Coding and billing strategies for a cash-based practice

By focusing on patient relationships, offering transparent pricing and navigating regulatory considerations, you can reclaim control over your business and build a thriving cash-based practice that prioritizes patient care and professional satisfaction.

Are rising demands from insurance payers overwhelming your practice? Overloaded with forms to complete after five, eight and 10 patient visits? Does it feel like you pour your heart and soul into jumping through hoops, only to have a behind-the-scenes desk jockey who has never seen your patient make decisions about the care you have prescribed? Does this sound familiar?

Reimbursement woes are common in chiropractic practices that rely heavily on insurance for payment. Many DCs find their cash flow depends on the whims of insurance companies and their constantly changing reimbursement policies, which can fluctuate unpredictably. Unfortunately, insurance companies are tightening their regulations regarding chiropractic care and medical review policies, and DCs face additional issues from state legislation that negatively impacts reimbursement rates.

Considering the challenges posed by changing insurance regulations and reimbursement, a cash-based model starts to look appealing, right? While you can’t implement this transition overnight, there are relatively seamless ways to move toward a cash practice. However, it’s important to dispel some common misconceptions about cash practices; many people assume the transition simply means forgoing direct billing to third-party payers, but the reality is more nuanced. By addressing five marketing, billing and coding misconceptions, we can uncover strategies to create a successful cash practice.

Misconception #1:
I will lose a lot of patients if I stop accepting their insurance.

The fear of losing patients often stands as the biggest hurdle for DCs considering a shift to a cash-based model. However, a cash-based model isn’t about excluding those with insurance; instead, it fundamentally reorients the focus from third-party payers to the direct and tangible value you provide to your patients. In today’s healthcare landscape, patients are increasingly willing to invest in their health when they truly understand the distinct benefits of a direct-pay relationship.

To effectively attract this new patient base, communicate your unique value proposition. This means clearly articulating what makes your cash practice different and, crucially, better for your patients. Key benefits to highlight include patient-centered care, which offers more dedicated time with the doctor, truly personalized treatment plans and freedom from the arbitrary limits on visits or modalities frequently imposed by insurance companies.^1,2 A cash-based model champions transparency and predictability: patients know exactly what they’ll pay upfront, eliminating the anxieties of surprise bills, confusing deductibles, co-pays and coinsurance uncertainties.³ Another compelling advantage is the emphasis on wellness and long-term health. Unlike traditional “sick care” models driven by insurance, cash practices can pivot to proactive health and prevention, which often isn’t covered by insurance, ultimately leading to better and more sustainable long-term outcomes for patients.⁴ Finally, the inherent simplicity of a cash practice, no paperwork hassles for the patient and generally easier scheduling, has significant appeal.

Misconception #2:
Targeting patients for a cash model is hard.

Building on what we covered above about communicating value, strategic marketing and branding are necessary, requiring a deliberate effort to speak directly to the audience who values these direct-pay benefits. An optimized online presence is key; your website should be tailored for local SEO, and your cash-based model, value proposition and the specific services you offer should be meticulously explained. Including authentic patient testimonials and compelling success stories can build trust and demonstrate results.^5,6 Furthermore, content marketing plays a vital role. Regularly creating and sharing informative blog posts, engaging videos and valuable health tips can illustrate how your unique approach yields superior results, further drawing in your target audience.⁷

In addition to digital efforts, active community engagement, such as hosting workshops or seminars on specific health topics, positions you as a local expert and fosters deeper trust within your community. Establishing successful referral programs is also essential, encouraging satisfied patients to spread the word, as word-of-mouth remains one of the most powerful and credible marketing tools available. Lastly, forming strategic partnerships with other local wellness businesses, such as massage therapists, personal trainers or nutritionists who also operate outside the traditional insurance model, can create valuable cross-referral opportunities and expand your reach.

Misconception #3:
Your practice must have cash reserves or alternative cash flow before moving to a cash-based model.

Shifting to a cash-based model isn’t about simply charging arbitrary amounts; it necessitates thoughtful pricing and payment structures that simultaneously offer undeniable value to your patients and ensure your practice’s sustained profitability.⁸

Whatever your actual prices, transparent and convenient payment arrangements make it easy for patients to engage with your cash practice. Where legally permitted by federal and state regulations, offering a small discount for payment at the time of service (TOS) can incentivize immediate payment.⁹ For larger care plans, providing flexible payment plans, such as interest-free installment options directly through your practice or via reputable third-party financing companies, can make higher-value services more accessible.¹⁰

Adopting modern payment systems is essential for streamlining operations. Utilizing online payment portals, text-to-pay functionalities and auto-debit systems for memberships significantly simplifies collections and dramatically reduces the administrative burden on your staff.

Finally, effectively managing cash flow during the transition period is paramount. You don’t have to convert to 100% cash overnight; a gradual shift is often more sustainable. Consider implementing a hybrid model initially, slowly phasing out less favorable insurance contracts while simultaneously building your cash patient base.¹¹ Comprehensive financial planning is also non-negotiable. This includes accurately understanding your cost per visit and setting clear revenue targets, critical steps that will empower you to price your services effectively and ensure the long-term profitability of your practice.^{12, 13}

Misconception #4:
I still must work with insurance companies in an out-of-network capacity and bill on behalf of patients who ask.

Operating as an out-of-network (OON) provider, you do not have a pre-negotiated, contracted rate with an insurer. In this model, you retain the ability to set your own fees, and patients pay you directly at the time of service. Patients then take on the responsibility of submitting a superbill (an itemized receipt containing all the necessary coding) to their insurance company for potential reimbursement, based on their specific OON benefits.¹⁴ You must engage in clear patient education regarding this process and explain that while your practice doesn’t directly bill their insurance, you will readily provide a superbill for them to submit. Emphasize that any reimbursement they receive is entirely dependent on the specifics of their individual policy and whether they have met their deductible.^{15, 16} The benefits of this model for your practice are significant: It grants you more control over your fees and the freedom to design comprehensive treatment plans without insurer interference.

Misconception #5.
I have to stop seeing Medicare patients entirely.

The landscape for Medicare patients presents unique considerations. Unlike some other healthcare providers, DCs cannot fully “opt-out” of Medicare; you must choose to operate as either a participating provider or a non-participating provider.¹⁷ A participating provider agrees to accept Medicare’s allowed charge as full payment for all covered services. Conversely, as a non-participating provider, you are permitted to charge more than Medicare’s approved amount, though there is a limiting charge, 115% of the Medicare approved amount, that you cannot exceed. In this scenario, patients pay you directly, and Medicare then reimburses the patient for their portion.

A compliance must-have when treating Medicare patients is the Advanced Beneficiary Notice (ABN) form. For any covered service that is no longer covered (which, for DCs, includes spinal chiropractic manipulative treatment (CMT) for the purpose of maintenance care), you are legally required to issue an ABN to the patient before providing the service. The ABN informs the patient upfront that Medicare will likely not pay for the service; therefore, they will be personally responsible for the cost.

Finally, exercise extreme caution regarding “dual fee” schedules. Charging different fees for the same service based solely on a patient’s payment method (e.g., cash versus Medicare versus other insurance) can be illegal or unethical in many states. Your standard fee schedule should consistently apply to all patients, with any permissible discounts for prompt payment or demonstrated financial hardship offered only where explicitly allowed by state and federal law.

Final thoughts

Transitioning to a cash-based model is a marathon, not a sprint. It requires clear communication, strategic planning and a deep understanding of your practice’s value.

Erin Stubblefield DC, CPPM, graduated from Palmer College of Chiropractic in Davenport, Iowa, in 2006. After several years of private practice, she transitioned to full-time teaching. In 2024, Stubblefield became a Certified Physician Practice Manager. In addition to her role as an Education Specialist with KMC University, she is also the owner of Sunflower Consulting LLC, where she serves as a healthcare and practice coach. Stubblefield resides outside of Kansas City and is a published author and continuing education presenter. For further information, contact her at drerin@kmcuniversity.com.

References

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