Insurance panels or cash pay for a solo therapy practice, and the math that decides it

Hannah Lee· Licensed therapist planning a private practice; still at a group practice· Idea stage, Health & Wellness·3w

I have been a licensed therapist for six years and I am at a group practice that keeps a little under half of what I bill. I have wanted my own practice for two of those years and I am finally sitting down with a spreadsheet instead of a fantasy.

The fork is panels or cash pay. On panels, the contracted rate I see for my license type in my state is meaningfully below what I would set as a private rate, credentialing took a colleague of mine about four months per payer, and then I own the claims, the denials and the sixty day waits. Cash pay is a cleaner business and a much harder sell, because I work with people who are already counting money, and asking them for $160 out of pocket is a real thing to ask.

The middle path everyone mentions is two or three panels for volume plus a cash rate, and superbills for out of network folks.

What I cannot model is how long the caseload takes to fill either way. Twenty two sessions a week is my full number and I do not know if that is a six month build or an eighteen month one.

For anyone who went solo: which did you start with, and if you started on panels, did you ever get off them? My worry is that a full panel caseload is a very comfortable trap.

4 replies

Jen Okafor· Open·3w

Different industry, same fork. When I opened the studio I had to decide between filling the room with a cheap intro price or holding a rate and filling it slower. I held the rate and the first four months were genuinely frightening, and I still think it was right, because the people who came in at the real price are the ones still here.

Your twenty two number is the part I would pressure test. I planned for a full schedule by month four and it took nine, and my entire cash plan was built on month four. Whatever your fill timeline is, I would add half again and see if the plan survives it.

Hannah Lee· Idea stage·3w

Adding half again breaks it, which is useful to know now rather than in March. At an eighteen month fill I need either a part time contract gig alongside it or a much smaller office than the one I keep driving past and imagining myself in.

The intro price parallel lands too. The cash pay version of a cheap intro is sliding scale, and I do want sliding scale slots, but I have watched colleagues end up with a caseload that is entirely sliding scale because they never capped the number of them.

Cheryl Dunn· Open·3w

I do books for a couple of small practices, not yours and not in your state, so check everything with your own CPA and an attorney who knows licensure where you are.

Two cash flow things. Panel money arrives weeks after the work, so your first three or four months on panels can be busy and broke at the same time. Budget for that gap specifically rather than assuming revenue equals cash. And separately, many states want licensed professionals in a particular entity form rather than a plain LLC. That is a fifteen minute question for a local attorney and a very expensive thing to get wrong after you have printed everything.

Jen Okafor· Open·3w

The busy and broke phase is real and nobody warns you. My version was gift cards and prepaid packs in December, which felt like a fantastic month and was actually me borrowing from January and February.

Hannah, if you do go on panels, please build the spreadsheet with the money landing when it actually lands, not when you do the session. That single change is what made my forecast stop lying to me.

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