Rev Up Your Revenue

Now that Medicare’s oxygen cuts have finally arrived and we know that this will mean an average 8 percent reduction nationwide, were you ready? Although the industry knew the cuts were coming, ready or not, you were given approximately one week’s lead time from notification to implementation date.

Whether or not you found the decrease palatable, the reality was that you expected a cut of some kind. Even so, you had to confront the new reality very quickly — you would be doing the same work for less money.

In coping with the reimbursement cuts, a look inward at your operation is imperative. To compensate for lost income, now and in the future, consider adding revenue to the bottom line by tapping into your existing patient base. In other words, adding revenue from your current respiratory patients is one way to recoup the loss in oxygen income.

QUERY

The first question is how much revenue per respiratory patient do you currently garner? Easy to calculate, this figure is the result of your total respiratory revenue divided by your total active respiratory patient census. Once you know this figure, how can you begin to drive up revenue?

CONSIDER THIS

It is important to recognize that as the insurance industry changes and Medicare cuts continue, patients will become more involved financially with their own health care management. Unless they go without or find limited accessibility, they will pick up some of the slack for what their insurance doesn’t pay. Therefore, as patients grow more accustomed to paying, they will want products to improve their quality of life.

How does this impact you and your company? It provides you an opportunity to assist your respiratory patients in this pursuit by offering more ancillary products that can make them more comfortable.

DETERMINING NEED

How do you determine what the patient needs? You first have to know what equipment the patient is currently using. Your software should enable you to generate a report of respiratory patients by payer, by product.

For instance, you can see which patients have nebulizers but no oxygen, and vice versa. A COPD (chronic obstructive pulmonary disease) patient may very well need both. Some nebulizer patients prefer an ultrasonic nebulizer if they are ambulatory. They may be willing to pay for it since Medicare won’t. (Remember to issue an Advance Beneficiary Notice and file a non-assigned claim if you elect to dispense one.)

You may also sort reports by disease state or ICD-9 code. If you have an OSA (obstructive sleep apnea) patient, did his overnight sleep study show oxygen desaturation that would qualify him for oxygen? If so, does he currently have oxygen? If not, discuss his test results and the patient’s other diagnoses with the physician.

If the patient does have oxygen, which company provided it? Why did that same company not get the order for the CPAP? Perhaps the patient might want to get all of his or her equipment from the same source. As you can see, this opens up more questions, but potentially it also allows you to gain more respiratory revenue.

For the non-Medicare patient, some insurance companies might be willing to pay for an ultrasonic nebulizer if you have a letter of medical necessity from the physician. Further, a COPD patient may have problems performing activities of daily living. In that case, you may decide to focus on noncovered products that could prove useful for this type of patient. For example, you might choose the peddler, a product that helps with circulation and provides non-aerobic low impact exercise to help the COPD patient gain strength.

REFERRAL SOURCE MARKETING

Before you launch a new add-on sales program for your respiratory patients, it is a good idea to connect with your existing respiratory referral sources to determine their patients’ needs. If they don’t know and you aren’t sure what additional services and/or items you might provide, contemplate attending trade shows (local and national) to learn about new and innovative product lines.

Additionally, comb trade journals, surf the Internet and talk to manufacturers and distributors about any new product offerings. Present this information to your referral sources to see which items might peak their interest.

You can invite the manufacturer to help you conduct a lunchtime in-service for the referral source to demonstrate the new products. Results should show an increase in referrals for these ancillary products, thereby increasing the revenue-per-patient figure — and your bottom line.

INCREASING PATIENT SALES

Not only should you enhance your product selection for the referral community, but you should also market directly to the patient. Granted, Medicare forbids you from telemarketing, but the program actually encourages (if not implores) you to check on your existing patients.

Your objective is not to make a direct marketing call for covered items, but if you are calling to check on the patient, there is no reason he or she can’t order additional products from you. A special promotional educational day/fair at your store could heighten the awareness among customers and referral sources.

Additionally, your sponsorship at local charity events can also improve visibility. Written as well as oral communication representing your company also will help you gain credibility and should make a profound imprint on your business.

As patients are forced to pay upward toward 50 percent copays on some insurance plans, they will become increasingly more aware that health care costs are truly their responsibility. The less the insurance pays, the more financial onus rests with the patient. This will pilot a keener interest in patients’ own health care needs, and they will want to know more about managing their diseases. In turn, this will lead to increased sales opportunities for your company.

One way to help is to raise awareness about complementary products your patients may need, which will also increase your revenue per patient. Remember that, invariably, it is five times easier to sell to an existing patient than a new one. Simply put, increasing revenue per patient will increase income and improve profitability.

All, or even some, of these tactics should help you reach your goal — a way to counteract the recent Medicare cuts. One thing is certain: With Medicare and other insurance companies cutting payments, there is no free lunch for you or your patients. But with additional marketing and some effort, you can increase revenue for your existing respiratory patients.

Miriam Lieber is president of Lieber Consulting, specializing in operations management and reimbursement for the HME industry. She can be reached by e-mail at [email protected] or by phone at 818/789-0670.