Is a Cash-Based Physical Therapy Clinic Right for You?

Dwindling reimbursement rates and increased business costs have impacted the profitability of many insurance-based physical therapy practices. Looking at the hassles and paperwork associated with insurance and Medicare reimbursements, it’s no wonder that the idea of running a cash-based physical therapy clinic sounds very appealing. However, the challenge of changing from a traditional insurance-based business model to one that accepts only cash for payment keeps most physical therapists from taking this approach.

Despite the perceived risks, a growing number of physical therapy practices are shifting to a cash-pay business model. As health savings accounts, consumer-driven health plans and the desire for individuals to remain active as they age continues to increase, the demand for cash for physical therapy services will likely continue to grow as well.

Jarod Carter, PT, DPT, MTC and owner of a cash-based physical therapy clinic, Carter Physiotherapy, only accepts cash payment for his services. He believes, “Cash based services are an important part of surviving the coming changes in the healthcare industry, as well as maintaining high quality therapy treatment options for consumers.”

At his Austin, Texas physical therapy clinic, Carter has a simple clinic set-up with a small waiting room and a private room with a treatment table. Currently, his clinic is a one-man operation. In exchange for cash, his clients receive one full hour of one-on-one manual therapy.

Dr. Carter is currently writing an e-book for therapists interested in converting to a cash-pay practice or adding cash payment options to a current practice. A few of his cash-based physical therapy practice tips are highlighted below:

• Don’t rely on the same customers and referral streams. The customers you’ve become accustomed to seeing at a traditional insurance based clinic may differ from the customers willing to pay cash for therapy services. Carter recommends targeting customers that place a high value on performing at the highest level possible. Many of these health-conscious individuals are willing to pay more for services that help them achieve their goal.
   
• Build a niche for your clinic. The key for a cash-based physical therapy clinic is to focus on offering something different from a traditional physical therapy clinic that accepts insurance. For instance, clients of insurance-based practices may have session with a different physical therapist or physical therapy assistants for each visit. At cash-based Carter Physiotherapy, clients receive one full hour of hands-on manual therapy with Dr. Carter at each visit. Carter believes some clients are willing to pay more for consistent, dedicated care focused on helping them get better faster.
   
• Supply receipts customers can submit to their insurance company. Customers with a health savings account or those with health insurance can submit receipts and often receive reimbursement for some or all of their out of pocket expenses. To simplify the reimbursement process for his customers, Carter supplies self-claim receipts to his customers which break his services down into terms most insurance companies understand and require.
   
• Evaluate your market. Is your city right for cash-based services? Take a look at other healthcare practices operating on a cash-pay business model. For instance, do several dentists offer teeth-whitening services for a fee? Research the demographics of the area in which your physical therapy clinic operates as well as any fitness clubs, sports training facilities, running clubs, biking organizations, youth sports and other fitness groups in the area.

To learn more about adding cash-pay elements to your practice listen to a full podcast with Dr. Jarod Carter at PTTalker.com.

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