Typically when you think of hybrid in PT, you think of hybrid care (in-person vs. virtual care). More recently, however, there’s been discussion about hybrid as a business model: combining in-network, out-of-network, and cash-pay options. Why? Patients are increasingly looking for flexibility in how they access and pay for treatment, just as practices are looking to diversify revenue streams.
Many practices find that offering options for payment and care through hybrid business models can attract more patients to PT and help remove some of the barriers to entry. This not only leads to improved completion of care rates, but also optimization of patient outcomes. In fact, WebPT’s PT Patient Experience report shows that of the patients who dropped out of PT, 34% of them said that treatment was just too expensive or that their insurance ran out.
Of course, navigating the maze of insurance and Medicare compliance when it comes to cash pay isn’t easy. There are a lot of rules around this. In particular, if you work with Medicare patients you must tread very carefully, and those with payer contracts need to look at the fine print (or better yet, contact a legal consultant). But, cash-pay options for physical therapy can offer a lot of benefits and there are ways to dip your toe into the water before taking a leap.
Adopting a Hybrid Approach to Cash-Based Care
Patients are taking a much more hands-on approach when choosing treatment programs—44% of patients are choosing clinics without a doctor’s recommendation, and 89% of all patients use other factors, like social proof and schedule flexibility when deciding where to seek care, according to the aforementioned report. With patients playing an active role in selecting their care providers, they’re also more interested in cost transparency and alternative payment options.
There’s a persistent perception that cash-pay services are only for the wealthy but, in reality, rising deductibles are a greater obstacle to care access than ever before. If a practice’s cash-based prices compete with some insurance out-of-pocket costs, patients may choose to cash directly to the provider to avoid exorbitant deductibles (of course, if their insurance allows). Therefore, offering cash-based care can be an effective way to remove obstacles to care access for underinsured patients who don’t have PT benefits.
Cash-pay options allow therapists to adhere to a set self-administered fee schedule for services and free both providers and patients from restrictive insurance coverage. Of course, reimbursable services still provide a reliable revenue stream for many practices, you just have to make sure to follow the correct order of operations.
Clinics established as cash-based can bill some 3rd party payers and accept out of network benefits, but traditional practices working with Medicare patients, regardless of your status of participating or non-participating, cannot accept cash-pay for treatment services covered by Medicare — only non-covered services. And some payers, like Medicare, may have rules around establishing separate tax IDs and separate treatment areas for cash services. But the beauty of cash-pay business models is their flexibility—contrary to what many providers might think, transitioning doesn’t have to happen all at once.
Launching Cash-Based Services Gradually
Instead of completely dropping out of the insurance game (and remember, you can’t “opt-out” of Medicare), practices can gradually introduce cash-based services that aren’t part of their normal offerings and not covered by insurance. This allows the team to get a feel for handling cash-based revenue streams while assessing the patient impact and overall marketability of these services.
Services that are generally quick and easy to incorporate into flexible care models include:
- Telehealth appointments
- Wellness services (e.g., massage, infrared therapy, cryotherapy, and health screenings)
- Fitness services (e.g., personal training, recovery sessions, and group exercise classes)
- Retail offerings
Not only do these types of additional services enhance lead generation and diversify revenue, but they also naturally help with retention. Patients may start out with insurance-covered care, but then choose to take advantage of cash-based wellness services.
When patients reap the benefits of extra services offered to them, they will be more likely to stick with their course of care and refer others as well. This naturally brings substantial benefits to clinics, as it can lead to increased referrals and better overall business outcomes. Adding these services gradually and in accordance with insurance contract regulations can help traditional practices explore cash-based treatment as an alternative revenue stream.
Flexibility for patients leads to diversification options for practices—when you’re not tied to a single model, you may avoid the effects of changing reimbursement rates or other economic factors. Offering cash-pay options can be a competitive advantage over other clinics in your area that may still be operating under the traditional insurance-only model. Best of all, a well-executed hybrid payment model can lead to strengthened patient loyalty, referrals, and retention.
Want to understand more about the best marketing strategies for winning over potential and current patients? WebPT and MEG Business are teaming up on May 24th at 9am PST to discuss how to “Double Your Reach: Marketing Hacks for Inside and Outside Your Practice.” Sign up today!
The webinar will be roughly an hour long (with 45 minutes of presentation and 15 minutes of live Q&A). If you can’t make the live event, don’t worry; everyone who registers will receive a recording at a later date.