Some things come as no surprise. Our 2018 State of Rehab Therapy survey validated one pain point we hear about constantly: insurance regulations are one of the biggest barriers to providing quality care to patients. With all the red tape you have to cut through to receive reimbursement for the treatment you provide—not to mention the hoops you must jump through to get (and stay) credentialed with payers—it’s no wonder that more and more PTs are turning to cash-based practice models. After all, with payers out of the picture, PTs can truly focus on providing exceptional patient care.

And it’s not just providers flocking to this payment model; many patients are more than happy to pay cash for physical therapy if it means receiving more personalized care. With the proliferation of high-deductible health plans, insured patients often face high out-of-pocket costs, so there's not a huge financial jump to move to cash-based services.

All of that being said, there are some special considerations for providers who opt to go cash-based.

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Cash pay is a different animal.

Appealing as it may sound to rip up all your insurance contracts and dash gleefully into the cash-pay sunset, running a fully or partially cash-based practice is not the same as running an insurance-based one. And that’s especially true when it comes to the billing process.

Let's break down some billing must-knows for cash-based PT service providers:

1. Transparency is key.

As mentioned above, many patients are happy to plunk down cash for PT treatments. But as this Medical Economics article explains, it’s our responsibility as providers to be transparent with our billing. When we receive treatment from a massage therapist, acupuncturist, or reiki practitioner, for example, the rates are clearly listed in many places: brochures, websites, and even at the front desk. This makes us feel confident there will be no billing surprises after we receive treatment. PT patients want the same.

Even if you also have a sliding-scale arrangement in which you charge a different fee based on a patient’s ability to pay, you should at least have your normal prices for each type of treatment fully accessible to prospective and current patients. This transparency will help you foster the trust and buy-in you need to continue collecting cash for your services.

2. Documentation is still important.

Most of us have spent our fair share of time pouting over the frustration of creating defensible documentation. “If you didn’t record it, it didn’t happen” is the mantra that keeps us safe from lawsuits and ensures we receive full reimbursement for our services. Many folks would say it’s gotten out of hand—to the point that some therapists spend as much time documenting as they do treating!

Part of the temptation to go cash-pay is the assumption that you’ll have a much easier time satisfying documentation requirements. And while that’s partially true—for example, you won’t have to keep track of all the different elements required by different payers—documentation is still very important in a cash-based clinic.

As Teddy Willsey, PT, DPT, CSCS, the director of Healthy Baller Sports Medicine, explains, “Cash PT can sometimes be misunderstood to mean we don’t deal with insurance at all, don’t document, and only accept cash. That couldn’t be further from the truth.” His clinic uses WebPT to document, and the clinicians provide their patients with the necessary paperwork to submit to their insurances.

Willsey says that, while not every patient will get reimbursed, providing solid documentation increases their chances. And that, in turn, helps ensure they can continue seeing you—rather than transferring to an in-network provider.

Another reason documentation still matters is that in any business, the busier you get, the harder it is to store all the information in your head. You’ll still want detailed notes about the treatment plans and clinical reasoning associated with each patient, so you—and any other therapists who go on to treat a particular patient—can continually provide excellent care.

Also, I’m not implying that your patients are lining up to sue you, but if a legal issue ever does arise, strong documentation is your best defense.

3. Staff must understand payment processes.

If you’re fully cash-based, it won’t be too tough to train your staff on your billing processes. But if you’re just introducing cash pay into your practice, it can go dreadfully wrong if your staff members aren’t on the same page.

We always recommend that you train specific staff members on the nuances of each insurance payer, and the same goes for cash pay. That means ensuring your team understands:

Understanding Medicare-Specific Rules

Let’s explore Medicare a bit more. There are some really convoluted rules around accepting cash from Medicare-covered patients, and it’s important to understand the three options PTs have for their relationship with Medicare:

  1. You can be a participating provider. This means you will sign an agreement with the Centers for Medicare and Medicaid Services (CMS) to “accept assignment” for all Medicare-covered services. (“Accept assignment” means you’ve agreed to accept the Medicare-approved amount as full payment for services covered by Medicare.) If you’re a participating provider, you cannot accept cash for Medicare-covered services (beyond the standard deductible and 20% coinsurance for the service). Instead, you must bill Medicare directly for those services. And that defeats the purpose of being a cash-based PT!
  2. You can be a non-participating (i.e., non-enrolled) provider. This means you still have a contractual relationship with CMS, but you won’t sign an agreement to accept assignment for all Medicare-covered services. You can still choose to accept assignment for individual services, but when you don’t, you can charge more than the Medicare-approved rates—up to what CMS dubs “the limiting charge.” If you go this route, you can accept cash payment from Medicare patients at the time of treatment, but you must submit claims to Medicare so that Medicare can reimburse the patient. This means you can’t always avoid insurance headaches!
  3. You can have no relationship with Medicare. With this option, you have no signed contract with CMS, but that doesn’t mean you are “opting out” of Medicare; you simply have no relationship. (PTs actually cannot opt out of Medicare the way certain other practitioners can.) To make a long story short, this means you cannot provide Medicare-covered services—including skilled physical therapy services—to Medicare beneficiaries. You can, however, provide wellness services to Medicare patients on a cash-pay basis, as these services are never covered by Medicare. That means you need to be very clear about Medicare’s definition of “wellness services” versus “physical therapy services.”

Because of the intricacies involved with treating Medicare patients on a cash basis, many therapists simply opt to avoid them altogether—and instead focus on other patient populations.

Willsey tells all his Medicare-eligible patients that they cannot submit to Medicare for reimbursement, but some Medicare patients will submit to their secondary insurance and receive reimbursement. In case you’re curious, Willsey has opted into the “zero relationship with Medicare” camp.

4. You must be able to clearly explain the value of your cash-based services.

If you elect to run your clinic on cash-only model—or even if you’re simply introducing some cash-based services to your menu of offerings—you’ll need to be highly skilled at conveying the value you provide to your patients.

In this blog post, Ann Wendel of Prana PT points out that many patients’ copays are anywhere from $30-50 per visit, and traditional in-network clinics might see those patients three times per week. But if you see a patient once per week and charge $90, then the patient isn’t really paying more—and as Wendel stresses in her article, it’s important that you educate that patient on this very point. Furthermore, even if the patient’s tab is slightly higher, you can make a compelling argument that the care your patients receive is better and more personalized—which may keep you from losing those patients in-network providers.

Willsey, for example, tells his patients “that this model of PT is very different...we consider the full person and are not held to strict rules of ‘treating one body part’.” He also lets patients know that when he worked for traditional clinics, he had to see 15-plus patients per day, which meant he simply couldn’t provide the same quality of care that he can when he has a full 60 minutes with each patient. 

He is also careful to manage his patients’ expectations if they do try to get reimbursements through their insurance, telling them upfront that insurance companies put a lot of resources into auditing and denying claims. So, patients should be aware that there is always a possibility they will not receive reimbursement.  


Do you have any special tips for cash-pay PT billing? If so, let us know in the comment section below!

Meredith Castin, PT, DPT, is the founder of The Non-Clinical PT, a career development resource designed to help physical, occupational, and speech therapy professionals leverage their degrees in non-clinical ways. Meredith is also the co-founder of NewGradPhysicalTherapy and works as a freelance writer and editor for a variety of publications.

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