Rehabilitation & Therapy Facility (PT/OT/Speech, Rehab Hospital) Feasibility Studies

What a Rehabilitation & Therapy Facility Feasibility Study Actually Covers

A feasibility study for a rehabilitation & therapy facility (PT/OT/speech, rehab hospital) is not a generic healthcare narrative dropped into a new cover page. The scope is built around the operational architecture of the specific setting: a freestanding outpatient therapy clinic operates on visit volume, therapist productivity, and authorization approval rates, while an inpatient rehabilitation hospital operates on qualifying-admission criteria, classification rules, and average length of stay. The study addresses whichever mechanics govern the proposed facility, and the deliverables reflect that specificity.

• Discipline-level visit or census projections built from population utilization rates, referral-source mapping, and payer authorization patterns by therapy type (PT, OT, speech).
• Therapist productivity model expressing billable units per clinician per day at documented productivity standards, translated into net revenue by payer class.
• Payer-mix and reimbursement schedule with Medicare fee schedule rates, Medicaid state plan rates, and commercial contract yields stated explicitly, not averaged away.
• Authorization and visit-cap friction analysis showing how payer-imposed limits compress realized visit volume below gross demand.
• Regulatory classification documentation for inpatient settings, covering qualifying-condition criteria and the compliance thresholds that govern census eligibility.
• Referral-source concentration analysis identifying the physicians, health systems, and post-acute networks that would generate admissions or referrals, with concentration risk quantified.
• Ten-year pro forma with full sensitivity and interest-rate stress benchmarked against RMA and IBISWorld data at the NAICS level.

How Market & Demand Analysis Is Built for Rehabilitation & Therapy Facility Feasibility Studies

Demand for rehabilitation and therapy services is not read from a single market-research report. It is assembled from multiple independent data layers that, taken together, allow a defensible estimate of the patient population the proposed facility can realistically serve.

Population and utilization data are drawn from U.S. Census Bureau age-cohort files and county-level health-status indicators, because rehabilitation demand is disproportionately concentrated in older age brackets and in populations with stroke, orthopedic, neurological, and cardiac diagnoses. Medicare claims data and state all-payer claims databases, where accessible, supply condition-specific utilization rates that anchor the demand model to observed behavior rather than assumption.

Competitive supply is mapped through state health facility licensing registries, Medicare provider enrollment files, and CMS certification records, which together identify every licensed outpatient therapy provider and every certified inpatient rehabilitation facility within the defined service area. Certificate-of-need filings and state health planning office records are reviewed where CON regulation applies, because CON status directly constrains new supply and affects the competitive landscape the proposed facility will enter.

Referral networks are assessed through physician and specialist density data from state medical board registries and CMS physician compare files. Drive-time and access analysis uses road-network data to define realistic primary and secondary service areas. Trade association utilization benchmarks from organizations such as the American Physical Therapy Association supply independent productivity and utilization reference points against which the modeled assumptions are tested.

The Assumptions That Decide the Outcome in Rehab & Therapy Facility Underwriting

Every coverage ratio in a rehabilitation & therapy facility (PT/OT/speech, rehab hospital) feasibility study is ultimately a function of a small number of operating assumptions. Identifying those assumptions, stating them transparently, and stress-testing each one is the analytical work that separates a credible study from a projection that cannot survive lender scrutiny.

• Billable visits or census per period: The single largest revenue driver. Tested at minus 5, 10, and 15 percent from the base case to show the visit or census floor at which coverage breaks.
• Net revenue per visit or per patient day: Determined by payer mix and contracted rates. Sensitivity runs across payer-mix shifts—particularly Medicare-to-commercial ratios—because a modest shift toward lower-yield payers compresses revenue materially without changing volume.
• Therapist productivity and staffing ramp: Outpatient revenue cannot exceed what licensed therapists can bill. The ramp from opening-day staffing to stabilized productivity is modeled month by month, not assumed instantaneous, because early-period cash flow is where most outpatient clinics face their greatest stress.
• Authorization approval rates and visit-cap exposure: Payer authorization denial rates and per-episode visit limits reduce realized volume below gross referral volume. These are stated as explicit assumptions, not buried in a blended yield figure.
• Operating cost structure and fixed-cost leverage: Lease or debt service, licensed staff compensation, and billing infrastructure create a fixed-cost base that is largely insensitive to short-term volume changes. The model isolates contribution margin to show how quickly volume shortfalls translate into coverage deterioration.
• Interest-rate sensitivity: Stress applied from plus 0.5 to plus 3.0 percent on the proposed debt to reflect rate risk across the loan term.

What SBA, USDA, and Conventional Lenders Look for in Rehabilitation & Therapy Facility Feasibility Studies

Lenders and guaranty agencies approach rehabilitation and therapy facility credit requests with a specific set of concerns that differ from those raised by general commercial real estate or retail lending. Understanding those concerns shapes how the feasibility study is structured.

Where the project is a licensed inpatient rehabilitation hospital rather than an outpatient therapy clinic, the analysis follows the firm’s hospital financial feasibility study methodology, with inpatient census, admitter relationships and Medicare reimbursement modeled directly.

SBA lenders underwriting outpatient therapy clinics under SOP 50 10 8 require documentation that projected debt-service coverage meets the 1.15x operating and 1.00x global minimums. For a therapy clinic, the coverage question turns on whether the referral base is broad enough to sustain volume without undue concentration in a single physician group or health system, and whether the payer mix produces sufficient net revenue per visit after authorization friction. The study addresses both directly.

USDA Business & Industry and Community Facilities programs are relevant where the proposed facility serves a rural or underserved market. Those engagements follow RD Staff Instruction 5001 and require the same coverage documentation, with additional emphasis on community need and the absence of duplicative services—factors the demand and competitive-supply analysis addresses explicitly.

Conventional lenders financing larger outpatient platforms or system-affiliated inpatient rehabilitation hospitals typically require 1.20x coverage and place particular weight on referral-source stability, management experience in the specific therapy disciplines, and the facility's position relative to any certificate-of-need constraints. For inpatient settings, lenders also scrutinize the qualifying-condition compliance rate, because a facility operating near the classification threshold carries regulatory risk that can affect census and reimbursement simultaneously.

In every case, the fiduciary duty runs to the lender and the reviewing agency. No fee is contingent on the finding, and no determination is revised under pressure.

Cost, Timeline, and How a Rehabilitation & Therapy Facility Feasibility Engagement Runs

The engagement process is designed to be predictable for both the sponsor and the lender. A fixed fee is quoted within one business day of a project inquiry; the fee does not change based on the study outcome, and no portion of it is contingent on loan approval or any other result. Wert-Berater, Inc. has prepared 4,000+ engagements representing $41.2 billion in evaluated project value, and the fee structure reflects that volume of standardized process, not bespoke negotiation on each engagement.

Standard delivery is 10 to 15 business days from receipt of a complete data room. The data room for a rehabilitation or therapy facility engagement typically includes the proposed lease or site control documents, the draft staffing plan with licensed-therapist counts by discipline, the proposed payer contracts or fee schedule expectations, any existing referral relationships or letters of intent from physician groups, and the construction or tenant-improvement budget where applicable. Incomplete data rooms are the most common source of delay; the firm identifies gaps at intake and does not begin the clock until the room is complete. Rush delivery is available where the lending timeline requires it.

Every engagement is published to a secure client portal. The financial model is a fully linked Excel workbook with no hardcoded values, and it remains live in the portal so that a reviewer can change any input—visit volume, payer mix, therapist count, interest rate—and watch every downstream calculation update in real time. The narrative report includes an explicit statement of conditions: the assumptions on which the affirmative finding rests, stated so that any party can monitor whether those conditions are met as the project moves toward opening.

Frequently asked questions