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What You Need to Know to Open a Physical Therapy Cash Practice


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I am concerned about something I see more and more with private practice physical therapists and that is the ease in which we place blame on an insurance company for patients who do not get better. I hear things like, “Their insurance company cut them off" or “The patient could not afford the co-pay so I had to discharge them" amongst many other things.

There are really two games at play here. One of them is the game of figuring out what is going on with a patient's condition and restoring them to optimum health. THIS game is fun, challenging and rewarding. There is tremendous pride in the playing of this game.

The other game is trying to receive an equitable exchange for the work you did in restoring a patient's health and function.

It seems like it should be like buying a pound of bananas at the store. You receive the bananas and pay the cashier on the way out. You receive the treatment and you pay the receptionist on the way out. Simple.

There is another sub-game at work in receiving compensation for your service. It is not like buying bananas, it's WAY more complicated than that. The insurance company is playing a different game and this game is not in alignment with the game that both the physical therapist AND the patient want and that is simply to be “fixed. "

The insurance game is loaded with unforeseen barriers, complexities and ever changing “rules. "
I am not saying that insurance is without value because it really is valuable to the consumer. There was once a time when insurance companies were working more in coordination with providers to ensure that there was high quality delivery of services and they exchanged back for those services rather well AND with significantly less documentation burden. It's different now.

You hear over and over about the “high cost of healthcare" and this is true. It gets communicated in the press and any time the subject of healthcare is discussed. It does cost more to deliver.

Salaries are insane compared to the amount of revenue a physical therapist can make in the current healthcare system. The cost of goods is not coming down so I agree fully with the high cost of healthcare. What is NEVER communicated in the press is that the insurance companies are not paying for the “high cost of healthcare" YOU AND YOUR PATIENTS ARE!

Reimbursement is reducing, co-pays and deductibles are increasing, providers are signing up with insurance companies on a “case-rate" basis and have to eat any services above the case-rate. Not to mention the costs associated with getting paid with waiting on the reimbursement, the fact that they can pay you and then months later ask for the money back, and the time spent with over-the-top documentation and account follow-up time answering their queries. Couldn't we just sell bananas?

We see physical therapists and physiotherapists from all over the US and Canada and I have never heard one of them complaining about the “frustration" of treating patients. That is where their passion lies directly. It is the red tape of being reimbursed for those services that stresses one.
The above is only some data to wake you up but my concern is really on the patient. I am truly concerned with the final result with our patients and just how much sacrifice will be made in the future to achieve those outcomes.

If physical therapists start going weak on making sure that the patient gets a great outcome it will begin to weaken the profession. Our outcomes are largely affected by this financial arrangement with the insurance carrier.

Here are the options as I see them on a patient outcome when the insurance carrier is cutting services or not covering what is needed for the patient and who is ultimately making the sacrifice:

1. Discharge the patient early. This results in both patient and profession sacrifice.

2. Continue treating the patient. Without additional compensation this results in PT sacrifice.

The lucky guys who are not in network have the option of having the patient pay cash for additional services beyond what the insurance considered UCR but most everyone else who is in-network cannot and have to resort to number 1 or 2 above.

Sure there are barriers to putting up a separate cash practice. I will not deny that. You have to figure out how to get doctors and patients to refer but you already have that now with your current practice. You have to figure out how to get patients to pay maybe $50.00 a visit but co-pays are almost that high now and if you are not collecting them you are committing fraud so you already have to figure out how to “sell" those co-pays.

The barriers to opening up a separate cash practice are something YOU CAN DO SOMETHING ABOUT! The barriers imposed by the insurance carriers are complicated and always changing. Ask yourself if you think the insurance game is getting more simplified and efficient or complicated and decide what you should do next.


Shaun Kirk is Co-Founder of Measurable Solutions Inc. , a consulting firm engaged in all areas of business management. Measurable Solutions trains entrepreneurs and executives how to be consultants to their own businesses, so they not only can expand their own business but any business. With his partner, Jeff F. Lee, he has built the most rapidly expanding company of its kind in the world. Visit his website at or his blog at


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