A Ton of Prevention

The Medicare Reform Act, otherwise known as the Medicare Prescription Drug Improvement, and Modernization Act (MMA), became effective Jan. 1, 2004. Although the reimbursement reductions that affect the home medical equipment industry will become more severe over time, you should not sit idly and wait for the larger cuts to become effective. Rather, it is imperative to begin evaluating your company's practices to prepare for the bigger changes that are forthcoming. Knowing what to expect will help you make an educated decision about your company's future direction.

Refine Operations

Know the facts. Before planning for change, explain Medicare reform to your staff. Identify those changes that are effective immediately and those whose implementation is scheduled for later. For example, we know that fees are frozen for 2004 and that inhalation drugs are now paid at 85 percent (80 percent for many drugs including albuterol and ipratropium) of Average Wholesale Price. So, you need to determine how much of your business is driven by inhalation drugs to make decisions about your business going forward.

Even more basic, according to Gary Morse, vice president of reimbursement for Rockville, Md.-based Roberts Home Medical, “know your revenue breakdown by payer — exactly what percentage of revenue Medicare represents. You should also break this down by branch.” Morse also recommends that you break down revenue by product to more accurately know the impact of the reform legislation on your company.

Once you define the basics, evaluate your company's strengths and weaknesses. By department, ask your staff to generate a list of what they do well and where there is room for improvement. Compare their findings to management's. Observe job functions to see how daily tasks are performed. Watch to see if staff members rely on your software to perform their tasks or if they use manual logs to get their job done. Manual processes waste time and should be automated as soon as possible.

Further, when a group of employees engages in conversation about a specific case, the cause is usually that someone neglected to enter notes in the system, which means you have to retrace conversations and actions to determine what exactly happened with the case. Again, by simply entering notes in the system, you will establish a chronology and a diary for the next person who handles the patient.