Alternative Payment Models for Cash-Pay Rehab Therapy Practices

In case you missed it, I recently reviewed the ways cash-based practices are making an impact on the health of society. From in-home maternity services to commoditizing educational resources, the ability to offer cash-based services to a wide variety of populations is ever expanding. And with this expansion also comes innovative payment models to help make cash services more accessible. 

In today’s article, let’s dive into how payment models are evolving in cash-based rehab practices!

Insurance: Friend Not Foe

Most rehab professionals get into cash-based practices to get as far away from insurance companies as possible. At MovementX however, we believe that despite all of the drama, insurance companies serve a crucial role in the health of our society and we should work alongside them instead of running in the opposite direction. 

There are ample opportunities to collaborate with payers in ways that guarantee you make an appropriate margin on your services while simultaneously offloading the cost of care from the patient. Here is a high-level overview of each of these options: 

• Direct out-of-network billing: In this model, you bill the insurance company your established fee schedule (cash rate) and bill the patient only the balance of what the insurance doesn’t pay. Please note that different insurance companies have various policies on balance billing, so it’s in your best interest to consult each plan’s policy prior to balance billing.
• Billing on behalf of the patient: In this model, the patient pays you your established fee schedule (cash rate) at the time of service, and you submit the claim to the insurance company on their behalf. The insurance company then pays the patient back for the cost of care. 
• Superbilling: This method of collecting cash payment is by far the most commonly discussed. In this scenario, the patient pays you your cash rate and then they submit an invoice (a.k.a. the superbill) to the insurance company and manage the billing independently. While this method does offload the cost of care for patients, it can be laborious and confusing for some, so make sure your process is airtight and easily understood. WebPT has even done some of the upfront work for you by creating a free superbill template for cash-based PTs.

Don’t forget—should you decide to utilize any of the above billing strategies, you must adhere to insurance billing compliance practices. But don’t be intimidated, it just takes a little bit of research and you’ll soon be your own billing expert. 

Conquer physical therapy billing with our highly comprehensive (and totally free) billing guide.

Group Therapy 

We’ve all heard of the group therapy code 97150 in traditional PT models; however, it can be billed in the cash-based space, too—specifically if you’re utilizing any of the three billing strategies above (given that the patient’s insurance plan allows for it out of network). If you’re not collaborating with payers, then consider using group therapy as a means for delivering  discounted cash services. 

I realize that the idea of treating three to four patients at the same time may send shivers down your spine. But, when done correctly, group PT sessions in this model not only helps build community, they make sessions more fun and are cost efficient for all parties. As an added boost to your revenue stream, this methodology also opens up time in the day to see additional patients while still providing a high-quality experience. 

Here is a real life example of group PT session we have hosted at MovementX: 

Say you have three patients on your caseload with similar treatment needs. The first patient is an active 70-year-old who had a knee replacement last year and is still experiencing weakness walking down hill. The second patient is a 65-year-old who broke their ankle 20 years ago and is having some soreness on long walks. The last patient is an 81-year-old who was recently diagnosed with knee osteoarthritis. 

While these three patients don’t know one another, they all have similar strength and mobility goals and live in the same community. These patients have all been paying your $180/hour rate, but have expressed concern about the ability to continue paying it. You recommend a once weekly group PT session at $75 each (get creative here, setting a price point is very personal based on you and your patients’ financial needs.) You are now making $225/hour and the patients get to access your expertise for less than a personal training session. 

Here’s something else to consider: In a group session at a drastically reduced rate, patients should not submit to insurance. You may find that it is actually cheaper for the patient to pay the cost of a full session and then submit to insurance for reimbursement. This is most likely the case if they have met their deductible or out-of-pocket maximum for the year. Be diligent about verifying out-of-network insurance benefits and tracking reimbursement rates so that you can make the most informed decision for you and your patient. 

Sliding Fee Schedules

Many cash-based therapists share the concern that they may not be able to deliver equitable care because of the barrier of cost to certain populations. Well, it’s no secret that the margins on a cash-pay visit are most often significantly higher than those for an insurance based session. Because of our higher margin, we have the flexibility to design a mixed caseload of full-rate and discounted sessions.

One of the ways to offer discounted services is through a sliding fee schedule, which is a payment model providers can use to offer services to those who cannot afford full-priced care. Some sliding fee schedules work on a “donation” or “pay what you can” model. At MovementX, we like to use a fee schedule with a bit more structure. 

We have designed a three-tiered payment model based on a patient's belief around their economic stability and their ability to access health care. We leverage the Green Bottle Sliding Scale model to customize a set of questions that indicates which tier the patient falls into. Most of our physical therapists have a set number of sliding fee schedule patients they will accept per week. 

Customized Plans of Care

In traditional clinic settings, we so quickly fall into standardized care plans such as twice weekly visits over the course of six weeks. However, in a cash-based therapy model where every move isn’t focused around justifying care for insurance purposes or adhering to strict prior-authorization requirements, you can get quite a bit more creative with how you deliver care. 

With every patient we make an attempt to not only review a plan of care from a clinical, goal-oriented perspective, but also from the perspective of the patient’s budget. If the patient can’t afford more than one in-person session per week, we can design virtual accountability check-ins and stretch sessions out every two to three weeks. 

Conversely, if they have the means, we can see patients up to five days in a row to help them achieve their goals faster. 

Regardless, my advice is to establish open communication with your patients about financial goals and limitations to the same extent we do with clinical goals. Not only will this make you feel less hesitant about selling your services (a topic for another cash-based blog), it will also help the patient with adherence to their plan of care. 

To get started designing your payment models, be sure to consult your state legislation and top payer contracts to ensure you’re staying compliant with your pricing models. From there, if you are one of the many rehab therapists who have entertained the idea of starting your cash-based journey but have hesitated due to cost of care, I hope the above tips inspire you to get creative with your delivery of services!