Cash vs. Insurance Based Physical Therapy: What’s the Difference?
Physical therapy clinics operate differently across the board. One main factor drives a lot of the details into how outpatient physical therapy (PT) operates, insurance or cash based. In this article we will explain what it means to be an insurance or cash based clinic and some of the main differences that occur in time, billing, and care for each model. Please note, this is explaining outpatient PT, which means non-hospitalized, non-long term care patients.
Insurance Based Physical Therapy
Insurance based physical therapy is also known as the traditional model for PT. In this model the patient is referred to PT by a provider who may be a primary care physician, a specialist, nurse practitioner, or chiropractor. The provider may have a relationship with the clinic to which they are referring, for example, orthopedic hospitals usually have PTs on staff and will refer “in-house” to their own PT clinics. Fun fact here, a PT referral is actually good to be taken anywhere and you do not have to go to a specific clinic, you have choices, but I guess we can write another article on that later.
Once you arrive to the clinic and are seen for your visit the therapist will write a note and enter charges for the visit. The office will take those charges and bill your insurance company for you and they will get reimbursed at the previously agreed upon rate between your insurance company and that specific PT company. Coverage varies depending on your plan, deductible status, and how your insurance processes the claim.
Some patients receive full coverage, while others may owe a balance depending on those factors. In this model, insurance uses algorithms to determine what is considered standard care. For example, back pain in a person your age “should” improve in ‘x’ number of visits and with ‘y’ interventions. Once that number of visits is met, the cost associated with your care reaches a certain level, or the therapist wants to use an intervention that is not approved for that diagnosis, then insurance will alert the provider and patient as such. Typically, insurance will pay for 2-3 visits per week for 8-12 weeks for routine PT diagnoses and the associated treatment plans. Most insurance based clinics employ physical therapists (therapist), physical therapy assistants (PTA), and physical therapy technicians (techs). Your first session and usually every 30 days thereafter a therapist will see you to perform some type of evaluation. The return sessions are able to be performed by a PTA and in some cases, support staff such as techs may assist with exercises under the supervision of a licensed therapist.
Cash Based Physical Therapy
Cash based PT is a newer model, but has been in practice around Indianapolis for over 20 years, especially for specialty markets, such as pelvic health PT. The cash based model means the clinic does not communicate directly with insurance companies. In this model the patient or client (semantics) may or may not be referred to PT. Fun fact, the amount of direct access to a physical therapist is state dependent. Indiana PT practice act allows 42 days of direct access before requiring MD, NP, PA, etc involvement; another good resource article idea. The client contacts a PT clinic, usually a brief phone call is involved to determine it is a good fit for services, then is scheduled for the initial evaluation. Upon arrival at the cash-based PT clinic you are seen for your visit and a plan of care is determined based on the professional’s training, their experience, your needs, and your input in the decision process.
The therapist will recommend how many times per week (usually 1), how many weeks, and what types of interventions to perform based on what you need. You then pay an agreed upon service price for the visit that is typically a set number and not dependent on which interventions were performed. Payment does not have to be cash; it can be credit card, HSA, FSA, or check. Cash in this case means money is exchanged from the client to the therapist at time of service. Some clients are able to submit a detailed receipt, called a superbill, to their insurance for reimbursement. If approved, then the insurance company would reimburse the client directly. Finishing out the usual experience part of cash-based PT. In most cash-based clinics, follow up visits are often one-on-one with the same therapist and typically last around an hour, depending on the provider’s model. Once you have met your goals and the plan of care is completed, then PT is finished.
Differences To Note Between Insurance vs Cash Based PT
There are several key differences to note in the insurance vs cash-based PT models. The descriptive difference in the name of the model is how the billing is run either through insurance or handled directly by the patient. More differences pop out in the frequency and duration, or how often and how long a client will participate in PT. Also, who chooses that time frame, is it dictated by insurance versus an alliance between a skilled practitioner and the person for whom they are caring. Again, these are typical and usually scenarios that we are generalizing to help explain the difference between cash-based and insurance PT. Ultimately, both models aim to help patients recover and reach their goals; the right fit depends on your personal preferences, coverage, and the type of care experience you’re looking for. In the following resource posts we will analyze the pros and cons for each model.
Stay tuned for more!
By Sara Zehr, PT
