One of the biggest questions therapists ask when thinking about a cash-based practice is: “Will I actually make more money?” It is easy to assume that cash-based practice always means higher rates. The real story is more complex. Even if the hourly rate is exactly the same as insurance reimbursement, the difference often comes down to time saved, hidden costs, and when you get paid. You might ask yourself what do cash based practitioners earn? If you decide to try a cash based approach, be sure to check out the Cash Based Business Starter Checklist.
The Hourly Rate: A Level Playing Field
Let’s imagine two therapists, both earning $100 per session.
- Therapist A bills insurance.
- Therapist B runs a cash-based practice.
On paper, both bring in the same amount.
- 15 clients per week × $100 = $1,500 weekly gross
- Monthly gross (4 weeks) = $6,000
So what is the difference?
The Time Equation
For insurance-based therapists, that $100 per session comes with hidden time costs. Hours are spent on:
- Documentation beyond clinical notes to satisfy insurance requirements
- Prior authorizations and progress reports
- Billing software and claim submissions
- Following up on unpaid or denied claims
Many therapists estimate 5–10 hours per week of unpaid administrative work just to get paid for sessions they have already completed.
Cash-based therapists also spend time outside of direct sessions, but in a different way. Instead of insurance paperwork, they may spend 1–3 hours per week on:
- Marketing their services
- Networking with schools, pediatricians, or community groups
- Managing scheduling and client communication
The key difference is that for cash-based practice, most of this work is front-loaded. Once families know you and trust you, referrals often come by word-of-mouth, which reduces the weekly time commitment.
When you factor in those extra hours, the effective pay looks different.
- Insurance-Based Therapist: ~$75/hour once unpaid admin time is included
- Cash-Based Therapist: ~$95–98/hour after accounting for marketing and client management
The Cash Flow Factor
The timing of when you get paid is another major difference.
- Insurance Model: Therapists often wait weeks or even months for reimbursement. Payments can be delayed by errors, denials, or backlogs. This creates unpredictable cash flow and the frustration of chasing down unpaid claims.
- Cash-Based Model: Families typically pay upfront at the time of service, whether by credit card, check, or online transfer. That means steady, predictable income you can count on every week.
For many therapists, this alone is one of the most appealing aspects of cash-based work. You know that the session you just completed has already been paid for.
Can Your Community Support Cash-Based Services?
A cash-based model does not just depend on you. It depends on the families you serve. Before making the leap, ask yourself:
- Does my community have the income to support private-pay therapy? Families need disposable income to afford services outside of insurance. Areas with higher median household incomes, or where families prioritize supplemental education and health services, may be more receptive.
- Am I positioned in a niche that families see as essential? Specialties like feeding therapy, handwriting help, or executive function coaching may feel urgent enough that families are willing to invest out of pocket.
- Could I expand beyond my zip code? Online therapy, coaching, or parent consults allow you to serve families outside your immediate area. This is especially valuable if you live in a community with fewer families who can afford private-pay services.
Your success is not only about how you price your services. It is also about whether the families you want to serve can see the value and have the resources to pay for it.
The Hidden Costs
Looking at the numbers means more than just hourly rates. Each model comes with hidden expenses.
- Insurance-Based Practice
- Billing software or outsourced billing services
- Staff time (or your own time) to manage authorizations and denials
- Lower reimbursement for missed sessions if families cancel late (or sometimes no reimbursement at all)
- Cash-Based Practice
- Marketing tools such as website hosting, printing flyers, or social media ads
- Client management tools such as simple EMR or scheduling systems
- Occasional no-shows or cancellations that are not reimbursed
The difference is that cash-based therapists often see these costs as investments in growth. Insurance costs often feel like barriers to being paid fairly.
Real-World Scenarios
- Insurance Example: A therapist sees 15 clients in a week at $100/hour, submits claims, and later finds 3 sessions denied due to paperwork errors. That is $300 lost plus the time spent resubmitting.
- Cash-Based Example: A therapist sees 15 clients in a week, 2 cancel late, and she enforces her 24-hour cancellation policy. She still gets paid for those missed sessions because families agreed upfront to the policy.
These everyday differences add up quickly when you look across a month or a year.
Hybrid Approaches: The Best of Both Worlds?
Some therapists choose to blend both models. For example:
- Accept insurance for core services but offer parent coaching, groups, or consulting on a cash-only basis
- Transition slowly by keeping a part-time insurance caseload while building private-pay referrals
This hybrid approach reduces financial risk while letting you experiment with cash-based services. Over time, many therapists increase the cash-based side as their visibility grows.
The Bigger Picture: Stress vs. Stability
At the same hourly rate, insurance might look safer because referrals are built-in. That stability comes at a cost. Unpaid hours, delayed cash flow, and the frustration of working within someone else’s rules can weigh you down.
Cash-based practice requires upfront effort in marketing and communication. The reward is greater control over your time, immediate payment, and the ability to design services that meet real family needs, not just what insurance will cover.
The real difference between insurance and cash-based practice is not always about earning more per hour. It is about:
- How you want to spend your time
- How quickly you want to be paid
- Whether your community can afford private-pay therapy
- Whether you want insurance companies or families to define your services
For some therapists, the trade-off of insurance paperwork and delayed reimbursement feels worth it for predictable referrals. For others, the freedom of a cash-based model, getting paid upfront, saving hours each week, and serving families who value their expertise, is worth the effort.
At Whole Child Guide, our mission is to help you market yourself, grow visibility, and connect with more clients. Whichever path you choose, you will have the tools to succeed.