Referral concentration. Equipment inventory. State licensing.
- eCFR, 42 CFR 424.550, title 42 as of 9 October 2026, retrieved 2026-10-13. A provider or supplier is prohibited from selling its Medicare billing number or privileges. Suppliers not covered by part 489 report a change of ownership within 30 days; a TIN-changing change of ownership generally needs a new enrollment application.
- eCFR, 42 CFR 424.516(d), title 42 as of 9 October 2026, retrieved 2026-10-13. Physicians, nonphysician practitioners, and their organizations report a change of ownership within 30 days.
- eCFR, 45 CFR 164.501 and 45 CFR 164.502 and 45 CFR 164.514, title 45 as of 9 October 2026, retrieved 2026-10-13. Health care operations include sale, transfer, merger, or consolidation and related due diligence. Minimum necessary still applies. 164.514 is de-identification.
- APTA, Code of Ethics for the Physical Therapy Profession, Standard 1.2, effective 1 January 2026, retrieved 2026-10-13. Protect patients’ and clients’ confidential information except as authorized or as permitted or required by law.
If the files are already in a folder, grade which row they are on. Cashpian is a gated room for that packet. It is not a listing portal. It does not sell the company or run the deal.