Today I’m interviewing a Private Physical Therapy Practice Owner who has been completely Out-of-Network with 3^rd Party Payors for 13 years! Tom Ockler is not just a practice owner and PT, but also an accomplished author and teacher.

Give us the background of your Cash-based practice?

What are the general logistics: setting type, treatment length, employees, rates, etc? 

Cash-based may not be the best way to describe what I do. It is actually a hybrid that does not accept private insurance as payment in full. We will bill the insurance company but the patient is responsible for whatever the insurance does not pay.

We explain this to the prospective patient over the phone, then take their insurance info and call the company to verify if they have out of network benefits, what the out of network deductible is and how much has been met so far. Since out of network deductibles are now in the $2000-$4000 range these days, it makes little sense to use insurance but we give them the option. We call the prospective patient back and explain what we learned about their coverage. We offer a pay-as-you-go rate that saves around $35 a visit. We accept cash, check, and have a virtual terminal for CC, DC, HSA charges.

Each patient gets a full hour or more of one-on-one time with the same PT (me) and is never touched by non-licensed people . It’s just me, my golden retriever Bailey and a practice/office manager who does not touch the patient. Bailey does greet the patients and has contact with the patients via belly rubs. Hers, not the patients’.

When you started your practice, did you immediately go 100% Private-Pay or did you start out as a fully or partially insurance-based practice?

From the get go, I decided to not accept private insurance as payment in full. Here is why.

I am in my 34th year of practice. I was a hospital administrator and still saw patients for 11 years then did self-contracting for 10 years and now I have been in this private practice for 13 years as of June 1, 2012. I learned and became proficient in Muscle Energy and Counterstrain and had already developed a reputation in the market area (Cleveland, Ohio) as having a different and very effective approach for the patients that did not respond to conventional intervention.

When I decided to start the private practice back in 1999, I started with a fresh sheet of paper. I saw what the insurance companies were doing; slowly increasing premiums and decreasing benefits/reimbursements. I thought that I can do things that not many can do and that I wanted to spend more time (the hospitals were already moving toward multiple 2-4 patients per hour) with the patients. I believed that an educated and unsatisfied patient would be willing to pay out of pocket for a better product. I even wrote and published a book called The Case for Alternative Health Care back in 2007 which describes how and why I did it this way.
I bounced my business plan off several PT managers/private practitioners and they all said the same thing: You are out of your mind and you will be out of business in 6 months.

Here was the plan:

• Nobody but me treating patients
• No hot packs, no ultrasound
• Everyone gets an hour of my time
• I would not be a preferred provider (legal extortion) with any private insurance companies
• I would ask/advertise for the worst of the worst patients
• Give me the frequent flyers that the docs or other PTs didn’t know what to do with
• I wanted to have a dog at work with me

Well, that was 13 years ago, and I doubled the space in 2005.

What were the key factors that made you believe a Cash PT practice was viable in your area?

• People were unhappy with what was being called and billed out as Physical Therapy.
• I wanted to spend more time with my patients and do the difficult specialty work myself.
• I saw what the insurance companies were doing to the profession and healthcare in general.
• There was no way my time and skills were worth any less than what I felt was appropriate.
• An ever-increasing population of educated and alternative-leaning patients who would pay for a better product and better outcomes (these people are called LOHAS … “Lifestyles Of Health And Sustainability.”)
• I knew as an administrator what the hospitals were passing off as therapy was pitiful.
• I knew that MET and Counterstrain were completely safe and very effective.
• I was well-known in the area having spent 11 years as the Director of PT at the local hospital.

What was the biggest challenge you faced as you started your practice?

Getting good consistent office help.

What is the biggest ongoing challenge of running your cash practice?

Hospital Docs used to refer to me all the time, but now I believe they are being arm-twisted by the hospitals to keep all referrals in-house. Hospitals overbuilt and extended themselves and didn’t see the changes in reimbursement coming to the extent that they are. Now they tell the Docs, either you refer to in-house therapists or you won’t have a place to practice. It’s a different world out there now. Way more difficult than 13 years ago, or even 5 years ago.

How did/do you overcome these challenges?

You just have to keep plugging along. Reputation and word of mouth are better than most paid advertising. I have also been doing free lectures for the public since day one, and that is very helpful. I lecture on something called EFT—the Emotional Freedom Technique—and I really pack people in for those free talks. I am also fortunate that I teach 18 weekend MET courses a year all over the country. Between the teaching income and the income from sales of manuals and DVDs that I ship all over the word, it helps keep me afloat.

More questions for Tom?

And now I pass it to my readers … if you have any other questions for Tom, please post them in the comments below (notice you can now post comments through Facebook as well).

Interested in the cash-based private practice model?

Click Here to learn how to start your own Cash-Based Practice