With the growing concern regarding reimbursement cuts, pharmacy changes, competitive bidding and the other doom-and-gloom news you hear, I say let's get lean and mean and fight for the industry.
Home medical equipment and pharmacy have provided for me and my entire family since I was born. I grew up in an independent pharmacy, counting pills with my daddy at a very young age. My parents told me to select a career that, above everything else, would make me happy. That is what I did, choosing respiratory care in HME. As time progressed, I chose to consult in the entire industry — and I'm still happy with my decision today.
Don't Leave It if You Love It
I walk into clients' offices every week of my life. Too often, providers ask me, “Do you think we should just sell, considering what is happening in this industry?” My answer is always the same: “Do you love what you do?” Most tell me, “Yes, and I know I would miss my patients very much.” They've answered their own question.
But to stay in this business, providers do need to plan. Have you thought about how you are going to replace lost revenues from the reimbursement cuts that will come in the inhalation drug market, or with the competitive bidding process? Do not procrastinate, because, right now, your competitors are streamlining their corporate structures and diversifying.
For example, with reimbursement for inhalation drugs soon to be calculated at average sales price (ASP) plus 6 percent, pharmacies should consider adding new product lines. Although the government says it plans to add a service-cost component to the ASP-plus-6-percent formula, who knows what additional fees will really be added?
Some inhalation drug pharmacies are adding diabetic supplies on their shelves, and many have been successful in doing so. Depending on location, some pharmacies even compound for veteranarians and enjoy the cash benefits.
Whenever you consider your business and how you might expand or diversify, think outside the box. When investigating other product lines, remember that everything you offer in the business does not have to be reimbursed by Medicare or Medicaid.
Some providers have the concept that if they take cash from a customer, they have done something wrong. One provider, thinking I was from Medicare, even threw his cash register and credit card machine under the counter when I walked in the door. I explained to him that providers can indeed accept cash and credit cards from customers. (The funny part is that I went into his storefront only because I needed directions to another provider's location.)
Cash is good
There are no 1500 forms to complete. There is no waiting 60 to 90 days for your money.
Plan for the Future
Do you actually accept credit cards as part of your business practices? If you do not, you should consider setting up this service. Patients are more likely to give you a credit card for their coinsurance, deductibles and for items not covered by any insurer. If you review your accounts receivable, you will find that a very large percentage is patient-pay. In streamlining, you will need to become more active with patient collections. In a lot of cases, coinsurance and deductibles often just meet your cost.
Retail showrooms are becoming more visible and widespread among HME providers. Once upon a time, many were getting out of retail, but times have changed. I have recently witnessed some beautiful showrooms packed full of cash-paying customers.
There are many items patients and loved ones need that are not covered by insurance. Patients and their caregivers have to purchase them from somewhere, so why not from you? It is important, however, that your personnel be fully trained to make your retail showroom successful.
Providers still have a legal obligation to bill Medicare-covered items on behalf of beneficiaries if they have a prescription for that item. It is also important to explain this to the beneficiary or caregiver. If you don't, customers may pay for the item without a prescription, only to return a few days later wishing for you to file a claim.
To truly streamline operations, HME companies must put activity-based cost accounting in place. Do you know how much it costs your company to make one delivery? How much does each intake person cost, and what benefit are they adding to your company? How much is each biller or accounts recovery employee costing versus what they are bringing in daily? Activity-based accounting will tell you.
To move forward in this industry, providers must be able to justify each piece of their operation. Make sure you have an effective method for tracking inventory and that your warehouse is not overstocked. What is the turning ratio of each item on your showroom floor? Also, track what customers are requesting that you do not currently stock; you may find that you need to add certain lines to your business.
Many providers are being called by brokers telling them that this industry is taking a turn for the worse and that they need to sell while they can. But if the industry is so bad, then why do others want to purchase your business? Do not sell under pressure for the wrong reasons.
Any business you enter will be filled with obstacles, internal problems and employee difficulties. But what business can you enter that, at the end of the day, touches so many lives and gives independence to so many? Every day, you help improve your patients' quality of life. I cannot think of any other industry so gratifying and worth being in than this one.
Let's get lean and mean, and move positively into 2005.
Jane Bunch is CEO of Kennesaw, Ga.-based JB&CS. A reimbursement specialist, Bunch delivers educational seminars worldwide, helps develop corporate compliance plans, and serves as a consultant for fraud and abuse cases. She can be reached at 678/445-1221 or via e-mail at BILLHME@aol.com.
Billing and Sales Bootcamp
On Monday, Oct. 25, join Jane Bunch of JB&CS and Louis Feuer of Dynamic Seminars & Consulting as they put attendees through Billing and Sales Bootcamp. Two of the industry's most entertaining and energetic speakers, Bunch and Feuer will share information on strategies for improving business.
Hear about the challenges billing and sales departments must address as they work together to build revenues, and the issues and the goals that HME companies must meet and achieve to build a cohesive business organization.
Sessions at this all-day program, to be held in Orlando, Fla., include a focus on the latest issues in reimbursement and key selling strategies.
For more information about Billing and Sales Bootcamp, call 678/445-1221 or visit www.jbcservices.com.
