Chiropractic Cash Practice Pros and Cons

What You Need to Know

John Davila, DC, FICC

The chiropractic cash practice model is undoubtedly becoming more common. This article will unpack the pros and cons of a cash practice and highlight important factors to keep in mind when choosing a model for your practice.

Key Concepts

• Myths about cash practices
• Tips for choosing a practice model
• Considerations for your practice’s location

Whether you’re just starting out or you’ve been practicing for a while, you might be familiar with the chiropractic cash practice model. It’s a growing trend that has become even more common in the last few years. In 2022, 34% of respondents in a Fees & Reimbursements Survey by Chiropractic Economics reported that they collect up to 25% of their fees in cash. Of that 34%, 23% reported receiving more than 75% of fees in cash.

But is a cash practice right for you? Can a chiropractic cash practice free you from all the red tape and regulations?

I’m not here to sway you one way or the other, but as a retired practitioner turned CE instructor, I hope to constructively weigh the potential benefits and disadvantages of the cash-based chiropractic model.

Insurance Companies Will Still Hold You Responsible

When considering your practice model, keep this in mind: If you think you’re getting out of the insurance game with a cash-practice, you’re not.

Anyone purporting that an all-cash practice eliminates all interaction with insurance companies is not telling you the whole story.

It’s important to note that the majority of patients carry insurance, and many of them will still try to recover some of their out-of-pocket expenses through their insurance provider, even if they paid with cash. That means the superbill, or itemized statement of care, you hand them still needs to be correct and compliant in every way.

For example, using wellness codes for active care to keep fees down for your patient may not raise a red flag immediately, but if a patient files a malpractice claim and takes you to court, any misconduct on your part is bound to surface in discovery. The patient’s lawyers and the state board of examiners will have access to every page of your records – you will be held responsible, legally and financially, for any unexplained and conscious errors. Worst case scenario, you could face fraud charges.

Always make HIPAA compliance, risk management, and the quality of your documentation a higher priority than a patient’s payment method. Doing so will ensure patient satisfaction and protect the integrity of your practice.

Your Practice Model Doesn’t Have to Be an All or Nothing Choice

There is no rule that says your model has to be all or nothing. However, the key to stability is not how you get paid, but being prepared to accept different payment methods and insurance plans, follow state laws, and comply with insurance regulations. An ideal compromise might be to run a mostly cash practice and make limited exceptions for specific third party payments, like Medicare. When you choose to accept diverse revenue streams (i.e., cash patients, group health, Medicare, Worker’s Compensation, and personal injury coverage) you can foster greater steadiness, trust, and longevity in your practice.

It always circles back to why you chose this profession in the first place – you wanted to help people. With that goal in mind, diversifying your accepted payment methods is the best way to support the financial needs of your patients.

Discount Pricing Can Put You Out of Business

Champions of chiropractic cash practices frequently emphasize the potential to set your own fees in a cash-based model, and there’s truth in that. But it’s important to keep in mind that placing fee structure (i.e. the ability to offer discounted prices) above your care model could begin to eat into your profitability.

You’re a chiropractor, but you’re also a business owner. You have overhead (staff, rent, marketing, etc.) and tax liability to consider. To truly understand your profit potential, you need to do some math; What are your monthly and annual expenses? How many patients do you need to maintain per month, and how many visits per patient is necessary before becoming (and remaining) profitable? Your job is to help your patients be well and get back on their feet. Considering that, how many patients need to be in the pipeline to maintain a solid base?

When It Comes to Reimbursements, All Locations Are Not Created Equal

Not every chiropractic practice follows the same rules or abides by one set of regulations – it typically depends on local or state rules and laws. Therefore, location is everything to a practice, and not just because of parking.

Insurance reimbursements will vary depending on where you locate your practice, which can impact your desirability. Find out what reimbursements are like in your part of town – and don’t be too quick to say, “My cash practice won’t be affected.” It can be affected, and it’s always best to be prepared.

It’s critical that you do your homework and understand the process in your area. Which insurance plan are the majority of patients under? Which insurance plans do you want to align with? Which insurance company has the best relationships with practitioners? Ask around. You’ll be amazed at what you learn.

Do Your Homework to Sustain Success

My goal in this article was to give you food for thought, not to sway you one way or the other. If you take away anything from this article, let it be this: If you want to open a practice or rework your practice model, be flexible and open-minded in your thought process. Realize that insurance companies will always be a part of the equation for you.

Setting up a cash practice is a viable business model, so long as you do your homework and maintain realistic expectations; every model has weaknesses.

I wish I could say that chiropractic colleges prepare us for every real-world situation, but if they did, we never would have left the classroom! The responsibility is on you to seek out objective information and ask questions so you can make informed decisions.

Let me close with a few considerations and suggestions to get you started:

• Review the government’s reimbursement rules for private insurance, Medicare, and Medicaid.
• Understand how audits work and why they happen – you are not immune to them, no matter the practice model you employ.
• Review and understand the Office of the Inspector General’s (OIG) federal compliance laws and create your own compliance manual appropriate for your practice model.
• Never forget that proper coding and valid documentation matter regardless of your practice model. Your documentation should reflect the care provided and support the current procedural terminology (CPT) code you use, not how a patient pays for your services. If you document based on how the patient presents rather than whether they pay with cash or a third party, you’ll mitigate your risk going forward.
• Keep in mind that maintaining a compliant practice is an ongoing job. The homework is never fully complete.

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This document should not be construed as medical or legal advice and should not be construed as rules or establishing a standard of care. Because the facts applicable to your situation may vary, or the laws applicable in your jurisdiction may differ, please contact your attorney or other professional advisors if you have any questions related to your legal or medical obligations or rights, state or federal laws, contract interpretation, or other legal questions.

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