Q&A: What Type of Discount Should I Offer to Patients so They Choose My Cash-Based Therapy Practice?

What are you worth?  What is your time worth?  How much do you value your treatment?  Are you afraid patients will go elsewhere when they learn the price you charge?

I have answered a fair amount of questions about offering discounts for services.  I have tested discounts in my practice.  In a traditional physical therapy model it is illegal to discount a patient’s treatment by allowing them to not pay their co-pay, nor is it allowable to charge a different rate than your contract rate.  However, in a cash based practice, you set your own rate and you can do what you like.  If you have a practice that has a mix of in-network and out-of-network patients you can have a cash rate for people who want to pay you the same day and a different rate that you bill Medicare/private insurance when they want to pay you 30+ days after the treatment.

In your own cash based practice you can provide a discount, the only conflict would be any contracts for service that you sign if you are in transition or have a mix of cash paying patients and in-network patients.

I personally do not believe in discounts for my time/service based on my past experiences offering a discount for services. If I was in business to sell a physical product a discount would be enticing as this a different type of sale and a discount on a widget is much different than a discount on your time.  I give all of my patients a self-treatment ball, and if they loose it or the dog destroys it a new one is $5.  Sometimes I just give them a second one.

When I used discounts to get patients/clients in the door for their 1st visit, not only did it not increase the number of patients I treated, I attracted people I did not want to work with. People who only come for the free time and try and take more than they are offered, and who do not schedule follow up full price treatments.  These people did not value my time or their treatment and were not committed to helping themselves or to their home program.  I feel I charge a fair rate for my time, expertise and service and I feel good about what I earn and know my patients are receiving an excellent value for their payment.

Charge a fair price, and stick to it. The answers to the questions above will help you set a fair and reasonable price for your therapy services.  Once you discount it, you devalue your service. Provide excellent service, exceed expectations and people will feel the true value of your care. On the rare occasion that someone asks for a sliding scale, I will offer to discount their treatments if they pay for a package of them upfront. Win-win, but I usually do not take off more than $10 and this has only happened once in the last few years.  In general, if people are wiling to pay you at the time you provide a service, 10-30% of a discount is not concern that will determine if they come in to see you.

Selling packages can present some issues, one of which include the patient not needing to complete the specified amount of treatment sessions. Another is providing discounts can make the accounting of which codes are provided somewhat difficult to predict, though the beauty of a cash based practice is that you do not need to rely on what the insurance company will pay. I do want my patients to have the best chance of receiving reimbursement. The total price on the receipt you provide your patients should reflect the discount and total amount the patient paid to you. You can use a separate line item for the discount, a “provider discount”, to make it so that the patient see the full amount you charge and the discount they are receiving.

For example if you charge $100 and the patient get a 10% discount and they only pay you $90, the receipt or super bill that they submit to their insurance for reimbursement should reflect that they paid you $90. I use QuickBooks and I will add a “provider discount” item in which I manually enter the discount amount. If you sell a package, you will need to furnish a receipt when the patient pays and just charge them for “physical therapy” and separately at each visit provide them with an itemized “super bill” that reflects the charges in units with all the codes and information they need to file a self-claim. This can be just a pre-printed form that you have available and on which you can just fill in some blanks.

If you want to thank someone or provide an incentive you can always charge your full price, but provide your patient some extra treatment time. To add value to my treatments I have a patient newsletter, online videos of self-treatment techniques that they can do at home, I give a free self-treatment ball to each patient at their first visit, I make myself available by phone, email and text if they have questions or concerns, I provide an experience they can not find elsewhere and I pack as much information into each session as possible.  Free products or discounted products are different than discounting the service and time you provide to people. Your time does not cost you any physical money, but do not undervalue the treatment you provide and your expertise.  If you do offer a discount to patients make sure they know the retail price or actual value of what they are receiving.

I do know of some practices that offer a Free initial screen or heavily discount the initial evaluation. It seems to me that this is a way for them to also work around restrictions in the Direct Access laws; especially if there is no provision to treat a patient until a physician signs the plan of care. Does this apply to you?

Do you offer discounts?  What has been your experience receiving or giving a discount? I would appreciate your thoughts in the comments section below.

About The Author

Aaron LeBauer

Aaron LeBauer PT, DPT, LMBT started a 100% cash based physical therapy practice right after graduation. He's on a mission to save 100 million people from unnecessary surgery & enjoys helping passionate therapists build successful businesses without relying on insurance.

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6 Comments

  • Gary Richardson

    Reply Reply June 11, 2013

    Aaron,

    Nice article and I agree with you on discounting the price – we have tried promotions in the past and then later the purchaser never wants to pay the full price.

  • Aaron LeBauer

    Reply Reply June 11, 2013

    Thanks for the comment Gary. The lure of providing a discount is enticing, I think because the huge multinational companies do it, but they don’t really care about margin as much as volume.

  • Sean Wells

    Reply Reply June 14, 2013

    I have offered free 30 min exams in order to increase rates off clients entering my center. I have had a good conversion rate but my demographics may differ than other regions (more affluent). My region may value time more and see the free exam a commitment to my business. Treatment is not free. After my exam, I usually spend 10 min explaining
    my eval and them showing my clients my pricing. They usually buy and I treat them, and I schedule sessions for next day.

    • Aaron LeBauer

      Reply Reply June 14, 2013

      Sean, Thanks for sharing what works for you. Your offer is an excellent value for your patients. Does this offer attract more patients for your physical therapy program or your personal training program?

  • Rachel

    Reply Reply June 19, 2013

    Great post! I like your suggestion of offering more treatment minutes rather than a discount on price for patients that you want to provide something extra.

    • Aaron LeBauer

      Reply Reply June 19, 2013

      Thanks Rachel, adding more Value is always appreciated and goes a long way.

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