HME Software: Getting Wired

May 1, 2001 12:00 PM, Richard Park

Faced with increased competition, reimbursement cuts and slimmer margins, today's home medical equipment providers must continually look for ways to stay ahead of the curve -- and one of those ways is using software to streamline operations.

"Most HME providers will be looking for solutions that continue to provide efficiencies to their organizations and reduce their costs, and technology is one way for them to do that, especially the opportunities that are out there with some of the Web-based solutions," says Don DeCorte, director of product management at CareCentric. "The HME industry in particular is focusing more on activity-based costing and looking at solutions that reduce their overall internal costs for activities, like producing purchase orders and clean claims and getting them paid the first time around."

While HME software products have traditionally focused on billing, manufacturers say providers are now seeking solutions such as e-mail, personal digital assistants, data warehouse systems and purchasing that can incorporate or interface with several functions.

"Another thing that you're seeing more of. . . is software that not only provides a billing solution and inventory-control solution, but also a full accounting solution, where you're offering a general ledger, accounts payable and payroll," says Jay Williams, national sales manager for HME at QS/1 Data Systems. Providers, he says, are seeking integrated software packages so they don't have to re-key data.

While addressing the growing needs of customers is challenging enough, manufacturers must also keep tabs on industry-related regulations that could have an impact on software, such as the Health Insurance Portability and Accountability Act (see sidebar). And that is often a challenge, manufacturers say.

"The government generally gives us enough time, or just barely enough time, to make the software changes and to do the coding and the testing," says DeCorte. "But then they fall a little short in terms of a transition period for our customers to get updated."

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Electronic billing has become such a standard practice in the HME industry that even the durable medical equipment regional carriers provide free billing software for providers.

However, it is anybody's guess as to when the Health Care Financing Administration will accept electronic certificates of medical necessity with digital signatures from physicians. The industry has championed that cause for years, but HCFA remains reluctant to consider the issue, which has frustrated manufacturers and providers alike.

"Medicare is being extremely evasive on that issue, and at the last meeting I had with the DMERC heads, they basically made a joke out of it," says Richard Mehan, president of Noble House. "They are taking every precaution necessary not to answer any questions about it, and from a software vendor's standpoint, it's very frustrating. Everybody and their mother is accepting e-signatures. It's even been endorsed by the federal government. But Medicare is just taking an arm's length away from it. So I don't think it's moving forward at all."

Additional information about electronic signatures can be found in the Winter 2001 edition of HomeCareXtra.

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Computers have become a natural part of doing business in the HME industry. And while there may be some providers who are still hesitant to embrace technology, most realize their success depends on it.

"Nobody wants their business to be left in the dust," says Brian Williams, media development supervisor at Computer Applications Unlimited. "With computers doing so much for people these days, it probably would be tough to sit down with a ledger book and be able to come up with management reports that we can run by setting parameters within 30 seconds."

Technology, he notes, makes it "a lot easier to run your business. You can forecast, you can look at your inventory within seconds, you can see what's there, what you need to order. Computers were more of a luxury because we didn't know anything else. But more and more, it's becoming a necessity to be competitive and to have quality time for yourself."

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The following results offer some insights into the state of computer use in the home care industry. They were taken from HomeCare's 2001 Purchase Intention Survey and Medtrade 2000 Point of View Survey.

Do you intend to purchase computer equipment in the coming year, and if so, what?

Hardware 35.2%

Software 18.4%

Do you have e-mail capabilities?

Yes 94.0%

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One of the biggest issues for software makers is the Health Insurance Portability and Accountability Act, which establishes privacy standards regarding patient information. Industry players are still chafing from 1999 when, in preparation for the calendar flipping over to 2000, they shelled out millions to avoid computer meltdowns.

"You hear the words in the industry that say HIPAA is going to be bigger than Y2K for the health care provider," says Heidi Thometz, director of sales and marketing at Computers Unlimited. "That's from everything I've read in all the publications, and it's exactly what they're saying -- that for health care providers, HIPAA is going to cost them more than Y2K did."

At press time in mid-April, the implementation date for the standards was stalled for review by the Bush Administration, further increasing manufacturers' concerns. While they have in many cases established how they will change their software to comply with the new standards -- which include provisions on who can access and transmit data -- manufacturers are reluctant to move forward until the government issues its final rule.

"You wouldn't dare do it because you could start going down road A and then the government could say, 'Oh no, we're going to go down road B instead,'" says Jay Williams, national sales manager for HME at QS/1 Data Systems. "You could've wasted a lot of development time. So manufacturers are going to wait until there's definitely some written regulations that get published in the Federal Register."

Additional information about HIPAA can be found in HomeCare's March 2001 issue. Just pull up the back issue archive on this Web site and click on Washington Wit & Wisdom.

Experts Interviewed: Richard Basch, national sales director, and Richard Mehan, president, Noble House, Deerfield Beach, Fla.; Phil Cody, vice president, Dynamic Energy Systems, McKinney, Texas; Don DeCorte, director of product management, CareCentric, Atlanta; Heidi Thometz, director of sales and marketing, Computers Unlimited, Billings, Mont.; Brian Williams, media development supervisor, Computer Applications Unlimited, Harrisburg, Pa.; and Jay Williams, national sales manager for HME, QS/1 Data Systems, Spartanburg, S.C.

To follow up with these companies, check out the complete listing in HomeCare's annual Buyer's Guide.