Should You Take Insurance in Your Physical Therapy Practice?

Is insurance like the primary concern most people have when they're calling you? It's not mine. Mine is am I going to feel better again or am I actually going to be able to jump or bend or use my knee or leg or arm or elbow again? Hey, what's up? This is Aaron LeBauer and if you don't know me, I'm a physical therapist. I own a PT clinic here in Greensboro that's 100% cash based. For the last five years I've been working with thousands of passionate and driven physical therapists just like you to help them create, grow and scale their cash based practice. And today what we're going to do is help you figure out should you choose to be a cash based practice, should you just be out of network or should you just do like what most people are doing and create an insurance based traditional in network physical therapy business. So I want to tell you a little bit about what I'm going to do, what I do. I'll tell you about the three different options and hopefully by the end of the video you know exactly what you should be doing with your business. And be sure you subscribe below so you get more videos. So I started my practice back in 2009 at right after PT school. So I started my career in 1999 as a massage therapist. I started, I went and I learned some MFR techniques and I was using that and massage techniques and next thing I know people are telling me, Aaron, you're the first person who's ever touched me where I hurt. You're the first person out of dozens that I've been to that actually has helped me with my pain. No one's ever touched me where I hurt. No one. PTs, chiropractors, OTs, injections, medications, surgeries, physicians, etc. They've never touched any where I hurt. Until I saw you. I thought, you know, this is going to be the way it's going to be forever. So after six years of that and owning a practice in California, I worked as a mobile therapist. I moved to San Luis Obispo from San Francisco. I moved to North Carolina, opened my business again, Then I went to PT school. I already knew how I wanted to treat patients, but what I wanted to learn was how to give a better diagnosis and prognosis. So I knew exactly what was wrong. So my patients felt more comfortable knowing what was wrong. So I went back to PT school and on my first clinical rotation, like week number three, I saw 43 patients one day. I think I was there until 9 o', clock, doing paperwork. At the end of the day, I couldn't remember the patients that I was working on in the beginning and what I did or even who they were. I'm sitting there doing some manual therapy, some mfr, some mobilizations, with one patient looking over my shoulder at another patient trying to direct their exercises and correct their form. Right? You get it like you've been there. It's crazy. So I decided that day that no one was going to pay me to be the physical therapist that I wanted to be because I knew I wanted to spend one on one time with patients. And I needed at least a half hour, but generally 45 minutes to an hour so I can listen to them, so I could touch them where they hurt and so I could do all the things I'd been doing that no one else was doing and that they were dropping the ball on. They weren't addressing the soft tissue and they weren't addressing the patient's pain or concerns. So my clinical instructor told me, no one's going to pay more than their copay for physical therapy. I got out of PT school, I was already charging $85 an hour for massage. I knew that now as Dr. Labour, like right, people would pay me $10 more. I'm not saying that that's what you should be charging these days because that's way too low. But at the time I didn't have a coach telling me and all my professors told me I was crazy. So I looked into what it would take to be an in network practice. I've worked as a student in that first rotation. My final clinical rotation was a six month rotation. I worked directly with the business owner, basically as a business mentorship in his in network practice. I saw how that works and I've helped advise people, thousands of people, on transitioning from in network to out of network, transitioning in network to cash, creating a cash practice, and even creating an in network and out of network practice. So here's the difference. On one side you have in network, in network practices sign contracts with insurance companies to provide physical therapy at a certain rate. They get patients in, patients pay the copay, the clinic bills, the insurance for the work done with the patient. Insurance then decides what are they going to pay back to the insurance company. Boom. Patient pays insurance company every month, right? Insurance company decides that, you know, how are they going to pay you? In network traditional, you get contracts, you're a Medicare provider, you're contracted, you find a billing company or you do some in house billing and you can make a lot of money and scale really big because there's very low barrier to entry. The only barrier to entry is understanding what is physical therapy and what's it going to do for me. I tell people all the time, if in network clinics who are struggling, we're actually marketing the way that we market our cash based practice, they'd be crushing it. But they're not. Traditionally in network clinics are going to get on insurance panels. So insurance companies send people, they're going to market to physicians, they might do more branded marketing, et cetera. It's just about volume of patients. They're struggling because a lot of insurance based practices are relying on the physical therapy treatment sessions to provide the revenue that's generated. One of the smartest things you could do is use that as your lead generator or loss leader so people come in and they can get into one of your other health and wellness programs. It's the same reason that milk and eggs and bread are always cheapest. And they're at the back of the grocery store because along the way you're going to buy some olive oil, where Harris Teeter gets a huge markup on olive oil. So if you run your in network clinic like that, you market the way you market, you're gonna crush it, you're gonna scale and you know, we just minimize your risk. Because if there's an insurance contract that only wants to pay $32 a visit and you don't want to put six people on a therapist schedule in an hour, then we don't do that. And a lot of times then you get out of that contract. And as an out of network clinic filing on behalf of your patients, you can generate even more money. Mean it's a pretty good deal. So now we move from in network to out of network. What's the difference between out of network and in network? Out of network, you still file a claim for the patients, but you just don't have a signed contract. So the insurance companies are going to maybe ask you to sign a contract patient for patient, or they're going to come at you because it's cheaper for them. But as an out of network clinic owner, you can still reduce the barrier to insurance by telling people, yeah, we do take your insurance because we take your insurance and we process the claim for you and you can get reimbursed at an even higher rate. Are you getting this? A lot of times and it seems really illogical. You sign a contract and the contracted rate is lower than the out of network reimbursement. Rate, but remember, this is different for different people and all their different insurances. So that's out of network. Out of network. You can still fill file on behalf of your patients. If you're going to move from in network to out of network, let's say if you know your cost to provide a service and let's say it's $50 and some insurance like Aetna comes along and says we're only going to pay you $32, well, you can double the amount of patients you see or you just drop them. Basically you're paying me less than it costs me to provide the service. So we're done. And then all of a sudden, maybe they now reimburse you at a higher rate based on the patient's added network benefits. But you can still file on behalf of your patients, which is an easy value proposition. It's a great value add and you already have the infrastructure. So let's say you're out of network, you can do really well, you can scale really well and you still take people's insurance. Alright, then on the left would be cash based physical therapy, or maybe it's for you, it's on the right. Cash based physical therapy. You can go from here to here pretty easily. I'll tell you about that in a second. But you can. But what is this? This is contracting with patients directly, not with the insurance companies. And the patients pay you at the time of service. Out of network. Patients should pay you at the time of service or you should know what they owe you at the time of service, which is absolutely a number you can get so that they're not left with a bill six months later or three months later. Maybe they even pay you $150 a visit because you know, that's what you need. And later on insurance says, yeah, we'll pay $180 a visit and then you get that other $30. Great. But at least you've got that 150 a visit and at the end of the plan of care, the patient's not $1,000 in the hole. Like why would I ever pay that? I mean, if you've had that experience. Comment below and let me. If you've been in networking patients like, I got stuck with this bill, why would I even pay it? I'm gonna fight it with a cash based practice. We're not billing on behalf of our patients, we're not filing claims on behalf of our patients. We give the patients a super bill and the super bill has all the information they need to File a claim on their own behalf. Believe it or not, for a patient to file a claim on their own behalf is easier than it is for me to do it on their behalf. However, their perception of the time and effort it takes is much greater. So that's where there's a little bit larger barrier to the marketing and the sales and enrolling people in a plan of care, which is if I can be successful as a cash based practice and hire multiple therapists or have multiple locations and the in network therapist is using those same strategies, they're going to totally crush it. But they're not, they're not looking at it. And a lot of times their problems are different or they think their problems are different and they're really not. They're focused on the insurance and collecting the claims and I'm not focused on that. I'm focused on helping people and getting new people to see that we can help them. So as a cash based practice, we provide a super bill. Patients file a self claim, sometimes they get reimbursed, sometimes they're told we won't pay, which is not true. Insurance will pay only once you get your out of network deductible. For instance, we had a patient recently who had a $2,000 out of network deductible. This person spent $2,400 in our practice. They filed a claim expecting to get $400 back. The allowed amount for all 10 of their visits or whatever it was, was only $423. So he still had $1,500 and change to reach his out of network deductible. And then beyond that, they were only going to pay 40% and he owed 60%. So insurance isn't really straightforward and they don't want it to be because their goal is raising their share price. My goal is helping patients and feeding my family. So the easiest way is cash. So how do you go from in network or out of network to cash? Well, if you're already in network, you've got things set up, you've got your billing set up and everything. My recommendation would be go out of network. Just start dropping the lowest paying contracts. Continue to file claims on behalf of your patients. Happy. If you just don't want to deal with that at all, or let's say you want to completely downsize and just go to one person. You can drop all that, give a super bill, but once you go to one person, you lose this asset that you've built up that now only relies on you. So my recommendation would be to Stay out of network. It's just semantics at that point. But you've already got the system set up. If you're going to start from the ground up, which one would you start with? My recommendation would be start cash because you can get started right away and you can then add the systems to bill out of network. But to bill out of network, you don't have to sign any contracts. You just figure out, okay, am I going to use a EMR system and contract with a clearinghouse that's going to take 8% of collected and I'll file on behalf of my patients. Then all of a sudden you're out of network. It makes it a little easier for them. Lower barrier entry to you. But you can't start charging less. You actually have to charge more because it's going to cost you more to collect. You get it? So what you need to know is how much it costs you to do business, how much you actually want to deal with insurance companies. Do you have support staff to do it for you? Because I don't like doing it myself and it can be really frustrating. And so which of the three do you want? And there's no problem being a hybrid. You do Medicare and cash, Medicare and out of Network, Blue Cross, Medicare and cash or in network with everyone except two insurances. So in network and cash, whatever it is, decide how you want to serve patients, how you want to spend your time and focus for yourself and your staff and your business, and then go out and build yourself a business and create your systems and rinse and repeat and go help hundreds of thousands, if not millions of people avoid unnecessary surgery and expensive imaging so they know they can get PT first. And in order to do that, you have to learn marketing. One thing to never say, never go out and say, we don't take your insurance. No, don't take your insurance. Is insurance like the primary concern most people have when they're calling you? It's not mine. Mine is am I going to feel better again or am I actually going to be able to jump or bend or use my knee or leg or arm or elbow again? When is it going to heal? That's my primary concern. Don't make insurance the primary focus of your business and choose one of the three models that works best for you. So if you want to get more instructional and helpful and hopefully entertaining videos just like this one, hit subscribe below and comment below what kind of business you have and check the links out because I've got a free book. It's called the Cash PT Blueprint how I built and scaled a successful Cash based Practice. When everyone told me it wasn't going to work, it was crazy, it was unethical and no one's going to pay more than their copay for pt. I want to give you the book for free. All I ask is you pay shipping and handling. Find the book below or go check out cashptblueprintbook.com this is Aaron LeBauer and I'll see you on the next video. Sam.