Your Cash Practice: Switching to a Cash-Pay Model - Breakthrough

Your Cash Practice: Switching to a Cash-Pay Model

Learn about the process of operating a cash practice. Discover the advantages and disadvantages of running a cash practice for your physical therapy or chiropractic clinic. Understand the steps for getting started with a cash practice model.

Why Run a Cash Practice?

It’s not a secret that physical therapists and chiropractors alike run into issues dealing with insurance payers. Insurance is a major headache for many practice owners. Therefore, many practices are considering switching to a cash practice model or offering more cash-based services in their practice.

Each year, insurance reimbursements go down. In 2022, CMS implemented a 3% cut on physical therapy services and a 15% cut on services rendered by physical therapy assistants (PTAs). In 2023, another 4.4% cut is planned.

These circumstances threaten profitability and leave many private practice owners worried about the longevity of their practice and the future of the industry. 

Switching to a cash practice model can be a great alternative for some practices.

In this article, we break down how Aaron LeBauer started one of the earliest cash practices and why he created the Cash PT Blueprint. In the second part of this article, you will learn how to create your own cash practice for physical therapy, chiropractic or integrated care.

Aaron LeBauer’s Cash Practice Story

Cash-based practices aren’t entirely new: They are already active in the chiropractic space, where insurance benefits have been cut at an earlier stage. As a reaction, many chiropractors already converted their practices to the cash-based model.

In the PT space, this hasn’t been the case until more recently. 

Two major events catapulted Aaron LeBauer on his path to change the PT industry.

First of all, Aaron recognized that patients often weren’t treated as humans anymore. Treatments are often built around what type of insurance the patient has rather than what the patient actually needs. Coming from a traditional, old-fashioned group of physicians (he grew up surrounded by them), he knew that couldn’t become the standard for him.

His goal became to treat patients like real humans and design their treatment based around their real need. He chose to take the time to ask the right questions and build a relationship to treat the patient as well as possible.

Before going to physical therapy school, Aaron worked as a massage therapist. When he became a PT, he was able to see what business practices massage therapists were doing better than physical therapists. It was astonishing how little pay physical therapists accepted given the amount of education and training they have. So when he moved into the PT space, he knew in-network practice wasn’t for him.

He set out to go a different road: He built his own cash practice, and then shared his learnings with others.

He created the Cash PT Blueprint. A course and book for PTs who want to convert to a cash-based practice or take their cash practice and scale it up. Even if you’re in network, you can learn how to add cash-pay services to your practice. 

This is how it works.

How to create your own cash practice

With insurance reimbursement going down and physical therapists requesting higher salaries, shifting to a cash-based practice can be an appealing alternative.

You don’t have to hire people to file claims and complicate your business. As a result, you can have a higher profit margin, generate more income, and keep more revenue.

Steps to setting up or switching to a cash practice

You can’t rely on insurance companies, or in the US, Medicare to find patients for you. You have to put measures in place to make sure those patients are still coming through the door. And, once they’re in: It’s all about making sure that these people are better off than when they arrived.

To successfully set up your own cash practice, there are a couple of important steps to take:

1. Identify your target market

As most patients are familiar with the traditional, insurance-based payment system, you’ll need to define which part of your market is comfortable paying for the service upfront. There may be some regions where a cash-based model makes sense, while others where it is less feasible. Today, it is more common to see cash-based practices in urban areas or regions where the average income level is above average. 

2. Price your services properly

To run a successful cash-based practice, you want to set the right price for your services. To determine this, you’ll need to take overhead costs, an ideal profit margin, and an indication of what the market will pay, into account.

3. Provide fitting payment policies

As you’re not relying on traditional insurance policies, the payment procedure has to be clear for all parties involved. Does payment occur upfront or afterward, and is it done in full or in parts? Usually, those terms are recorded in a policy and procedure guide for billing and collection. 

4. Develop a marketing strategy

Since you’re not relying on insurance companies to drive patients to their in-network providers, you’ll need to put a bigger emphasis on marketing. But this gives you more control over your practice growth and reduces the need to rely on physician referrals. In this article, we break down how you can market your cash-based practice to generate the best results.

Challenges of Running a Cash Practice

Creating a cash-based practice may be the right option for some clinicians, but it’s not without its challenges. 

Here are two of the most common challenges physical therapists and chiropractors face when they start.

1. Convincing patients that they’re getting a better deal with cash-based services

The majority of patients are used to having their insurance pay for treatment and are unfamiliar with the cash-based model. This lack of understanding often results in fear of having to pay more for treatment, than they would have done through the traditional model.

According to the Wall Street Journal, this isn’t completely true. “Patients who pay upfront in cash often get better deals than their insurance plans have negotiated for them.”

If you’re starting up a cash-based practice, convincing patients that the cash-based model is better for their wallet is a conversation you’ll have frequently.

One of the best arguments to make for the cash-based approach is that the quality of the session can be much higher than the traditional sessions because you’re not dealing with the rules and restrictions that insurance companies require.

Practitioners in the cash-based space don’t have to stress about declining reimbursements or changing their sessions to maximize their billings. Instead, they can set a price that covers their costs and makes sure they have a healthy profit. As a direct result, they can put their full attention on the patient.

2. The risks for Medicare patients and cash-based physical therapy

This only applies to US practitioners and patients.

Medicare, a government national health insurance program, has some conflicting elements with the cash-based practice. In fact, it’s not possible to accept cash payment from a Medicare patient for physical therapy services, that’s only possible for non-covered services. Legally, physical therapists cannot opt-out of Medicare, which leaves cash-based services for Medicare patients forbidden territory. The American Physical Therapy Association (APTA) supports legislation that would change this, allowing Medicare beneficiaries to select the health professional of their choice through private contracting. 

The Advantages of Switching to a Cash Practice

Despite the challenges, the advantages of switching to a cash-based practice may be worthwhile to some. At the very least, it is worth considering how you can add more cash-pay services to your practice. 

1. Get to Know Your Patients

This model enables more flexibility around how you structure your time with patients and can deliver higher profit margins for your practice.  

To start and grow a successful cash-based practice the right interaction and attention are required: Slow down the conversation, ask the right questions, and get to know the patient first. 

2. Customized Plans of Care

The second element of running a cash-based practice is that you’re able to create customized programs for patients. This speaks to most practitioners who turn to this model as it allows them to focus on a journey of health and wellness, not just a quick fix. Plus, you don’t have to deal with the pressure of keeping up with the administrative costs of submitting insurance claims.

The transparency and clarity are unrivaled as both parties know that the charges are coming out of the patient’s pocket. No more “We’ll send to insurance and see what they pay” when the treatment ends.

3. Inclusivity

The cash-based model is inclusive.

As payment is by cash, patients aren’t rejected because of the limitations of their insurance. The cash-based model is designed for self-pay patients who are free from outside interference. This allows them to address their circumstances and needs of themselves, not what their insurances deem allowed or necessary.

After all, the cash-based model places the control back into the hands of the practitioners and patients.

4. Attract More Loyal Patients

The fourth advantage of a cash-based practice is that it attracts more committed patients.

In general, it’s safe to assume that patients who pay out of their own pocket are far more dedicated to their treatment plan. This is because they have paid their hard-earned money for it and thus, are more invested in a steady way to recovery.

5. More Time with Patients

Finally, it’s a big advantage that sessions don’t have a maximum duration and there’s no need to worry about insurance approvals.

This makes a thorough assessment of strengths, weaknesses, and imbalances possible. Which gives you a full picture of the potential issues of the patient. As a result, you’re able to work on the right areas and ensure the patient is pain-free again. 

After all, that’s your biggest goal. Right?


Both PTs and patients benefit from a cash-pay model for physical therapy and chiropractic services.

Many owners are incorporating more cash-based services because of the level of freedom and flexibility the traditional systems don’t allow. This way, they stop having restrictions with third-party payers, which prevents them from helping their patients in the best way possible.

It’s important to work through all the pros and cons of your decision of starting and growing your own cash-based practice. This will help you to understand if it’s the right option for your business goals and your patient population.

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