History repeats itself, but nothing stays the same. In the medical industry this is definitely a true statement. In the daily changing world of HME and pharmacy, providers must be willing to make necessary changes to stay in the game and survive.
We are a very young industry that seems behind on technology, software and other means to streamline business models to be as lean and mean as we need to be. But there programs available to assist you.
You have heard me say over and over again, for example, “It can all begin and end with intake!” Do you currently utilize software to ensure the intake is correct and the patient qualifies prior to the equipment and/or supplies being delivered? Are you utilizing your computer system to input the intake or are you still having your intake coordinators work the intake on paper before entering it in the computer system?
How many times has it happened that your intake personnel did not obtain all the information you needed? I know … too many times. I have seen too many write-offs on your accounts receivable (AR) on equipment that should have never been delivered in the first place. We have to streamline beginning at intake, and this, in turn, will increase productivity.
In beginning activity-based costing procedures for clients involved in the first round of competitive bidding, I always discover so much waste. This waste costs the company money. We just cannot afford profit loss amid all of the reimbursement cuts, capped rental on oxygen, 13-month rental caps on other equipment and the continuous changes in policy affecting reimbursement, not to mention the expansion of competitive bidding.
Audits are also costing this industry a lot of money. We have the most regulated industry in the country next to defense contracting. Both of these involve government dollars, and, as government dollars are tied to reimbursement, we are scrutinized closely and audited frequently.
The government received back $28 for every dollar spent auditing health care providers in 2002, according to statistical data. This is a big business, and with this kind of return, do not expect it to stop: Expect it to increase.
Embracing technology, which will save lots of time and money, can also help you be prepared for an audit. Educate your staff on how to work audits, and consult an expert who can assist you in getting it right the first time. Why pay back the money if you do not have to?
This industry also has some of the highest ARs I have ever seen. We have to become more diligent in working denials, ARs, secondary claims and patient pay. If you review monthly (as you should), you will find your patient AR is extremely high, as is your denial ratio. Are you using denial management software to track denials and work your secondary claims? If not, you are spending way too much time and money on attempting to work them on your own.
How many productivity reports do your employees turn in weekly? How often are they tested? It may be wise to look at outsourcing your billing, your corporate compliance plan administration or your collection of patient pay AR. Outsourcing these functions could be less expensive and more productive depending on your company's operational flow and the education levels of your employees.
Just because the way you have been doing business the past 25 years has worked for you does not mean it will work now. Old methods may be stunting your growth, increasing days sales outstanding, decreasing productivity and making it difficult to manage your staff efficiently. If you do not embrace change in this industry in this day and time, get ready to open that yogurt stand.
This is still a great industry with a lot of potential, and there are ways to survive through competitive bidding. You just have to be a smart businessperson with the will and determination to make your company stand out from the rest.
Plan tactics now to be the best you can be. Be positive, and encourage your staff to learn and grow with your company. Together, we can fight for our patients and our industry.
Jane Bunch is owner of Jane's Healthcare Consulting based in Marietta, Ga. A reimbursement specialist, Bunch delivers educational seminars, helps develop corporate compliance plans and serves as a consultant for fraud and abuse cases. She can be reached at 770/366-0644 or by email at billhme@aol.com.
