FAQ: The State of Rehab Therapy in 2022: Cash-Pay Edition

Our most recent webinar, “The State of Rehab Therapy in 2022: Big League Insights for Long-Term Wins,” provoked a ton of insightful questions from viewers—many of which were aimed at panelist Keaton Ray, whose experience as the co-founder and COO MovementX (a nationwide out-of-network PT practice), prompted a flood of questions from those curious how she and her team are able to make their approach work. Fortunately, she was kind enough to tackle these questions for us, so we’re featuring her answers below for the “cash-pay curious” crowd. Take it away, Keaton!

How can you raise your rates with negotiated insurance rates?

MovementX is an out-of-network clinic, so outside of Medicare, we do not sign any contracts with insurance companies and have the freedom to set our own fee schedule. That said, all cash-based and out-of-network clinics still have to adhere to certain regulations behind setting and changing rates, with particular attention needed for Medicare Advantage plans.

Not to get too philosophical with this question, but if you are locked into insurance contracts with low rates that cannot be negotiated mid-year, consider dropping these contracts altogether. Why give up an existing revenue stream? To optimize your revenue generating potential and grow your business, you must eliminate all low-value customers (payers included). In turn, this will help maximize the revenue from your high-value customers and build a more economically efficient business. 

Can you speak more on the settings that can be reached via cash-based service?

This could be another blog article unto itself. Cash services shouldn’t be viewed solely through the lens of payment for a session of therapy—the world is your cash-based oyster! There are an incredible number of populations that can be reached via the cash-based model of care. While you may hear about cash-based services most commonly through the lens of affluent, outpatient orthopedic settings, we are starting to see cash services move into more new settings. In my practice, we are seeing a huge uptick in: 

• Pelvic health and maternity care, 
• In-home vestibular and dizziness,
• Aging adult wellness, and 
• Neurologic conditions.

We’ve also contracted with jail systems, hospice nonprofits, government agencies, and employers to provide non-insurance based services. 

Cash-based care also allows you to design payment models that make high quality PT accessible for populations who are underinsured or economically disadvantaged. You can design sliding fee schedules, small group classes, online services, and workshops that allow education and access to care without the high price point. 

Is there a percentage of revenue share that MovementX has established for its employees? 

When we started MovementX, we promised ourselves that our therapists would be the highest paid in the industry. We studied what the average revenue share translates to in terms of hourly pay in a traditional setting, and decided to flip this model of payment on its head. 

While it hasn’t always been easy to grow a company on these thinner-than-normal margins, we have never compromised on how much we pay our providers. And because we knew our priority was provider pay and we understood our margins from the start, we were forced to design a business model that is capital-efficient and scalable. 

Every business model is unique, so my suggestion is to start with the end in mind and then build (or adapt) your operations and payer profiles in a way that exclusively supports this vision. Don’t compromise your business unit (the profit margin on one session, for example) for low paying contracts or other “shiny objects” that don’t lead to true sustainability.  

How do you manage handling Medicare patients? Do they pay cash also when the service is covered by Medicare? 

There is a lot of conflicting information out there about cash-based services and Medicare, and you should do your homework before venturing into this model. (I wrote about both the benefits and the potential pitfalls of cash-based services in this blog post.) As a physical therapist, there are three relationship levels you can have with Medicare: 

• Enrolled, participating 
• Enrolled, nonparticipating 
• Non-enrolled 

Each one of these relationships comes with nuances around payment and access to care; I recommend doing a deep dive on how they may impact your practice. 

MovementX is primarily non-enrolled, which means we have no relationship with Medicare and, for the most part, cannot accept cash-paying clients for medically necessary services. We have implemented numerous safety measures to screen for and educate these patients to ensure we are compliant with CMS’s rules. However, we do have several physical therapists who are enrolled but non-participating in Medicare, which means they have both a cash-based caseload and a Medicare caseload.  

And of course, you can always treat Medicare patients for wellness and unskilled services (although that introduces an additional set of shades of gray). My best advice? Start reading and learning from all the resources you can, then hire a healthcare lawyer for several hours to help you develop your company strategy.

What happens if a PT tells you the rate of pay they need, and you set the parameters for how many patients they need to see, but they don't meet that number due to low volume at the clinic?

This is a great question and something we take very seriously, as the financial sustainability of our providers is one of the most important factors to us. We have worked for years to refine our interview process to make sure the providers we bring into the company have all the skills—primarily soft skills—they need to succeed. 

Simultaneously, we are very strategic with the resources MovementX has available at any given time to commit to the success of a new provider, whether that’s time, talent, or capital. We are extremely heavy on mentorship and the nationwide community for support with generating referrals and learning from one another’s experience. After the initial ramp up time it takes for a physical therapist to build a cash-based caseload, we’ve found that caseloads stay extremely consistent! 

Thank you, Keaton, for answering these viewer questions and providing her insight on the cash-pay model. If you want more answers to the other questions asked during our webinar, check out our initial FAQ blog post.