In-Network/Out-of-Network/Cash: Which Is Right?

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The most important considerations before making this vital decision for your practice.

By Lauren Cadman, PT

I have been a physical therapist for 20 years and began my career in a traditional outpatient orthopedic private practice environment that was considered in-network with the majority of insurance companies as well as both Medicare and Medicaid.

Approximately three years ago, I made the decision to open my own cash-pay practice focusing on myofascial release and women’s health. Since opening, I have been able to grow and flourish. The catalyst for my decision was feeling like I was always justifying my treatments and spending too much time on documentation and not enough on patient care. I was finding it difficult to provide my patients with the quality of care that they deserved while being compensated for my skills and expertise.


We all began our physical therapy professional journey in similar ways and for similar reasons: to help make a difference in people’s lives. We begin our careers with our eyes and hearts wide open, focused on helping people rehabilitate, reduce pain, improve mobility, and achieve their goals. Regulations set by insurance companies regarding what modalities are allowed, how many visits we have to treat a particular condition based on a diagnosis code, and how we must document patient care and progress in order to be reimbursed become our new reality. Ever-changing challenges continue to be a source of distress for many practice owners, so it makes sense that we begin to question how we operate our practice. Do you choose to be in-network, out-of-network, or operate an all-cash practice? This is a great question, and although it seems like an easy answer, many factors must be reviewed before you can answer this question and feel confident that you are making the right decision for you and your practice.


Participating in a provider network and accepting reimbursement from an insurance carrier can help drive patients to your clinic. One of the most common questions that you will get from a prospective patient or referral source is, “Are you in my network?” or “What insurances do you accept?” Our society has been trained to use insurance for their medical needs, and they are guided by that learned behavior to seek out practitioners across the medical spectrum who are in their network. If you are in-network, then this of course is a positive for those patients who are seeking to use their insurance for their outpatient physical therapy services, and this ultimately may be less expensive for the patient. What you receive from the insurance company for your services may be sufficient for you to cover your expenses and make a profit. This is, of course, dependent on the insurance contract that your practice has and what your overhead expenses are.

Physical therapists may not receive cash for providing physical therapy services covered by Medicare (Medicare rules are more complicated for services like wellness and fitness services). If you participate in Medicare, you can’t be paid in cash for physical therapy interventions. Depending on your demographics, this may cause you to miss out on a significant number of patients. Medicaid is another area with its own rules that depend on both state and federal regulations.


Going out-of-network can allow us to provide more dedicated one-on-one time with our patients, decreasing the frequency of care that is required, and resulting in more effective and efficient outcomes with our treatment. Many “PT factories” see multiple patients per hour to meet productivity quotas, sacrificing care because we have shifted our focus from the patient to the reimbursement that we receive. This attitude shifts our focus from working for our patients to working for the insurance companies. As we have seen over the past decade, companies try to offset the rising cost of health care and reduce healthcare premiums for employees by adopting high-deductible health plans. As a result, the patient is paying cash toward a deductible, and it may be advantageous to pay cash for physical therapy services that will accumulate toward their deductible. In some cases, out-of-network and in-network deductibles cross-accumulate. Additionally, if your patients have met their out-of-pocket maximum for the year and the insurance is paying 100% of the bill, it may be worth investigating whether out-of-network clinics and in-network clinics are being covered at the same rate by their insurance company.

The inherent assumption is that “if I can’t use my insurance, it must be more expensive.” There are many examples showing the cost effectiveness that a cash-pay physical therapist may provide. Making an argument to your patients in what may be more cost effective can be tricky. While it is important to be transparent with your plan and engage your patient in their plan of care, the most important factor in demonstrating the value of your services is to deliver high-quality care and help patients achieve their goals.

Patients are more likely to succeed with physical therapy treatments if they have an investment into their own health. Many insurance plans will come with a deductible that has to be met before the insurance company will cover the cost of services. After services are provided as an out-of-network physical therapist, we can provide our patient with a detailed bill, called a “superbill,” that they can submit to their insurance company and receive some reimbursement for out-of-network services. As a final note: many of our patients have either a flex care spending account or a health care savings account that they can use for out-of-network/cash pay physical therapy services.


There is a growing trend of medical practices that are catering to self-pay patients in direct response to economic and cultural shifts in the Unites States. Our patients are becoming more educated and conscious in making their decisions for health care. We can take this opportunity to demonstrate that we are the neuromuscular experts and movement experts and therefore their best choice to restore them to their prior level of function and movement. 

What do I need to know to make the decision of whether to be an in-network provider or out-of-network provider?

  1. Is your community right for a cash pay model?
    1. Do some research on the average income of the households in your area
    2. Are there other successful cash practices in the area?
  2. Set up policies and fee schedules to allow you to be successful
    1. Will you have your patients pay up front at the time of service or will you bill them (highly recommend having them pay up front)
    2. Be consistent and transparent
  3. Demonstrate to your patients the value that is gained by being a cash pay PT through level of care and results
  4. Market your cash pay practice
    1. This may be even more important as a cash pay practice and will be enhanced by direct access.
    2. Word of mouth marketing, social media marketing, a robust and updated website, as well as getting out a providing education to potential patients are critical.
  5. Be informed of Medicare rules at it relates to cash pay physical therapy
    1. You can’t take cash pay for covered physical therapy services, only non-covered services can be billed as cash pay to a patient with Medicare or Medicaid
  6. If you’re already running an insurance-based practice, you can survey your patients and find out how they feel about paying cash upfront for services, rather than going through their insurance.

Signs you may be ready for an all-cash practice

  1. Tired of the over-emphasis on production and profit. You must work longer hours to get the caseload in and meet productivity that will allow you to be profitable
  2. Frustrated with the bureaucracy of insurance companies, documentation changes or regulations from insurance companies, third party administrators and government funded programs
  3. Feeling undervalued; not getting paid what you are worth based on the level of education and experience you have
  4. Feeling pressured to reduce quality of care in order to complete timely documentation.
  5. Loss of freedom due to outside influence telling you what you can and can’t do.

Benefits to the patient for paying cash for physical therapy

  1. Cost effective care
    1. Our extensive education and training position us as neuromuscular primary care experts. For most patients with movement problems, physical therapists should be the provider of choice. For people with high deductibles, it makes financial sense to pay a therapist for a comprehensive evaluation and treatment.
  2. Accessibility
    1. Direct access in some form is available in all states. Patients typically have shorter wait times in a cash-based practice and we know through clinical prediction rules that the sooner a patient can begin treatment the faster and better the outcome.
  3. Transparent and affordable cost
    1. For the self-pay patient, finding a physical therapist who offers fair, simple and transparent prices is crucial. Cash-based pricing eliminates the added administrative costs when submitting claims to insurance companies. No more submitting to the insurance companies and seeing what they will pay. Both parties know that the charges are coming out of the patient’s pocket and the total cost is known upfront.
  4. All patients are welcome
    1. Today’s health care consumer has become more educated about their choices for care.
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Lauren Cadman

Lauren Cadman, PT, is the owner of Premier Wellness & Myofascial Release. She may be reached at

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