At WebPT, one of our core values is called “F up; own up.” It’s an accountability value that reminds us that everyone makes mistakes, and the best thing we can do is take responsibility for our actions, fix the problem, move forward, and hopefully prevent others from making that same mistake in the future. In that vein, I’d like to “F up; own up” for something. For years I have spoken to the benefits of offering cash-pay options in a clinic—often encouraging clinicians to add them to their suite of services. And while I still stand behind the idea that offering cash-pay services can do a lot of good for our patients and our profession, I believe I’ve done therapists a disservice by failing to clarify that operating as a 100% cash-based practice may not be an option for every clinic in every location, as there are significant drawbacks to this model. 

So, let’s take a step back and talk honestly about the different facets of cash-pay practices: the good, the bad, and the ugly. 

The Good 

Cash-based clinics can sidestep many burdensome payer requirements. 

One of the more easily recognizable benefits of operating as a cash-based clinic is the ability to (mostly) wash your hands of commercial payers. When PTs don’t contract with payers (and also decline assignment), they can provide any service to patients that’s within their scope of practice—and charge whatever the market will pay. Cash-based clinics don’t have to wring their hands about reimbursement cuts, or modifiers, or NCCI edits—they discuss pricing up front, whip up a summary of treatment and ask patients to foot the superbill. Depending on the model, there’s no waiting period for payment, and there is reduced overhead for claims processing and adjudication. This offers a great deal of financial security to PTs, as they have more direct control over their revenue streams. 

I recently spoke to Dr. Keaton Ray, PT, DPT, OCS, ATC, CSCS, the Co-Founder & COO of the out-of-network organization MovementX. She affirms that diminished administrative burden is one of the biggest draws of cash-pay: “Documentation is more streamlined, billing and claims issues diminish, fewer staff is needed, and ultimately your overhead is lower.”

Before we move on, I want to point out that some cash-based clinics may still interface with payers—and those that treat Medicare patients definitely do. But we’ll return to that thought in a bit!  

Cash-based services can help your marketing and retention strategies. 

Diversifying your income by offering cash-pay services is an excellent business gambit. If patients aren’t in need of the specific PT services that a clinic normally provides, they may still be interested in ancillary wellness or fitness services that are offered on a cash basis. And once you get someone in your clinic—even if it’s for just dry needling—you can begin to form a rapport with them, and educate them about the benefits of PT over time. From there, they may seek your care the next time they have an injury—or they may direct an injured family member your way! 

Furthermore, offering cash-based wellness services can be a good way for a clinic to delve into a niche and differentiate itself from its competitors. Not every PT clinic offers nutrition counseling, health screenings, or cryotherapy—which is exactly why these services would stand out in the market. 

Cash-pay PTs can spend more time with patients. 

For years, PTs have shouldered the burden of declining payer reimbursement rates and increased administrative burden in regards to documentation and regulatory adherence. To counter this trend, some clinics have bumped up their productivity requirements, asking PTs to spend less time with individual patients so they can fit more treatment time into their schedule. When pushed to an extreme, high patient volumes are totally counterproductive to quality patient care. 

In comparison, this is where cash-based practices can really shine. “The most popular benefit of owning a cash-based practice is obvious: more money in your pocket,” said Ray. “Based on fair market value in your community and your desired income, you can set a cash-based hourly rate that gives you financial freedom and allows for lower productivity requirements.” And when PTs can spend more time with individual patients, patients are more likely to feel satisfied with their care. 

The Bad 

Commercial insurance—and especially Medicare—regulations can and often do still apply. 

Cash-based clinics may be able to avoid a ton of billing snafus by virtue of not contracting with payers, but they can’t avoid all of them. That’s because cash-based clinics—and especially those with providers who accept assignment—still work with payers on a regular basis. Whether you seek payment on behalf of your patients or your patients submit their own claims, there’s a good chance that your claims (and your documentation) will end up in a payer’s hands—thus, requiring you to still follow their rules. 

Here’s what Ray has noticed: “We have often seen that when someone goes out-of-network with insurance companies, they drop all focus on compliance whatsoever… Even though you are in a cash-based practice, you must stay on top of endless regulations and compliance measures. In fact, you still have to comply with many insurance regulations even though you have no relationship with them”

Medicare

Medicare, perhaps unsurprisingly, only complicates this cash-pay conundrum. Per regulations established by the Centers for Medicare and Medicaid Services (CMS), PTs (unlike physicians) cannot completely sever their relationship with Medicare. That means PTs must follow many of Medicare’s rules—and remain under Medicare’s limiting charge. 

The Ugly

Cash-based clinics are often inaccessible to all but the affluent. 

As mentioned above, one of the benefits of running a cash-pay practice is that therapists can charge more for their time and reduce their productivity quotas as a result (improving patient satisfaction in the long run). Unfortunately, these charges often come at a premium, and are therefore inaccessible to many mid- to low-income patients. “Most cash-based practice models are focused on a certain population that can afford to pay out of pocket, “ said Ray. “While cash-based practices no doubt dramatically improve the quality of life for the provider—and oftentimes the patient—it is not the solution to the health inequities that exist in our country.”

If we want to reach more patients and chip away at the 90% of patients who could benefit from rehab therapy but never receive it, then we need to remain accessible to patients who come from all walks of life—not only those who can afford to pay for top-dollar healthcare. 

Regulatory advocacy is not always top-of-mind for cash-pay providers. 

Because cash-based practices don’t often work with payers (and when they do, payers have limited reach), regulatory advocacy may not exactly be top-of-mind for these providers. This is something Ray has noticed as well, “It may be tempting to build a little cash-based island for yourself and forget what everyone else is doing out in the real physical therapy world,” says Ray, but “if our profession’s rights are restricted or our payment is cut, it will ultimately negatively impact you.”
And she’s absolutely right. When payers fiddle with reimbursements for contracted PT services, those same changes can apply to out-of-network payments, too. Except PTs won’t immediately feel the cuts—instead patients will as larger and larger percentages of their healthcare charges become their responsibility. And patients can only shoulder so much financial burden on their own. The movement in the world of payer policy still applies to cash-based clinics—and we need cash-pay providers on the frontlines of our advocacy efforts. After all, we are all PTs—regardless of the type of practice we work in—and we must remain united in the difficult fight for more recognition of our profession.

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Cash-based care models are not without their flaws. They’re not always accessible to patients, they’re less autonomous than you might think, and they may encourage advocacy apathy—but they also open doors to many great opportunities. They allow providers to spend more quality time with their patients, they can help spread PT to more patients, and they’re perfectly positioned to use their outcomes data to prove how therapists would benefit from higher reimbursements. It’s just a matter of knowing cash-pay’s strengths and weaknesses—and finding ways to make the largest impact possible wherever you’re able.