Plugging into HME IT

Who could have guessed there would come a time when terms like “electronic document exchange” and “Web-based functionality” would come tripping off providers’ tongues almost as frequently as acronyms like “DMERC” and “HCPCS”? Welcome to a new day in the home medical equipment industry, one in which information technology (IT) is as important to providers’ bottom lines as offering the latest products.

Advances in IT tailored for HME have also brought another word into providers’ business lexicon: automation. And according to some experts, to boost productivity and profit in the competitive market to come, providers won’t be successful without it.

“While manual processes do work, irrespective of the size of the company, all providers have to embrace technology in one way, shape or form,” says Jeff Frankel, president of Trac Medical Solutions, Schenectady, N.Y. The company markets CareCert, an Internet-based system for processing CMNs online. “Technology is synonymous with greater efficiencies, which are synonymous with greater profitability, and with greater profitability you’ll have better care being provided.

“The industry has tried to squeeze as much cost out of procuring product as we possibly can,” Frankel continues. “You can try to extend the life of a concentrator … but you can only go so far with that before you have to start looking for other avenues to managing your business more effectively. That’s where IT comes in.”

Factor in the administrative simplification mandated by HIPAA and federal reimbursement cuts set out by the Medicare Modernization Act, and providers are being pushed to automate their operations, according to Weyman Perry, vice president, sales and marketing, for Duluth, Ga.-based Fidelis Software, which developed the Brightree online application.

“The types of things that were ‘nice to have’ are becoming ‘must haves’ with the increasing price pressure from programs like Medicare and Medicaid,” Perry says. “Personnel costs—workflow efficiency and accuracy—are one of the areas [with the] greatest potential to squeeze out additional productivity gains, thereby allowing a business to remain profitable in the face of reimbursement cuts.

“In addition,” Perry points out, “having the data available to analyze critical issues like payer and product line profitability are becoming necessary for culling out unprofitable portions of a business.”

Jim Clark, president of Miami-based SoftAid, which offers inventory-management software as well as a Web-based business management program, suggests looking at the benefits of technology in terms of both hard and soft costs. “Hard costs are things like increasing revenue and decreasing costs. On the revenue side, especially in health care, you look at things like proper billing or reduced denials. Technology can help on the expense side with labor costs, [which is] the biggest cost in most companies, across industries. If your staff works more efficiently, you can reduce labor costs.

“Soft benefits, on the other hand, are the peace of mind of knowing that your systems and records are secure, having a more manageable workflow and workday, working in a more organized manner and knowing you’re in compliance with government regulations,” Clark says. But, he explains, “there are no tangible dollar figures you can attach to [these benefits, though] it is generally a major benefit to improve efficiencies in your business or personal life.”

Functionality to Fit
A myriad of process management tools are available to HME companies today. Along with the patient-management, billing and inventory-control functions that providers have come to expect from a business package, today’s HME IT applications also offer capabilities including:

Collection data. Memphis-based RemitData, for instance, uses electronic remittance devices to collect payment data from health care providers and to provide productivity enhancements, sorting transactions by the reasons they were denied or from highest to lowest dollar. “This lets providers pinpoint what they are doing right and what they are doing wrong, and gives the staff the ability to go after things that will bring in the most money in the shortest time,” explains CEO Bentley Goodwin.

With this information, providers can compare their denial rates with those of other companies and to an average rate, as well as to a “virtual company” that bills the exact same products. “When we create these virtual companies, it allows us to compare apples to apples and oranges to oranges instead of an apple to a mixed-fruit basket,” Goodwin says.

Executive-level operations. Providers can use technology to outsource complex functions such as accounting and budgeting. Randy Harrod, a certified public accountant and owner of Harrod CPA Group in DeLand, Fla., provides an application called e-CFO that performs the functions of a “virtual CFO,” specifically, resource management.

“Accounting is basically scorekeeping, whereas financing is managing resources, taking the information out of the system and extrapolating it in a way that allows you to make decisions on it,” says Harrod, who is a former COO of Medicare Rental Supply in Georgia and CFO for InHome Medical in Florida.

Integration of handheld devices. With connectivity available between IT systems and handheld or wireless devices like cell phones or personal digital assistants (PDAs), employees can ramp up productivity. Delivery drivers can get route and traffic information delivered to their PDAs, for example, and by avoiding traffic or not getting lost on the way to a patient’s home, add time for more deliveries each day.

SoftAid’s Clark describes a more high-tech scenario with real-time claims processing or point-of-care settlement: “When a piece of equipment is delivered, that information goes into the PDA, comes back to the provider in real-time and can be billed electronically as a claim to the payer. The payer could automatically adjudicate the claim, decide what to pay, then forward back a response. When this happens in real-time, before leaving the patient’s home, you know what you’re going to get paid, and you can collect the copay or balance.” The Promise of the Internet

For Lee Hartz, general manager of Management by Information (MBI), Sherwood, Ark., the future is “all about integration and the transfer of applications to the Web browser.” Hartz and others see greater online functionality as another boost for HME IT.

“In traditional Windows applications, the user interface for the system must be programmed into each component of a system, which is different for every vendor. With browser-based applications,” Hartz explains, “applications from different vendors and components such as e-CMNs can integrate seamlessly because they are all designed around a common interface—the Web browser.” MBI’s i-emphsys is a browser-based home infusion pharmacy and HME product that “manages a provider’s business from patient intake to collection of [accounts receivable],” Hartz says.

Fidelis’ Perry counts the benefits of an Internet product like Brightree in “low upfront and ongoing cost, high functionality, flexible connectivity and operation in a real-time—versus a batch-mode—environment. The foundational change in the platform will change how employees get their work done, how they are trained in their jobs, how they hire and manage employees, how salespeople deal with the operational arm of the company and their customers and how they interact with manufacturers.”

Atlanta-based CareCentric, which owns the Mestamed, Dezine DME and MSS product lines, has just completed Ac-cura.net, a system that is built on Microsoft’s .NET technology. This type of Web-based application “opens all kinds of doors of communication outside one’s business, with employees working from home, with manufacturers, with payers, with drivers on the road,” says Mark Kulik, the company’s vice president of sales and marketing. SoftAid, which markets the Windows-based DMEOffice for automating order entry and inventory management, also markets the Web-based ManageDME, the benefits of which are “anytime, anywhere access–just like using any Internet browser” such as Netscape or Microsoft Explorer, says Clark.

“A provider with multiple offsite warehouses can go online and request inventories, managing the process from remote locations,” he explains. “With real-time, when you place an order, the inventory is then moved from ‘inventory.’

“You may have minimum reorder levels, where if inventory falls below certain levels, the system will automatically reorder it. Manufacturers are allowing electronic data interchange (EDI) from major vendors for the vendor to electronically date a purchase order and for the manufacturer to fill the order and send the shipping information to providers and electronically invoice.” Browser-based systems typically are available by renting or leasing the browser space from the vendor, or by installing a server and related equipment. If providers lease the browser space, the vendor is responsible for upgrading the applications and providing security and backups. The benefits of leasing include lower costs upfront and the convenience of handing over responsibility for server maintenance to an outside party. The downside is the service remains an ongoing expense because it is on a lease.

For providers with one location, experts agree the lease option is preferable. But for any size company, and as with any IT purchase, they suggest that providers should investigate carefully when considering an Internet solution.

“Online [application] users are at the mercy of a third party that is responsible for maintaining the system and ensuring that data is properly protected,” cautions Michael Barish, president, AnCor Healthcare Consulting, Coral Springs, Fla. “Also, online applications are still relatively new and do not have the proven track record for successfully handling the business needs of HME companies.”

A Paperless Workplace
Another resource gaining HME owners’ attention is document imaging. The technology is being heralded as the next big thing in HME IT, if only because it is easily adopted (the only hardware required is a scanner) and has an immediate impact on business operations.

“Document imaging is the next leap, an important next step,” says Dennis Nasto, vice president of sales, marketing and customer support for Secure- Care Technologies, Austin, Texas. “It’s essentially taking all of [your] records and putting them into electronic form. We’re really moving toward a paperless environment.”

“Document imaging is an example of technology that increases the ability to service the customer as well as improving the operational efficiencies of an HME company,” explains Esther Apter, CEO of MedForce Technologies and president of Healthcare Management Solutions, both in Monsey, N.Y. MedForce offers document imaging through its MedForce Scan.

In any HME office, Apter points out, “files need to be accessed continuously throughout the day to verify information, check on previous deliveries or pull documentation needed to process or appeal a claim.

“Instant, simultaneous access to the files saves at least four minutes each time the file is needed. This includes the time it takes to get up, go to the filing cabinet, pull the file, find the document, copy it, put the original back in the file and put the file back in the cabinet. The four minutes does not take into account the time to look for the file or document if they are not in the cabinet or in the right place in the cabinet.

“Document imaging also enables multi-location [companies] to access documents from any of the locations,” Apter adds.

“An average person in a DME billing department retrieves a minimum of four files or documents (including copies of EOMBs) per hour,” she estimates. “If that person’s salary is $30,000 per year, the cost of retrieving each of those documents is a minimum of $7,000 per person per year. That is money that can be spent more effectively. Plus, if you add those minutes back into each person’s day, you should see at least a 30 to 40 percent increase in productivity.”

Plugging Into the Future
According to CareCentric’s Kulik, IT is one of the most important assets for DME providers, second only to employees. “You can have all the computer systems in the world but not have great employees; likewise, you can have great employees, but if your software miscalculates [a claim, the employees] don’t matter.

“Given the complexity of reimbursement today—with all of the different regulations, payers, prior approvals and copays—you’ve got to have a system that can keep track of these things,” Kulik states. “There’s no room for error, especially when margins are tight.”

“The software and IT solutions used to manage a … provider’s organization can be the tool that facilitates growth and profitability—or the opposite, the reason the company’s growth is stunted,” Apter believes. RemitData’s Goodwin agrees. “A properly implemented IT solution can make your staff much more productive by utilizing tools available within the IT infrastructure that you can’t get using manual processes,” he sums up.

“Everyone is always asking, ‘can you do more for less?’ If you can’t, somebody else can.”