Collection at Time of Service

Your practice may participate with a variety of insurance plans, but you collect copays, deductibles, or other fees that are the patient’s responsibility at the time the service is delivered. This reduces the number of bills you have to send and increases the likelihood of collecting all patients' fees.

If your practice doesn’t currently collect copays, deductibles, and other patient fees from the patient during their office visit, you can modify your policies and procedures to do so, without changing your status with insurers or making major changes in your business model.

This approach has many benefits:

• It avoids the delay — often weeks or months — in collection of these fees that results from waiting to bill the patient after the insurance company has paid.
• It lowers the administrative costs of billing.
• It improves service to patients by providing clear information about costs up front.
• It immediately identifies patients who are reluctant to pay, so you can address their concerns early and professionally.

Limited Insurance Contracts

Your practice owner may decide to participate only with third-party payers whose payment and policies make sense for their business model.

Perhaps you have insurance contracts that pay so poorly that they barely cover your costs. Other payers may insure a very small number of your patients and have procedures that are so burdensome to both your administrative and clinical staff that, despite attempts at negotiation are not worth continuing. At the same time, you may have payers with whom you wish to continue to contract. If this is the case, it is reasonable to retain the contracts that make sense for your practice and discontinue those that don't, adopting a hybrid model with some in-network contracts and some out-of-network patients.

If you keep careful records and know your costs of providing care, you should be able to determine whether a specific payer contract makes sense for your practice. Don't make the mistake of confusing busy with successful. Seeing a large number of patients insured by a specific payer is a good thing only if the payment covers both the cost of providing the care and results in a reasonable profit for your practice. As an out-of-network provider, you can either:

• Collect payment directly from patients at the time of service and provide an itemized bill for them to submit to their health insurer.
• Collect from patients at the time of service and offer to send courtesy bills to the insurer on their behalf.
• Accept assignment, bill the insurer, and bill the patient for the balance once the insurer has paid. (It is best practice to collect copays, deductibles, and other fees that are the patient's responsibility at the time of service.)

Since physical therapists cannot opt-out of the Medicare program and still provide covered services to Medicare patients, some practices choose to be out-of-network for private insurers while continuing as Medicare providers. Read more about limitations with cash-based payment and Medicare beneficiaries.

No Insurance Contracts

Your practice may opt-out of all private insurance contracts and become an out-of-network provider for all patients. You may have patients pay in full at the time of service or bill the insurer directly and bill the patient for the balance not covered by the plan.

Some physical therapists decide to be out-of-network providers when they first open their practices. In other cases, established practices may decide to convert to an entirely out-of-network status.

As an out-of-network provider, you will likely save administrative costs by not having to deal with insurance negotiations, billing, and collections. You will be able to set your fee schedule based upon your actual costs, the value you ascribe to it, and what you determine the market will bear. You are able to make more decisions about the care you provide such as the length of appointments, the number of visits, and the services you provide.

Patients will choose your out-of-network practice based upon the value you provide. As your practice will no longer be listed in health insurance directories, you may lose some of your referrals from participating physicians whose patients prefer to remain in network.

Noncovered Services

Your practice may choose to provide services that are not covered under most insurance plans. These offerings may include fitness, wellness, and health promotion; prevention programs; educational seminars; weight loss programs; and sports performance enhancement programs. For these services, your practice determines the value, establishes the fee, and, in most cases, collects the fee at the time the service is delivered. Some practices offer fitness memberships or enrollment in fitness classes, and may have a different payment model such as a monthly membership fee or set price for enrollment in a series of sessions or classes.