Blog Post

Founder Letter: The Other Side of the Coin: How Physical Therapists Can Avoid Cash-Pay Pitfalls

Cash-Based PT may be trending this year, but moving out of network is risky. Learn more about cash-based pitfalls & how to avoid them.

Heidi Jannenga
5 min read
July 7, 2021
image representing founder letter: the other side of the coin: how physical therapists can avoid cash-pay pitfalls
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The responses are in and the consensus is final: Cash-based services are this year’s hottest revenue diversification trend per our team’s annual industry report. And to be honest, I’m not surprised. 

In the years leading up to the pandemic, physical therapists had long been subject to dwindling payment rates and increasingly complex payer regulations, leading many to explore their cash-based options—and extricate themselves from the middleman (i.e., insurers). This past year, however, we’ve seen more therapists than ever dip their toes in the cash-pay pool to avoid an economic pitfall stemming from COVID-19. In fact, 45.5% of clinic leaders surveyed in our report said that they intend to add or increase cash-based services this year.

Although there are some real benefits to penetrating this market—as evidenced by the considerable amount of cash-based content WebPT has produced over the years—there are some potential risks, as well. This is especially true if you’re considering a transition to a primarily (or completely) cash-pay model.

Physical therapy’s reach is already tenuous.

You and I both know that the services physical therapists provide are invaluable. We address the full spectrum of musculoskeletal diseases and complaints—and yet, we still are fighting an uphill battle when it comes to helping other healthcare stakeholders better understand the value in what we do. As a result, we are overlooked and undervalued by other healthcare professionals, which in turn impacts our ability to reach the 90% of patients who could benefit from seeing a physical therapist but never do. 

This gap in care has been the albatross around our industry’s neck for longer than we care to remember. And I fear that as more clinics move away from insurance contracts, this gap is liable to widen even further, making it tougher for underinsured patients to access care. Why? Because cash-based care is historically inaccessible to those who are most vulnerable.

Cash-based clinics can be far too exclusive.

Cash-based PTs assert that their services are ultimately more cost-effective (for patients) as they tend to be more personalized, less rushed, and therefore require fewer visits to achieve an optimal outcome. While I’m all for finding ways to spend more one-on-one time with patients, I think it’s important to stress that the vast majority of individuals who seek out cash-based PT can comfortably afford the hundreds—and sometimes thousands—of dollars a month in unbudgeted expenses for these services.

After all, there’s a reason the APTA recommends considering the “demographics of your community…when deciding whether to transition to a cash practice.” And it’s the same reason highly successful cash-based PTs, like Dr. Jarod Carter, recommend establishing cash-based practices in “more affluent areas of town.”

We can get the best of both worlds. 

Thus, if we collectively throw in the towel on our contracted relationships and go all in on cash pay, we risk closing our doors to all but wealthy patients—ultimately hurting those who need us the most. To this end, consider the following two solutions:

  • Option 1: Take a hybrid approach to cash-based care. Before you drop out of the insurance game entirely, gradually introduce cash-based services that are outside your normal offerings. This enables you to get a feel for managing cash-based revenue streams, as well as assess their overall marketability and patient impact.
  • Option 2: Be transparent about your cash-based fee schedule and offer it to all patients. This enables patients to compare your rates to their deductibles to determine the most cost-effective route. If your cash-based pricing can compete with some insurance payments, this can actually help underinsured patients overcome barriers to necessary care (e.g., exorbitant deductibles).

Diversify your service portfolio with health and wellness offerings that go beyond the traditional scope of rehab therapy.

Physical therapy needs all hands on deck.

As much as it pains me to say, physical therapy remains a highly fragmented industry. Our profession is composed of many specialties, sub-specialties, and practice settings, making it far too easy for each of us to retreat into our own niche—and away from the general PT community as a whole. Although we’re all guilty of getting lost in our own siloes, this rings especially true for those in the cash-based space.

Cash-based providers may be less inclined to advocate for their peers.

One of the biggest motivators of going cash pay is to free yourself from payers’ bureaucratic hoopla. And while I empathize with this reasoning (who doesn’t want to call their own shots?), it’s incredibly critical for those cash-based providers to stay connected to the rest of the industry—especially when it comes to advocacy. Just because cash-based providers may not immediately feel the effects of a Medicare payment cut, they still have a responsibility to advocate for their peers and the industry as a whole.

Advocacy comes in all shapes and sizes.

Fortunately, there are many ways to advocate for the PT profession, a few of which include:

  • Becoming an active member of organizations like the APTA, APTQI, or the PT-PAC;
  • Bringing a voice to the legislative stage (e.g., joining key CMS committees and government agencies);
  • Submitting letters to the editor of local newspapers or local congresspeople to raise awareness about legislative issues impacting rehab therapy (e.g., the upcoming changes in Medicare’s pending 2022 final rule); and
  • Building relationships with both parallel and non-parallel healthcare industries (i.e., cultivating coopetition).

But, above all, the most important action PTs can take to advance our profession is tracking outcomes data. Collecting and sharing outcomes is the key to demonstrating rehab therapy’s real value to all healthcare stakeholders—payers, patients, and referral sources, included. And those in the cash-pay realm play a critical role in this.

Since cash-based PTs may have the opportunity to provide more patient-centric, one-on-one care than their insurance-based counterparts, then they may have greater opportunity to collect objective data proving the benefits of their treatment approach (as opposed to a more high-volume approach where patients may see multiple therapists and extenders). Perhaps they even achieve better outcomes in fewer visits. But how will anyone know this without the data to prove it?

There is tremendous power in data—wield it!

To be very clear, this piece wasn’t written to bash cash-based physical therapy. Rather, my message to cash PTs is this: Don't let the financial benefits of cash pay distract you from building a better future for our profession and ensuring better patient access to therapy in the decades to come. If we start creating an environment in which PT is viewed as a service for the wealthy, we will undo our hard work to gain recognition as the go-to primary care providers for all patients with musculoskeletal issues.


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