PT Classroom - The Three Types of Rehab Practices ׀ by Englebert De Vera, PT


Engelbert De Vera,PT has been a Physical Therapist since 1998. He worked in the corporate world for the first 6 years of his PT career and decided to go solo in mid 2003. He ventured in different businesses but has kept his interest in using his knowledge as a PT to create his own rehab company. In this article, he will differentiate the 3 types of Rehab Practice and show you the practice of his choice using the formula that made him $480/hr in one TKR case.


The Three Types of Rehab Practices

It is not uncommon among therapists that whenever we hear the term private practice we automatically think of a clinic filled with exercise equipment and having patients go in and out of the facility on a weekly basis. However, that kind of private practice is actually just one among the 3 types of REHAB practices I’m about to discuss in this article. You’ll be surprised to see that there’s actually other options besides the traditional clinic.

You may already know the types I’m about to discuss, but this article will break down the basic requirements of each practice so you can see and decide which type is best suited for you to get into in case you’ve been considering to have a practice you can call your own.

First Let’s Define PRIVATE PRACTICE.
What is Private Practice?
- to engage in one's profession as an independent provider rather than as an employee.
Mosby's Dental Dictionary, 2nd edition. 2008 Elsevier, Inc. All rights reserved.
- a business that is managed and owned by an individual professional person
Macmillan Dictionary

OK So Here Are The 3 Types Of Rehab Practices:
#1 - TRADITIONAL OUTPATIENT CLINIC: Like I said, this is the most common type and it’s usually what we see in most cities. It’s the BRICK & MORTAR Outpatient model where you normally bill under Medicare part B and patient’s insurance. So let’s see what it takes to do this model.
1. Good amount of capital required. A friend of mine who used to have his clinic spent at least $200,000.- in his 1st year of putting up his practice. This covered his rent, payroll and equipments plus marketing expenses.
2. Building space required which means you have to hire a contractor to build it for you to make sure you’re compliant with the city codes.
3. Requires registration of the facility and don’t ever forget to renew it or you’ll be penalized.
4. Requires application for Medicare provider number for each therapist.( be ready to do paperwork ! )
5. Requires coding accuracy to bill Medicare. ( Hello ICD-9 codes ! )
6. If you outsource billing you have to pay a certain percentage of the reimbursement which can go as high as 8% to 10%. ( do it yourself or outsource ?)
7. Subject to Medicare cap which sets a limit to what you can get reimbursed every year. If there’s a need for further rehab, you have to fill up more forms to get reimbursed. ( paperwork ! )
8. Furthermore you also need to be enrolled as a provider with the insurance companies if you decide to accept insurance, (more paperwork!).
9. If you decide to accept CASH, you have to make sure you’re not violating rules. You have to find out if it’s legal to accept cash if a patient has Medicare or insurance coverage.
10. Marketing. No doctors sending you patients means no business. So be prepared to establish a solid relationship with doctors which means you have to set a time to do just marketing. You can’t expect to just stay in your clinic treating patients all day, unless you hire a marketer which means more expenses.

Fair warning: I’ve met some colleagues who had to use their income reserves since they still have to pay rent and meet payroll regardless whether they had enough patients for the month or not.

In My Opinion:
This practice model is too expensive; labor intensive and requires high maintenance. This is not to say that there are no successful private practice clinics out there. I’m sure there are private practice owners who are doing well and are happy with their situation. However, most owners that I’ve talked to have expressed that you’re lucky to break even in 5 years. I’ve encountered more therapists who closed their practice or are currently struggling to stay afloat. Very seldom do I hear that this business model is great and very profitable. I usually hear a lot of Medicare reimbursement complaints and some are now exploring the cash based practice in order to avoid dealing with Medicare and insurance problems. It’s a fact that this is a tough business. (Again, this is based on my encounters with other colleagues. And I think this is why we can count the number of clinics in any city. Why do you think there are more PT employees vs practice owners? Go figure.)


#2 - MOBILE OUTPATIENT SETTING: This is very much the same with the above model except for some obvious differences. The differences are...
1. You have no expensive facility required since you do house calls but still bill under Medicare part B or other insurance providers. In the Medicare application form, you have to specify that your treatments will be done at your patient’s place.
2. The challenge for this model is convincing insurance companies that your entity is still considered outpatient and not a home health agency.
3. You’re still required to apply for a Medicare provider number for each of your therapists as well as apply with insurance companies to be their network provider.
4. You still have to do accurate billing codes if you want to get paid right. ( Nope, you’re not escaping those paperwork ! )
5. Forget hiring a PTA since they need direct supervision under outpatient rules. It’s pointless to hire a PTA if you have to be there by their side when they do house calls. So your only option is to hire a PT which is more expensive than a PTA so your profit margins are reduced.


#3 - REHAB CONTRACT COMPANY: This is sometimes referred to contracting as a company. This is different from a staffing company since most of those companies are head hunters and they basically place you on a 13-week assignment or permanent placement.

Also different from an individual contract wherein you get paid for what you do for an agency as an individual only: example - a company hires you to do prn eval or re-eval. In this individual prn scenario, you only get paid for the work you do. If you don’t do the prn work, you don’t get paid.

A rehab contract company is an entity ( usually an LLC or a corporation ) that provides the actual therapy services on a weekly basis by doing evaluations, re-evals, follow-up visits and discharges LOCALLY for a certain facility usually a home health agency . Your market is usually where you’re located although you can expand if you want to.

The company provides PT/PTA , OT/COTA and even speech therapy services. You can delegate referrals coming in since you’re contracted as a company. Meaning you can still create revenue even if you’re not doing the work yourself. This is what I’ve been doing since mid 2003 and this the practice model that actually paved the way for me to ESCAPE the typical 9-5 PT job.

Here are the reasons why I chose this practice model:
1. No facility required since it’s mostly done in a home health setting.
2. No enrollment required as a Medicare or insurance provider (since they’re not being billed by your company directly. Your client- the home health agency bills them! Nice!)
3. Can be started while you’re working your full time job! How’s that for a LOW RISK ! You still have your guaranteed 40/hr a week job while doing this on the side!

4. You can hire PT/PTAs , OT/COTA, SLP and ALL of them are PRN! It’s pay as you go! Which means what you pay your PRN staff is directly proportional to what treatment sessions they’ve done. Totally different from having a full employee wherein you have to pay
your staff regardless whether you have patients for them or not.
5. Not subject to CAP. You bill the home health agency for any services provided with a straightforward invoice per discipline, no billing codes needed ! (You can continue your services as long as there’s a clinical necessity and MD order.)
6. You control the time when you want to work. No need to clock in!
7. You don’t market to doctors! (Your client, the home health agency does that – how cool is that?!)
8. Can be started from a home office or office in the cloud meaning your system is online ! (how cool is that ?! )
9. You can grow this gradually until the revenue is equal or greater than what your job pays and eventually have the option to quit your job. ( You can ESCAPE your 9-5 job! )
10. Fastest model to start since all you need is to put up your company, gather your team and clients and you’re in business! So there you go. I hope you’ve learned a lot from this article. To show you how this works, I’m giving away a FREE VIDEO on How I made $480/hr on 1 TKR patient using this business model.

If you have any questions I can be reached at
Just click the link below and I’ll send you the video. Enjoy!

Last revised: October 21, 2014
by Engelbert DeVera, PT

Terms & Conditions

Please review our terms and conditions carefully before utilization of the Site. The information on this Site is for informational purposes only and should in no way replace a conventional visit to an actual live physical therapist or other healthcare professional. It is recommended that you seek professional and medical advise from your physical therapist or physician prior to any form of self treatment.