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 them live. So, we compiled the most common ones into the following FAQ. Read on to discover the answers to all of your most pressing cash-pay PT inquiries. (Please note, however, that with all matters concerning Medicare rules, scope of practice definitions, direct access laws, and insurance contracts, we strongly advise you to seek expert legal counsel, as we are not healthcare attorneys.) Don't see your question here? Dr. Carter tackled even more webinar brainbusters in this podcast

The State of Rehab Therapy in 2017 - Regular BannerThe State of Rehab Therapy in 2017 - Small Banner

Providing Cash-Pay Services to Medicare Patients

Is there such a thing as out-of-network Medicare?

If a provider has no relationship with Medicare, then that provider would be considered "out of network" for Medicare beneficiaries. But, the rules for Medicare patients are different than the rules for most out-of-network patients who are commercially insured. If a provider has no relationship with Medicare, that provider can accept cash payment for any service that would not ordinarily be covered by Medicare (such as wellness and fitness services). However, providers who have no relationship with Medicare may not provide Medicare beneficiaries with services that would be covered. We recommend checking out this post from Dr. Carter's blog to learn more about what it means to have a "non-relationship" with Medicare. Also, be sure to download the free resource Carter offers here.

How do I know which services Medicare will cover?

Dr. Carter details the three scenarios in which Medicare will not cover physical therapy services in this blog post.

Medicare currently does not cover telehealth. So, can provide telehealth services on a cash basis without submitting any paperwork to Medicare?

As explained in this FAQ resource, yes, in some cases, you may be able to provide telehealth services to patients on a cash-pay basis, as Medicare does not consider therapists to be "eligible providers" of telehealth (and thus, won't cover telehealth services provided by physical therapists). That said, "it’s important to note that...not every state has added telehealth services to its PT scope of practice. Furthermore, 'There are no defined rules for advancing licensure standards for physical therapists utilizing telehealth services on a large scale nationally.' Thus, it is imperative that you review your state’s practice act before providing telehealth services to any patient."

If I provide Medicare patients with wellness services—and I have no relationship with Medicare—do I still need to submit a claim to Medicare?

If you are providing services that are never covered by Medicare (e.g., wellness or fitness services)—and you have no relationship with Medicare—then there's no need to submit a claim to Medicare. Additionally, as Dr. Carter explains here, while Medicare does not require you to issue an advance beneficiary notice (ABN) for these services, "you can certainly create your own written notice to inform them of what they’ll be receiving, what it will cost, and the fact that Medicare will not cover any part of those costs." Doing so can help ensure you cover all of your liability bases.

I am currently a Medicare participating provider; can I change my status to non-participating?

Yes, you may change your participation status at any time. However, your status change will not take effect until the following calendar year. To adjust your status for 2018, you must do so by December 31, 2017.

Do I need a DME license to provide orthotics on a cash basis?

No. A DME license is only required if you are dispensing covered orthotics and other covered equipment to Medicare patients.

Providing Cash-Pay Services to Commercially Insured Patients

How do I transition current in-network patients to cash-pay status when I decide to go out-of-network?

If possible, we’d recommend notifying current patients in person (be sure to check your state laws/practice act for other requirements). Additionally, you may need to send a letter to notify your past patients (check with your attorney to see if this is a legal necessity; if it’s not, then Dr. Carter suggests speaking with them in person if and when they return to your clinic). In any case, when notifying patients of this change, be sure to explain:

  • Why you are making the change.
  • How it will allow you to provide even better care—and why they should get future (or continue to get current) treatment at your clinic.
  • That you’ll help find in-network provider options for those who can’t go out-of-network.

I am currently working for a company that is under contract with insurance companies. Would I still be bound by those contracts if I started my own cash-pay practice?

If you are operating under your own separate business—with a separate tax ID and NPI—then you may be able to treat some patients on a cash-pay basis. However, we would recommend consulting with a healthcare attorney who is familiar with the practice laws in your state first.

When you go out-of-network and consider yourself cash-based, how does that impact pre-authorizations?

Some payers still require pre-authorization for out-of-network services. So, have the patient reach out to his or her insurance company to verify out-of-network benefits. If the payer requires authorization, you will need to complete the authorization form.

Would a patient who is paying cash be able to claim that amount for reimbursement or application toward his or her out-of-pocket deductible?

You can provide invoices to your self-pay patients that they can then use to submit claims to their insurance companies. However, there's no guarantee that they will receive reimbursement, so it's important to communicate that to them upfront. You can learn more about cash-based billing considerations here and here.

How do I become an out-of-network provider with insurance companies?

For comprehensive guide on going out-of-network, check out this resource from Dr. Carter as well as this post from the WebPT Blog.

What should I say when a patient or potential patient asks, “Why don’t you take insurance?”

Dr. Carter recommends starting the conversation by getting patients to discuss their pain and injury—as well as how it’s limiting them—before you bring up the cost of your services. From there, you can explain how being out of network enables you to provide superior care that specifically address their needs. You can also provide patients with the necessary paperwork to request reimbursement from their insurance company—or, you can bill out-of-network on your patient’s behalf. Additionally, keep in mind that with the rise of high-deductible health plans, many patients may end up saving money by going out of network. For more on this topic, check out this post from Dr. Carter's website.

If a patient comes in and wants to do self pay, am I obligated to ask for insurance info?

That depends on your relationship with the insurance companies. If you have no relationship with any insurance companies, then you do not need to ask for patients’ insurance information. However, if you have relationships with insurance companies, some may require you to submit claims to them even if the patient would prefer to pay cash. As Dr. Carter mentioned during today’s webinar, though, the 2013 HIPAA Omnibus rule states that patients are entitled to request that you do not share their PHI with their insurance companies. Please note that this request must be patient-initiated.

How do I go about billing out-of-network on behalf of my patients?

For everything you need to know about successfully billing out-of-network on behalf of your patients, check out this interview that Dr. Carter and Aaron LeBauer conducted with Jerry Durham, who—along with his partner—took his three-clinic practice out-of-network with all of their private payers.

If a patient has different deductibles for in-network and out-of-network services, are those deductibles calculated separately?

That would depend on the insurance plan. According to this resource, “In some health plans, any amount you pay toward your out-of-network deductible also counts toward your in-network deductible. In other health plans, the two deductibles are totally separate.”

What is the definition of a wellness visit versus a skilled therapy visit? And how does being out of network affect each category?

Wellness visits generally include preventive exams or services. Specifically, wellness services often are not exclusive to the PT scope of practice and can be performed by a certified individual (such as a massage therapist or personal trainer). Skilled therapy visits, on the other hand, involve medically necessary interventions that only a therapist or therapist assistant can perform. For both types of services, some plans may cover part of a service if the provider is out-of-network, but this is typically not the case.

Can craniosacral services fall under the skilled therapy category? Or are those services strictly wellness-based?

Craniosacral services would likely fall under the wellness category, as they (1) aren’t considered to be medically necessary interventions and (2) can be performed by a non-therapist.

Do you have to follow the formal re-evaluation schedules with outcome measures every 30 days like you typically would for insurance patients in order for cash-pay patients to get reimbursed through their out-of-network insurance benefits?

That depends on the payer. For example, some non-Medicare payers require functional limitation reporting, so you would need to include FLR on your documentation in order for the patient to receive reimbursement. Ultimately, your documentation should allow your patient to be reimbursed, so it’s important that you adhere to any documentation standards set forth by the insurance company.

Pricing and Discounting

Is it necessary to have a set fee schedule (i.e., the same rates for everyone) for private pay, non-Medicare patients? Or can the rate vary based upon the type or complexity of therapy care?

According to this article from APTA, “it is recommended that you bill based upon a single fee schedule for all of the services that you provide.” That said, if you wish to make need-based exceptions to your fee schedule, you might want to consider implementing a discount model. If you're looking for additional advice on creating your fee schedule, check out this post from the WebPT Blog.

How do I establish pricing if I’m not in-network with any insurance companies?

According to Dr. Carter, “you can price your services at whatever level the free market will support.” That being said, it’s important to remember that you still need to adhere to the guidelines set by your state practice act. Thus, your “billing must always be in line with the actual treatment provided.”

When Carter started his cash-based practice, he didn’t have to worry about contracts with third-party payers, so he set his rates based on what he believed to be the value of his services—as well as what other in-network clinics in his area were charging and being reimbursed for. He also looked at other cash-pay providers—both therapists and top-notch massage therapists and personal trainers. When he opened his clinic, he charged $125/hour. Three years ago, he increased his price to $150/hour. Now, he charges $165/hour. These upward adjustments account for inflation, increased overhead costs, and his growing reputation. All of Dr. Carter’s patients know exactly what they’ll be charged for each visit—as he believes cost transparency is important. However, he has removed pricing information from his website, because he prefers to have that discussion over the phone in order to communicate his unique value and thus avoid sticker shock. To learn more strategies for suppressing sticker shock, check out this free webinar hosted by Dr. Heidi Jannenga.

What about if I’m in-network with some third-party payers?

Dr. Carter recommends that all in-network providers carefully review their third-party contracts with a healthcare attorney, because some “do not allow you to accept full private payment from patients with that insurance—even if the patient wants to pay cash.” While you’re at it, be sure to watch out for contracts that include a “most favored nation” (MFN) clause—as this could prevent you from charging cash-pay patients less than you charge that insurer.

Can we give discounts to out-of-network patients? How should we go about doing this?

You can set up a cash-pay discount structure to apply to your fee schedule. It’s important to base your discounts on your existing fee schedule and to provide all cash-pay patients with the same discounts.

What is the typical cash-pay rate for PT services per visit?

There is no typical per-visit cash-pay rate for PT services. Rather, the price each provider charges should be based on a number of a factors, including geographic location and expertise.

Can I offer cash-at-time-of-service or same-day-payment discounts to patients who are covered by an insurance company that I’m contracted with?

According this blog post by Dr. Carter, this rationale makes sense because you’d be offering the same discount to patients and third-party payers—and, of course, it would be rare that a third-party payer would ever actually pay at the time of service—but “that doesn’t mean it’s absolutely legal.” Because “state laws and individual contracts vary widely,” it’s a good idea to review them with a healthcare attorney before proceeding with this type of arrangement.

I am interested in learning what about best practices for tiered rates for those seeking different private pay services.

As this article from the APTA states, “it is recommended that you bill based upon a single fee schedule for all of the services that you provide.” However, many practices opt to create a discount structure to better serve individuals with various financial hardships.

Dealing with Direct Access Restrictions

Can a cash-pay practice be successful in a state with restricted direct access laws?

Dr. Carter practices in Texas, where patients need a referral to receive any physical therapy treatment beyond an evaluation. As a result, his practice loses thousands of dollars every year because the therapists can’t treat patients immediately—and many patients have difficulty obtaining a referral. It’s admittedly a huge problem, which is why Carter and his team are working to develop relationships with physicians to make it easier for patients to obtain the necessary referrals. While it’s challenging, it’s doable. And Carter and many of his cash-based colleagues have built successful practices in states with restricted direct access laws.

I also practice in Texas. After a patient contacts me to receive physical therapy, how do I obtain the referral necessary to provide treatment?

Your patients can obtain a referral from their primary care physician—or any other physician for that matter. Often times, it can be easier and more expedient to send patients to physicians who understand the value of rehab therapy and with whom you already have strong relationships. The referring physician may or may not require the patient to complete an office visit prior to providing the referral.

I’m in a state with full direct access, so I can evaluate and treat patients without a physician referral. Do I still need to send the plan of care to a physician for certification to ensure my patients are able to receive reimbursement or credit toward their deductibles?

That would depend on the patient’s insurance company and plan requirements. While direct access allows physical therapists to legally provide treatment without a referral, it doesn’t guarantee that the therapist—or patient—will be paid.

If I’m a physical therapist in a restricted direct access state, can I treat a cash-pay patient’s injury under a sports conditioning plan of care in order to circumvent the referral requirement?

This could be risky, legally speaking. As a physical therapist, you are subject to all legal rules and regulations associated with your PT license when you are providing services that fall under your scope of practice. Furthermore, as Kylie McKee explains here, “if a patient becomes injured or experiences any other kind of medical episode, it’s the provider’s responsibility to administer aid to the best of his or her ability as defined by duty of care. In other words, if the therapist’s qualifications include the skills necessary to administer aid in an emergency situation or detect early risk factors for certain health issues, then he or she could be held legally accountable for failing to do so.”

Building and Maintaining a Successful Cash-Pay Practice

What are the keys to success in a cash-based model?

Ultimately, it comes down to showing value and improved outcomes, which requires comprehensive outcomes tracking. Here are several other things Dr. Carter recommends offering to ensure you’re providing superior and unique therapy services:

  • Extended treatment sessions
  • One-on-one attention from a licensed therapist
  • Exceptional and better-than-average results (i.e., fewer trips to the clinic)
  • Luxurious clinic setting
  • Niche treatment services (e.g., specializing in treatment for cyclists, runners, or triathletes)
  • Complementary services (e.g., exercise or wellness services)

What are the characteristics of private pay patients?

People who place a high priority on functioning and performing at their best. Ultimately, it’s more about a person’s mindset than his or her wealth status. That being said, Dr. Carter does believe that it may be advantageous to have a clinic location in a more affluent area.

How does cash pay impact referral volume?

While physicians may not refer as many patients to out-of-network clinics, it’s still crucial to maintain these relationships. Bear in mind that a physician is putting his or her reputation on the line when he or she refers a patient to another provider. So, if that physician genuinely believes the patient will receive the best possible care at your clinic, then he or she may refer the patient to you—regardless of whether you are in-network or out-of-network. However, according to Dr. Carter, cash-pay providers should also increase their focus on developing non-physician referral sources.

What are some strategies for reaching new cash-pay patients?

Here are a few cash-pay marketing strategies Dr. Carter discussed during the webinar:

  • Generating word-of-mouth referrals (by asking current patients for reviews and referrals and staying connected to former patients)
  • Developing relationships with referral sources in the wellness and fitness spaces
  • Leveraging the Internet and social media platforms (i.e., for reviews and content generation)
  • Promoting lead generation (i.e., by nurturing relationships by phone and email or offering free consultations)

What kind of documentation do I need to do for cash pay patients?

As Erica McDermott explains here, “To be successful, cash-based practitioners must give their documentation and billing processes the same level of attention and care as providers who depend on reimbursements to keep their practices afloat.” Why? Because you, as a cash-based healthcare provider, are still held to the same legal standards as those providers who practice under a traditional third-party payer model. And if you ever found yourself at the center of a legal dispute, your documentation would be your best defense—and failing to document to a high standard could put you in a pretty vulnerable position. Additionally, if your out-of-network self-pay patients plan on submitting claims to their insurance companies for direct reimbursement, then your documentation and billing information will need to meet those payers’ standards as well. As Dr. Carter mentioned on today’s webinar, you’ll need to provide patients with receipts that include CPT codes, ICD-10 codes, EINs, NPIs, and service locations.   

How do athletic trainers fit into the cash-pay model?

According to this document covering a cash-based reimbursement model for athletic trainers, athletic trainers “may offer performance enhancement, mobility training, nutrition counseling, athleticism training, summer camps for athletes, seminars, strength and conditioning programs, rehabilitation services, post injury therapy conditioning, weight management counseling, wellness classes evaluations, and more.” However, keep in mind that, as the same resource goes on to note, “You need to identify any state specific licensing and regulatory agencies involved in your profession and check with them for any required documents or licenses you may need. You must also check your state licensure/certification board and review your scope of practice and what patient population you can care for.”

Is cash-pay realistic in a small market?

As Dr. Carter explained during the webinar, there are certain geographic locations where operating a full cash-pay practice may not be feasible as there isn’t the necessary market demand. However, a hybrid practice—that is, one that offers services to both cash-pay patients and traditionally insured ones—can be successful just about everywhere.

To build a successful cash-pay practice, should we focus on therapeutic approaches more than modalities for pain and inflammation management?

There’s no across-the-board recommendation for providing a specific type of service in order to attain success in a cash-based practice model. Rather, you should offer the services that you are uniquely qualified to provide and that your current and potential patients want to receive and are willing to pay for.

Why should my patients pay me cash, versus paying cash to a personal trainer, massage therapist, yoga teacher, or rolfer?

Wellness services are great, but they don’t always address the source of pain and injury. Physical therapists focus on restoring and maintaining function, and they approach functional limitation from a health standpoint. Furthermore, physical therapy practice is based in scientific research and has proven results that can be reproduced, as opposed to some holistic approaches.


Still scratching your head over cash-based physical therapy? Tell us your question in the comment section below, and we’ll do our best to show you the money—er, get you an answer.

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