BUT then I came across this article written by a DPT colleague that summed it up perfectly. Sometimes there's NO reason to re-invent the wheel, best to just share the knowledge.
Thank you, Kevin Prue and New Grad Physical Therapy!
How Does A Cash PT Practice Work?
Kevin Prue July 1, 2015 2 Comments 17,398 Views
Cash-pay physical therapy (cash PT) is an alternative business model to the traditional insurance based physical therapy business model.
Cash-pay PT is gaining a lot of interest from both clinicians and patients. The main reason this model is so appealing is because it emphasizes quality patient care over quantity patient care, while removing the headaches and restrictions associated with insurance based care.
My cash pay physical therapy clinic
My cash clinic follows a similar model that other cash pay clinic owners have made successful.
· We provide one-on-one care, usually in one hour time blocks per patient.
· Patients pay for these services the same day they receive care, and we 'can' provide a “super bill”
with all the coding and information necessary for the patient to file the claim with their insurance company.
· Depending on the patient’s insurance policy, patients will either receive a check from the insurance
company as reimbursement for covered services provided by the therapist, or the cost of the
appointment will be applied to the patient’s deductible.
· Most cash pay PT clinics only see patients once per week or sometimes every other week, opposed
to the typical 2-3 times per week for “x” number of weeks. So a patient attending a cash PT clinic
may actually only need 4 or 5 visits, opposed to the typical 12-15 visits at an insurance based clinic.
Justifying the costs of cash PT to the patient
At this point you may be asking yourself a few questions like, “How do I convince patients to pay cash for my services when they already have health insurance?” or “How can a clinic possibly make a profit only seeing patients 4 or 5 times?”
First, patients are willing to pay for services they value, and perceive as valuable.
Not every patient at my clinic is wealthy; some struggle to make ends meet, like millions of other Americans, but they view exercise and movement as an important part of their daily life. Patients don’t think twice about paying cash for a personal trainer, attorney, massage therapist, or other services, so why does physical therapy have to rely on insurance reimbursement?
Some patients are already paying for things like a gym membership or to participate on a sports team, so if they are injured and unable to participate in these activities, they feel like they are wasting money. If I can get them better faster than the alternative clinics, these individuals are going to be happy to pay for my services.
The truth of the matter is cash PT may actually even be more cost effective for some patients. Let’s look at the numbers. The table below shows the cost associated with 4 weeks of PT at a cash clinic vs an insurance based clinic.
Cash PT Traditional PT
Cost Per Visit $125 Co-Pay $40
Number of Visits 4 Number of Visits 12
Total Costs $500 Total Cost $480
Time Spent with the PT 240 Minutes Time Spent with the PT (15 per 30 minute visit) 180
Cost per minute $2.08 Cost per minute $2.67
While these numbers are averages, and things can change based on a patient’s individual insurance policy, I think it gives you a good idea of how a cash PT practice compares to an insurance based practice.
It’s important to remember that if a patient hasn’t met their deductible, they may get stuck with the entire bill at the end of their PT care if they are attending a traditional PT practice.
As far as cash PT goes, if the insurance company reimburses the patient for 50% of the services provided, the out of pocket cost decreases to $250 for patient. That’s nearly half the cost of attending an insurance based clinic. Don’t forget to factor in time missed from school or work a patient encounters while attending the insurance based PT clinic 12 times vs just 4 times at cash PT practice.
So there you have it, a quick glimpse into the inner workings of a cash PT practice vs a traditional insurance based PT practice. I hope you found it interesting and hopefully you learned something new!
At Olympus Movement Performance we value 1-1 time with you and getting you better faster.