Capitalizing on Cash-Pay: 5 Strategies for Out-of-Network Success

As reimbursements continue to decline, more and more physical therapists are looking outside the traditional third-payer reimbursement model to buoy their business and provide better care for their patients. But, forging an unfamiliar course can be challenging—if not outright daunting. Luckily, there are pioneers—like Jarod Carter, PT, DPT, MTC—who are already leading the way to out-of-network success. So, all we need to do is follow in their footsteps and heed their lessons learned. To that end, here are five strategies to help you capitalize on cash-pay:

1. Recognize the state of things.

Reimbursements have been declining steadily for a while now, and as a result, it’s becoming increasingly tough for healthcare professionals to provide quality care and earn enough money to make a profit. Plus, with the proliferation of high-deductible health plans, patients are financially responsible for a larger portion of the cost of their care—and many don’t fully understand this. Thus, providers are having to step in to educate patients about the specifics of their plans—something most would argue is the responsibility of the insurance carrier—in order to ensure payment from those patients. And patient collections can be difficult, especially if the education piece isn’t handled properly. Providers who are unable to collect patient payments—for any reason—run the risk of having to eat the patient’s portion of the cost, which many clinics simply can’t afford to do. In other words, playing the third-party payer game may no longer be a sustainable business option for many practices, which is why many providers are opting out.

2. Do your research.

In some regions, a 100% cash-based practice may not be possible, as the necessary demand does not exist. So, please do your research—and speak with a healthcare attorney in your area—before making any changes to your current business model. That being said, adopting a hybrid model—that is, remaining in-network with some insurance companies and opting out of others—or simply adding cash-pay wellness services to your repertoire can work almost anywhere. In fact, the rise of HDHPs has actually helped pave the way for this type of business structure, because patients are becoming accustomed to paying for at least some of their care out-of-pocket. In this way, the lines between patient and consumer are beginning to blur, so many patients are evaluating the value of the care they receive much more closely. Providers who can not only provide value, but also prove that value objectively via outcomes data, are in a particularly good position.

3. Explore your options.

You can certainly provide skilled physical therapy treatment to generate a cash-based revenue stream, but that’s far from your only option. In fact, I recommend you give some thought to what kinds of health and wellness services your clients really want—and will pay for. Here are some examples of cash-pay services to get you started:

  • Continuing education classes for PTs or physical trainers
  • Public classes (e.g., anatomy, nutrition, stretching, or injury prevention)
  • Fitness training (e.g., medically oriented gym memberships, yoga, cycling, or Pilates)
  • Alternative wellness (e.g., Reiki, Ayurveda, acupuncture, or traditional Chinese medicine)

And by no means do you need to be the one providing all these services yourself. In some scenarios, it may behoove you to partner with a non-therapy provider in order to better serve your patients and boost your bottom line. No matter what services you decide to offer, be sure you’re providing value that’s commensurate with what you’re charging.

4. Get the word out.

While physicians may not refer as many patients to out-of-network practices as in-network ones, it’s still crucial to retain those relationships and develop ones with new, non-physician referral sources at the same time. Ultimately, your referrers are placing their reputation in your hands when they send patients your way.  So, if you’re the best therapist for the job—and you have the data to back that up—you’ll see referrals, whether you’re in-network or not. Plus, now that direct access is available to some degree in all 50 states, you can market your services directly to patients and take on the role of a care coordinator—referring patients out to other providers and building relationships of reciprocity. When it comes to marketing strategies, be sure to cover all your bases: word-of-mouth, social media, and lead generation. You may even want to adopt a patient relationship management system that can help you engage and re-engage your patients.

5. Speak confidently about being out-of-network—and your pricing.

Prospective patients will inevitably ask whether you accept their insurance, and depending on their comfort level with out-of-network providers, they may hesitate to give you a shot. So, as Dr. Carter advises, don’t jump into the money conversation right off the bat. Instead, get your soon-to-be patients talking about their pain, injury, or condition and how it’s restricting their quality of life. From there, you’ll be able to discuss exactly how you can help—and how being out-of-network affords you the flexibility to really focus on providing them with the best possible care. Once you’ve connected in that way, you can broach the pricing discussion—confidently, because you already know your value, right?—and explain what it means to work with an out-of-network provider (i.e., patients may be able to request reimbursements from their insurance companies, and depending on the terms of a specific insurance plan, working with you may even cost those patients less than they’d pay to see an in-network provider). If you’re not the one handling these phone calls yourself, Dr. Carter recommends ensuring that your entire staff is so certain “of your value that they would be willing to pay for your services themselves.”

Dr. Carter and I recently hosted an entire webinar on this subject titled, “Cashing in on Private Pay: The PT’s Guide to Going Out-of-Network.” If you haven’t already listened to the recording, I recommend doing so here. You’ll learn even more about capitalizing on cash-pay, including how to:

  • Remain compliant with Medicare patients.
  • Price your services legally.
  • Maintain defensible documentation (yes, even cash-pay therapists need to do this).
  • Format invoices so your patients can request reimbursement from their insurance company.
  • Start a cash-pay clinic or transition an existing clinic.

As the healthcare landscape continues to evolve, there’s more opportunity in cash-pay than ever before. And taking advantage of that opportunity may just be your ticket to ensuring financial success in the long term—regardless of whatever additional changes come down the pike.