As regulations intensify, reimbursements dwindle, and patients take greater control of their health care, interest in cash-pay services and cash-based practice models has increased, especially among physical therapists. For years, we here at WebPT have kept a pulse on the cash trend, sharing hard-hitting pieces by Ann Wendel and Jarod Carter. Recently, we discovered a new out-of-network model—one that’s complementary to the in-network model most practices already have. This setup allows providers to dip their proverbial toes into the cash-pay pool. In an effort to learn more about this innovative option, we sat down with its co-founder and CEO Ian Kornbluth. Read on for the full interview.

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What is ActivCore?

ActivCore is a physical therapy franchise model specifically designed to combat the rapid decline in insurance reimbursement dollars. By offering an unparalleled treatment experience, ActivCore can attract and retain more cash-paying customers in your facility.

With this business model, ActivCore clinics open within established physical therapy facilities. The ActivCore clinic operates as a totally separate clinic that co-exists under the same roof as the original clinic. Occupying a mere 100 square feet of space, this new “out-of-network” clinic allows practices to diversify with sustainable, cash-based revenue streams for many years to come.

From the consumer perspective, what makes ActivCore an appealing option?

With ActivCore, patients get personalized 55-minute treatment experiences with physical therapists who use the most progressive clinical tools and techniques on the planet. What could be more appealing than that?

How does the model work?

When you add ActivCore to your practice, we provide everything you need to launch and run your own successful out-of-network clinic. As a franchise model, we have specific systems, processes, and innovations to make you stand apart from the competition.

So, ActivCore is simply an “add-on” to existing facilities?

Exactly; think of it the same way you’d think of a Starbucks store within a Barnes & Noble. The ActivCore clinic occupies a small area where a specially trained physical therapist can deliver one-on-one treatment experiences at a premium price.

How did the model come to fruition?

We opened our first out-of-network practice in 2004, and since then, we’ve seen our profession go through significant changes. From large corporations capturing a sizeable share of the private practice market, to insurance companies making dramatic reimbursement cuts across the board, these developments have impacted PTs’ quality of life. We developed ActivCore to empower physical therapy practices with a model that helps therapists get back to focusing on the reason most of us chose this profession in the first place: to help people and get paid what we deserve!

ActivCore was not an overnight success for us. It took many years of trial and error to establish a sustainable franchise model that could address the massive changes that have occurred within our industry.

What does out-of-network mean?

Simply put, going out-of-network means treating people outside of their insurance network and collecting a premium for the services rendered. The out-of-pocket cost for out-of-network care is greater than a typical co-pay, so most patients only choose to go out-of-network if they are not getting the results they want in the more traditional, high-volume treatment environment. Thus, the therapist’s undivided time and specialized skill set become increasingly important in an out-of-network model.

Why would a private practice owner want to go-out-network?

The traditional in-network model is becoming less financially viable as insurance companies make it more and more challenging for providers to get reimbursed. In fact, compared to a decade ago, the average physical therapist must see two to three times as many patients to generate the same amount of revenue. We, as a profession, need to start thinking about ways to address this growing problem. Adding on an out-of-network component to your facility is one practical solution.

Keep in mind: For providers who choose to go out-of-network, a solid marketing plan is essential. This is because those providers won’t be listed in any insurance network directories. Instead, out-of-network providers must attract patients via word-of-mouth referrals or online visibility.

Why would a patient pay more out-of-pocket?

ActivCore is a tried-and-true model that we’ve employed for over a decade at our own facilities in New Jersey. We also launched an ActivCore franchise in Denver that was an instant success.

Compared to some traditional clinic environments, ActivCore offers a more personalized setting in which physical therapists focus on one patient at a time. Therapists have sufficient time to learn, practice, and refine their hands-on skills. Additionally, they have access to innovative tools like the Redcord suspension system.

Often, a personalized treatment experience translates into a faster recovery period and less time away from the patient’s sport, work, or active lifestyle. We’ve noticed that patients take all of this into account as they decide whether they’re willing to pay more out-of-pocket.

If a provider goes out-of-network, will that provider still have to abide by the rules of each patient’s insurance company?

Most people think that going out-of-network means breaking free of typical insurance company rules and regulations. That’s simply not the case. To submit claims for reimbursement, the out-of-network provider still must be credentialed and recognized by the insurance company. Furthermore, providers still need to request authorization of patient visits when necessary. On the bright side, when you go out-of-network with a particular insurer, there is no contract between you and the insurance company. Thus, you’re not subject to the limits of in-network reimbursement rates. Plus, you’re legally allowed to collect up to your full treatment rates from the patient.

What does it take to get started?

All you need is 100 square feet and one dedicated physical therapist. This is a low-risk opportunity to "dip your toes" into the out-of-network pool, while maintaining the insurance contracts for your original clinic.

So, it’s possible to run two separate practices—one in-network and one out-of-network—within one existing clinic location? Will doing this affect my current insurance contracts?

While this is a new concept in the physical therapy world, in-network and out-of-network practitioners have co-existed for years in hospitals and physician offices.

Owning and operating an out-of-network clinic will not affect the current in-network contracts you have in your other clinic. The clinical staff are completely separate. However, before an in-network patient sees any of your out-of-network therapists, you must provide full disclosure of the situation and its implications to the patient. Additionally, you cannot provide the patient with any type of financial incentive (e.g., a co-insurance reduction or deductible waiver) to go outside of his or her insurance network.

Can other types of facilities add ActivCore?

ActivCore clinics also can share space with medical offices, fitness studios, or athletic clubs. ActivCore can even be its own stand-alone clinic.

Are there benefits to franchising instead of trying to do this on your own?

Consider franchising the “express lane” to reaching your goals. We’ve packaged ActivCore into a turn-key franchise model that you can successfully add to your existing facility within about 30 days. By leveraging the legwork we’ve already done, you don’t have to reinvent the wheel and potentially waste time and money going through this process on your own.

How much legwork is involved with establishing an ActivCore practice?

ActivCore’s franchise onboarding process is fast and simple. The original practice owner forms a separate professional entity—which conducts business as ActivCore—and then shifts just one staff physical therapist into this new clinic. Everything must remain completely separate from the original business entity, from the tax ID and NPI numbers to the EMR account and clinical staff. Essentially, while the two clinics are under the same roof, they operate as completely separate businesses.

Speaking of EMR, how does the ActivCore model work with EMR systems?

We use WebPT as our exclusive EMR provider. So, all ActivCore clinics must use WebPT. As a member since 2008, we can attest to the user-friendly design and reliability of this technology platform. It really makes practice management easy. Plus, the company is constantly searching for ways to better the profession.

What’s your cash billing policy?

At ActivCore clinics, all patients pay in full at the time of service. By collecting directly from the patient, we eliminate any risk of therapists not getting paid for their time. We fully disclose our billing rates to patients prior to their initial evaluations. We also verify whether patients have any out-of-network insurance benefits.

Regardless of whether the patient has coverage, our rates are set; we even list them on our website. Those rates are based on fair market value for the specific geographic region and the clinical experience of the provider. For instance, it would cost more to go to an ActivCore location in New York City than one in Ithaca. Similarly, it would cost more to see an experienced therapist than a new graduate working in the same facility.

Do ActivCore providers still submit claims to insurance?

Yes, we serve as an advocate for our patients to help them get reimbursed by their insurance companies. Because patients pay us in full at the time of service, we submit claims to their insurance companies with instructions to reimburse patients directly.

How does ActivCore help protect practices from the challenges associated with the changing PT payment landscape?

ActivCore offers a more personalized, cash-based setting to ensure both you and your patients thrive for the long term. By relying less on insurance payers and more on the cash value associated with your time and skill set, ActivCore can help you create sustainable revenue streams and referral sources.

What’s your advice for those providers who are considering cash-pay models? What steps should they take before jumping in?

My advice is to avoid doing this on your own. There is a tendency for physical therapists to form private practices that are totally independent of any other practices. As a result, our industry has become totally “fragmented”—and with everyone doing their own thing, none of us have enough strength to fight against insurance cuts or to compete against large corporations. Our primary mission at ActivCore is to help independent PTs band together and create strength in numbers. That way, no one has to be out there all alone.


To learn more about ActivCore, visit the website. You also can access ActivCore’s education products via the WebPT Marketplace. We appreciate Ian taking the time to answer all of our questions. Have Qs that we didn’t ask? Leave them in the comment section below.

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