Should I accept insurance in my PT practice?
Should I take insurance?
This is probably one of the first questions you asked yourself when starting your PT practice. Sometimes it’s an ongoing question: we might add or drop insurance contracts as time goes on.
The #1 question to ask yourself before accepting an insurance contract:
Will accepting this contract require a significant change in the way I treat, or decrease the quality of care I can provide my patient?
Your first instinct might be to answer “yes” for a reason something like this:
“I used to work in an insurance-based clinic, and I was double booked, saw 4 patients an hour, and was constantly doing paperwork.”
This might be the case, but were individual insurance contracts the reason for that? Or was it the corporate model you were working in, where profits came before quality care? Or maybe the clinic you worked in accepted too many insurance contracts, or accepted too many low-paying insurance contracts. Or maybe you used to work in a state where insurance reimbursement was low, but you recently moved to a state where insurance reimbursement is better.
So…
What factors do I need to look at to decide if I’ll be forced to change my treatment plan or double book patients?
Check the reimbursement rate for each individual contract and get an actual number for reimbursement per treatment code. You will likely need to do some digging to find this out as many insurance companies aren’t transparent about their rates and reimbursement until you’ve initiated the contracting process.
Think about your own overhead and costs- if you’re paying for front office staff, a buildout for a big brick & mortar clinic, high rent, or a billing department to support your admin tasks, this all adds to your overhead. Will the insurance contract (booking 1:1) allow you to earn enough to not only cover costs but earn profit? Or would you need to double or triple book appointments to earn enough per hour?
Check pre-authorization requirements. If they’re significant, this will add admin time for you or might require you to pay for additional admin staff.
Your ideal scenario to accept an insurance contract looks like this:
Reimbursement rate matches the rate you’d ask for on your own
You can cover overhead and earn a profit with the hourly rate provided by that contract, assuming 1:1 visits
Pre-authorization requirements wouldn’t create a significant administrative burden for you.
What we didn’t mention: insurance restricting a patient’s total number of visits.
Insurance restricting a patient’s total number of visits is frustrating. It is, however, not a reason to not accept insurance.
Insurance restrictions just mean the patient has to end up paying cash. The insurance company can’t ban that patient from receiving more care on their own. They’re just saying they’re not going to pay for it. So, by going in network with that insurance contract, you’re just offering the patient a bonus number of sessions covered by insurance before they have to go the self-pay route.
