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5 Things to Consider You if Want to Open a Cash-Based PT Practice

May 23, 2018 1:45:42 PM

If you’re considering opening a private physical therapy practice, you may be wondering if it’s better to have a cash-based practice.

Many physical therapists are leaning towards cash-based because they often run into restrictions with third-party payers, and it interferes with their ability to help patients reach their full potential and goals. There is also the cost of collecting payment from third-party payers to take into consideration. If you’re considering opening (or converting to) a cash-based business, this model has its pros and cons.

Knowing if your community is the right market for cash PT

This step takes some research. You need to know your patient population and understand if most would be willing to pay cash for PT services or not. Is your community a high-income area or low-income area? Are there other successful cash-based practices in the area?

If you’re already running an insurance-based practice, survey your patients and find out how they feel about paying cash up front for services, rather than going through their insurance.

Setting up your fees and policies

In order to determine your fees, you’ll need to consider your overhead costs, desired profit margin and what you think your patients are willing to pay. The APTA offers assistance here.

You will also need to set up a payment policy. Will all patients be required to pay up front, or will you bill them later? Do you want to offer payment plans, etc.? Whatever you determine, it must be consistent across the board for all patients.

Selling patients on the value of cash PT

A lot of patients are used to insurance and may be unfamiliar with cash PT – and they may be concerned that they’ll end up paying more if they don’t go through their insurance companies or find in-network providers. Surprise! “Patients who pay up front in cash often get better deals than their insurance plans have negotiated for them,” (WSJ).

You better be ready to explain this concept to your patients and sell them on the value of your care. Like most cash-based practices, you’ll provide expert, one-on-one care once a week rather than the usual 2-3 times a week some patients will spend at an insurance-based practice. This often means patients end up paying around the same amount for PT – to heal in less time. Most quality-conscious patients will be in favor of that!

Knowing how to market your practice

Being an “out-of-network” provider means you may have to market your practice even more than an insurance-based practice. You have a great opportunity to reach direct access patients and show your community why your services are more valuable than other PT services in your area.

Although your marketing efforts won’t be much different than an insurance-based practice’s efforts, if you really want to be successful you’ll work diligently in this department. Most private practice owners don’t have much of a marketing plan and aren’t aggressively pursuing direct access patients. Take the opportunity to differentiate yourself and show patients why YOU are the best option for therapy.

Medicare patients are another story…

Medicare is where things get a bit rocky in the cash-pay model. You can’t accept payment from a Medicare patient for physical therapy services, only for non-covered services. There are other important rules and payment options regarding Medicare patients in this article.


Both PTs and patients can benefit from a cash-pay model in physical therapy – but it’s important to work through all the pros and cons and determine if it’s the right option for your business goals and your patient population.

Did you know FYZICAL consists of both insurance and cash-based practices? Some people think FYZICAL is just a cash-based model, but this is a myth! Make sure you’re in the know – check out these 10 Myths about FYZICAL.

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Written by FYZICAL

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