Features
Downsize Those DSOs
How often have you complained about the length of time it takes to get reimbursed for an equipment claim? Home medical equipment providers' DSOs (days sales outstanding) seem to stretch into lengthy timeframes, but according to Bently Goodwin, CEO of Memphis-based RemitDATA, “Medicare by law [can] pay a clean claim after 14 days, and from all of the data we get, 99 percent of the time they do that.
“If you subtract 14 days from the DSO number, what you get is the number of days it's taking providers to submit a clean claim,” Goodwin points out.
So what's the problem? To see what explanations — and solutions — there might be, HomeCare asked the reimbursement management firm to search its database and pull out DSOs for Medicare claims in three basic categories including DME, respiratory and rehab. If your company's DSOs are better than the averages shown, pat yourself on the back! If they're higher, now you have a target to aim for.
| DME | 68 |
| Respiratory | 53 |
| Rehab | 90 |
| Data represents a categorized and weighted analysis of approximately 775,000 Medicare remittances adjudicated by the four DMERCs between Feb. 1 and Feb. 28, 2005, and processed for RemitDATA customers. Figures reflect the average number of days elapsed from date of service to Medicare check issue date. | |
| Source: RemitDATA, 866/885-2974, www.remitdata.com | |
Start with how you calculate DSO, Goodwin advises. “There are literally a dozen ways that companies can compute a DSO,” he says. “As a result, there are no meaningful comparisons that you can make because you don't know how the other companies calculated their DSO or what their product mix is.”
