HME News

APR 2017

HME News is the monthly business newspaper for home medical equipment providers. This controlled circulation publication reaches 17,100 home medical equipment services providers, including traditional HME dealers & suppliers, hospital- and pharmacy-o

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hme news / april 2017 / www.hmenews.com 9 e ditorial By Ken Ro BB ins T he aging of a merica has cre- ated an enormous demographic of consumers that have strong desire to enjoy life to the fullest— and they're empowered to do it. a dvance- ments in technology and accessibility have yielded devices and equipment that keep people mobile, active and healthy for lon- ger than ever before. That has resulted in tremendous demand for h M e . i n most businesses, strong demand equates to increasing profits and compe- tition; but as h M e providers know, the healthcare sector doesn't work that way. i t's anything but a free market because a monopoly is calling most, or all, of the shots: Medicare. i n the face of skyrocketing demand, many h M e providers are strug- gling to pick up the scraps from a payer that is driving reimbursements to rock bot- tom levels. Despite Medicare policies that can skim profits away from h M e providers, savvy players are learning to tap into the immense market demand in different ways. Three trends sweeping the industry are changing how h M e providers must look at their business models: i f you can't beat them, join them: selling out Competitive bidding puts h M e providers in a constant state of battling to offer the lowest price. i f it sounds like a race to the By s a R ah h anna T he M aking of n ew Year's resolu- tions is a customary tradition on Dec. 31. a s the ball drops and the n ew Year is upon us, we look for ways to improve ourselves and our com- panies in a variety of ways. One resolu- tion that should make the top of your list is improving your overall collections. With reimbursement levels at an all-time low, collections turnaround is more important than ever. Most people give up on their n ew Year's resolutions by March. We go into the challenge with hope, faith and determina- tion. But once we start feeling the pain asso- ciated with making the change we back off or give up completely. We give ourselves many "reasons" why we are failing and it can't be done. n egativity creeps in and we just give up. i n 2017, let's make the com- mitment to push forward and not look back. i f we equate our collections journey to that of an old-fashioned road trip, we can find many similarities. We start out with excitement, positive feelings and a sense of adventure. h owever, many times along the way the mantra becomes: " a re we there yet?" There are g PS miscalculations, wrong turns, and stops along the way to rejuvenate and rest for the next day's drive. So how do we take the road trip to improved collections? First and foremost, there is no "shortcut" to the collections for- mula. i f determination and perseverance are Take a road trip to improved collections part of the plan, then reaching your destina- tion is guaranteed. s etting the course 4 e stablishing expectations: The first step to improved collections revolves around the hiring process and job descriptions. h aving the right people in place with well- defined roles and e x p e c t a t i o n s , which are the basis for evaluat- ing performance, is important. The skill and knowl- e d g e re q u i re d to be effective in a team mem- ber's role need to be described in the job description—it's the founda- tion for training. Job competencies are essential requirements to successfully perform specific work functions and, therefore, are critical elements of their position. 4 Training: i t is important to have an organized approach to training, no mat- ter the size of your company. The biggest mistake companies make is lack of thought and investment in their training. e ducating your team takes time, talent and treasure. Without effective training, goals, compe- tency evaluation, and collections will not improve. The main reasons for low collec- tions and high accounts receivable revolve around poor training and staff evaluation. Truly evaluating your team based on their productivity, errors, compliance and com- petency rarely occurs. The cause is that to evaluate these areas you need data. Many providers don't know how to get the data and/or use it for the purposes of training and performance assessments. What are the effects of a poor training program? Staff turnover, high denials, slow cash flow, high DSO, lower profitability. 4 a nalytics: n ot all industry software programs provide functionality to draw out the information that companies can use to evaluate their businesses. Sometimes you can gain this information through custom reporting features within the system, the use of exporting features to e xcel and/or a ccess or a combination of both to manipu- late data for work queues, training, tracking and reporting. i t is important that these data points are actually in the system to produce the reports that can be used to trend the big picture and then drill down to the details that foster best practice results. i t is best if management determines the workload and the claims to be completed through data extraction/reporting and timely filing lim- its for claims when working a R and denials. The key to analytics is to have people who understand the reporting mechanisms, formulas and algorithms. Personnel expe- rienced in e xcel and a ccess is important if the information can't be gleaned through custom reporting through your software. g etting to the point where the data means something takes effort, diligence and dol- lars. i dentifying movement in key data ele- ments allows managers to move quickly to change behavior and also focus their energy where it is most needed. e xamples of areas to trend are: Payments by age and by payer source, revenue, submissions, denial rate, a R by age and status, pending and held rev- enue, and overall DSO and by payer. By trending this information, manage- ment can set goals for each category and then monitor for results. When establishing target goals for each data point, it is important to acknowledge your starting point and work incrementally toward the desired outcome. c onclusion Make that n ew Year's resolution a perma- nent habit by committing to using data to drive performance and behavior. i f you don't understand how to gather the information, invest in the training needed to produce the reports through your system, e xcel or a ccess. Start with the basics of a good job description and approach training with a plan and purpose. Then use report analy- sis to gain solid information to improve outcomes in the revenue cycle. By staying focused and determined, solid business decisions will be made and profit potential increased. hme Sarah Hanna is the president of ECS Billing & Consulting North. She can be reached at sarah- hanna@ecsbillingnorth.com. bottom, it is. Cuts in quality, cuts to mar- gins, and cuts in service conspire to erode the qualities that make companies great. Often, it means whoever can create the lowest expenses and is willing to accept the lowest margins wins. Call it the Wal- martization of home medical equipment. That's bad news, but the economies of scale that fuel price and margin drops are making smaller h M e providers attractive targets. That has created a robust seller's market, as industry juggernauts grow hun- grier for competitors to gobble up. h M e providers that don't have the resources, agility, or will to compete anymore can cash out and call it a day. s hift reimbursement responsibility to patients h M e providers have a history of acting like medical providers when it comes to filing insurance. They often fulfill patient orders with Medicare information and then file claims on behalf of patients and get reim- bursed directly. Withering reimbursement rates introduce great risk when expenses cannot be fully recovered and is leading some h M e providers to rethink offering this service. The process has also become so complex that many h M e providers feel like they have to partner with expensive outsourced companies to handle claims. Some h M e providers are finding relief by shifting this responsibility to consumers. They only accept full-cash payments for products and then the responsibility to file paperwork and get reimbursed by Medicare falls squarely on the policyholders. Pay- ment delays, denials and reduced reim- bursements are now risks absorbed entirely by customers. i t's great for h M e providers, but there's just one problem: Consumers hate it. Until it becomes standard industry practice, it pretty much guarantees many consumers will simply refuse to do business with you. b oost margins with "caretailing" i f selling out or i n c o n v e n i e n c - ing customers isn't for you, fear n o t — y o u c a n leverage the referral aspect of Medicare to fuel higher margin sales. Basing topline revenue on Medicare reimbursements alone is a losing proposition; instead, think of Medicare as a loss leader or doorbuster on Black Friday. i t gets people in the door, but you really want them to buy higher- margin items or services. Many patients desire much more than the often basic products Medicare covers. h M e providers have opportunities to offer upgraded merchandise that make their lives easier, less painful, or more convenient. Whether it comes in the form of upgraded equipment or complementary items that make covered products function better, the Medicare purchase is just the lead. The real profit comes from those upgrades that cost extra, but deliver more value and improve lives—at higher margins. Many of these items do not require pre- scriptions and are not covered by Medi- care at all. Consumers eager to optimize their golden years and family members that want the best for them are often happy to purchase these higher-margin products. Transitioning to offer more of these cash sale items removes Medicare from the transaction and eliminates problematic reimbursements. The h M e business is a sector that should be in a fantastic growth mode, but Medi- care is effectively squashing many of the opportunities to find success. The best workaround is to shift into offerings that Medicare can't touch, like value-added ser- vices, add-ons, complementary products, replacement parts, and servicing products. Something to remember is that how well h M e providers succeed in the coming years relies on how savvy they become at marketing. hme Ken Robbins is the CEO and founder of Response Mine Interactive (RMI), a fully HIPAA compliant digi- tal agency that helps health and wellness compa- nies improve their marketing to acquire more quali- fied customers and patients using direct response strategy. He can be reached at ken.robbins@ responsemine.com. YOUR SUCCESS DEPENDS ON YOUR MARKETING Here's a guide on how to ease the tightening vice of Medicare on home medical equipment profits ken robbins s arah hanna

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