A Managed-Care State of Mind

A first glance at Dallas Oxygen reveals a typical HME business: a 21-employee, two-branch operation that provides oxygen and medical equipment to the greater Dallas-Ft. Worth metro area. Owner Dean Cheney, with a gray beard and ponytail, calls himself an “old-timer.” He's an industry veteran of 30 years whose business has developed a reputation for good service, with drivers braving their way through miles of traffic-clogged highways. The shop carries the gamut — lots of respiratory products, from liquid oxygen to CPAPs, along with other DME, including mobility products.

But a look at the company's billing paperwork tells a different story. Much of it isn't going to any DMERC. Instead, more than 60 percent of the bills go to managed care.

So how has small, independent Dallas Oxygen gotten its foot so far inside the managed-care door, and why did the company tackle payers that stereotypically do not have the greatest reputations for paying bills on time? The answer, according to Cheney, lies in one word: negotiation.

“With Medicare, there's no negotiation at all,” he explains. “With managed care, at least, you can sit down and negotiate rates.”

That, he says, opens up whole new realms of possibilities. Savvy contract negotiation can bring rates that account for product price plus all costs, including not-so-obvious factors like Dallas traffic. Managed-care representatives “know how big Dallas is,” Cheney explains. “They know you can't get to the other side of town in 20 minutes. Managed-care groups are in the area, and know the area. You don't get that with Medicare.”

Getting Past the Front Desk

The company first got attention from managed care about 10 years ago by doing work in the pediatric arena, a niche where many insurers had a tough time finding Dallas-area vendors.

Cheney says that when approaching managed-care contract writers, HMEs get the standard, broken-record response. “The first thing you hear is, ‘We already have a vendor; we don't need any more,’” he says. “But you can talk to their case managers, and they'll say, ‘We can never find people to do such-and-such work.’”

An HME representative talking to a case manager starts a new ballgame. These people, on the front lines, can reveal what the insurer really needs. In Dallas Oxygen's service area a decade ago, it was apnea monitors for children.