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.

Knock Out Patient Dropout: 8 Ways to Increase Retention and Revenue - Regular BannerKnock Out Patient Dropout: 8 Ways to Increase Retention and Revenue - Small Banner

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.

  • Common Questions from Our Cash-Based Physical Therapy Webinar Image

    articleAug 30, 2017 | 19 min. read

    Common Questions from Our Cash-Based Physical Therapy Webinar

    Earlier this week, WebPT’s president and co-founder, Dr. Heidi Jannenga, PT, DPT, ATC/L, teamed up with cash-based physical therapy guru Dr. Jarod Carter, PT, DPT, MTC, to host a webinar covering all things cash pay —from insurance contracting considerations and Medicare rules to self-referral marketing and service pricing. Thousands of rehab therapy professionals registered to attend, which means we received a ton of questions—so many, in fact, that there was no way we could answer all of …

  • Cashing In on Private Pay: The PT's Guide to Going Out-of-Network Image

    webinarJul 27, 2017

    Cashing In on Private Pay: The PT's Guide to Going Out-of-Network

    For many rehab therapists, submitting a claim to a third-party payer feels a lot like pulling the lever on a slot machine. You never know for sure what you’re gonna get—and most of the time, it’s less than you’d hoped for. With seemingly ever-increasing regulations—and constantly shrinking reimbursements—it’s no wonder so many PTs, OTs, and SLPs feel like the financial odds are stacked against them. [video://] As a result, more and more rehab therapy providers are trying …

  • PT in the House: 6 Benefits of Running a Home-Visit Therapy Practice Image

    articleOct 20, 2017 | 7 min. read

    PT in the House: 6 Benefits of Running a Home-Visit Therapy Practice

    What if I told you there’s a physical therapy practice model that requires minimal investment, has a low operating cost, and is practically burnout-proof? What if I added that this model provides a steady flow of new clients and is well poised to meet the rehab needs of the Baby Boomer generation? It would almost be too good to be true, right? Well, this model exists, and since 2009, my partners and I have enjoyed all of …

  • 4 Keys to Keeping a Steady Cash Flow Image

    articleMay 18, 2016 | 5 min. read

    4 Keys to Keeping a Steady Cash Flow

    As a private practice clinic owner, you’re probably familiar with the cold sweat-inducing struggle to keep a steady cash flow. Claims management muck-ups, inefficient processes, staff issues, and lack of insight into your clinic’s financial health can leave you feeling like you’re riding a revenue rollercoaster. So, whether you’re trying to maximize reimbursements , combat employee theft , or optimize patient payments , these four keys to maintaining a steady cash flow will help you even out …

  • Founder Letter: 3 Ways Your Practice is Losing Money Image

    articleMay 5, 2016 | 7 min. read

    Founder Letter: 3 Ways Your Practice is Losing Money

    Much like the patients you treat, your practice can appear healthy on the outside despite significant internal issues. And when those issues are money-related, the consequences can be deadly. If your practice already is in the red, you know you’ve got some pretty serious cash flow problems. But even if you’re in the black every month, you may still be washing dollars down the drain. While there are myriad ways your practice might inadvertently be losing revenue, …

  • 5 Reasons You Should Attend Ascend 2015 Image

    articleApr 28, 2015 | 4 min. read

    5 Reasons You Should Attend Ascend 2015

    Have you heard? Ascend— the ultimate business summit for rehab therapists —is back. Last year, the inaugural event took Dallas—or at least, Dallas physical therapists and private practice owners—by storm for one jam-packed day . This year, Ascend is upping the ante—big time. For starters, our 2015 event will run for two days instead of one—and trust us, you don’t want to miss it. Here are five reasons you should attend Ascend 2015: 1. You’ll earn CEUs. …

  • Collection Objection: Overcoming Patient Excuses for Why They Can’t Pay Image

    articleApr 19, 2017 | 5 min. read

    Collection Objection: Overcoming Patient Excuses for Why They Can’t Pay

    If collecting patient payment at the point of service was important before, then it’s mission-critical now—especially as reimbursements continue to shrink. That’s because—as we’ve mentioned here , here , and here —only 21% of patient balances that aren’t collected at the point of service are ever recovered. That’s a lot of cash you’re leaving on the table if your patient collection strategy is not on point. So, in addition to implementing a solid payment policy, successful providers …

  • Are Conferences Worth It? Image

    articleJun 9, 2015 | 4 min. read

    Are Conferences Worth It?

    Networking, welcome parties, and complimentary food (and drink tickets) are nice, but conferences can run a pretty penny—anywhere from $100 to upwards of $1500 per attendee, depending on the size of the event and the caliber of the speakers. Before shelling out any of your hard-earned money to attend or sponsor an event of this kind, you’ll need to make sure it’s worth the investment of your time and money. But value isn’t one-size-fits-all. What might benefit …

  • 3 Common Rehab Therapy Credentialing Mistakes Image

    articleJul 18, 2018 | 6 min. read

    3 Common Rehab Therapy Credentialing Mistakes

    Proper credentialing is a crucial step in running a successful physical therapy clinic. If your clinic and therapists aren’t properly credentialed with insurance providers from the get-go, your bottom line might suffer. And it’s not just new clinics that are susceptible to making credentialing mistakes; in fact, any clinic that has gone through a change in ownership, rapid growth phase, or any other transition might find itself mired in credentialing headaches. But before we get to the …

Achieve greatness in practice with the ultimate EMR for PTs, OTs, and SLPs.