2006 Reimbursement Survey

As reimbursements shrink, home care companies across the size and revenue spectrum told us they are working on business processes to improve efficiency and increase profitability. A general “regrouping” is how one provider put it. But based on the results of HomeCare's 2006 Reimbursement Survey, most have a long way to go.

More than 60 percent of the companies participating in this year's survey said they don't calculate days sales outstanding according to product category or payer. Though claim denials average 12 percent, only 37 percent of respondents appeal all of them. A quarter said they are not using HME-specific software for even the most basic tasks.

Without such practices, how can providers know where their most profitable business lies? How can they improve processes if they don't know there's a problem? How can they become more efficient if they're not using the tools to do so? All questions posed by HME consultants and reimbursement specialists who reviewed the survey results.

What's more, these experts say, drilling down to find those internal stats will be vital not just for companies to remain competitive — but to remain in business.

“Companies that don't focus on maximizing reimbursement will have little chance of making a profit,” says Miriam Lieber of Lieber Consulting, Sherman Oaks, Calif. “In light of the demands and constraints placed on HME companies by the government and other payers, they have to work smarter and harder just to maintain status quo.”

Wallace Weeks agrees. “To keep ahead of the reimbursement cuts that the Medicare Modernization Act mandates, companies are going to have to be more efficient not only in billing and collections but in every aspect of their business,” says Weeks of Melbourne, Fla.-based Weeks Group.

“The environment has been forgiving enough in the past that providers could focus on helping people and not give much attention to managing the business. We no longer have that forgiving environment.”

In fact, according to Lieber, Weeks and others, there is room for improvement in virtually all areas of providers' reimbursement practices, particularly among small home care companies.

Using Technology

With reimbursement at the core of most home care businesses, 80 percent of HME execs indicated they handle these functions internally with their own full-time employees.