Just as with regulatory compliance, one of the keys to addressing the new Medicare Prescription Drug, Improvement, and Modernization Act (MMA) successfully is to address your own internal management systems. Ironically, this is both a key part of the solution and a key part of why we're in this mess in the first place.
Why? The greatest insight I draw from the Medicare reform law is sobering: Congress does not believe that the HME industry has its act together.
We cannot discount the fine lobbying work done by the American Association for Homecare and state associations. But Congress appears convinced that those organizations present the voice of only the very best suppliers. Our lawmakers evidently believe that most HME providers do not have their acts together, are not professional and do not know “the Rules” or much care about them. In short, the clear message of MMA is that the government does not believe our industry is particularly “professional.”
Consider: More than 60 percent of providers in the industry remain unaccredited. Of those, more than half had no immediate plans to become accredited, at least before accreditation became mandatory under the new law (see HomeCare, December 2003).
I do not suggest that accreditation instantly confers respectability and accountability. However, it is one of our few — and often the only — objective measurements of professionalism.
Consider: In a mid-November announcement, the Centers for Medicare and Medicaid Services estimated that the error rate for Medicare payments went down from 13.8 percent in 1996 to 6.3 percent in 2001 and 2002. However, in 2001-2002, DME suppliers, on average, showed a 13.6 percent error rate — more than twice as high as the health care average. Let me repeat — twice as high.
Consider: Prior to the new Medicare law, the national trade association for home health agencies responded to an erroneous report about high industry profit margins by efficiently collecting and analyzing 6,425 cost reports. They demonstrated that the profits for the reported period were actually only 5.15 percent and that they would fall to virtually nothing in 2003. Many industry experts believe that this action convinced Congress to back away from reimbursement cuts for home health agencies.
What reliable, Medicare-specific financial statements could the HME industry provide? Umm … none? How long would it take us to gather this information? Umm … never?
In short, Congress apparently believes the HME industry may know how to “talk the talk,” but we do not know how to “walk the walk.” I fear they may be correct.
So, what are solutions? I agree with many experts who suggest that product and payer diversification is one answer. Retail sales, cross marketing, enhancements, add-ons and “lifestyle” purchases are all part of the solution.
But these choices focus on outside sources of revenue. How do you pursue this growth effectively? How do you support this growth effectively with your delivery systems, financial and patient management systems, compliance with law and payer rules, and so forth? The answer, of course, is easy to say and hard to achieve: figure out what you require to accomplish your goal, then implement your actions. Train and motivate your employees to achieve these ends; fix problems that arise; keep up with new information; and monitor and adjust as necessary.
Guess what? This is the same approach to maximizing profitability that is embraced by successful businesses in all industries. This is the same approach that is necessary to achieve and demonstrate professionalism. This is the same approach that is essential to persuade Congress that we, as an industry, finally can “walk the walk.”
And these are the five rungs of the ROPE Ladder that we have been discussing in the context of compliance for several months, summarized as follows: Make sure your operating systems comply with whatever rules are out there. Be sure you have a way to teach your systems to personnel. Implement an effective way to identify, report, investigate and fix problems. Use outside resources to make sure your internal systems stay compliant. Make sure all of your operating systems, including your monitoring system, continue to operate as you intend.
See, the solution to mastering Medicare reform is to follow the ROPE system. Just kidding — but only a bit.
Neil Caesar is president of the Health Law Center (Neil B. Caesar Law Associates, PA), a national health law practice in Greenville, S.C. He also is a principal with Caesar Cohen Ltd., which offers compliance training, outsourcing and consulting and the author of the Home Care Compliance Answer Book. He can be reached via e-mail at ncaesar@healthlawcenter.com or by telephone at 864/676-9075.
The ROPE Ladder
Rung 1: Articulate the way you want things to run, and note how they run now. Then, tweak your systems as necessary to comply with “The Rules.”
Rung 2: Teach your operating systems to your employees.
Rung 3: Implement a clear and simple method for dealing with problems — identify them, report them, investigate them and fix them.
Rung 4: Give your compliance staff resources to help them keep up-to-date with internal and external changes that may sometimes require you to refine your operating systems.
Rung 5: Monitor your operating systems to make sure they continue to run as you intended.
