Exploring Physical Therapy Models: Cash-Based vs. Insurance-Based Approaches

In the dynamic field of physical therapy, two primary models stand at the forefront: cash-based and insurance-based practices.

My video, “Cash-Based VS Insurance-Based Physical Therapy | Pros and Cons,” sheds light on these models, drawing from my years of experience in both.

If you’re a practitioner looking to gain clarity about these models, this article will provide a clear understanding of how these models impact the quality and accessibility of physical therapy and overall life, guiding you to make informed decisions in this crucial healthcare sector.

Understanding Physical Therapy Models

As an experienced physical therapist, I want to guide you through the key differences between cash-based and insurance-based physical therapy models.

Cash-Based Physical Therapy

In this model, patients pay directly for services and give them the option to see you as an out-of-network provider. Patients can choose to submit on their own for reimbursement through their insurance companies and will often get reimbursed according to their out-of-network benefits. It allows for a personalized treatment approach and greater flexibility, as insurance constraints don’t limit therapists.

Insurance-Based Physical Therapy

Conversely, this model works within insurance policy frameworks. Treatments are often influenced by what insurance covers, making therapy more accessible due to lower out-of-pocket costs, but often at the expense of treatment flexibility and quality.

Both models have merits and challenges; the choice depends on individual goals and circumstances. Let’s explore these models to help you determine your physical therapy business goals.

Pros of Cash-Based Physical Therapy

I’ve owned my cash-based practice for over ten years and have seen firsthand the benefits of the cash-based physical therapy model. Let me share with you why this approach can be highly advantageous for both therapists and patients.


The schedule aspect can be on every pro and con list, depending on your perception of each schedule. I enjoy the schedule in a cash-based world because I can seamlessly manage it if I have something to do, whether picking up my kids from school or going to one of their sports games. It allows time to do things that are a priority for me, whereas an insurance-based practice makes that a little more complicated, which I’ll get into later on.

Direct Patient-Therapist Relationship

In a cash-based model, the direct financial relationship between patient and therapist fosters a more personalized care approach. I can tailor treatment plans to each patient’s unique needs and goals, directly correlating with our ability to address their needs better. In addition, since patients are paying upfront for their services, patient compliance in the cash-based world is excellent. Patients who have committed to pay out of pocket for our services are vested in their recovery. This helps immensely with patient outcomes and your success rate as a clinician.

In that same vein, I was finishing up a session and had a patient cancel. This allowed me to extend the session with my patient, tackling something I wanted to work on with them next time. They understand that time equals results, and for us, time and results equal income.

Quality Over Quantity

In a cash-based setting, the focus is on the quality of each session rather than the quantity. This means more intensive and focused treatments, leading to quicker and more effective results.

In that same vein, I was finishing up a session and had a patient cancel. This allowed me to extend the session with my patient, tackling something I wanted to work on with them next time.

By prioritizing quality care, I aim for long-term health benefits rather than short-term fixes. This approach addresses not only patient’s current concerns but also equips them with the knowledge and skills to manage their health in the future.

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Cons of Cash-Based Physical Therapy

While the cash-based model offers several benefits, it’s important to acknowledge its limitations. I believe in providing a balanced perspective, so let’s discuss some of the challenges of this model.

Business Scaries

The ‘business scaries,’ which I like to call, are the number one reason people may fear opening their cash-based practices.

When I first became a physical therapist, I had no intention of entering a managerial role. But when I decided to start my own practice, I had to face the business side of it.

During the schedule I was building when I started, I had openings that I used to figure out the business side, whether it was working with the web designer or trying to optimize SEO or SEM. The business aspect takes a little research, but you can do it. And if you are struggling with the business side by yourself, consult people with experience.


What I like about the schedule in a cash-based practice is you get paid for seeing patients. But you have to go out and see and work hard. The hours can become a little crazy, however. There were times I was seeing patients at or before 5:00 a.m. While I liked that, not everyone will.


With great power comes great responsibilities. You’re now moving out of the realm of just a patient-clinician into a business owner and an advocate for your entire business. You have to communicate directly and manage every little aspect of your business, which can be difficult for some people.

Limited Accessibility

From a practitioner’s standpoint, this model can limit the patient base. As a therapist, I might miss out on serving a broader demographic that cannot afford direct payments, which can be a significant consideration in practice.

Pros of Insurance-Based Physical Therapy

I’ve also worked extensively within the insurance-based physical therapy model. This approach has its own advantages, particularly regarding accessibility and financial feasibility for patients.


In an insurance-based environment, you will have more stability in your schedule. You’ll have planned and expected times about when you’ll be at work and when you’re not.

It will also be very systematic regarding how many patients you will see and how full your schedule will be. An insurance-based environment provides a stable, everyday schedule.

It also provides a stable paycheck. When you sign on for insurance based, you sign on for a salary.

Cons of Insurance-Based Physical Therapy

I’ve observed several challenges within the insurance-based physical therapy model. While it offers stability and standardized care, there are downsides that practitioners should be aware of.


For me, the schedule in an insurance-based practice is something I particularly don’t like. If you have other priorities in your life, like I do with my kids, adjusting your schedule can be a burden.

To go along with that, it can be challenging to take off for holidays. In terms of yearly planning for your schedule, it’s difficult to prioritize your personal needs in an insurance-based environment.

Paperwork Burden

Dealing with insurance companies involves complex billing processes and paperwork. This administrative burden no doubt takes away from the time and energy most of us would prefer to dedicate to patient care and time with your family.

Insurance reimbursements can be delayed, and in some cases, claims may be denied. For a small business, the uncertainty of payment would make surviving very difficult. Larger companies can manage the delay and uncertainty of payments by treating such a larger volume to account for this. However, these issues create added stress to the therapeutic process.

Pay Structure

Assumingly, if you become a physical therapist, you want to work hard and help your patients succeed and get better. The pay structure in an insurance-based practice doesn’t reflect your hard work. Let me explain.

The pay structure doesn’t reflect your work ethic and is not results-driven. There is no direct correlation with improving your patients, which is why we’re in this field of work.

10 years ago, when I was still in an insurance-based practice, nothing reflected our patients’ satisfaction with our work. It was very number-oriented. Those being our productivity numbers, which decided whether or not we would get a bonus or other incentives. But the numbers were unattainable, and I didn’t like that I couldn’t see customer satisfaction.

Making the Right Choice

I know firsthand that choosing whether to start a cash- or insurance-based physical therapy practice can be complex. It’s not just about the treatment but also how it aligns with your schedule, financial situation, mission, and goals.

Don’t hesitate to consult people with experience. They can provide insights into how different models suit your business goals. Talking to others with experience in both models can provide valuable real-life perspectives that might influence your decision.

Navigating the Path to Optimal Physical Therapy Care

Each model presents its unique set of advantages and challenges; the choice ultimately depends on the kind of care you want to provide for your patients.

Whether you opt for the personalized care and flexibility of the cash-based model or the stability and standardized protocols of the insurance-based model, it’s important to make an informed decision that aligns with your specific circumstances. Remember, the quality of care is paramount in both models.

I encourage you to weigh these considerations carefully and seek professional advice if needed, as your choice will significantly impact your physical therapy journey.

About the Author
Dr. JJ Thomas, DPT, MPT, CMTPT
JJ Thomas is the owner and founder of Primal Physical Therapy and Primal University, located in Bryn Mawr, PA. She is an instructor for Evidence in Motion, and lectures and speaks nationally on the topics of Dry Needling, Functional Movement Analysis, and Functional Anatomy. She has been published in IJSPT for her contribution to a commentary on dry needling and consults as a content expert for organizations such as the APTA and FSBPT. In this role, she played a large part in the addition of a CPT code for dry needling through the AMA and was on the task force that helped identify competency standards for dry needling education nationally. JJ works with US Field Hockey teams, and individuals from US Lacrosse, US Polo, USA Track and Field, NFL, NBA, PLL, MLB, and more.
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