Are you exasperated with health insurance companies? If the reimbursement process and claims appeals are frustrating you and your physical therapy staff, it might be time to consider going from an insurance-based physical therapy practice to a cash-based practice. After all, the freedom to treat patients without answering a health insurance company’s demands is an enticing proposition. An all-cash physical therapy practice is not a one-size-fits-all solution and there are challenges, but it might work for your practice.
What Practices Need To Consider Before Going Cash-Based
Not Entirely Cash-Based
A cash-based physical therapy practice is not wholly cash-based. What these practices have is a financial policy requiring payment when physical therapists render treatment. However, this payment system is not strictly limited to cash only. Cash-based physical therapy practices offer payment options including cash, checks or credit/debit cards. Those patients who have health insurance pay for the care upfront and then submit insurance claims for their reimbursement. Although physical therapy practices that opt to go cash-based never take private insurance, some will still work with Medicare.
The fact is, your physical therapy practice may already be more cash-based than you realize, thanks to higher insurance deductibles and higher self-pay portions. If your practice maintains a policy of payment expectation at the time of service, then your patients are cash patients.
Advantages of a Cash-Based Practice
There are certainly advantages to make your practice all cash-based and avoid spending your time trying to gather payments from health insurance companies. Your cash-based practice can have lower overhead due to decreasing the constraints for claim processing, patient billing, and managed care costs. Probably the best advantage is the additional time that you and your staff can devote to patient care instead of working on insurance obligations.
Going all cash means that you will no longer require billing employees and collections statistics. You will practice in real-time as payment comes at the time of the visit. Say goodbye to pre-certification, recoupment, or review, and the surprise dissents making financial projections challenging.
The transition to a cash-based business does have challenges. A significant problem involves trying to keep patients, bring in new patients and increase referrals. You will undoubtedly encounter patient loss because some clients do not like processing their insurance claims and will choose to go elsewhere.
Reward your patients who choose to stay and get reimbursement by making the process uncomplicated and straightforward. Unfortunately, cash-based practices often appear less service-oriented than those who bill insurance companies. Additionally, many patients will remain within the confines of their insurance company’s participating provider lists. When clients no longer view your practice as a participating provider, you will need to devote additional time and resources to market your practice, draw in new patients, and retain current ones.
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