What Is a Cash-Based Practice? Definition for PT and Chiro Owners
A cash-based practice is a clinic paid directly by patients at the time of service instead of billing insurance, setting its own prices and often giving superbills so patients can seek out-of-network reimbursement.
A cash-based practice is a PT or chiropractic clinic that gets paid by the patient, not the insurer. The patient pays at the visit or buys a package, and the clinic sets its own prices, visit length and plan. Rehab Lab, a cash PT client with two Wisconsin clinics, sells packages of $5,000 for 12 visits, $7,000 for 18 and $10,000 for 30. No in-network clinic could design an offer like that, because the fee schedule would decide the price for them.
How does a cash-based practice handle Medicare?
A cash-based practice has to plan for Medicare separately, because PTs and chiropractors cannot opt out. CMS lists both under "Providers NOT Eligible to Opt Out" (CMS), and CMS guidance on Section 1848(g)(4) says claims must be submitted for Medicare patients' services (HHS/CMS). In practice, cash clinics choose one of three paths: do not see Medicare patients for covered services, enroll and bill those patients properly, or build a compliant setup with an attorney. Our Medicare and cash-based PT guide goes through each.
What does a cash-based practice owe self-pay patients?
A cash-based practice owes self-pay patients a good faith estimate of costs in many cases. CMS says that "if you aren't using health insurance to pay for your care, your health care provider must give you a good faith estimate," with the estimate due within 1 business day when care is scheduled 3 to 9 business days out and within 3 business days when it is 10 or more days out (CMS). Most cash-practice EMRs can produce one. Build it into the booking flow so nobody forgets it on a busy Monday.
How does a cash-based practice get new patients?
A cash-based practice gets new patients by marketing directly to them, because it is not listed in insurance directories. That means ads with a specific first-visit offer, a phone answered in five minutes, past-patient reactivation and referrals from happy patients. It is a different skill from running an in-network clinic, and it is the part most owners underestimate when they leave insurance. Start with the going cash-based hub or, if you are opening from scratch, how to start a cash-based physical therapy practice.
This is general information, not legal or billing advice; check your state board and a healthcare attorney before you change how you bill.
Questions owners ask
Can a cash-based physical therapist see Medicare patients?
Only with care. CMS does not allow physical therapists or chiropractors to opt out of Medicare, and covered services fall under mandatory claims submission, so get a healthcare attorney's advice before treating Medicare patients for cash.
Do cash-based clinics take any insurance?
A fully cash clinic does not bill insurers directly, though patients can often submit superbills for out-of-network reimbursement. A clinic that bills some payers and takes cash from others is a hybrid practice.
Do cash clinics have to give price estimates?
Yes, in many cases. CMS says providers must give patients who are not using insurance a good faith estimate when care is scheduled at least 3 business days in advance.