Independent valuations of Australian physiotherapy practices

Start with the revenue channels

Private fees, usually with a health fund rebate claimed on the spot through a terminal such as HICAPS, are the practice's own pricing decision; the extras benefit and the annual limit behind it are the insurer's. APRA reports that at 30 June 2026, 15,525,399 people, or 55.5 per cent of the population, held some form of general treatment (extras) cover, and that insurers paid $140.70 million in physiotherapy benefits across 3,291,049 services in the June 2026 quarter, an average benefit of $43 a service. The rebate contributes to the fee; the gap a patient accepts is what the practice controls.

Medicare contributes through the chronic condition management allied health items on the Medicare Benefits Schedule (MBS). Item 10960 covers a physiotherapy service of at least 20 minutes for a patient whose chronic condition and complex care needs are managed by a medical practitioner under a GP chronic condition management plan, at a schedule fee of $74.55 from 1 July 2026 and a Medicare benefit of 85 per cent, or $63.40, with the patient paying anything charged above it. MBS Online caps the patient at five allied health services a calendar year across every allied health provider they see, so the item supports referral flow far more than margin.

NDIS revenue follows the pricing the National Disability Insurance Agency (NDIA) publishes. The NDIA adjusted a number of therapy price points from 1 July 2025 to align them with non-NDIS market rates, after benchmarking that drew on Medicare data, private health insurance claims and data from 13 comparable government schemes. Under the NDIS pricing schedule effective 1 July 2026, physiotherapy (support item 01_721_0128_1_3) carries a national price limit of $183.99 an hour, $257.59 remote and $275.99 very remote, with provider travel at $92.00 an hour. The NDIA presents the schedule as guidance on appropriate prices rather than a fixed ceiling, though a Bill introduced into Parliament on 14 May 2026 proposes to give the Minister for the NDIS power to make a pricing determination. HPNA assesses NDIS billing on the arrangements in force at the valuation date and the participant and plan manager concentration behind it (see NDIS valuations).

DVA work runs on a GP referral and a treatment cycle of up to 12 sessions or one year, whichever ends first, though treatment for holders of a Totally and Permanently Incapacitated Veteran Card sits outside the cycle. The provider accepts the DVA fee as full payment and cannot charge a gap: under the physiotherapists schedule of fees effective 1 January 2026, item PH20, a standard consultation in rooms, pays $75.10. DVA reviews unusual provider claiming each year, so claiming patterns are tested rather than annualised. From 1 July 2027 DVA will remove the 12-session cycle, raise allied health fees under a $169.7 million investment, and introduce a $5,000 annual threshold for reviewing a card holder's treatment.

Compensable work is regulated state by state, and the approvals attach to the clinician rather than the practice. In New South Wales a physiotherapist must be approved by the State Insurance Regulatory Authority (SIRA) before treating injured workers and, under section 60(2C)(e) of the Workers Compensation Act 1987, must hold general registration with Ahpra and complete SIRA's three-part introductory training program. That approval number is unique to the practitioner, cannot be used by anyone else and is valid across each location they work. SIRA's fees order effective 1 February 2026 sets the maximum fee payable, treatment needs insurer pre-approval unless exempt, invoices are due within 30 calendar days, and if the insurer declines liability the patient becomes personally responsible. WorkSafe Victoria funds physiotherapy only from providers registered with WorkSafe and with the Physiotherapy Board of Australia other than as a student, needs no referral to start treatment, but requires an initial Allied Health Recovery Management Plan within the first five consultations, and lets the worker be charged the difference above the WorkSafe rate, $71.28 excluding GST for a standard consultation, item PY102, from 1 July 2026. WorkCover Queensland pays an approved and registered provider up to the maximum scheduled fee in its table of costs, and nothing above it or to a non-approved provider. The Transport Accident Commission sets maximum rates too, $100.07 for a standard consultation, item PHY200, from 1 July 2026, and past the first 90 days after the accident, consultations need approval before delivery. This is price-controlled, approval-gated revenue that a buyer inherits only to the extent the approved clinicians stay.

Aged care work arrives as in-home funding under Support at Home and as contracts with residential homes, which decide for themselves how they source allied health. Both are contract-dependent rather than patient-dependent, so one decision moves a block of revenue. Sports club and school contracts, group exercise and clinical Pilates classes, hydrotherapy that relies on someone else's pool, and retail sales complete the mix. Class income deserves particular care: since 1 April 2019 private health insurers have not been able to offer cover for 16 named natural therapies, Pilates among them, so what a patient can claim may turn on whether the session is delivered and billed as a physiotherapy service.

Maintainable earnings after clinical wages

Maintainable earnings are the profit the practice can produce in a normal year after normalisation (removing one-off, personal and non-market items), typically reported before interest and tax, and either before depreciation and amortisation (EBITDA) or after them (EBIT). In physiotherapy the decisive adjustment is a market clinical wage for the owner: an owner treating a full caseload on a small wage is producing revenue, not business profit. See maintainable earnings.

Physiotherapist dependence and goodwill

Goodwill is the value of the practice above its identifiable net assets. Personal goodwill attaches to a clinician and leaves with them; transferable (commercial) goodwill attaches to location, brand, systems, referral relationships and team, and can be sold. In physiotherapy, patients often prefer a clinician, but episodes of care are short, many patients arrive by location or referral, and a multi-clinician practice keeps most bookings when one physiotherapist leaves. Key-person risk (the exposure to losing the owner or a senior clinician) is therefore usually moderate, rising sharply where the owner holds the scheme approvals, the club contract or the surgeon relationships. See how practitioner dependence affects value.

Workforce: employees, contractors and percentage splits

Physiotherapists are engaged as salaried employees, on a base plus a billings incentive, or as contractors paid a percentage of what they bill. Percentage splits are common and are not neutral for value. Revenue NSW ruling PTA 041 applies the relevant contract provisions of the Payroll Tax Act 2007 to medical centre businesses and names physiotherapy practices among them, drawing on Thomas and Naaz Pty Ltd v Chief Commissioner of State Revenue [2021] NSWCATAD 259 and Commissioner of State Revenue (Vic) v The Optical Superstore Pty Ltd [2019] VSCA 197. Similar relevant contract provisions operate in the other states and territories. Where payments to contractors would be deemed wages, a buyer carries payroll tax the historical accounts may never have shown, and comparable questions arise for superannuation. HPNA normalises for that cost and notes any historical exposure. The position for a particular practice should be confirmed with your accountant. See payroll tax and contractor arrangements.

A practice that recruits new graduates, supervises them and builds them a caseload carries lower key-person risk than one built around a single senior clinician, and the billings-by-clinician report shows the difference.

Utilisation, premises and equipment

HPNA reads the practice management system as closely as the accounts: billable hours against rostered hours, visits per episode of care, cancellation and non-attendance rates, rebooking rate and average fee by channel. Equipment is modest (plinths, rehabilitation equipment, electrotherapy units, reformers); the fit-out is the larger investment and is tied to the lease, so remaining term, options, market rent and assignment rights matter more. See premises and lease terms.

Choosing the method

Established practices are usually valued by capitalising future maintainable earnings: dividing them by a capitalisation rate, or multiplying them by a multiple (the factor that converts a year of earnings into a value). The multiple rises with a spread of channels, depth of clinicians, a low owner billing share, a long lease and clean contractor arrangements. It falls with scheme concentration, owner-held approvals, a short lease and unresolved payroll tax exposure. HPNA does not publish sector multiples, because the assumptions behind any figure matter more than the figure.

What the conclusion includes

Enterprise value is the operating business before debt and cash; equity value is what the owners hold once borrowings are repaid and surplus assets, such as cash beyond trading needs or property in the entity, are added back. An earnings-based conclusion assumes that a normal level of working capital, the funds tied up in day to day trading, transfers with the business. In physiotherapy that is receivables rather than stock: private fees settle at the desk, but insurer, NDIA, plan manager and DVA claims can sit unpaid for weeks, and prepaid class packages are unearned income a buyer must still deliver.

A conclusion for the whole practice is reached on a control basis. Where the subject is a parcel rather than the whole, a minority interest may warrant a discount for lack of control and for lack of marketability, unless the shareholders agreement or the purpose of the valuation calls for a pro-rata share of the whole.

Price and value are different things. Market value is what a hypothetical willing but not anxious buyer and seller would agree, both properly informed and neither compelled to act. A price actually paid may sit above or below it, because a particular buyer may be paying for a location, a referral relationship or the removal of a competitor.