History repeats itself, but nothing stays the same. In the
medical industry this is definitely a true statement. In the daily
changing world of HME and pharmacy, providers must be willing to
make necessary changes to stay in the game and survive.
We are a very young industry that seems behind on technology,
software and other means to streamline business models to be as
lean and mean as we need to be. But there programs available to
You have heard me say over and over again, for example,
“It can all begin and end with intake!” Do you
currently utilize software to ensure the intake is correct and the
patient qualifies prior to the equipment and/or supplies being
delivered? Are you utilizing your computer system to input the
intake or are you still having your intake coordinators work the
intake on paper before entering it in the computer system?
How many times has it happened that your intake personnel did
not obtain all the information you needed? I know … too many
times. I have seen too many write-offs on your accounts receivable
(AR) on equipment that should have never been delivered in the
first place. We have to streamline beginning at intake, and this,
in turn, will increase productivity.
In beginning activity-based costing procedures for clients
involved in the first round of competitive bidding, I always
discover so much waste. This waste costs the company money. We just
cannot afford profit loss amid all of the reimbursement cuts,
capped rental on oxygen, 13-month rental caps on other equipment
and the continuous changes in policy affecting reimbursement, not
to mention the expansion of competitive bidding.
Audits are also costing this industry a lot of money. We have
the most regulated industry in the country next to defense
contracting. Both of these involve government dollars, and, as
government dollars are tied to reimbursement, we are scrutinized
closely and audited frequently.
The government received back $28 for every dollar spent auditing
health care providers in 2002, according to statistical data. This
is a big business, and with this kind of return, do not expect it
to stop: Expect it to increase.
Embracing technology, which will save lots of time and money,
can also help you be prepared for an audit. Educate your staff on
how to work audits, and consult an expert who can assist you in
getting it right the first time. Why pay back the money if you do
not have to?
This industry also has some of the highest ARs I have ever seen.
We have to become more diligent in working denials, ARs, secondary
claims and patient pay. If you review monthly (as you should), you
will find your patient AR is extremely high, as is your denial
ratio. Are you using denial management software to track denials
and work your secondary claims? If not, you are spending way too
much time and money on attempting to work them on your own.
How many productivity reports do your employees turn in weekly?
How often are they tested? It may be wise to look at outsourcing
your billing, your corporate compliance plan administration or your
collection of patient pay AR. Outsourcing these functions could be
less expensive and more productive depending on your company's
operational flow and the education levels of your employees.
Just because the way you have been doing business the past 25
years has worked for you does not mean it will work now. Old
methods may be stunting your growth, increasing days sales
outstanding, decreasing productivity and making it difficult to
manage your staff efficiently. If you do not embrace change in this
industry in this day and time, get ready to open that yogurt
This is still a great industry with a lot of potential, and
there are ways to survive through competitive bidding. You just
have to be a smart businessperson with the will and determination
to make your company stand out from the rest.
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