Creating Passive Income in Contract PT with Bert De Vera | CashPT Lunch Hour #38

Foreign.

Hey, what's up, y'?

All?

This is Aaron LeBauer with the Cash PT Lunch Hour. And welcome back to another episode. Today I have an exciting guest just to share with you. His name is Bert Devera or Engelbert Devera. And he's got a cash based model of practice that's unlike what you're probably expecting. It's like, it's not your typical cash practice. It's not your typical physical therapy practice. And I met him about three years ago and actually Bert contacted me and we chatted and I think every time we talked for about a year and a half, I was in the airport somewhere and I finally got to meet Bert a while back at csm and he's doing some amazing things. I just wanted to get him on the podcast to share exactly what he's doing to hopefully inspire you to take the next step in your practice and in your life. So, Bert, welcome to the Cash PG Lunch Hour. Thanks for joining us today.

Thank you for having me, Aaron. Thanks.

It's just awesome to have you here and thank you for all your support over the years with what I've been doing. And having other people like you in this world is just always a pleasure and help for everybody.

You're welcome.

So tell us a little bit about, you know, where you, like, where do you live, who you are, and just give me, like, tell me what your practice is called and we'll go from there.

Sure. Thanks. My name is Bert Devera. Full name is Engelbert De Vera, but I just go by Bert. I'm originally from the Philippines and I came here in the United States fourth quarter of 1997. So I was recruited as a traveling PT and the company that got me was based in Clearwater, Florida. And, you know, I came here with only 500 bucks in my pocket. New to the United States, not knowing the, you know, American way of life. So I had to learn all of that. Putting gas in your own car, how to use credit cards, you know, going to groceries and everything, everything. So it's typical American way of life. So. And I came here in pursuit of the American dream, you know, so I was so grateful to come over and work as a physical therapist. And for the first six years of my career, like I said, I was a traveling pt and yeah, so that's what got me here. And then eventually I got my wife here in 99 and then we have two kids. They were both born here in the United States. And after 4Q97, I got my license in 98. So I've been a physical therapist since 1998. This is my 20th year as a PT.

Wow, that's awesome. And you live in Texas now, right?

Yes, I'm now based in Texas and specifically Corpus Christi, Texas. We're close to the bay, Gulf of Mexico, where I can always go fishing or kayaking and do some water sports. Love it.

And they got good shrimp down there, too, right?

Oh, heck, yeah.

So how'd you end up in Corpus Christi?

Well, I used to do a traveling work in Victoria, Texas, that was hour and a half from Corpus Christi. So when we were trying to explore nearby cities, we found that there. There's a city close by Victoria that's really close to the water. During that time, there were. There were no GPS. I think that was later part of the 90s. So we just look at the map and, you know, we drove down here, and when I saw the water, it reminded me of my country, the Philippines. And I looked at my wife, I said, this is where we're going to buy our house. So that's what happened. That's what brought us down here.

That's awesome. So how many people live there?

Corpus Christi has about 330,000 population.

Okay.

All right.

Is it like a coastal town? Is it right on the water?

Yes, it's right by the Gulf of Mexico. We have you as a naval base here, and the Navy train here for their Navy pilots. So you always see, you know, Navy flights going on over your roof every day. And we have the USS Lexington Museum that was parked here. And I don't know the military term. What was it, decommissioned or something like that. So people come here and visit that museum?

Yeah, yeah. I've been through Texas twice, but. And I've been to San Antonio and Houston, but almost made it to Austin, Texas, but we decided we didn't want to spend an extra day. We were trying to get to New Orleans and driving across country, so we cut straight down there, and I never got down to that part of the Texas where you are, so.

Man, you should have come down here.

I know, I know, but you're like, how far away from Austin?

Three hours.

Three hours? Yeah, yeah, yeah. The Texas is huge, and there's not a lot of anything in the middle of it and land for like a dollar an acre or something like that, right?

I wish, man. It's getting more expensive. You know, people from Silicon Valley have been moving to Texas, and it drove the prices up.

Oh, yeah. So it's been 15, 20 years since I drove through. And I remember Seeing these signs, it was just like, you know, stop here, get like pennies an acre or something like that. Dollar an acre. Maybe I was dreaming, but I'm pretty sure I was in Texas. Tell us a little bit about your practice because when we met and we talked first, I remember you telling me like you don't deal with insurance at all, but you don't have a cash practice like I do. A little bit about like what's the name of your practice or business? And tell us a little bit overview about how you're serving patients and what you're doing.

Sure, sure. Thanks. Just a little bit of history, how I got into this business. Like I said, I was a traveling PT for the first six years of my career from 98 to mid 03. You know, I was working for the corporate world and in mid 2003 had this itch of going on my own and starting my own business. And originally, unlike most therapists, I was looking into doing a private practice brick and mortar clinic setting where I wanted to build Medicare insurance. The problem with that model was, at least for me, I look at it as a problem was, you know, it's a headache for me to deal with Medicare insurance and based on my style, I just don't want to deal with that. Alright, so, because not everybody have the same style, you know, different physical therapists have different styles. If you want to deal with Medicare insurance and you're successful with that, hey, hats off to you. But I'm just saying it's, it's not me. Okay? So I didn't want the idea of having to pay a leasing rent or I mean at least payment every month, paying leased equipments or having staff in my clinic and then not knowing if I have the money to pay them. So I research and research and look at the possibility of having a practice without having to pay a lot of overhead. And so I discovered that there's a way to do that and that's what I've been doing since 2003. So my practice is based on in the home care setting, I contract with different home health agencies where I provide physical therapy, occupational therapy and even speech language pathology services. Now obviously I'm not an OT and I'm not an SLP. So I take care of the PT and I hire PRN, PTs and PTAs. I hire PRN, OT, OTAs and I hire, you know, speech language pathologists. So whenever a home care agency needs the rehab part of their business, you know, to get covered, for example, a total knee or a stroke, they call they call my company to take care of the rehab aspect. And so I send my crew and then I build the agency. Okay.

So.

And then I create passive income by letting somebody see the patients for me or under my company. And I don't have to do the work. Now if I want to work my, you know, if I want to work and do it myself, I have that option because I know some therapists want to be hands on and I too sometimes want to be hands on and do everything, you know, especially if I like the case. So I have that privilege, I have that option. But if I want to go on vacation and do something else, then I also have that option. I have that leverage. Does that make sense?

Yeah.

Yeah.

So basically what you are doing and just recap it is that you've got a business that subcontracts other physical therapists and your business is subcontracted by the home care agencies when they have a need or space or they don't have enough therapists to cover the patient load themselves.

Yes.

Right. So you're the middleman.

Yes, sort of.

And you're also, you can treat patients if you'd like, but you don't have to. You just build the agency directly. They do all the Medicare billing, you subcontract from them. And you don't have to deal with insurance companies at all.

That's right. So it's, it's, that's why it's very similar to cash based, because I don't do any billing codes, I don't do any insurance codes. I don't have to be a network, you know, provider for the insurance. I just bill the agency straight up, whatever rate we have agreed upon in the contract. That's what I do. And most of these home care agencies have contractors like me because they don't want to lose money. They want to be able to cover every single referral that comes into their door. And not all of them have in house therapists because they save money by contracting out, because they only pay the therapist only when they have patients to see for rehab. So it's a win win situation. Okay. And even the ones with in house therapists, they still hire contractors like me as a backup because once their in house therapies are full, they don't want to send out that referral or reject that referral. They'd rather have somebody see that referral and make money off of it, you know, so. And they don't want to disappoint the doctor sending the referral and tell them, hey, we don't have enough therapists. They're full. We can't see this patient. Nope, they don't want to do that. Okay, so that's where we come in. And as a matter of fact, I have a group of therapists all over Texas working under my company. Dallas, San Antonio, El paso, Corpus Christi, McAllen down to Brownsville. And I have about 100 therapists with all three disciplines combined. And this is all we do. And they all work for me. Prn. I don't have to hire somebody full time. I don't pay benefits because usually these therapists do this on the side. They already have their full time somewhere. They have their own benefits. So they call this as either their beer money or shopping money or car payment money or however you want to call it.

Right. Student loan money.

There you go. Student loan money.

Yeah. New VAW money. That's great. So you basically kind of have the best of all, like ten worlds. Like you've created your own job. Okay. You've also initially you created your own business asset, which is other people working for you. And you don't have to deal with insurance.

Nope.

You don't have to be. You don't have to. Like you're an employer, but people are subcontractors rather than, you know, full time employees where you have a liability and. But you still have to deal with the hiring and firing and. But you've, and you don't have to deal with it. Like I said, don't do it with insurance. If I didn't see it before, it counts as two, you know, or Medicare. So that's pretty awesome. So tell me, brings up a couple questions. So do your, do your therapists have to be credentialed with Medicare independently or private insurance or just because they're subcontracting? Does it like, is it the home care agency that takes care of all that? How does that work?

That's a very good question. And the answer is no. None of my therapists, including myself, are Medicare credentialed. It's not a requirement in the home care setting, unlike in a private or outpatient practice setting. So the entry for a staff pt, OT or speech therapist is quick. You don't, there's no waiting period. Oh, you gotta have your NPI number. You gotta be a network with insurance. None of that. Okay? So that's why I can always hire PRN therapists quickly as long as they fit the culture of my company. And I say that because I don't hire everybody. Okay? Not because they just. Not because they Have a license, they're gonna be a part of my company. No, I look for a good fit, meaning I look for, number one, character as a therapist, meaning they take care of the patients well, and then number two is their ethics. And then I make sure they don't have any disciplinary actions. Then I put them through a 90 day trial to see if the patients are happy with them and if they're a good fit within our company.

And so when you hire them as, when you hire people as independent contractors, how do you make sure that they're not classed as employees? Like how? Like, I mean, I think that I know the answer, but I'm not doing hiring independent contractors. But I know that there's an issue between, you know, when someone, an employee or when they're really a contractor. Like, how are you doing that? How is that working for people? Like, you know, are they in control of their own schedule? Do you provide, like, what equipment do you provide for them? Are you just providing them with like a day and time to go see patients? How does, how does that work?

That's a very good question. I actually asked that from my CPA and I also went through the questions. If you go through QuickBooks online where they ask you questions to identify whether your hire is a contractor or an employee. And when I went through those questions, it came out they're independent contractors. And I agree 100% because to answer your question, I don't tell them when to see the patient. They do their own schedules, I don't provide any equipments, they have their own stuff. And basically I don't tell them what to do with the patients. They are their own therapists. The therapists themselves, they decide what to do with the patient. So basically they're independent. You know, I don't dictate what they're supposed to do. Unlike, you know, I'm not saying, okay, you have to report to my office at this time of the hour or whatever. I don't do anything of that. So. However, if you want to hire this staff as an employee, you can do that as well. It just depends on how your account accountant sets up your company. So it has, I think it's an accounting or accountant question. But to classify the staff as independent contractors or employee, you will have to go through a set of questions to fulfill the requirement. Does that make sense?

Yeah. Yeah. So basically, like someone's employee, if I tell you, you know, when you show up for work, who you're treating, how you're treating, I give you all the equipment to do it all. But if, if I'm like, if I'm just distributing jobs and saying you can take it if you want.

Right.

They have their own business entity. Like I'm assuming, like, are you guys, your contractors have their own business entity or are they self employed? How's that?

Some of them have their own business entity, some of them, they just use their Social Security where the they get a 1099. But the metaphor I can use is in the construction business. Okay, so for example, I'm a home repair company. So if I have a client that needs a plumbing repair, I just call the plumber and say, hey, go to this address, set up a schedule, fix their plumbing issue and then bill me. Yeah, so it's the same thing with my setup.

You're the general contractor.

Exactly. So hey, here's a referral, shows a diagnosis. It says eval and treat. You want it? If they say yes, okay, take care of it. Then send me your. Send me your bill.

Awesome. So how many, like for one of your independent contractors, how many patients do they usually see a week and how much are like how much can they earn? And as a pt, I mean. Cause I know some people, I mean, I don't know about you, but like, I know some people are like way too comfortable working in like home care agencies to get out and start their own business. But. And it can be decently lucrative. I mean, if I was going to come work for you, is there like a range of salary that would make and you know, how does that look? And I'm thinking of this from not just an employee's perspective, but as a business owner's perspective is how much am I going to have to pay out the people? And then the follow up question is like, what's the margin look like and how are we going to maximize that? But I'll ask that question in a minute.

Sure. I mean, that's a very good question. Because if you want to get into this business as a business owner, here's how you're going to make money. Okay, I'm going to explain to you through a case study. So for example, you have total knee replacement. Okay. If you're the business owner, you do the PT eval and then you do the re eval. Okay? So I did this eval on a Friday. This is a case study I did myself. I did eval on a Friday. The frequency I had was one time a week for the first week and then three times a week for the next four weeks. So that's 13 visits total. Right. So one week one, three, week four is the lingo we use in home care. So I did the first visit, and the going rate within the city, for example, is 75 bucks. Well, it's in that range, 75 bucks. And then I did the eval and the discharge. So I have two visits. So that's 75 and 75. That's 150. Follow me so far. Now, out of 13 visits, if I did the two evals, how many visits are left in between? 11. Right? So the 11 visits I give to the PTA, I delegate that to the PTA. Now, I paid a PTA anywhere from 40 to 45 bucks, okay? And that's decent because they probably get paid anywhere from 25 to 30 at a nursing home or hospital. That's about $15 or more from what they're making. Okay? So at $45 per PTA visit, the profit margin is at $30, because my company still charges $75 flat rate per visit. So $75 minus $45. I pay the PTA. I make a profit of $30 per PTA visit, correct?

Yep.

So now the PTA did the 11 visits. So 11 visits times $30. That's $330 passive income. And all I did was do the eval and the discharge. Okay? So total total revenue for one total knee case in this case is 150, plus the 330 passive income. I made 480 bucks in this one referral, and all I did was eval and discharge. Now, here's what's good about this. Should I decide to do the to delegate the eval and the discharge to another PT because I want to go on vacation, I still keep the $330. I may pay out the 75 to the PT for the eval and the discharge because that's the going rate. I may not make money on that, I may break even on that, but I still keep the $330 that I make off of the PTA, right? Okay. So the PTA is happy because I gave the PTA a job, because sometimes they send them home early from the nursing home. You ever heard of, hey, our census is low. You got to go home or you got to use your paid time off, Right? That sucks, right? So now here I am. They call me, hey, Bert, you got any work for me? Yeah, I got work for you. So it's a win win situation. Providing solution for their low census or their shopping money or student loan money. Same with the pt, who's also being sent home or low on budget or low on money paying student loans. Hey, Bert, I can do eval and discharge, you know, every now and then. Give me some. They're happy, I'm happy, Everybody's happy.

Right? That's awesome. And then the way you make money on that is just by scaling that up.

Exactly.

Contracts, getting more people to work for you.

Right. And it's very scalable because in this model, I can hire as many PRN therapists as I want. You know, that's why I have about a hundred therapists combined pt, OT and slp. And there's no cost for hiring any PRN therapists. So you can build your team however, you know, you want it to grow big.

Yeah. Are you doing. So who's. Well, are you. I mean, if. I mean, there's a little cost, I mean, I mean there's like probably like a onboarding cost and a. And maybe a background check, but it's small compared to having to pay out $4,000 every two weeks.

Yeah, yeah, you're correct on that part. Your cost is probably to do a background check, you know, which in Texas doesn't cost that much. I only pay like less than $3 to go into a department of public safety website.

Do it. What other, what other? I mean, what other costs are there in onboarding someone? Like, there's that. There's like an orientation maybe like, like, is there like computer like software that they have to log into, you have to get users for? I mean, it sounds like it's small, but I'm just thinking like, yeah, yeah.

Usually the software is provided by the Hunker agency. So there's no cost on my part.

Okay.

You know, so. And it's pretty much straight. I mean, as pts, most evals are very self explanatory. We know the pattern. You look at it and okay, this is where my subjective goes or objective. It's pretty much easy. In five minutes they can figure it out, you know. Okay, this is how it works.

Yeah. And how are you, how are you distributing the work? So do you have like a dispatcher? Do you have an assistant? Are you doing it? You know, and you just call people down a list. You send out like an email or text and says, hey, next person respond back gets this patient. How is that working?

Yeah, that's a very good question. So I have a secretary that works for me part time and she's pretty much my gatekeeper. So whenever we get a referral, she would send me a text. Hey, Bert, we got a referral. I'm gonna go ahead and see who's in this area. And I'm gonna. I'm gonna send them text or an email or a memo that we have this referral. And usually they would reply, you know, if they're gonna take it or not. And then we tell the home care agency if we're gonna take the referral or not. So it's very, very organized. I rarely see any paper. Everything is digital. So it's, It's. It's very automated in a sense, you know, because I'm kept in the loop. I know who's seeing who. I know how many referrals we got today. I know whether we took that referral or not. And I'm not even doing anything. It's usually the gatekeeper. So the power of delegation is a key.

Yeah. So you've got 100 therapists and one assistant, and what do you, like, see a couple patients a week?

Like I said, work when I want to. And I'm saying that in a very humble way. I'm not trying to brag, but it's. It's the benefit of having a business, I guess, when you have a system going on, you know, just like McDonald's high school kids can run it. It's. It's a very good feeling, and it's a very good position to be into when you want to work because you want to, not because you have to.

Right.

So it's.

Yeah, it's.

It's great. I'm very grateful.

That's awesome. Well, obviously, you worked hard to get there. What's the. What was the biggest challenge in getting this whole thing started that you encountered?

Good question. The biggest challenge is, number one, believing in yourself, believing that you can do it. I used to have a colleague that told me this when I was starting. Hey, Bert, what makes you think the home care agencies are going to work with you or are going to give you patients? And I just looked at him and I said, what makes you think they wouldn't? So make a story short, I never hired that colleague to work with me because of his unbelief, you know, and, you know, I started this in 03. The rest is history. I've been doing this for the past 15 years. And, you know, if given the chance to do it again, I'll do it all over again. So the biggest challenge is having a team of therapists that believe in what you're doing. And I always tell them, look, we're doing this because, number one, we're clinicians. We're not just here to do to make money. Okay. If you do the right thing as a clinician, money will follow. Okay? So I don't ever hire somebody that always puts money first. You know, money is just a byproduct of what you do. You know, if you do it right, that's. That's our principle.

Yeah, that's great. Yeah, same thing here. Like, that's what I was just telling. I was just talking about that yesterday when I did a Facebook live in my group. I was just talking about, you know, like, we're here to do the right thing, and if we do the right thing for our patients, you know, the money's gonna follow.

That's right.

That's something that my dad taught me growing up, which is pretty amazing. And I've had people say, oh, it's about the money. I'm like, no, man, if I wanted to earn money, I'd be a banker. There you go, There you go. I had a friend who, out of college, got a job at bank of America, and he gave up a $25,000 bonus, end of the year bonus in October. And I was like, I'm sitting there, I'm living on ramen noodles and on racing bikes. I'm just like, can you just squeeze out a few extra months for me? You know, but he hated it. But, you know, anyways, I digress. So tell me, so you've also started teaching people how to do this, right? Yes. So how did that come about? And, you know, were people just asking you, hey, Bert, how do I do what you're doing? Or, you know?

Yep, pretty much. Pretty much. You know, I've been a guest in some other podcast and I've gotten inquiries on, you know, know how to do this business. So I figured there are other therapists out there who are looking for ways to make money as a physical therapist and still do what they love as a clinician, you know, but are very afraid to jump into the brick and mortar setting because they don't want to get a loan. They don't want to, you know, leave their jobs or abandon whatever they're doing. So I came up with a, with a course, with a coaching program to where if you want to do this, you don't have to quit your job, you can do this on the side, you can start it slowly. And if you're already a clinic owner, you don't have to abandon your clinic or give up what you're doing right now, even as a cash based practice, because you can do this as a supplement to what you're already Doing this is another source of income. This model is not going to compete with your full time job. It's not going to compete with your cash based practice. It's not going to compete with your brick and mortar clinic. Look at it as another source of revenue, another stream of income. And we all know, you know, the rule for improving your income is to have a lot of streams of income, right? Yep.

Yep. Well, and you also have to have more income than you have expenses.

Exactly. In Texas they say, you know, son, it's simple, you gotta have more coming in and going out. That's how the cowboys say it.

Awesome. So, so you got a course and you got. So what's the, what's your course called?

The course is home health contract startup.

Okay. And it basically takes people from, you know, nothing to how. Exactly how to create a business model like what you've had teaching people how to hire people, how to get contracts, etc. That kind of thing.

Yes. I basically teach them how to put up their company. It's a, it's a, it's a course where I teach you from A to Z, from step one to step down. I teach them how to hire PRN staff and what to look for. I teach them how to set up a contract with their PRN staff, how to find contracts with the home care agencies, how to survey the agencies and look for agencies that you want to work with in your area. There's a database where you can see if this agency is a good one or not based on national rating, you know, average. Okay. And then I teach them how to bill using their digital gadgets, iPhone or iPads. You know, I teach them how to make sure they get paid. Because the problem with any business, whether physical therapy or not, is cash flow. If you don't get paid, then you don't have a business. Right?

Right.

So I teach them how to make sure that they're getting paid, you know, because you got to have money to pay your staff. You got to have money to survive as a business. So if I can just say one thing to PT entrepreneurs or any rehab professional out there who wants to start a business, you gotta make money if you want to get into a business. There's nothing wrong with making an honest buck, okay? If you can't make money, then you don't have a business. You have a hobby. Okay? And if you want to give value to your patients, if you want to help your patients to really improve their quality of life, you gotta stay in business. If you can't stay in business because you're afraid to make money. You think it's wrong to make money. You're embarrassed to make money. Then your accomplishment for being a clinician will turn into a disappointment, because now you're gonna close your business, and therefore your patients cannot see you. Therefore, your patients cannot get the benefit from you of being a clinician. So you got to make money. Okay? Warren Buffett said there's only two rules in going to business. Rule number one is don't lose money. Rule number two is don't forget rule number one.

That's awesome. Amen. I could totally agree with that. And exactly everything you're saying, and you put it really well, because a lot of people are afraid to, in my practice model, charge what they're worth, you know, and they're. They're charging what, you know, patients are paying, you know, copays. And I'm like. But, you know, you're not going to survive as a business charging $75 an hour, you know, or $15 for 15 minutes of dry needling at the gym. I mean, it's. You know, it's like we need to get. Get you up because. Not just to make more money, but to give you the life you want and be able to take care of your patients because you. You can't keep the doors open, you can't feed your family, you can't treat your patients.

That's right.

So that's awesome, Bert. Well, tell us, like, where can. Where can we find out. Where can someone find out more about you? And then, you know, like, what's your website? Do you have a. Like a podcast? You know, where do we find you on Facebook, Instagram, anything like that?

Yeah, my website is bertpt.com. that's B as in boy E R T as in tango, PT as in physical therapy dot com. And. And if you want to message me, you can go to bertpt me. That's Bert. No, I'm sorry. Yeah, bertpt me. And at the end of this podcast with Aaron, Aaron is going to give you a link to where you can see a free video that I'm giving out to Aaron's audience, and you can see how everything works. I'm going to show you what happens from eval to discharge, what happens in between. I'm going to show you the numbers, and then from there, you can ask me any questions after you watch that free video.

Awesome. Yeah, we'll just make that link. Labourconsulting.com Bert B E R T. So if you want to get that free video and training from bert, go to labourconsulting.com Bert and it'll be right there for you.

Awesome. Awesome.

Thank you, Bert, for sharing everything today and being an open book and being an abundant entrepreneur. And I mean, obviously you've done a lot of amazing things in your business and building a incredible system that works for you instead of you working for it, even though if you want to work for it, you can. Is there one, like, last thing that if someone wants to get into this business model that they absolutely need to know or make sure that they do first?

If you want to get into this model, ask yourself first, why are you doing what you're doing right now? If you're an employee, why are you staying as an employee? Is that what you want to do for the rest of your life until you retire? If your answer is no, and you want to find something that's different from what you're doing, if you want to find freedom to where you can earn passive income on the side, then definitely check out what I'm offering.

Awesome. Awesome. Well, thank you so much. I appreciate it and I look forward to seeing you in person at the next event. Oh, we'll be at SSPT Live together.

SSPT bro.

Yeah. So if you guys are listening to this after Memorial Day week and SSPT Live is over for the year, if it's before, you will catch up with us and you can find out more information about that online labourerconsulting.com ssptlive but in the meantime, Bert, I really appreciate you being here. Spend the time with us today, taking the time out of your busy schedule to share all the secrets that you've learned about growing this business model. So for the Cash PT Lunch hour, my name is Aaron LeBauer and we'll see you next time. Thanks so much.

Thanks, Aaron. Thanks for having me.

Yep.

Sam.