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6 Reasons You Should Start a Cash Based Practice and Forget Insurance

I put together a quick list of the top top six reasons that I would recommend staying a cash based/cash only practice. This does not just mean paper money. It can include credit debit cards, HSA cards, FSA cards, AND paper money. Regardless though, we are going to discuss why I think we should stay cash based and not become a hybrid practice or start taking insurance.

I've been getting this question a lot recently from people who are just getting started with doing their own solo practice. They ask me, "Why should I stay cash based?" or "Why did you (Morgan) stay cash based rather than going down the insurance route?" Since I've been in this realm, compared to when I first started several years ago, there were more people who were very much on the side of the fence of cash only. Now there's probably more people who are in the middle and are either promoting or operating a hybrid practice which looks like both cash and insurance. I think that just goes to show that over time things can change, which is totally fine!

You may be in a place where you're first getting started or you actually did just start your practice and might be struggling to get patients. One thought process that sometimes people have is "maybe if I take insurance then I will get a bunch more patients". While I cannot speak to the actual objective numbers and data for that, I do not believe that that is ever going to be the number one selling point for your potential patients. It might be something that fits your audience, but most of the time people are going to work with you when they understand what it is that you do, what problems you solve, what solution and results they can expect by working with you; amongst other things. The whole insurance piece is just a tiny factor, if anything at all.

If you're just getting started and wondering if you should or shouldn't take insurance, should you just be cash, or you're wondering if you should look into that realm, I want to talk today about the top six reasons why I would stay cash based. I am still only cash in my solo practice. While you're reading this, take what fits with what you're looking for and leave what doesn't. This is 100% my opinion and based on my own experience. It would be worth it to you to look into other information about this as well.

#1 You're just getting started

The number one the reason why I would recommend staying cash based instead of taking insurance is that you are just getting started. You are literally just starting to research opening a practice, what it takes to create a business entity, maybe you just bought my mini course (Therapy Business Basics), which teaches you how to set up your own solo practice. You may not be sure what you're planning on doing. For someone like that, I always recommend just staying cash. If you aren't sure who you're trying to work with, how it's going to look, how you're going to do care delivery, etc. I don't think there's any reason to be looking into insurance reimbursement and setting up contracts. Especially when you don't have a clear path ahead of you. Staying cash makes the whole process of selling visits and packages to patients so much easier. You don't have to worry about a lot of other details.

I also recommend this for people who are just getting started and are seriously considering taking insurance as well. Most of the time I speak with people who are primarily cash based and potentially looking into accepting Medicare. What I recommend doing after you set up your practice, your pricing, and you have a better idea of what you're doing; stay cash based until you reach a certain threshold of inquiries about insurance. For example, if you're wondering about Medicare, I would suggest having a wait list for everybody who contacts your practice and asks about if you take Medicare. Something that I would say would be,

"Great question! I totally understand wanting to know about that. Our practice is not currently accepting Medicare. However, we are planning on looking into it further this year and potentially looking into accepting it this Fall. Would you be interested in being put on our waitlist and then I can contact you when that does come to fruition?"

That way when people contact you and ask about it you don't immediately just say no and then you never hear from them again. Instead, you give yourself another opportunity to reach back out to this person if in fact you do end up going down that route or you have some other kind of offer that might be appropriate for them. You're then creating more opportunities for yourself. Over time, you'll start to gather data of what insurances are maybe most popular in your area or with your audience. Then you're not trying to get credentialed with five different insurances when in your local area there might really only be two that actually would impact your business' operation.

I would recommend setting a threshold for yourself. Maybe it's after 10 inquiries without Medicare. Once you hit that threshold then you'll seriously start looking into how it works and how to get credentials, but otherwise you can put it on the back burner for now.

#2 You plan on staying solo

Reason number two why you might consider saying cash based instead of going down the insurance or hybrid road is that you plan on staying solo. You plan not to scale. This is what my practice has always looked like. I have several friends who do this.

In his book, Danny Matta calls it a lifestyle business versus a real business. A real business is one that scales. You hire and it's with the ultimate goal of being able to step out of always treating or always being in the business. It's something that can grow without you.

What I and the people that I work with typically have is more of a lifestyle business. It's something that I can own and operate myself and continue to treat patients with the goal of it supporting me and helping me with my own financial goals. I don't really have plans to hire any other therapists or anybody else. It has a ceiling and that's okay. If that is you, I think that it would be a lot easier to stay on the cash based side. That's one of the reasons why I do it.

#3 Your practice is a side gig

With reason number three, there are a lot of therapists who start their own practice while they're still working full-time or part-time. If they're doing their own practice and doing it on the side I would highly recommend just staying cash based. If you're just doing it on the side and you're not looking to make it into your full-time thing, I think it's a lot simpler and a lot easier to just stay on the cash based side. You can always change your mind, but as long as it is a side gig for you, unless you're a whiz with insurance, I would recommend staying on the cash based side.

#4 You want to spend time doing other things

Reason number four that I would suggest staying cash based practice is you want to spend your time doing other things. For example, I don't want to spend extra time trying to figure out billing. I know if I spent time learning it then I would get into a rhythm, but for lots of the other reasons that I listed, I don't want to spend the time really to learn and that's okay. Just like for somebody who is really into figuring out insurance reimbursement and credentialing, etc. that's totally okay. Personally, I don't want to spend my time doing that. I want to spend my time with my husband, in the gym, with my dog, doing nothing, doing other things just in life that I want to do.

That could be you or more business related, if you want to spend your time starting to do online coaching or programming, or you want to build and sell a digital product, you won't really want to get into content creation. You just want to do other stuff in the business and find other ways to scale or spread things out and have multiple income streams. If that's the case, then just stay cash based. Then, that way you can use that time to dedicate to other things that you want to do rather than the billing side of things.

#5 It's easier to keep track of your billing

Reason number five is that it's a lot easier to keep track of your billing and do your bookkeeping. This allows you to have a better general sense of your revenue as a single therapist practice without any prior business experience. If you stay cash then you don't have to worry about extra stuff with getting insurance reimbursement. It's very straightforward to charge a patient and you're paid in real time. If you're planning on staying solo and you're not planning to scale, at least for right now, you can always change your mind. You want the admin and operation stuff to be as simple as possible.

#6 You're trying to figure out insurance

Lastly, the number six reason is if trying to figure out insurance, (learning about it and how to submit your billing). If it stresses you out, don't worry about it. That is a totally valid reason to just not want to worry about it. That's okay. There are tons of other ways that you can grow your business and even if you want to just keep it low-key, that's fine too.

If trying to figure out if this whole insurance versus cash versus hybrid thing is something that's stressing you out and you don't know what insurances to look into, you don't know what the reimbursements are, you don't know how it works, and that just feels all super overwhelming to you, don't worry about it. I give you my permission! You don't have to worry about it, or at the very least you can put it on the back burner for a while. The reason you got into this was not to be super stressed out and have a bajillion pieces of paperwork to do.

Those are a few of the reasons that I usually share with people when asked about cash versus insurance versus hybrid. I'd love to discuss everything a little bit more and if you have any other questions feel free to shoot me an email at You can always find more information on my website as well.

Listen to this episode on my podcast!


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