This post is an interview of Emily Wegmann MPT, OCS, co-owner of a successful cash-based PT clinic in North Carolina where they specialize in pelvic floor therapy.
Give us the background of your cash-based practice? What are the general logistics: setting type, treatment length, employees, rates, etc?
We are an out-patient physical therapy clinic with a specialty in pelvic floor therapy for both men and women located in Raleigh, NC. We have one-hour appointments for initial evaluations and follow up treatment sessions. We have a flat rate fee of $175 for evaluations and $125 for treatments and submit claims on behalf of our patients, who are then reimbursed by their insurance companies at the out of network rate. In addition, we treat Medicare patients as non-participating providers. We have a separate fee schedule for Medicare which is based on the physician fee schedule for North Carolina. Medicare patients pay at time of service per CPT code rather than via a flat fee. We submit the claims to Medicare on behalf of our patients and they are reimbursed directly by Medicare.
Presently the two owners are the sole practitioners, administrators, billing office and marketing team.
When you started your practice, did you immediately go 100% private-pay or did you start out as a fully or partially insurance-based practice?
Our initial business plan has been based on 100% fee for service, out of network, private practice. We have not considered being contracted with insurance however, it does help that we submit claims to the insurance companies for our patients.
What was the biggest challenge you faced as you started your practice?
The biggest challenge has been educating patients about the out of network fee for service practice model. Many people are confused about their insurance plans and are uneducated about their financial responsibilities for in-network vs. out of network insurance benefits. In addition, they don’t often factor the amount they already would pay out of pocket via a copay for in-network services. We are pleased that approximately 50% of our referrals are actually scheduling. We had estimated in our budget that 1/3 of patients referred would schedule. We have been pleasantly surprised!
What is the biggest ongoing challenge of running your cash practice?
Educating patients about the benefits of physical therapy in a cash based model.
How did/do you overcome these challenges?
We continue to market in a variety of ways; classic marketing to MDs and providers, community marketing via print and radio ads. We are beginning to explore social media via Facebook and Twitter. We find our biggest resource is our website. Many people find us via internet searches.
How do you market to physicians (if you do)? More specifically, how do you explain your private pay model to them and ensure that they still send you patients?
We were well known in our community and had a strong physician referral base prior to starting our practice. Since opening 6 months ago, we have focused on reintroducing providers to our new name, location, and practice model and we highlight all of the benefits of being out of network providers. Specifically, we have done lunches, flyers, thank you cards and other traditional marketing techniques. We make personal phone calls with our providers about the coordination of care and frequently refer patients to them as well as receive referrals from them. We have direct access in North Carolina so for many of our patients physical therapy is the first medical screen for their symptoms. As a result a referral to a medical practitioner may be necessary. We specifically ask potential referring providers that we meet about their specialties are so that we can refer them patients. We have found allies with private practice physicians who are facing the same competition that private practice PTs face with the growth of hospital owned specialty centers and satellites. The team approach has been working great for patient care and for our business.
What would be your best advice for someone who is considering starting/converting to a cash-pay practice?
Don’t undervalue your services! Do your research—determine your fees based on both the physicians fee schedule as well as what your local market will bear. Some regions will thrive with high fee schedules; others may not sustain a cash practice model at all based on market, regardless of the quality of the services offered. Find a good mentor and don’t reinvent the wheel. Use professional services to strengthen areas you feel are your biggest weakness. Find an excellent accountant and health care attorney- work your contacts to find people recommended by your circle. Get involved in your community- your friends, neighbors and colleagues- and previous patients- are your biggest referral sources. Lastly, don’t hesitate! Start today, it was the best move ever! Great quality care, great quality of life! Of course if you can, have the world’s best business partner, I do!
Carolina Pelvic Health Center, Inc.
Emily R. Wegmann, MPT, OCS
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If you have any questions for Emily, please post them in the comments below.
Interested in the cash-based private practice model?
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Great job Emily and Jarod! What other type of cash-service niche practices have you seen flourish?
Golf is a big one. Youth Sports. Triathlon and Cycling. The list goes on… If you can establish yourself as “the expert” in a certain niche, you’ll be able to do quite a lot in the cash-based realm.
Hi Jarod and Emily,
Thanks for the great interview! I’m kind of confused about the way you do Medicare out of pocket, though…can you explain this a bit more? As far as I have learned, PT’s can never take a cash payment for services provided to a Medicare patient. Jarod and I have both blogged about this before, and if there is new information, I would love to have access to it. I am so disheartened by turning away Medicare patients from my cash based practice.
Thank you,
Ann
I guess the 2nd part of my question is: if you ARE seeing Medicare patients as a non-par provider, and you still have to submit bills to Medicare (I think you just have to submit the first one, and then not after that for that patient – not sure – that’s kind of unclear to me) only to have them deny…then you are still opening your practice up for an audit by Medicare, right? So do you have a compliance expert who helps you with documentation? And if you are paying a compliant expert, are you making enough of a profit from treating this patient population to make it worth all of the extra paperwork, risk, hassle, etc? If we could opt out, that would be a different story; but, being non-par makes me apprehensive! Any advice appreciated!
Hi – Great Post – I am confused how you have a separate fee schedule for Medicare vs non medicare patients. I thought Physical Therapy needs to be billed the same to all providers if anyone is being reimbursed by health insurance. Thanks for any inforation.
Hi Ann and Teresa,
These are great questions regarding Medicare and the fee schedule, and a topic often discussed in these and other forums. We will do our best to answer them fully!
Can non-participating providers accept payment up front?
Yes, non-participating providers are technically able to collect payment from patients at the time services are rendered. The claim is submitted to Medicare, and Medicare reimburses the patient directly and passes on the claim a secondary insurer, if applicable, for additional direct patient reimbursement. The patient is responsible for his or her deductible and any allowable charges not paid for by Medicare and other insurance providers. Sounds simple (kind of); HOWEVER, here are the things to be aware of when determining payment:
Fee schedules, limiting charges and the like:
We are not contracted with any insurance provider and are not bound by contracted fee schedule amounts with private insurers. Non-participating provider for Medicare are able to have a separate and distinct fee schedule for Medicare patients based on the physician fee schedule for non-participating providers (see below on how to determine the fee schedule in your region). The separate Medicare fee schedule cannot exceed the standard fee schedule.
Not surprisingly, non-participating and participating Medicare providers have different fee schedules. If you consider this route, make sure you have the CORRECT fee schedule for starters. The non-participating fee is determined by your intermediary (if you live in NC, SC, VA or WV, you can find the fee schedule here on the Palmetto/GBA website; if you live in CA, HI, or NV find it here. See the follow-up answer for additional links if you reside in a different state). Non-participating providers are permitted to charge up to 115% of the designated fee per each code. When you look up the fee schedule for your region, you will find the fee assigned to each CPT code as well as the limiting charge (the highest allowable charge) for each code.
Sounds easy, right? Just find the fee, tack on an additional 105-115%, and you are ready to go. Not so fast.
MPPR (Multiple Procedure Payment Reduction):
The MPPR, simply put, means that the highest billable unit charged is reimbursed at 100% of the allowable amount, and that the values of other codes charged during the same visit will be reduced when more than one code is billed on the same date. Currently, the reduction is 20% for those in private practice but is slated to increase to 50% in April. The APTA website does an excellent job of defining the MPPR and discussing the implications if the proposed 50% reduction goes into effect. Importantly, the patient may NOT be billed for the difference between the fee and the reduction created by the MPPR. This means another calculator and adjustment to the fee before you charge the patient.
Secondary Insurance
The good news is that Medicare automatically pushes any claims directly to the secondary insurance provider when applicable. The bad news is that there is another calculation to be made if a patient has secondary insurance. There is another calculator that further adjusts the fee amount if the patient has another insurer. At last inquiry, it was stated in these terms: ‘Using this calculator is an estimate, not a guarantee that the fee amount will be what we determine when the claim is processed.’
Bottom line:
We are able to collect payment from Medicare patients up front as non-participating providers, but must consider at least three different calculators to determine the exact amount to bill the patient at time of service. Even with all three calculators it is difficult to determine the exact cost the patient would owe up front. For this reason, we have decided to forgo collecting cash at time of service and are now billing Medicare with traditional billing methods (still as non-participating providers). Once the claims are processed, we are informed of the remaining patient responsibility and bill them accordingly. We discuss this openly with patients when they call, let them know that there will be a component of payment that they will be responsible for and answer any questions. It is not ideal however it allows us to continue to work with these patients and make sure that we are charging the patient appropriately.
Sound complicated? Well, we think it is. We are continuing to evaluate the best possible ways to accept all patients in a cash based model. In an ideal world, physical therapists would be able to opt out of Medicare just as physicians do. Ann, we are including a link to your blog (http://www.webpt.com/blog/post/medicare-issues-facing-cash-based-pts) for those who want to learn more about to take action to allow physical therapists to opt out and provide services to Medicare patients in a cased based model.
Best,
Emily & Sarah
Hi Ann,
Again, a great question- and certainly an understandable one!
As nonparticipating providers, we are required to submit the claims directly to Medicare. We don’t know that any type of provider who works with Medicare patients is any more or less likely to be audited, so we are certainly very aware of remaining in compliance with all of Medicare’s rules and regulations.
With respect to documentation compliance, we use WebPT as our EMR system. WebPT integrates all Medicare updates into the documentation program, including integration of G codes and PQRS reporting (there is an added annual fee for PQRS reporting). Our documentation and charges/ CPT codes are then streamlined into our billing system for all patients, regardless of insurer. We can’t speak for other EMR systems; however any that you use should incorporate Medicare regulatory updates. We have been very pleased with WebPT and the webinars they offer on the latest Medicare requirements.
We continue to regularly evaluate the cost vs. benefit of treating the Medicare population as non-participating providers. We consider these patients as part of our community and will continue to offer services provided that our business is still able to thrive while doing so.
If you have more questions or want more details about payment, regulations and guidelines for non-participating Medicare providers, we suggest contacting your Medicare intermediary directly. If you are in Jurisdictions 1 (CA, NV, HI) or 11 (NC, SC, VA, WV), you may contact Palmetto/ GBA here. You can find out who your jurisdiction and intermediary here and here, however it is best to check out CMS directly in the event of more recent changes.
Emily and Sarah
Jarod, excellent interview. Ann great question.
Emily, congratulations on your new practice! I’m just down the road in Greensboro. We should get together sometime.
I’ve always thought filing on behalf of patients is a great value added service. it can take some of their fear about reimbursement away, but that’s a process that takes time away from patients when done with out EMR or an assistant. How does that work with webpt? Is it an option they provide? Or something you had to work around?
Hi Aaron,
Thank you for your encouragement! Yes, we should get together- it is great to meet other PTs doing great things in our area.
We agree that filing for patients is an important service to provide, and helps them feel more at ease with the process.
We have found it easy to submit claims through Kareo, one of WebPT’s billing partners. Our documentation includes the CPT codes for that session, and is pushed directly into the billing system. From there, we audit the charges and submit electronic claims for all insurances, with exception of BCBS (we print those claims).
Those patients with a secondary insurance bring us the EOB and we then submit the claim again for further reimbursement. This takes us a little bit longer but again, is a worthy service to provide.
There is time to get set up with billing, as well as a fee; and of course there is a learning curve to understanding what information you need and in what form. Once that is completed, it is pretty easy and worth the extra time to put our patients at ease.
There are occasional questions that arise (if the insurance is not a typical provider, if there is a rejection or secondary insurance claim that also needs to be filed), but generally we have had positive experiences with almost all insurance providers even though we are out of network/ non-participating providers. If we can’t work it out ourselves, we have excellent support through WebPT and Kareo.
We hope that this answers your questions. Best,
Sarah & Emily
Sara & Emily,
Thank you for the insight and information. (Thanks to Jarod for making it happen!)
I have a new practice that is also cash based. Prior to this interview we were printing invoices for the patients to submit, but would like to be able to submit for them. We also use Web PT and are working with Kareo on billing for Medicare.
When setting up Kareo to bill as an out of network provider, did you need to call Medicare and your local insurance companies in order to determine if they would accept electronic claims from an out of network provider?
Thank you,
John
Hi John,
Great questions.
For private insurance companies I would recommend making a list of all your insurance companies and than each insurance company will need a W-9. Sometimes the insurance may require other information or forms specific to that insurance company. I called each insurance company to determine where and who to send the information to prior to opening the doors. We also submitted with our W9 forms a standard letter stating we were out of network providers and included our group NPI and tax ID number and individual NPI’s.
For Kareo there is a step by step guide on how to set up each insurance company and insurance plan. This is called the enrollment process. A Kareo rep can walk you through the mechanics of the process but we can also help you if you get stuck. Once you have completed the enrollment process for each insurance company than you want to make sure that under the “practice settings tab” under the “insurance company” tab for each insurance company you unclick the box that say ” provider acceptance assignment”. Otherwise all payments will be sent to you instead of the patient. We also called Kareo to make sure that box # 13 was blank and box # 27 said no (do not accept assignment). All claims can be sent electronically regardless of your in or out of network status. With the exception of BCBS, they require you send paper claims to your local BCBS address.
With respect to medicare: to file claims to medicare you must be either a participating or non participating provider and have a PTAN number. Once you have your PTAN number you set up your medicare insurance company in Kareo per their instructions and you are good to go. As we stated earlier we are now billing medicare for our patients instead of collecting fees up front. This has made for some accounting and tracking changes for us but the turn around time for payment is quick, about 2 weeks from the date we electronically send the claim. Palmetto GBA automatically deposits the payment into our bank account. When you enroll in Medicare you fill out EFT so that they can deposit the funds into your account. IT takes about another 2-4 weeks for the secondary insurance company to pay us. Medicare automatically sends the claims on to the secondary insurance for you.
Hope that answers your questions. Feel free to call us if you need more specific details. Good luck.
Emily
Emily,
Thank you for the reply. That is extremely helpful. We are also planning to bill Medicare and are currently waiting for our PTAN. Do you receive any reimbursement from the secondary insurance for Medicare patients?
John
Hi John,
Yes we have received payment from the secondary insurances in the form of a check. It usually comes about 2-4 weeks after we receive our Medicare payment.
Also, if it takes a while to get your PTAN contact your local state/national house rep/senator. We waited 6-8 months for our PTAN and finally contacted our Representative and had our PTAN within 2 weeks.
Emily
Emily,
You have been a great help. Thank you!
John
Emily,
One final question (I think). When you were setting up your fee schedule in Kareo, how did you set your flat rate scale for your non-medicare patients? We have set up our regular fee schedule but were unsure how to put it in for the out-of-network portion.
Thanks again!
John
Hi John,
I would give Kareo a call for those details. I would need to look back through our notes to help you out. You are welcome to call or email me directly. http://www.carolinapelvichealth.com.
Kindly,
Emily
Wow! This is all very interesting. My husband and I have been operating a cash-pay clinic for 4 years in Durango, Colorado. We are doing well, but would love to build the business further. We offer out-of-network billing that is done with a biller and provide EOBs for patients to submit on their own. However, I had no idea Medicare was even an option. Hmmmm. Thanks so much. I will look into this.
Ashlie
Really good info and thank you Jarod for posting it. I know it is great to do the reimbursing for them but isn’t that part of the reason to do cash pay is not deal with insurances?
Yes, some cash practices choose to not submit anything for patients and some choose to do so as a courtesy. I completely agree with your sentiment and that’s why I don’t send in claims. Keep in mind… those that Do send in claims for their patients are still taking payment in full up front, and then any reimbursement the patient gets is sent to them directly (so the practice is not waiting for some level of reimbursement).
Great post! Thank you Emily and Sarah for sharing such detailed information- it was VERY helpful. It is very inspiring to see how you have built your practice. I am also living the the Raleigh area and working towards starting my own practice serving mainly the geriatric population. I plan to become a medicare provider however I have been debating whether or not I should go cash-based for the non-medicare clients. What are some of the resources you used to do market research initially ? I would love to chat further with you one day about the market in the RDU area in relation to cash-based practice and pricing!