The average 45 percent reimbursement cuts in Round 2 competitive bidding were extreme, but was anyone really surprised? If anything, the latest news on Medicare reimbursements just confirms what providers already know—they need to look elsewhere for revenue.
But where to look? HomeCare reached out to the industry in search of providers who have found new and innovative sources of revenue. The examples featured on the following pages include a new service provided to long-term care facilities, a focus on home accessibility side-by-side with preventative medical services and a Pennsylvania provider whose charity involvement is an opportunity to do well while doing good.
These stories have in common an appreciation of the need to be flexible and innovative in the face of adversity. “Traditional home care as we have known it for the last 20 years is over,” says Marc Connolly of Liberty Rehab & Patient Aid Center, one of our featured providers. “We really have to listen to what the market needs and mold our business to keep costs controlled and build long-term relationships.”
Let’s look at how three providers are doing just that—and please, contact us to share your story, too (see sidebar at the end of the article).
Respiratory Assistance
In addition to traditional DME, Liberty Rehab & Patient Aid Center in Connecticut provides oxygen, sleep therapy and medical equipment rental to long-term care facilities in the local community. Most recently, Liberty has expanded that business with a new level of service: Providing licensed respiratory therapists to local nursing homes on an hourly basis, paid for by the nursing homes.
Liberty Rehab’s “Respiratory Assist” program is a partnership with local skilled nursing facilities with a goal of helping each facility decrease the number of patients who return to the hospital within a month. Medicare penalizes hospitals for readmissions that occur in fewer than 30 days, so hospitals want to keep unplanned readmissions to a minimum. Therefore, hospitals favor—and direct additional business to—skilled nursing facilities that have the best record of avoiding readmissions.
By working with long-term care facilities to lower the incidence of readmissions, Liberty Rehab’s Respiratory Assist program helps to avoid the “revolving door” of COPD patients going back and forth between long-term care and hospitalization. For Liberty Rehab & Patient Aid Center the program is a new, nontraditional revenue source that paved the way for other new business, too.
Liberty Rehab has four DME/HME sites in Connecticut: in Stamford, Monroe, Stratford and Derby. The company has four divisions covering home care, retail, long-term care equipment rentals and staffing. Retail products include compression hosiery, orthopedic softgoods, bedding, bathroom safety and diabetic footwear. There is also a new women’s boutique at the Stamford location. In Round 2 competitive bidding, Liberty Rehab bid on six categories and was awarded three contracts in one CBA the company serves and one in the other.
“We’re going to get hurt by competitive bidding,” says William Fletcher, president and owner of Liberty Rehab. “We have always looked for ways to expand, and our Respiratory Assist program is key to building on our existing nursing home business. Expanding on the institutional side and the retail side will help offset decreases in traditional home care.”
Liberty Rehab’s Respiratory Assist program involves Liberty providing a respiratory therapist to each long-term care facility to help manage complex respiratory patients, to train staff one-on-one to develop core competency and to educate patients on respiratory disease management. The respiratory therapists are Liberty employees, and the long-term care facility pays an hourly fee to Liberty for the time each respiratory therapist spends at the facility. The program is tailored to each facility’s needs.
The Respiratory Assist program is helping to lower hospital utilization among long-term care patients and raising occupancy of local long-term care facilities. “The goal is to help the long-term care facilities become proven clinical leaders,” says Marc Connolly, general manager of Liberty Rehab & Patient Aid Center. “The hospitals know our staff therapists are in there doing the work and providing quality patient care throughout. We can help them do a better job.”
The program first began in 2010 in a facility where Liberty already provided respiratory equipment rentals. Since its inception, the program has grown from one facility to six. The long-term care facility pays Liberty for the cost of the program and does not get reimbursed. Their payback comes from avoiding hospital readmissions, improving their reputation and standing with local hospitals and thereby boosting occupancy rates.
The program also helps to raise awareness and name recognition of Liberty Rehab among local hospitals, referral sources, long-term care facilities and patients. A byproduct of the program is to open the door for Liberty to meet the additional needs—whether rental equipment, sales or even disposable supplies—of facilities that participate in the program.
The only costs to Liberty are the addition of new respiratory therapists to the staff, although those costs are offset, and an additional margin provided by the fees paid by long-term care facilities participating in the program. The company’s home care division already had therapists on staff for oxygen and CPAP follow-up. Connolly estimates the program represents an 8 to 10 percent growth in business so far.
Andy Tarutis, corporate administrator at Transcon Group, operator of Greenwich Woods Rehabilitation and Health Care Center, a long-term care facility in Greenwich, Conn., acknowledges the insight, guidance and professional support of the Respiratory Assist program at Greenwich Woods. “Today Greenwich Woods has an excellent competitive advantage in the marketplace, being able to care for COPD patients when other facilities lack the training, expertise and support to do so. It has helped secure additional referrals to the facility. Marc Connolly and his Respiratory Assist team were central to this program’s launching and continued success.”
Connolly also sees possible opportunity to expand the program to provide respiratory therapists to other environments, such as a freestanding ancillary medical clinic or even a manufacturing facility.
Promoting Accessibility
A new 10,000 square-foot mobility showroom at one Kohll’s Pharmacy & Home-care location in Omaha, Neb., highlights how the family-owned business has embraced the home renovation market as a complement to its existing mobility product line. Adjacent to the showroom featuring mobility products and home accessibility services is another example of how Kohll’s is reaching beyond traditional DME. A Preventative Medical Clinic nearby offers a combination of medical services including skin care/aesthetics (Botox and Juvederm), medically-supervised weight loss and bio-identical hormone replacement therapy, all supplied by nurse practitioners.
The new businesses support each other, says Laurie Dondelinger, marketing director of Kohll’s Pharmacy & Homecare. Dondelinger notes that customers of the mobility showroom are often Baby Boomers looking to address issues on behalf of their aging parents. The Baby Boomer demographic includes customers perfect for the health care services that address mid-life concerns, from skin aesthetics to weight loss to hormones. “We’re seeing more traffic and getting more phone calls,” she says. Sales numbers also point to healthy growth in the new areas of business.
Kohll’s Pharmacy & Homecare is a third-generation family business, founded in 1948 and now with eight locations; seven in the Omaha metropolitan area and one in southwest Iowa. The company began as a traditional retail pharmacy, including greeting cards, candy and a soda fountain. Over the years it has focused on health care; they stopped selling candy, alcohol and cigarettes, which provided high profits but did not contribute to the pharmacy’s core mission of promoting good health.
The pharmacy has also expanded into medical equipment, beginning with wheelchairs and respiratory and now including power chairs and scooters, hospital beds, etc. Locations offer certified fitters for mastectomy prosthetics, compression hosiery and orthotics. Kohll’s emphasizes service and works to be a liaison between the physician and the patient. For example, a customer care center tracks reorders of diabetic test strips and can alert a physician if order patterns suggest patient non-compliance. In DME Round 2 competitive bidding, Dondelinger says Kohll’s participated in all categories and won in “most.” They are one of the “little guys” chosen to provide testing strips for Medicare recipients and are gearing up for the July 1 switchover.
The mobility business has expanded into vehicle lifts as a way of broadening a wheelchair user’s ability to travel beyond the home. Kohll’s also offers wheelchair-accessible vans and rentals. Inside the home, working with stair lifts, ceiling track lifts and roll-in showers led to a broader focus on accessibility construction projects, from adapting bathrooms to widening doors and lowering countertops. The Mobility Showroom at the Millard location in Omaha brings various aspects of mobility together in one place, and Dondelinger says it’s the largest mobility showroom of its kind in the nation.
The Mobility Showroom displays several showers featuring various options and materials. Home renovation choices address aesthetics as well as function. “A home modification doesn’t have to be clinical and sterile, and the variety of items and materials we offer makes that clear,” she says. Material swatches highlight available finishes, including stone and granite. Grab bars include models that look like bath towel bars or other bathroom accessories. A range of product choices include standard options as well as more modern and upscale choices. The showroom displays include full-size tubs, showers and transfer benches. Customers can try out the options and decide what they need. “This gives them peace of mind to know it will fit their specific needs.”
“It’s much different than how our stores used to be,” Dondelinger says. “Now people can come in and decide what will work for them. They can come to any location and have most of their questions answered, or we can go to a patient’s house and do a free mobility evaluation.” There are smaller displays at each store, too. Featured brands include Bruno chair lifts and vertical platform lifts, Sanspa walk-in tubs, Moen grab bars, HealthCraft rails, HandiCare bath lifts, BHM ceiling lifts and Prairie View Industries modular and multifold ramps.
“People are looking at how they can stay in their home longer and avoid going to a nursing home,” Dondelinger explains. “We really listen to our patients, and they lead our expansion into new businesses.”
The construction sector of Kohll’s Pharmacy & Homecare does a brisk business in bathroom remodels, as well as in installing decks and ramps. They can even do full-fledged home additions. The construction business includes a half-dozen employees with various skill sets, from cabinetry to painting and drywall. Electrical and plumbing work is subcontracted.
Kohll’s opened the first Preventative Medical Clinic five years ago, and a second clinic opened within the last two years. Using well-trained nurse-practitioners to provide the medical services is key to Kohll’s success. For example, regulating hormones using bio-identical hormone replacement therapy, a naturally compounded product with fewer side effects, requires careful monitoring of hormone levels that involves blood testing. Kohll’s added nine employees to operate the Preventative Medical Clinics.
Expanding business effectively is a matter of looking and listening to current customers’ broader needs, Dondelinger says. “They may not tell you directly, but you can learn a lot from what they tell you would help them have an easier life. And you can provide it for them. That’s how it started for us.”
Charity Partnership
Variety Pittsburgh, a charity that helps children with disabilities, wanted to provide 100 adaptive bikes to children before Christmas 2012. The My Bike program kicked off on Nov. 5, 2012, which left little time to register the children, fit them for bikes and deliver the bikes in time for the holiday. The charity put the project up for bid and three companies competed. In the end, Blackburn’s—located in Tarentum, Pa.—was named the sole provider/partner, based on pricing and also a pledge to be a resource throughout the program. The project supports Blackburn’s mission of “Helping People Live Life Better.”
Variety Pittsburgh is dedicated to empowering children with disabilities by providing them with the equipment and experiences they need to gain mobility, confidence and independence. Blackburn’s had worked with the charity in the past. However, Charles P. LaVallee, Variety Pittsburgh’s chief executive officer, raised the stakes significantly when he envisioned an ambitious new program to provide adaptive bikes to families who cannot afford them.
Blackburn’s offered a “fitting day” on Nov. 26, from 8 a.m. to 8 p.m. at a Marriott in Pittsburgh, during which they saw 30 of the children in one day. Fitting involved measuring the children’s legs and assessing the functionality, support and steering needs on each child’s bike (actually a three-wheeled vehicle).
“December is a busy month for any DME company,” says Jeff Rukas, Blackburn’s sales representative involved with the My Bike program. “But we pulled together a team of eight to 10 people who really had to work hard to get this done. There were a lot of moving parts. We didn’t have to add any employees, and it was good team building for the group. Gifting of adaptive bikes has never been done to this scale, let alone in one month.”
The hard work paid off, with 90 bicycles delivered Dec. 20. “There were a lot of parents in tears when they saw their kids ride a bike for the first time,” Rukas says.
Blackburn’s serves regions of Pennsylvania, Ohio, New York and West Virginia with facilities in five locations. The company specializes in providing institutional and home care patients with a full spectrum of pharmaceutical services, medical supplies, bariatric equipment, support surfaces, respiratory services, accessibility aids, durable medical equipment and high-end rehab mobility.
The My Bike program will continue, and Blackburn’s will be key to its ongoing success. The first 100 bikes (with 94 delivered so far) are Phase I, and Phase II involves funding for another 140 bikes. The next phase will extend the program to 10 additional counties in western Pennsylvania. A kickoff event will be held in each county, including county executives, hospital staff, medical staff and press, to promote awareness of the program. Then a fitting day will be held in each area, and a third event will be held to present the bikes to children and families. The program could continue even longer if additional funding becomes available. Expansive media coverage has spurred additional donations to the program, including one donor who sent Variety Pittsburgh a $10,000 check.
Although the results are hard to quantify, partnering with the charity has provided public relations benefits for Blackburn’s through frequent mentions in media coverage. The program has also enabled Blackburn’s to enhance relationships with contacts in the medical community. Participation with the program has involved meetings with upper management and local CEOs, which have allowed Blackburn’s to display its commitment to children and raised its positive image in the community. “This is giving us exposure to children and their families who could become customers for a long time. We can show them the level of service we can provide,” Rukas says. For example, Blackburn’s has service technicians to address maintenance or repair issues with a bike’s chain or wheel.
“We already have strong relationships with most of the clinics in the area, since we have been around a long time. But there’s no doubt that this is enhancing our relationship with these clinics. The therapists are also buying into the program.”
The program has provided additional business for Blackburn’s, almost 100 bikes so far. The cost to sponsor an individual bike is $1,800, and Blackburn’s has “comfortable” margins on the sales, Rukas says. There are also no billing issues: the charity promptly sends a check for the total once the bikes have been delivered. The program has also brought in additional cash business from families who hear about the bikes but don’t meet the income requirement for the free program.
Rukas says the plan is to expand My Bike into a national program, which could provide an opportunity for other DMEs around the country to become involved. “Blackburn’s can’t service bikes in Texas.
“First and foremost, we are involved in this because we want to be,” Rukas says. “There’s nothing more pure and good than supplying a child with a disability their first bicycle. You’re enabling families to spend time together doing things they never could before. This has been bigger than just creating revenue; we have been able to change lives, too.”
Visit Virtually
Blackburn’s
www.blackburnsmed.com
Kohll’s Pharmacy & Homecare
www.kohlls.com
Liberty Rehab & Patient Aid Center
www.libertyrehab.com
Variety Pittsburgh
varietypittsburgh.org
Tell Us Your Story
Have you developed an inventive nontraditional revenue stream for your HME business? Tell us your story and you might be featured in an upcoming issue. E-mail us at sgibson@cahabamedia.com.
