After what seemed like an interminable walk from the parking lot to the office, nervous and winded, I arrived at my new doctor's office for my consultation appointment. I was immediately asked to complete a massive survey. After 30 minutes and a cramped hand, I approached the window behind which the office clerk accepted my completed survey, identification and insurance cards.
After a short wait I was called to the side desk, where a professionally dressed businesswoman appeared. She asked me to follow her into an office, where she promptly closed the door and invited me to sit down. She explained that regardless of what happened that day or in the future, my PPO insurance would not be accepted because the contract with my insurance company had been terminated.
She was all business and matter-of-fact in her approach but respectful of me. I was instructed to pay the entire $450 up front. When I paid, I could see the doctor.
It felt more like a mortgage broker appointment than a doctor's consultation, and the message was clear: No matter my medical condition or need, I was expected to pay if I wanted to see the doctor. I appreciated the candor and professionalism, and promptly pulled out my credit card. I left my new physician's office that day with a clean bill of health, and I knew the HME industry should take a lesson from this doctor's business-like approach.
First, I guess when you collect your money before rendering service, you can afford an office just to discuss finances with patients. Second, the doctor's business manager didn't waver — the rules are the rules. Finally, the professionalism in the discussion about my bill and the doctor's expectations were decided way before I arrived. If I wanted to proceed, I knew what I had to do.
This scenario, however, is diametrically opposed to the norm found in the office of a home medical equipment provider. If you embrace an open but matter-of-fact approach to collecting your money, I do not think you will seem cold or harsh; you are simply assuring the patient that you will remain in business.
Are You Prepared?
Not only are third-party payers being rejected from doctor's contracts, competitive bidding may also leave HME providers in a similar position. If you are not a contract provider, you must make plans to diversify away from Medicare (for certain products in certain areas) for a time. In preparation for competitive bidding, whether it succeeds or fails, you must be certain you can survive with lower reimbursement rates and learn how to work under new conditions.
In all likelihood, the rate of attrition and consolidation will be high if competitive bidding actually happens. The percentage of providers that remain in the industry will be significantly reduced, and the level of service, regardless of what CMS demands, will wane.
Additionally, with CMS audits of all kinds now rampant, it is hard to imagine that we will ever find a way out of an arbitrary decision made by people who don't practice in our industry. Rather, it is time to arm your team with a compliance plan that is proactive, which, hopefully, will help your cause when you are audited. Despite the additional resources required to complete necessary internal compliance audits, you are not guaranteed that Medicare will grant you a favorable outcome even if you deserve it. That being said, you cannot afford to throw your arms up and quit. You should instead establish tighter control over documentation protocol and ask for chart notes that corroborate other written medical necessity justification.
Remember it was perfectly acceptable and expected that I would pay my physician up front when I needed health care. If this is the norm among other health care providers, why are those in HME waiting to institute the same mechanisms to collect payment? If the doctor won't provide the necessary documentation up front, obtain an Advance Beneficiary Notice (ABN) and require payment from the patient.
As insurance plans pay less and patients are expected to pay more, consider revamping your financial policy for patients. Make sure that the patient portion, which can sometimes be as much as 40 to 50 percent, is collected. Unless and until the cycle of providing the goods and worrying about payment later is broken, HME providers will continue to struggle to make ends meet just because they can't say “no” or are worried they might anger the referral source.
The notion of waiting for the insurance to pay and/or not knowing how much will be paid is simply unacceptable today. Figure out how much the plan might pay by looking for patterns and previous payment trends. Additionally, use various websites to verify benefits. As a general rule, you should be able to come up with what is expected by a third-party insurance for your most readily used plans.
I believe it is easier to be in the business of reimbursing the patient than trying to bill and rebill. Despite all of the attempts to collect patient copays and private pay, it is common to find HME providers who remain lax and treat patient pay portions as an after-the-fact concern. As you know, these receivables easily mount and can become extraordinarily difficult to collect when they grow old.
Some companies are simply not set up to handle the collection of the private/patient pay portion and outsource this responsibility to companies that do this more successfully. There are also automated invoicing services specializing in HME. If you are not astute at collecting copay or private pay portions, you should consider changing your protocol or utilizing an outsource option. One of my clients improved its private pay collection by 25 percent when the company outsourced this function.
As the HME industry takes serious turns that force providers to hire additional resources to deal with audits, staff is typically left unnerved (understandably) but better prepared. Many providers are working to create more operational efficiencies, focusing on automation to cut costs and improve productivity. Others are simulating competitive bidding to ensure they can survive reduced reimbursement.
Finally, HME providers are beginning to ask for medical necessity documentation before rendering service. If it is not secured, they are asking the patient to pay (after executing an ABN). If it's good enough for the doctor (who prescribed a patient's DME equipment) to obtain payment before proceeding with the office visit, surgery, procedure, etc., it is time you act in kind. This is one way of securing finances and retraining the referral community that you are simply mimicking their behavior and solidifying your relationship to ensure your longevity in the HME business.
Miriam Lieber is president of Lieber Consulting, Sherman Oaks, Calif., specializing in operations management and reimbursement for the HME industry. You can reach her at 818/789-0670 or by email at miriam@lieberconsulting.com.
Watch for Miriam Lieber's popular "Bottom Line" column, returning to HomeCare in 2011!
