by DENISE H. MCCLINTON
Friday, August 1, 2003

The uncertainty that remains a constant in the home medical equipment industry fortunately is alleviated by the solutions HME software programs offer. Providers can streamline business functions, increase claims accuracy, decrease denials and fully manage their companies' assets while remaining compliant with ever-changing regulations. Yet, a significant challenge remains: How can providers better use available technology to take full advantage of their software's existing features?

Freedom from the burdensome paper trail is a tremendous benefit, particularly in this industry, which is overly dependent on forms. “Instead of being bogged down with paperwork, HME software can take you from your purchase orders right through to electronic claims and accounts receivable as one integrated process,” says Brian Williams, marketing manager for Computer Applications Unlimited in Harrisburg, Pa.

Software packages can make HME operations more efficient, which leads to increased profitability, says Heidi Thometz, director of sales and marketing for Billings, Mont.-based Computers Unlimited. Thometz believes that analyzing business operations and adjusting them accordingly is what HME providers must do to be successful — and software can help them accomplish that objective.

This is true considering the high volume of rentals the industry manages, says Lee Hartz, general manager of Management by Information, Little Rock, Ark. “You have to know where your assets are. Good software allows you to do that, so you can be sure that you not only recover those assets at the end of the rental period from the patients, but that you also are able to perform reimbursement accurately,” he says.

With uncertainty over competitive bidding, a potential CPI freeze and other pending legislation, “Providers need to be asking themselves, ‘How can I make my business more efficient given the fact that my revenue is not going to grow proportionately?’” says Mark Kulik, senior vice president of sales and marketing for Atlanta-based CareCentric. “The answer is technology.”

Beyond Billing

Because billing plays such a significant role in the HME business, it often precludes providers' other concerns. “In this industry, getting paid is so difficult that it becomes the primary goal,” says Thometz. “A lot of the business management practices that can save money, such as inventory control, go by the wayside just because of the work billing involves.”

The time-consuming challenges of billing also can limit providers' ability to streamline the remaining aspects of their business, says Kent Barnes, director of marketing for Team DME! in Nashville, Tenn. Software providers have created products that can enable the HME industry to become more efficient, streamlined and profitable. But, they say, this requires providers' interest, training and the willingness to grasp the capabilities of the technology they may have already purchased.

“Health care in general historically lags behind other industries in terms of technology,” says Jim Clark, vice president of Miami-based Soft-Aid. “Technology that you see deployed in other industries, like transportation, has not been deployed in home care. That's changing.”

Underutilization of software is perhaps the biggest obstacle for HME providers. However, this is not unique to the HME industry, says Jerry Knight, president and chief executive officer of Duluth, Ga.-based Fidelis Software, which produces Brightree software. “Microsoft has done numerous studies about the functionality of Microsoft Word, Excel or PowerPoint [and found] that 90 percent of people use less than 20 percent of the functionality of their Microsoft Word,” he says. “It is no different with HME [software capabilities].”

Automated inventory control is one of the main tasks software developers say is underused. “I still find that a lot of companies do not utilize the inventory control features of their software,” says Phil Cody, vice president, Dynamic Energy Systems, McKinney, Texas. Cody explains that bar coding and scanning capabilities offer providers numerous ways to get more accurate information, such as on-hand inventory, sold or rented quantities, and revenue generated.

Barnes reiterates the point, noting that HME providers, especially smaller companies, are “lagging behind” in the area of inventory control, mainly because their efforts are focused on collections.

Another area where HME technology could be put to greater use is determining insurance eligibility, Clark says. “Eligibility is not where it should be. Providers can go online and send a request to a patient's insurance company to confirm whether the patient can receive the equipment — before they send a bill only to find out the patient is not covered,” he says.

Finally, document imaging, which currently is not being embraced by many in the industry, is perhaps the most timesaving and cost-reducing function technology offers, Williams says.

Scanning patient files, insurance cards and other documents puts all the patient's information on an employee's desktop, eliminating the need for numerous trips to file cabinets as well as the risk of violating Health Insurance Portability and Accountability Act privacy regulations. “If you pull a file from the filing cabinet and leave it on your desk overnight and the cleaning crew comes in to clean, technically, that's a violation of HIPAA,” says Esther Apter, chief executive officer of MedForce Technologies, Monsey, N.Y. “In this situation, they have access to private information on that file. With scanning, you do not have that problem.”

While electronic patient filing offers exceptional benefits, it requires a significant financial commitment. However, software suppliers say a good scanning package should pay for itself within a year. They note that it is important to look for scanning software that is easy to use, without excessive data entry requirements. The goal is to increase efficiency, not increase the time spent on the filing process.

Evolving Interest in E-Claims

Electronic claims, although not new to the HME industry, are experiencing a renewed interest. “Once providers dip their toes in the electronic claims pool, they are ready to dive right in,” Williams says.

The main benefit to providers is accuracy. The software programs won't let users advance without supplying the needed information, which means fewer claims will be denied based on insufficient information.

One of the greatest challenges to industry-wide use of electronic claims submission is the ability of the durable medical equipment regional carriers to keep up with the HME industry's technology. “The technology that the DMERCs use is so antiquated that the modern technology tools of today can't speak the language of their old jalopies,” explains Knight. “That's why HIPAA creates a new wave of opportunity in certain respects because it forces not only HME providers, but everyone else in the industry, to take it up a notch and begin to communicate with each other in a consistently safe, secure and private way. That's a good thing.”

Meeting the mandatory HIPAA requirements has been a concern for software developers and providers. “HIPAA has awakened the industry to the need to make a change,” Clark says. “When providers started going to software vendors saying ‘Hey, what can we do?’, many decided that rather than upgrading [their existing system], they would go to a new system. HIPAA has helped providers justify making IT purchases that they had put off for a long time.”

Another electronic tool — electronic certificates of medical necessity — also has generated a tremendous amount of interest from HME providers, and software companies are continuing to work toward making them an industry norm. E-CMNs could reduce errors and save providers considerable time and money. However, the challenge is convincing physicians to buy in to the process.

E-CMNs, says Kulik of CareCentric, could provide the industry with significant cost savings. They also can enable physicians to improve the management of their practices. Yet, he acknowledges there are challenges that are impacting their widespread use: resistance to change, a fragmented industry whose participants range from very large to very small companies at different levels of sophistication within their businesses, and the fact that the HME industry spends considerably less money on technology than other industries spend.

The Next Wave of Technology

One of the most talked-about introductions to the HME software market is browser-based, also known as Internet-based, applications, which are easy to use and eliminate the need for additional hardware, say their proponents.

“A very small percentage of organizations are utilizing the capabilities of the Internet,” to manage remote locations and distribution of products, says Soft-Aid's Clark. By operating in real-time via the Internet, “all of the information is located at a central site, all automated — a single source of information to share across the enterprise.”

Fidelis' Brightree product is built on the .NET Internet-based platform and looks and behaves like Microsoft's suite of products, which include Outlook, Word and Excel, Knight says.

“The HME industry is begging for additional tools, technology assists and additional levels of sophistication to deal with all of the curveballs that are and have been thrown at them in the regulatory area,” he explains. “This tool does all that in a very private and secure medium.”

Real-time business also delivers security and flexibility.

“The focus is on asset management,” Knight explains. “This technology allows providers to be more efficient and to do more work with the same people or even more work with fewer people.”

Soft-Aid also has developed a program on the .NET platform, and Computers Unlimited just unveiled Wireless Warehouse, a browser-based application.

“The .NET platform is like Windows was several years ago,” says Soft-Aid's Clark, meaning he expects .NET to become the IT norm. “It was a huge move from DOS environments to Windows. The .NET and browser-based environment is going to be that same sort of paradigm shift where walls come down and real-time capabilities are very practical.”

MBI also has been testing a browser-based product for about a year, and Hartz says its accessibility is appealing to providers.

“Because the product is in a browser, you avoid a lot of the Windows issues with workstations,” he says. “If you have a browser, such as Internet Explorer, and can access the Internet, then you have the application available to you.”

After the ‘Post-It Note Era’

Although the progression of the HME industry toward high-tech solutions may be slow, it is moving in that direction. As Knight puts it, current HME software applications are taking the industry out of the “Post-it Note era” and create an environment that streamlines business processes from beginning to end.

“If you look at those companies that are successful, whether they are large companies, regional companies, or even the small independents, they are the ones that tightly manage not only their billing and accounts receivable, but their inventory as well,” Knight says. “Many of the systems that are out there today may err on one side or the other, but do both rather well.”

And, providers are catching on to the benefits of improving their software capabilities.

“Users have become a lot more savvy in a lot of ways, so the expectations are much greater than they have been in the past,” Team DME!'s Barnes says.

“You will see better software being developed, and with that, providers hopefully will utilize more and more of the pieces that are there for them to use.”

Find Out More

For more information on the software programs and vendors mentioned in this article, visit the Web sites listed below. For a comprehensive listing of HME software suppliers, check the HomeCare Buyers' Guide 2003-04 or search the Guide online at www.homecaremag.com.