There’s a lot of buzz surrounding cash-pay practice these days, particularly in rehab spaces, and with good reason: insurance reimbursements are decreasing (link to switch to cash article), and therapists in private practice are increasingly forced to see more patients in less time to compensate for these cuts. (1,2)
The stress of increasing patient loads has many providers across all realms of healthcare feeling burnt-out and dissatisfied at work. (Stone) Many are now considering the cash model of practice as a way to treat their patients in a more holistic fashion without breaking the bank. (3)
If you’re thinking about starting your own cash-pay PT or OT practice, here are five key steps to begin the process:
  1. Do your research
  2. Learn the legal ins and outs
  3. Determine your start-up costs
  4. Decide on pricing policies
  5. Market, market, market

Starting Your Own Cash-pay PT or OT Practice

Step 1: Do Your Research

Understanding your audience is a basic business concept, but it can be easy to forget in the excitement of planning a new practice. (4) Before you commit to cash, make sure your local community can support it. (5,6) Questions to consider:

  • Is there a need for therapy services in your area, or is the market already saturated? (6)
  • How much are prospective patients willing/able to pay for treatment? Will you be in an affluent neighborhood, or a lower income area? (6)
  • What does the competition look like? Are there already many other cash-pay providers in your area? (5)

It’s also key to understand your specific target audience within the larger population. If you have a sense of your niche within the local community of rehab providers, you can tailor your practice specifically to that niche. (3) By focusing on a specific group of patients, you can target your website and advertising to them, and focus your continuing education efforts on learning how to best serve them.

Step 2: Learn the Legal Lexicon

Perhaps it goes without saying, but you need to ensure that your practice will be in compliance with all federal, state, and local laws before you dive in. Meeting with an attorney who specializes in healthcare and/or small business law can help you determine where to start. (7)

Every state has different laws, but in most jurisdictions, you’ll need to apply for a business license—yes, even if you don’t plan to have a brick-and-mortar clinic. (3) Some states will require you to form an official business entity, such as an LLC, in order to operate your small business. (3) If you’re planning to rent or sublease physical space in which to treat patients, you’ll need to register that facility with your state board of PT or OT. (3)

Be sure to thoroughly review your state’s practice act and rules to ensure that you’ll be in compliance. (7) This is particularly crucial if you’re planning to offer a mix of services, such as general wellness classes in addition to skilled physical therapy, as different states have different rules for each. (8,9)

Finally, you’ll need a professional liability policy for your business—the individual provider plan you already have may not cover all aspects of your cash practice, so do your research on the specifics of your coverage. (7)

Step 3: Determine Your Start-up Costs

It can be easy to spend too much money too quickly when you’re setting up a new practice. By defining must-have items early on, you can make sure your start-up costs don’t spiral out of control. (3,10)

If you’re planning a dedicated physical space for your clinic, you’re immediately committing to higher overhead costs. (Hudgins) Some cash-pay providers choose to sublet space from another facility, such as a gym or yoga studio, on an as-needed basis, so they are only paying for the time they use. (3,7) Others travel to patient homes to provide care, further reducing up-front costs. (3) Regardless of your plans for your practice location, be sure that you’ll also have the capacity to grow as you bring in more patients. (10)

Many therapists choose to work part-time or PRN at an existing practice while they are starting their cash practices. (3) This can give you a modest stream of reliable income to count on while you dedicate the rest of your time to building and growing your business.

Step 4: Set Your Prices and How You’ll Bill

Once you’ve determined your ideal patient population, you’ll already have a better sense of the types of services you’ll need to provide to serve that audience. Regardless of which services you decide to offer, decide up front how much to charge for each. (5)

Some therapists in cash practice charge a flat rate for an initial evaluation and for each follow-up visit; others offer discounts on packages of visits. (3) Still others opt for a concierge model of care. Whichever option you choose, make sure you’re charging enough: account for your overhead costs, the market value of your specialized skillset, and the amount you need to make to survive and pay yourself. (3)

Once you’ve set prices for your services, determine how you’re going to bill for said services. Even though they aren’t billing insurance directly, many cash providers provide a superbill to their patients as a courtesy, so that those with out-of-network benefits can submit it to their insurance for reimbursement. (7,11) Using an established EMR system can facilitate this process (while also ensuring that you’re maintaining the all-important defensible documentation). (11)

Finally, you’ll need to be clear on Medicare compliance requirements – even though you aren’t planning to bill insurance, you are still liable to certain Medicare laws as a licensed PT or OT: make sure you understand the rules and abide by them.

Step 5: Market Like Crazy

After investing substantial time and effort on the previous steps, you’ll likely be itching to get into the real meat of your business: actual patient care. However, patients won’t just magically appear on your doorstep: you’ll need a plan to market aggressively to your target audience. (10)

When designing your marketing plan, focus on your “perfect patient”: which media outlets are most likely to reach them? (3) If you’re targeting older adults with balance impairments, for example, you probably don’t need to invest a lot of effort in creating a flawless TikTok account.

If you don’t have much prior business experience, it’s worth considering the consulting services of groups that specialize in healthcare marketing and practice development: spending a modest amount early on to increase your business acumen can save you money in the long run. (3)

And there you have it: a quick-and-dirty guide to starting a cash-pay practice in rehabilitation. While you’re planning the future of your business, be sure to consider tools like the AC Health app that can help you delight your patients and maintain a thriving practice for years to come!


1. Carvalho, E., Bettger, J. P., & Goode, A. P. (2017). Insurance Coverage, Costs, and Barriers to Care for Outpatient Musculoskeletal Therapy and Rehabilitation Services. North Carolina Medical Journal, 78(5), 312–314.
2. Limited Help: Congress Reduces Average PT Medicare Payment Cut From 9% to 3.6%. (2020, December 22). APTA.
3. Gonzaba, W. (2018). Cash-Based Physical Therapy: The Ultimate Guide [E-book].
4. Webster, J. (2020, August 13). The Importance of Knowing Your Target Audience. REVITY Marketing.
5. Stone, T. (2006). Cash-Only Practice: Could It Work for You? Family Practice Management.
6. Bercaw, C. (2021). Open a Cash-Based Physical Therapy Practice: 5 Things to Consider (. Fycizal Therapy & Balance Centers.
7. McDermott, E. (2020, December 8). The Ultimate Cash-Based PT FAQ. WebPT.
8. Texas Practice Act and Rules. (2021). Executive Council of Physical and Occupational Therapy Examiners.
9. State Physical Therapy Board: Laws and Policies | Division of Professions and Occupations. (2021). Colorado Dept of Regulatory Agencies.
10. Hudgins, E., Stover, A., & Walsh-Sterup, M. (2018). Opening a Private Practice in Occupational Therapy [Slides]. AOTA.
11. Wendel, A. (2020, November 2). Billing for Cash-Based Physical Therapy Practices. WebPT.