Before You Offer Cash-Pay Services: What The Law Actually Requires

Before You Offer Cash-Pay Services: What The Law Actually Requires

Offensive Compliance: Moving Beyond The "No" Mentality 

Welcome to this edition of the Compliance Marathon, fifteen minutes of action-packed compliance talk. It’s not going to be regular compliance, Daniel. It’s going to be the exciting stuff. The stuff that allows us to make some money and to actually, I don’t want to say weaponize compliance, but go on offense with compliance.

Daniel Hirsch, CEO, Founder, is the compliance guy. He’s the owner of Risk and Compliance Analytics, my favorite compliance guy on the internet. In this episode, we’re going to talk about what to consider from a compliance perspective around adding cash-pay services. We’re just going to let Daniel riff off of that and see if we can add some value. Daniel, take it away. What do we need to know about adding cash-pay services to private practices?

All right, awesome. Thank you, Adam. Thank you again for having me. Last time, again, that was a loaded topic and of course, I tried to jam too much detail into a short amount of time. Rookie mistake. I’ll stay on target, though, and let everyone know what’s necessary before you start offering cash in PT private practice. I love the way you said offensive. It’s 100% true. A lot of times, people think historically, what you think of compliance is like, “You can’t do that.” That’s all you hear.

Too many rules. Nobody likes it. It’s terrible.

The truth is, you just have to stay within the boundaries, and there’s a lot of grey area that you have to navigate towards. This is one of the biggest ones. A lot of times, people are like, “I always lose money on compliance and legal fees. It just never gives me anything back.” The truth is, if your compliance is not helping you expand in your practice, then you need to think differently.

Avoiding The Trap: Medicare Red Flags And Pricing Integrity 

A lot of practices are adding cash services right now, like wellness, performance memberships and stuff like that. On the surface, it seems simple. Patients pay directly, there’s fewer headaches but compliance really does matter. The biggest misconception, Adam, is that when you have cash pay, there are no rules. The truth is, in reality, legal and compliance obligations don’t disappear. They’re just differently involved.

Some risks actually increase if the program isn’t really structured properly. The whole idea is that you have to build it correctly. Let’s talk about what rules still apply. You still have state practice acts, the professional licensure, and consumer protection laws. You’ll also have maybe advertising standards and also, everyone knows fraud, waste, and abuse.

The gloves are off. Everyone is talking about that with this administration. If you also treat Medicare and Medicaid, then you have to be very careful because obviously they’re fully funded, they know exactly what they’re doing. The biggest trap when it comes to Medicare patients, I’ll start with Medicare. People think you’re billing Medicare patients for cash for services that are otherwise covered.

It’s a huge red flag when you try to switch somebody to a cash-based fee when it’s a covered service. That’s a huge red flag. Unless it’s statutorily not covered, you can’t do that. You can’t opt out. It’s not like you could just hand off that magic ABN form and be like, “Good luck.” I’ll say this again, Medicare beneficiaries simply can’t pay you cash.

If that’s what you want to do, you should stop and figure out first of all, is it allowed, is it a covered service, and where do I go when it comes to this? Let’s talk about, I guess, pricing. Pricing, we see packages all the time. We see creative memberships and discounts. The biggest issue is actually being inconsistent. The reason I say that is because self-pay pricing, if it’s not clearly defined, has to be documented very well. The consistency raises issues because if a discount looks selective, and I think you know where I’m going with this or discretionary or discriminatory, that could be a huge problem.

There are no buddy-buddy deals.

No, we call that the Boston deal. It can’t be. Practices, they need to have real clear policies to explain the pricing, the refunds, and what’s included. This also means for policies to describe exactly how it works without other exceptions. You cannot discriminate, it cannot be selective, and when you are applying discounts, you need to make sure you are giving a good-faith estimate.

I think we alluded to that a little bit last time. Is that on file? Is it transparent? You don’t want it to be your secret. You may be thinking like, “I’m just going to be offering this really great program, but I’m not going to tell anybody. It’s just going to be this quiet hush-hush.” It cannot be. It has to be transparent. I mentioned good faith estimate. There’s actually a really good webinar that I put out already on my website that really breaks down exactly how to do it, what’s needed, what’s necessary. It takes about five minutes to learn this. It’s very short, very easy. Definitely check that out.

There’s no point recreating the wheel on this. It already exists. The content, the guidance, it already exists. I think most providers understand that documentation has nothing to do with insurance. I get this question all the time. “What about my Aetna? What about my United?” The AMA is defining these codes. It doesn’t matter if it’s cash or commercial or federal.

A lot of times, also, owners will forget that the primary goal is to protect their license. You worked very hard to get this license,and you paid a lot of money. CEUs cost a lot of money. This costs nothing to learn and to grow as a practice owner. These things should be readily available. We’ll actually be speaking about this a little bit more and providing guidance on documentation, coding, and billing.

I think that’s for the next episode. We’re going to be talking a little bit about this with RTM. It’s one of my favorite topics to talk about. For years, really, I’ve been listening to a lot of Medicare auditors and speakers about what’s required in notes. You could even listen to this every month if you want. If you have a hard time falling asleep, you could go listen to these webinars. It’s terrible. Adam, 99% of this stuff is the same regurgitated content over and over again. They’re saying the same thing month after month, year after year. I’ll try to be respectful, but it hasn’t changed. Nothing has changed when it comes to the standard for documentation.

It’s not that complicated.

It really isn’t. You’ll hear staff, you’ll hear owners make excuses all the time of like, “They’re a new grad,” or, “They’ve been out for forty years,” and the truth is, it’s the same. The baseline is the same. There is a minimum requirement that everyone should know, regardless if you’ve been practicing for three decades or if you just got out last week.

To be clear, Daniel, not to interrupt, but this documentation requirement, no matter if you’re Medicare, cash, all of these documents, you can’t take off your PT hat.

The "PT Hat": Protecting Your License While Differentiating Scope 

You know what an attorney once told me? An attorney once told me that you can never take off your PT hat. Even if you’re a fantastic yoga instructor, this is just a random comment, but let’s say you want to do some yoga at night in your PT clinic. Guess what? You’re still a PT. You need to make sure that your practice act, that your licensure is being protected. Even if you claim and pretend to want to be doing something else, you can’t remove that title from yourself.

If you want to start offering cash services right now, you need to define what the services are clearly. You have to align your pricing, make sure that’s very clear. You also have to draft waivers and consent forms and you also have to designate services that are outside of what traditional therapy is defined as. You have to know, “This is what my therapy treatment is, and this is what my unique service is.”

They can’t be the same, in my opinion. Also, check with your liability insurance. I know that’s one of the things that most people don’t do and it’s usually because it’s often covered under your insurance, but it takes sixty seconds to find out the answer. It’s always worth just calling your carrier if it’s HPSO or CM, whatever it is. You could just say, “This is what I’m doing. Is it covered under my policy?” They’ll say very quickly yes or no.

A little bit of a cheat code. Just grab your policy, throw it into ChatGPT and ask it and it’ll probably tell you. It’ll probably get you pretty close.

It probably will. The truth is, you probably have some insurance agent, some rep that’s supposed to be answering this stuff. The answer is, if you don’t have it, they could easily add it as an addendum or amendment. Very easy to do. That’s one of the specialties that we do. We draft waivers, consent forms, and we make it very simple, very transparent. That’s what people need to be doing if they want to have cash services.

It was rapid fire, but I wrote down make sure that you have your consent forms. Make sure that your pricing is transparent, good faith estimates, and also you’ve got some documentation that shows why these cash-pay services are not the same scope as traditional covered therapy services.

Correct, because you don’t want to start entering that space. Once you start entering that space, now you have to deal with other contracts .it just gets very complicated when you’re trying to do something too similar. It’s always better to just go a separate route and say, “I’m distinct, I’m unique and this is why my services are worth X, Y, and Z.”

Operational Excellence: Documentation And Liability Cheat Codes 

The next thing is that documentation guidelines are still going to apply no matter if you’re billing cash. That’s a big one. I’ve never really considered that. I’m glad you said that. It’s too easy. Go to your EMR and create a cash service template, whatever that looks like, and make sure that you’re either using an AI scribe that is Medicare compliant or that you’re following the guidelines. The last thing I have is check with your liability insurance company just to ensure that you’re covered on that side as well. Did I miss anything?

No, that was it. That was really good. I wanted to make sure that we were very succinct and concise with this because it’s not complicated. People think someone down the street is doing this or they heard somebody say some crazy thing on a webinar and the answer is, it’s easy to stay in bounds with this. It’s very easy. Is ChatGPT going to help you a little bit?

Yes, but at the end of the day, you still want another pair of eyes that has expertise in this area. This is something where it could take 10, 15 minutes to do. It’s not a huge commitment if you have your idea already in place. You just want to make sure that at least you’re covering your basis to say, “By the way, I don’t want trouble down the road.”

I don’t want some patient coming back to me and saying, “I thought that was insurance, I thought we were using this and then it switched over to something else.” You don’t want that because I’ve seen many cases where someone is saying, “I thought that was a free service that you were offering me or I thought that was a cash service and then what happened? Now that’s being reimbursed?” You don’t want any confusion. You don’t want to rely on someone saying, “I understand you.” You don’t want that. You want it in writing and saying, “This is exactly what you’re getting from me.”

Yeah, so some of the services that come to mind are like dry needling.

Dry needling, you could have laser, you could have women’s health.

Shockwave stuff?

All of that, yes. Even Hypreice, we've seen that people want to do cash services. These are all great lines of service that people can do. The idea is that they should be standalone and they should be separate and distinct.

The Visionaries And The Knuckleheads: Moving Responsibly 

For those who are reading and want me to talk a little bit about this, I’m not a compliance guru. That’s Daniel. I do know entrepreneurs, and how you guys think. You guys are knuckleheads. We don’t ever want to stop and do this stuff. We’re visionaries, we want to go, we want to go to the next thing, we want to get that cash-pay project going, we want to rock and roll. It’s such an easy thing to just skip. It’s such a little easy little step to skip, but it also could be the most expensive simple step that you skip. It’s like we want to make sure that you’re rocking and rolling and that you’re moving aggressively and making money and serving patients, but also do it responsibly.

Make sure you have somebody on your team holding you accountable to making sure you're buttoned up legally. I just wanted to share that perspective because that’s you. If you’re reading this, that’s you because we’re all like that. We’re all wired that way. Daniel, really quickly. I know we only have a few more minutes, but quickly, could you just give me a quick little bullet point of where you see companies blurring the line between traditional covered services versus non-traditional covered services? Where do people get in trouble with that grey area right there?

The Danger Zone: Blurring The Line With Wellness Screenings 

I always see it on the front end with wellness screenings, where they think they’re being creative by getting people in the door. They’re like, “It’s free.” No, it’s not free. If you’re touching someone, that could be considered physical therapy. When people are transitioning from certain free screenings, that is a huge area that is very expensive.

People will gladly sue when they feel like they’re being taken advantage of when it’s not clear. I’ve seen that many times. That’s a huge area because again, to your point, these owners, they’re thinking they’re going to be creative and this is just a fifteen-minute pit stop to make sure that no unforced errors. You don’t need to drop the ball here.

This is something that’s very easy to do. You could be as creative as you want. If that’s what you’re doing, it needs to be very clearly delineated. If you’re having that free screening, that’s great, but we’re not touching that individual because once again, once you start mobilizing that person or whatever, it falls under a different scope. Very easy to do, but very easy to mess up.

Thanks for sharing that. Episode 2 of a 5-part series. Next time, we’re going to be talking about something really fun and popular. 2026 RTM, Remote Therapeutic Monitoring. We got a pay increase. If you’re not doing RTM, you’re missing out big time. If you’re going to start implementing RTM, you might want to make sure you’re buttoned up on the compliance side as well. Daniel’s going to share some information next time about that. Daniel, thank you so much. We’ll see you next episode.

Awesome. Thank you, Adam.

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