USPH 2026年第三季度业绩电话会：医院合作提振营收与费率

核心要点

• U.S. Physical Therapy（NYSE: USPH）公布2026年第三季度营收为2.23亿美元，同比增长13%，可比营收增长7%。
• 物理治疗业务营收增长13%至1.90亿美元。患者就诊人次增加8%至168万次，每家诊所日均就诊人次从32次提升至33次。
• 次均就诊收入增加5美元至111美元，主要反映出医院合作诊所的报销率提高。9月次均收入达到创公司纪录的112美元。
• 医院合作业务营收超过2500万美元，占季度总营收的13%以上，高于第二季度的不足5%。USPH完成了首批两项合作中涉及的72家诊所的转型整合。
• 工伤预防业务营收增长14%至3300万美元，其利润率提升230个基点至22%。
• 尽管员工医疗保健成本居高不下，管理层仍重申2026年全年经调整EBITDA指引为1.02亿美元至1.06亿美元。

核心财务业绩

业务与运营表现

尽管存在典型的夏季季节性因素，物理治疗业务量依然强劲。USPH连续第27个月创下单月就诊人次历史同期新高。成熟诊所营收增长6%，管理层将其中约3个百分点归因于就诊量增长，3个百分点归因于费率提升。

医院合作是次均就诊收入提高的主要驱动力。第三季度来自此类合作的营收超过2500万美元，已完成纽约大都会区62家诊所和墨西哥湾沿岸10家诊所的转型整合。2026年第四季度将是完整计入全部72家机构的首个季度。

管理层表示，纽约大都会区的业务量超出了最初预期。增长计划包括在现有机构内增加人员配置、开设新设诊所（de novo clinics）以及寻求补充性收购。USPH还在与其他医院系统商讨潜在合作事宜，但具体时间仍存在不确定性。

工伤赔偿是费率提升的另一来源。次均就诊收入增长8%，其在支付方结构中的占比接近11%，创2020年以来的最高水平。管理层将这一进展归因于业务量的增加，以及带来更高次均报销额的PPO协议的扩大。

联邦医疗保险（Medicare）次均就诊收入增长2%，超出公司此前对2026年增长1%的预期。商业保险次均就诊收入在第三季度持平，但年初至今增长2%。

工伤预防业务营收增长14%，剔除1月收购项目后的增速为8%。管理层表示，Clarity Testing Services、Briotix和Progressive的业务储备表现稳健，同时指出入职检测需求可能会随招聘活动而波动。

管理层业绩指引

结合年初至今的业绩表现以及第三季度的增长势头，USPH重申2026年全年经调整EBITDA指引为1.02亿美元至1.06亿美元。

管理层预计第四季度将受益于两项医院合作项目的整季度贡献，并指出医院合作营收的进一步增长应会支撑次均就诊收入继续提高。公司未提供具体的季度环比营收或EBITDA预测。

根据对最终医生收费标准表的初步评估，管理层预计2027年基准费率将产生约0.7%的正向影响。此外，公司预计自2027年起分两年逐步取消个人执业成本指数调整系数将带来持续数年的报销利好，不过公司目前仍在评估其具体影响幅度。

风险与关注重点

自保员工医疗保健成本仍是压制利润率的主要阻力。年初至今的理赔费用较上年同期高出700万美元，第三季度费用超出预算200万美元。管理层指出存在多起大额复杂理赔案，包括早产儿病例。

福利费用走高导致第三季度物理治疗利润率下降约150个基点。管理层提醒称，由于理赔的时间和金额不受公司直接控制，这一不利趋势可能会持续至第四季度。

USPH削减了行政人员编制和非必要可支配开支，以抵消部分压力。管理层表示，公司已削减了数百万美元的人力成本，该举措在9月带来的成效有限，但预计在第四季度和2027年将产生更大影响。

信贷额度项下的借款从2025年底的1.62亿美元增至2.47亿美元，反映出收购融资及股份回购的影响。现金总额为3800万美元，而上年年末为3600万美元。

由于部分大型工业客户在临近年末时停工或缩减活动，工伤预防业务在第四季度通常会受到季节性走弱的影响。

分析师问答亮点

• 医院合作业务推进：管理层预计第四季度将是全面体现两项合作业务成果的首个季度。管理层未对环比增幅进行量化，但表示业务表现依然强劲。
• 未来合作项目：USPH正与多家医院系统进行洽谈，预计未来数月及数个季度内可能发布更多公告。管理层强调与医院的谈判进展可能较慢，未给出确切时间表。
• 医院业务盈利能力：公司未单独披露医院合作业务的EBITDA。管理层表示纽约大都会区业务走势优于最初预期，预计将在提供2027年业绩指引时披露更多细节。
• 利润率提升机遇：业务量增长、医院报销费率提升、集中计费与收款以及技术应用均有望支撑利润率。但这些利好因素仍部分被医疗理赔成本所抵消。
• 成本削减举措：公司逐家诊所对行政人员编制进行了审查。USPH还在推广已在420处网点部署的WelcomeWare系统，并进一步推进收入周期职能的集中化。
• 计费过渡期：与首个医院合作项目相关的行政精简工作已经启动，但在某些职能完全退出之前，必须先结清历史存量应收账款。

业绩电话会完整纪要

完整财报电话会议逐字稿

管理层陈述

Operator

Good day, and thank you for standing by. Welcome to the U.S. Physical Therapy Third Quarter 2026 Earnings Call.

[Operator Instructions] Please be advised that today's conference is being recorded.

I'd now like to turn the call over to Chris Reading, Chairman and CEO. Please go ahead, sir.

Christopher Reading

Good morning, and welcome to U.S. Physical Therapy's third quarter 2026 earnings call.

With me today are Nchacha Etta, our EVP and new Chief Financial Officer; Eric Williams, President and COO East; Graham Reeve, COO West; Rick Binstein, our General Counsel; and Jason Curtis, our Senior Vice President of Accounting and Finance. Before we get started, Jason will read our disclosure statement. Jason, if you would, please.

Jason Curtis

Thank you, Chris. The presentation includes forward-looking statements, which involve certain risks and uncertainties. These forward-looking statements are based on the company's current views and assumptions. The company's actual results may vary materially from those anticipated. Please see the company's filings with the Securities and Exchange Commission for more information. This presentation also includes certain non-GAAP measures as defined in Regulation G, and the related reconciliation can be found in the company's earnings release and the company's presentation on our website.

Christopher Reading

Thanks, Jason. This is Nchacha's first earnings call with us. He has been on many during a distinguished public company career. Nchacha, welcome. We are thrilled to have you, and we look forward to introducing you more personally to our analysts and shareholders in the days ahead.

As always, I want to start by thanking our partners and our clinical and support teams. Their work changes lives for our patients across our physical therapy partnerships. It also keeps employees healthy and on the job of many of our nation's largest and most successful employers through our injury prevention teams. Our physical therapy business starts with great care, and that care delivers real value to the broader health care system. Even for Medicare age patients, completing an outpatient physical therapy plan of care is associated with lower next year total health care spend according to a study commissioned by APTQI in 2017 and independently performed by the Maran Group.

Great care is what lets us grow volume every year across a growing clinic base. This quarter is often a seasonally softer quarter as referral sources and staff vacations kick in. But we held steady this summer at more than 33 visits per clinic per day right through the quarter compared with 32 a year ago. We set a couple of important records this quarter. With respect to visits, every month this year has been a record for that month. We are up to 27 consecutive months where that has occurred, nearly 2.5 years of record volume each and every month. We did this while our operations and clinical teams completed a very major lift in this third quarter. All of the Metro New York facilities moved into our NYU Langone relationship and the majority of that lift occurred in the third quarter. That meant our therapists and administrative teams had to learn and navigate the new hospital-based EMR among other changes.

Despite that, Metro's volume has never been higher and has continued to grow as we benefit from great patient care and reputation among our new partner network of specialists. In September, we also onboarded our second hospital partnership, our Gulf Coast group, bringing in 10 of its facilities. Hospital revenue has grown from less than 5% in Q2 now to over 13% in this most recent quarter. Looking ahead, the fourth quarter will be the first with both partnerships for the full quarter. One of the points of impact, which shows up very clearly with these hospital partnerships is the net rate per visit. It rose by more than $5 per visit in the quarter and September reached $112 per visit. Both of those are all-time records for the company for net rate in any month and for our year-over-year net rate increase. I'm especially pleased about that. And as we onboard more opportunities, you will see those numbers continue to grow. Here's how all of that translated into results.

Physical therapy visits grew 8%. Combine that with the net rate improvement, total revenue grew 13% and PT income grew 15%. Importantly, also mature revenue grew more than 6%, the highest number we have posted in some time. In industrial injury prevention, revenue grew 14% and profitability grew 27%, a really great job by those teams. Together, EBITDA grew more than 16% with growth in all three areas: hospital, traditional PT as well as injury prevention. In a few minutes, Nchacha will walk you through all of these details.

One area which has weighed on our margins this quarter and in fact, all year was in our self-insured group health costs. They are running well above our historical average and especially above last year. We have a handful of very large complex claims, including several premature infants that have dramatically increased our expense in this area. As a self-insured employer, we absorbed these costs directly net of stop loss. Year-to-date, employee insurance claims expense is $7 million higher than it was last year. In the third quarter, it was $2 million over budget. We cannot control the timing or the size of these claims, but we are acting on what we can control. In the quarter, we made targeted labor reductions. And together with other initiatives, we expect those actions to help as we move forward.

We also made strong progress on growth. In the quarter, we announced a Twelve-Clinic acquisition with excellent young partners in a state with strong net rate and a good growth runway. In October, we added a significant sports medicine practice on Long Island to our very busy metro business. Our hospital initiative continues to build momentum and attract interested partners. And we are finding injury prevention opportunities that will broaden both our service offering in the industries we serve.

This is a pivotal year for us. The Medicare reimbursement cuts of recent years are behind us. We are executing on our hospital initiative with strong capable partners, and our teams are delivering outstanding care and service to our patients and our industrial customers. The end result is a better net rate, more margin opportunity and continued strength in volumes ahead. We are as busy as we have ever been and more is coming, including new revenue cycle initiatives and further cost and efficiency work. We also have a strong balance sheet, which sets us apart from many of our larger competitors and our partner model that powers every part of our business, physical therapy or injury prevention and our hospital affiliations alike.

That concludes my prepared remarks. Nchacha will now cover the financials in more detail. Nchacha, go ahead.

Nchacha Etta

Thank you, Chris, and good morning, everyone.

Before turning to our financial results, I would like to take a moment to thank the USPH team for the warm welcome. This is a team of talented individuals who are passionate about driving the company's long-term growth strategy and delivering strong and consistent financial results for all our stakeholders. I am looking forward to continuing to meet with our employees and partners and of course, many of you in the upcoming weeks and months. I am excited about the future for USPH, and I believe our third quarter results are a solid testament to the company's long-term growth potential as well as our financial and operational execution and discipline.

Now I would like to begin with an overview of our financial results for the third quarter. Our third quarter delivered double-digit revenue growth and expanded margins. This momentum gives us the confidence to reaffirm our full year EBITDA guidance. Total revenue for the third quarter was $223 million, up 13% from the third quarter of 2025, with comparable revenue up 7%. Physical therapy revenue was $190 million, up 13%. Mature clinic revenue grew 6%, which includes the benefit of our hospital affiliations and what we believe is the continuation of a strong ongoing trend. Volume was a key driver to our performance. Patient visits were 1.68 million, up 8% and daily visits per clinic rose to 33 from 32 a year ago. Higher visit per clinic means our existing clinics are becoming more productive, which supports the margin improvement results I will cover shortly. Revenue per visit was $111, an increase of $5 from last year, driven by higher reimbursement rates at our hospital affiliation clinics.

Turning to payer mix. Q3 2026 workers' comp results were a highlight, delivering an 8% revenue per visit increase over Q3 2025, with penetration approaching 11%. Medicare also outperformed with a 2% revenue per visit increase in Q3 2026, exceeding our estimated 1% 2026 increase. Commercial revenue per visit was flat in Q3, but increased by 2% year-to-date in 2026 compared to the same period last year. Hospital affiliations revenue exceeded $25 million in Q3 2026, and we have now converted 72 clinics, reflecting the completion of our first two announced affiliations. Adjusted physical therapy margin was 19% in Q3 2026, an increase of 60 basis points compared to Q3 2025, despite the unfavorable trend in employee benefit costs we experienced in the first half of the year, which continued in Q3 2026. As a result of this headwind, Q3 2026 physical therapy margin was negatively impacted by approximately 150 basis points. As Chris mentioned, we took aggressive actions to control payroll costs and reduce discretionary spending in the third quarter, which will continue to benefit margins in future periods.

IIP revenue was $33 million, up 14%. Excluding the acquisitions we completed in January, IIP revenue grew 8%. IIP margin was 22%, an improvement of 230 basis points compared to Q3 2025. Adjusted corporate expenses was 8% of revenue, an 80 basis point improvement compared to Q3 2025, reflecting good leverage as we grow. Third quarter [ $20 million ], up $4 million from last year. Adjusted net income was $12 million, up $2 million versus Q3 2025. Adjusted earnings per share were $0.80, an increase of $0.14 compared to Q3 2025. On a GAAP basis, net income attributable to USPH shareholders was $11 million compared to $13 million last year. GAAP loss per share was $1.04 compared to earnings per share of $0.48.

I will take a few moments to walk you through the GAAP treatment of net income in this instance. Under GAAP changes in the value of redeemable noncontrolling interest, which represents our partners' ownership stakes in subsidiaries we do not fully own, are excluded from net income that are included in the earnings per share calculation. When performance improves, those partner stakes become more valuable, and that has a dilutive effect on GAAP earnings per share. In other words, stronger operating results are contributing to the GAAP loss per share, which is why we focus on adjusted earnings per share as a clearer view of ongoing performance. Interest expense increased to $3.6 million. The year-over-year increase reflects borrowing cost to fund our 2026 acquisitions as well as opportunistic share repurchases. The income tax rate was 26.5% for the quarter and 28.9% year-to-date.

Now let us turn to our balance sheet. We ended the quarter with $38 million in cash compared to $36 million at the end of 2025. Borrowings on the credit facility were $247 million compared to $162 million at year-end 2025. We remain confident in our capital structure and our ability to support the ongoing execution of our growth strategy. On September 22, we entered into a new interest rate swap to extend our existing hedge on one-month term SOFR. The new swap begins on June 30, 2027, and runs through the credit facility expiration on April 14, 2021. It fixes the SOFR index for our term loan at 4.6% over that period with an initial notional value of $171 million. Combined with the existing swap, which remains in place through June 30, 2027, a sizable portion of our floating rate debt is now hedged, which we believe gives us improved visibility over our future interest costs.

Year-to-date operating cash flow was $64 million, up from $50 million in the same period last year. We deployed our cash along with borrowings in line with our priorities; $36 million for business acquisitions, $23 million for purchases of minority interest, $21 million in dividends to shareholders and $19 million for share repurchases.

USPH has consistently returned capital to shareholders through dividend paid since 2011 and increased steadily over time. Our current quarterly dividend of $0.46 per share reflects the durability of our cash generation and our Board's confidence in the business. We remain committed to a balanced capital allocation approach, investing in organic growth, pursuing disciplined partnership acquisitions, maintaining appropriate financial flexibility and returning capital to shareholders. I am pleased with the strength of the company's balance sheet and intend to continue our laser focus on continuous fiscal discipline, translating our operating initiatives into visible financial progress, seamless predictability and a disciplined value-creating capital approach.

Given our year-to-date performance and the acceleration we saw in the third quarter, we are pleased to reaffirm our full year EBITDA guidance of $102 million to $106 million. We are clear on the strategic direction of USPH, and we believe we are well equipped to get there. We remain focused on creating long-term sustainable value for all our stakeholders as we look to execute our strategy and work to capture the opportunities we see ahead of us. I am excited to be part of this team, and I look forward to working with all of you.

With that, we would like to open the call for questions.

Operator

[Operator Instructions] We'll take our first question from Joanna Gajuk with Bank of America.

分析师问答

Joanna Gajuk

So a couple of questions on these hospital affiliations. So clearly, you executed pretty well, it seems. But I just want to confirm, so the $25 million revenue in the quarter, right, we should expect this number to grow in Q4 because there was some of these clinics that moved into the affiliations late in the quarter, right, in September. So can you help us understand the magnitude of the sequential increase we should expect even outside of opening new clinics or adding things, based on just kind of the business in place right now?

Christopher Reading

Yes. I don't know that we're prepared to give a number per se, but your summary is correct. In the quarter, we added the bulk of the metro facilities. The final tranche didn't occur until the month of September. We also, in the month of September, added our Gulf Coast partnership. And so the fourth quarter will be the first quarter, first time that we will have had both of these partnerships fully loaded for the entirety of the quarter. Nchacha, I don't know if you want to say any more.

Nchacha Etta

No. We're pleased with the performance that we're seeing with our hospital affiliations. And I mean, it's really strong performance, and we expect that this performance will continue.

Joanna Gajuk

Okay. And I guess from that kind of base level, it sounds like you just added a facility through an acquisition into those hospital affiliations. Is there sort of a framework heading into next year, how we should think about growing that -- these affiliations in terms of de novos or our tuck-in acquisitions? Any kind of color you can give us in terms of how we should think about that growth going forward for the existing affiliations?

Christopher Reading

Right. So while we're not prepared to give numerical guidance yet for next year, I can tell you that our development team will be focused on tuck-in opportunities that bring readily available volume into these opportunities. And so in the Metro facility and Metro partnership, we have a number of de novos already slated between now and through next year. I'm sure we'll probably identify some additional tuck-ins as well. And then importantly, our facilities each week are getting busier and busier and handling more and more referrals. And so we have capacity within our existing facilities to continue to add staff and grow. And that, of course, will be a big focus as well. We'll give guidance in February that makes all of that a little bit more transparent in a numerical way. But directionally and strategically, what I just mentioned will be the focus for any of these hospital opportunities going forward.

Joanna Gajuk

Wonderful. And if I may, on a different topic, but it relates to next year, the final physician fee schedule, Rick just came out last night. I don't know if you had a chance to look at this, but the physical therapy rate update was still 3%. There's some adjustments. So it looks like overall number may be a little bit lower than the proposal. So do you have an estimate to give us ballpark for what it means for you guys. But also you had flagged potential reimbursement upside in '28 from some methodology changes. Can you help us understand if this was finalized? And any color on the magnitude of tailwind for the company if that was to happen in '28?

Christopher Reading

Yes. So I'll talk about the methodology briefly. We haven't, frankly, had enough time to map it all out. As you know, these vary on a geographic index factor basis. And so we still need to do that. But on first blush, which is very early, it looks like the sum pieces, parts on the base part of the physician fee schedule will be 0.7% positive for next year. So directionally positive. Separate from that, APTQI, the alliance that we started many years ago that aggregates all the largest companies in the space, we did some analysis and took that to CMS a while back on a very important modifier called IPIC. It gets referred to as IPSI, and that's the individual practice cost index modifier. Again, a lot of jargon here, I apologize and not easy to follow.

CMS is going to -- we recommended -- and this rule that was published last night follows the recommendations that we made, but CMS is going to phase out that IPSI modifier over a two-year period beginning in 2027. That phaseout will actually be a very significant benefit to us because that IPSI modifier has hurt us as a very efficient provider whose cost structure is not heavily weighted in very, very expensive considered like highly expensive surgical equipment or technology equipment. And so it actually penalized more efficient providers. That penalty is going to go away and the impact, we believe, will occur over a many year period, not only beginning with the phase out, but continuing beyond the phase out and give us a lift for a number of years.

Now what I'd like to do is have our team who's worked on this overnight, continue to work on it, continue to create clarity. And at some point, we can put out additional information when we're sure exactly of the numbers, but directionally very positive.

Operator

We'll move on now to Jack Slevin with Jefferies.

Jack Slevin

Nice work on the quarter. Maybe to start, volume was really good in the quarter. I understand some of the dynamics around the hospital affiliations that are ramping and a little bit of acquisition activity. But I guess I'd love to just hear in a couple of pieces sort of where you're seeing pockets of strength in volume and what you think is driving that? Yes, I'll leave it there.

Christopher Reading

Okay. I don't know that I would call it pockets. I mean we've -- as I mentioned in my prepared remarks, and we don't take this lightly, by the way. I'm happy about it, but it's a tremendous amount of work that goes into it from clinical and facility level, the operations team, the sales and marketing team. We've had 27 consecutive months, which each month has been a record for that month. Demand is strong, where we've maybe historically struggled a little bit, and it's a tight labor market. And so we continue to have to try to staff to meet that demand. We're in competition with large and many small providers. We have a little better resources than the small providers. And we have tremendous care that's being delivered at our facilities, recognized by our patients and our referral sources. And we have room in our facilities. And so those combination of factors accrue reasonably well for us.

We've been pretty resilient in that regard and pretty steady. And what I was going to say was I'm hopeful, but I'm more than hopeful. I know the team is working every day to continue that trend and to make that happen. And so we're going to continue to do what we know works and hopefully, we can keep it going.

Jack Slevin

Got it. Very helpful there. And then maybe I think helpful color earlier in the Q&A in terms of how to sort of look at the near term on the existing hospital partnerships. I know you've been sort of, I'd call it pretty confident that there could be other opportunities that pop-up. Maybe just wondering if there's any sort of thoughts you have on sort of potential pacing or when opportunities with new hospital partnerships might open up or start to layer in?

Christopher Reading

Yes. I can say this, and I wish I had a perfect crystal ball on this. One thing is clear. The two that we got out of the gate, always a little bit harder to get the first one started. And I think our initial partner has been fantastic. Both of our partners have been fantastic and move very, very quickly. Most hospital systems are slower to move. We're in discussion with a great many right now, and we expect that over a period of the coming months and quarters, we'll have an additional announcement or possibly a few additional announcements. But they're very difficult. So one of the things we're going to have to be a little getting ahead of ourselves in terms of deals that haven't closed yet. But as soon as things close, they'll be announced, and we'll have a little better clarity at that point to share on magnitude and opportunity and potentially on phase in. But we're confident we're going to get more of these done.

Jack Slevin

Okay. Helpful color there, Chris. And then last one from me. Just the workers' comp strength that you flagged in the quarter. Is there any detail you can give on what's driving that? Are you making sort of intentional efforts to go after that line of business or something that you see there that's driving the strength? I would just be curious to unpack that a little bit.

Christopher Reading

Yes, sure. Maybe, Eric, if you're able, if you could address that. You and Graham have been working on that hard.

Eric Williams

Sure. Yes, it has been a major focus of ours for the past three-plus years, and we've made huge inroads, a dramatic expansion of agreements significantly more. And a lot of them really focused on the PPO side of the house, which just pays more on a per visit basis. So it's volume-driven and it's rate driven. If you look at work comp right now as a percentage of our total payer mix, this is the highest it's been since 2020. And we have more contracts that are scheduled to come online as we continue to move through this year and into next year. So this is something that we feel still has opportunity to grow.

Operator

We'll move on now to Mike Petusky with Barrington Research.

Michael Petusky

Chris, if you mentioned it, I didn't catch it. Did you disclose how much EBITDA was actually generated in the quarter by the hospital partnerships?

Christopher Reading

We did not. And I don't know that that's going to be a number that we disclose unless eventually we end up breaking this out, which we haven't yet.

Michael Petusky

Okay. Could I ask one question that's, I guess, somewhat connected to that. When you first announced these, and I understand that it was a few quarters ago, you sort of said, hey, fiscal '27, we could absolutely see an incremental -- I think it was $7.3 million of incremental EBITDA associated with these partnerships. I'm assuming that you're maybe more bullish on that outlook now than at that time, but are you willing to speak to that?

Christopher Reading

Yes. Let me just say that we're -- on the metro side, we're trending nicely ahead of that. Volumes picked up really well. And then on the Gulf Coast partnership, we initially modeled that to begin, I think it was in June or maybe the end of June. It got held up on a kind of a regulatory -- it took a few months to solve with the state. And so it came in later, it didn't come in until September. But when you look at '27 impact, again, I don't know, unless Nchacha wants to jump in, I don't know that we're prepared to exactly quantify it at this point. We may give some more color for '27 as we go forward, but we're ahead of where we expected to be at this point.

Michael Petusky

Excellent. And then just a quick clarification, and I'll let others have a shot here. The 72 clinics, is that split between Metro and Gulf Coast? Or is that just Metro? It's unclear to me what the 72 clinics -- how many -- what's the split if you have that?

Christopher Reading

62 and 10 would be the split. I think 10 was Gulf Coast.

Operator

We'll move on to Larry Solow with CJS Securities.

Lawrence Solow

Welcome, Nchacha. I guess just a couple of follow-ups, Chris. Just a follow-up just from a high level, just curious if you could give us any anecdotal just feedback. I'm sure the feedback from your partner, it sounds like it's going great. But anything from payers or anything like that? Anything you could just speak to in terms of the hospital agreements and any feedback you have there?

Christopher Reading

Partner feedback has been strong. And of course, there's work to do always when you try to stand something up that's significant, particularly on the metro side, really significant. And look, these things when they initially start and we've converted in this case on the metro side to a new, very complicated non-PT-specific EMR, we actually slowed down just a little bit for a few weeks because our staff is just trying to keep that above water and then things pick back up again, and they picked up nicely. Again, it's going well. I think I won't speak for our partners, but I think everybody is pleased.

And then the payer side, again, our partners are billing under their payer contracts for the services that are being provided. We don't have an interface with the payers on that side. But I haven't heard of anything that plus or minus that's come from the payer side at all. But honestly, I don't know that I would hear directly other than through our partner, and we haven't heard through our partner that there's been any issue one way or the other.

Lawrence Solow

That's fair. And the margins PT were up 150 bps year-over-year in the quarter. And as you guys called out, there was 150 bps swing from the self-insurance. So 300 bps improvement ex the insurance side. I imagine most of that is just from the pricing on the hospital side, just the improvement. But it sounds like there's still some inefficiencies just ramping. So you probably have not to put -- maybe you can't quantify it, but it feels like there's also a seasonally slow quarter, too. So there's probably a lot of opportunities just to ramp up the margin incremental improvement from -- going forward, just at the -- on the hospital side. Is that fair?

Christopher Reading

Nchacha, go ahead.

Nchacha Etta

Yes. So like I said earlier, we're very pleased with the performance of the quarter. Our margins did improve this quarter in spite of the unfavorable headwinds from employee health care benefits that had what is 150 basis points margin impact. But we do believe that as our volume continues to increase and the net rate improves as well, which will be at the hospital rates, we will see our margins continue to improve as well. And added to that, we are going to focus on managing our expenses very prudently to ensure that we keep our expenses flat. That also should contribute to our margin improvements.

Christopher Reading

Yes. The one thing I will just throw a little caution out there for you guys is this fourth quarter, our employee expenses run hot all year. And comparatively, we ran cool last year. And so we're much above average this year. That may continue into the fourth quarter. It's something that we don't control directly. So I would just encourage you, don't get too far ahead too far, too fast. We're making progress operationally. There's a piece of this we don't entirely control. So that's still hanging out there for us.

Lawrence Solow

And things you actually don't fully control. Just curious, just to clarify, so on the IPIC modifier and the methodology change, it sounds like your expectation is -- I think you called out the 0.7% just from the [ schedule ]. Is there a potential upside to that from the modifier? Or should we kind of think of that beginning in '28 and maybe it's like a low single-digit percent over a multiyear period? Is that kind of -- again, I know nothing has been concrete yet, but is that how you're thinking about it today?

Christopher Reading

Again, my understanding is from a cake that was just baked and hasn't really cooled yet, we need a little bit more time. But if IPSI modifier begins its phase out next year, I believe it's a correct statement to say. We'll begin to see some benefit as that modifier phases out because the modifiers had a negative effect on our code values. The biggest impact will be after the phaseout has happened, which will take two years and then go forward. And so looking forward to that, and that was hard thought. And I just want to thank my CEO, Board members and Nick Patel and Liberty Partners and lobby group for the work that they did on that. It's very impactful, not just for us, but for the profession in general.

Lawrence Solow

Yes, absolutely. Chris, if I could squeeze one more in. The 21 de novo openings, is that correct number just in the quarter? Did I catch that right in the press release? It's a big number for one quarter and realize that was physically possible.

Christopher Reading

Yes. I don't have it in front of me. I don't think we did 21 for the quarter. Is that a year-to-date number? Maybe. That may have included the 10 that we acquired and then the Sports Medicine business that we bought in New York plus the de novos. Eric, I don't know if you have that in front of you.

Eric Williams

Of course, you're right. It included the new partnership that came on board on July 1 with 12 locations and the balance of those were de novos.

Operator

[Operator Instructions] We'll move on now to Constantine Davides with Citizens.

Constantine Davides

Just a follow-up on the hospital alliances and some of the questions around the impact there. I know you discussed previously some ways that the original accretion estimates might prove conservative, particularly with respect to some of the efforts around billing and collections. I'm just wondering if you thought about that further or if and when you might start to address potential take-outs of those?

Christopher Reading

Yes. Again, I'm not prepared to give a number, but that process has begun in part here very recently to begin to adjust some admin staff in our first based partnership. We'll be in a position to further quantify that when we provide guidance numbers as we look at '27 just to give you guys more color. But in any of these, there has to be a runoff of existing accounts receivable. The DSOs really are pretty quick for most payers. We average 30, 31, 32 on a blended basis for the company. But there's some old stuff that we have to collect. We'll transition that to our corporate-based billing collections office. And then at an appropriate point in time, these functions begin to phase out. And so that will happen -- some of that will happen in this quarter.

Constantine Davides

Got it. And then I appreciate the color on the medical cost trend issues you're experiencing, but I wanted to maybe drill into the offsetting it sounds like workforce reductions that may have occurred in the quarter. What level of savings are you may be targeting? And where and when should we start to see the full impact of those initiatives?

Christopher Reading

Yes. Nchacha, do you want to take it or you and Eric?

Nchacha Etta

Yes. So we started some expense control measures here in October, kind of mid-October to help us mitigate the employee health benefit costs that we are forecasting that we'll see again in Q4. And so that we -- because we started in mid-October, it was primarily focused on discretionary spending. And so again, we do expect that, that will help to a certain extent because we started so late in the year with the discretionary spend reduction, and some of these were already committed given the cost, I mean, throughout the year. And so we really don't have a specific number that we can share with you, but we hope that it will help mitigate some of the medical expense.

With regards to headcount, I'll have Eric maybe speak to that.

Eric Williams

Yes. Look, I'm happy to share. So look, as always, in a business that runs 790 locations and managing labor is critical for us. And so based on the headwinds that we've seen in terms of our medical costs rising rapidly here, we went and we went clinic by clinic, partnership by partnership, looking for opportunities to reduce staffing to be more consistent with the volume running through individual locations. The focus was primarily on the administrative side of it. And this is being done, by the way, while at the same time, we're trying to leverage technology and process changes in the revenue cycle, which goes all the way from the front desk center clinics all the way to our centralized CBOs that are doing our billing and collections. But yes, we took out several million dollars worth of labor, and this is something that we're going to continue to focus on going forward.

So it was helpful for us. We did get some benefit, a little bit of that in September, and we expect to see that benefit continue on a slightly larger scale in the fourth quarter, which is going a long way to help us balance out the one headwind that we can't have any control over, which is medical costs.

To Chris' point and to your earlier question, there's a lot of things we're in the process of rolling out. We got WelcomeWare right now that we've talked about on other calls in 420 locations. We budgeted for those headcount reductions in 2026, and we saw those savings in 2026. We continue to roll that out, which will pay more of benefit going forward in 2027. But there's also some process changes. We're in the middle of doing our best to centralize our billing and collections operation, some of which happened this year, some more of which will happen in 2027. So major focus going forward that we absolutely believe will yield labor cost savings for us, which will improve margins. And again, more color on that when we finish putting some touches on our 2027 budget.

Constantine Davides

And then last one, if I can squeeze it in. It looks like IIP had a nice both sequential and year-over-year improvement in growth. I know that moves around kind of quarter-to-quarter. There's some seasonality. So I guess, first, can you talk about the strength in the quarter, maybe what the pipeline looks like for that business? And then second, just near-term expectations, fourth quarter and just the impact of typical seasonality, what we should expect there?

Christopher Reading

Yes. So look at the whole -- go ahead, Eric, you want to go?

Eric Williams

Look, I was -- my comment would be this. I mean, this is an area that we continue to invest in and have business development opportunity. The same-store growth has been terrific, the organic growth in that business. It's always a function also of what service lines are driving the organic growth. So when you take a look at injury prevention services, those tend to be repeatable year after year. You enter into new agreements to provide services. When the revenue comes from employment testing, that's always a function of which sectors happen to be hiring and that can be high one year and low the next year. We've got a pretty good mix of where this business is coming from injury prevention services as well as post-employment testing. The pipelines look really solid for all three of our businesses. That includes Clarity Testing Services, Briotix and Progressive. So I feel good about it. But again, there's years where this has been just off the charts and this year, a little bit more moderate, and we'll get insights again into 2027 here in the next four to six weeks.

Christopher Reading

So let me add this. We do have a seasonal pattern within injury prevention broadly. And that seasonal pattern because we're embedded in these very large industries, very large manufacturers who tend to shut down to retool and in some cases, just save costs during non-busy periods for them, they tend to shut down towards year-end. And so fourth quarter is usually our seasonally soft quarter for injury prevention. So as you guys look forward, just remember that.

Operator

We'll move on to Benjamin Rossi with JPMorgan.

Benjamin Rossi

Apologies if I missed this, but how should we interpret the strength in PT revenue per visit in 3Q in light of the hospital affiliation model? And then can you help me break down what portion reflects improved rates or payer mix in the legacy business versus what portion reflects some of the changes in the affiliated clinic revenue being recognized?

Christopher Reading

I mean they're primarily -- the rate increase is primarily attributable to the increase in revenue from a little less than 5% in Q2 to more than 13% in Q3 to the higher reimbursement on the hospital side. Now there is some incremental improvement. We had a slight improvement in Medicare, and we had a more moderate improvement in our rate in work comp and those had a lesser effect than the hospital. I don't know, Nchacha, if we have it broken out exactly to the penny on which thing produced how much of each, but lion's share was hospital.

Nchacha Etta

Correct, Chris. I'll just add that our mature clinics did grow 6%. And within that 6%, 3% was driven by visits and the remaining 3% was weight to your point, Chris.

Benjamin Rossi

Got it. Super helpful. Just a follow-up on your mature PT clinics. Revenue there stepped up nicely by almost 300 bps from 2Q. Across visits, payer mix, what were the primary drivers of the 3Q acceleration? And how much of that pace do you think is sustainable going into 4Q and beyond?

Christopher Reading

A big driver is the hospital progression, the number of visits and the number of clinics that were onboarded within the quarter compared to Q2 on the hospital side. Again, that's the biggest driver. So as you look at Q4, again, I think we said this, but the Q4 will be the first quarter that we have both of these partnerships and all 72 facilities in for the entirety of the quarter. So I'm kind of expecting that we'll see a little bit more rate progression as that percentage of revenue under the hospital side grows.

Operator

It appears that we have no further questions at this time. I'd be happy to return the call to our hosts for any closing comments.

Christopher Reading

Listen, I just want to thank everybody for your time and attention today. Again, I want to tell you how thrilled we are to have Nchacha with us as part of this company and as part of our story comes at a very interesting, exciting time and he brings a wealth of experience, and we're just thrilled that he's here. And so we look forward in the coming days and weeks as we speak at several conferences together to introduce him to you more personally. And both he and I are available for follow-up questions as they arise in the coming days. So thanks again, and have a great day.

Operator

Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.