Rental Programs Deliver

In many ways, if you’re a DME provider billing Medicare and other third-party payers for power chairs or any piece of equipment with a billing cap, you’re already in the rental business. But HME/DME providers who have decided to bolster their rental program with expanded selections and services are really reaping the rewards. With inventory management software tooled specifically for rental program requirements—cleaning, maintenance, etc.—savvy business owners should consider adding this service to their existing business portfolio.

“The founder of our company has previous experience with rental operations, so we’ve basically been leasing medical equipment since the company’s launch 35 years ago,” according to Scott Eastman, information technology manager at Keene Medical Products. “We’ve seen the evolution of this technology over the years, and the software that’s available for managing rental operations these days is absolutely amazing. It helps make sure you’re where you need to be at each stage of the equipment’s service life.”

Integration Important

In 2004, Keene realized that it had outgrown the business software system that it had in place at the time and began exploring newer technologies. “We basically put the project out for bid and asked anyone who was interested to show us what they had to offer,” Eastman says. “There were a lot of service providers who could offer us certain things that we liked, but we came to the realization that it would really be best to have an integrated system with all the components produced by the same software design company. You want to make sure that all the data points are connected so that information is shared automatically between platforms, like purchasing and inventory. Otherwise you have to enter those numbers manually, and that would defeat the whole purpose.”

After much research the company finally decided to go with the TIMS medical suite, developed by Computers Unlimited. They were impressed by the fact that the company had been around as long as Keene had, and with its roots in industrial distribution had a strong grasp on developing robust, streamlined, integrated inventory management systems. “The rental module we developed for HME/DME really came out of our core industrial system for delivering and tracking gas cylinders,” says David Schaer, president of Computers Unlimited. “We had one customer who was delivering oxygen cylinders to both industrial and medical accounts, so that really marked our entry into the medical arena. Most of the applications we’ve developed over the years have been a direct result of and response to our customer’s needs.”

Taking its existing rental software for industrial clients, Computers Unlimited began learning about the modifications that would be required to track medical equipment through its lifecycle. The obvious additions would address cleaning and maintenance work required between rentals, and sometimes even during the leasing phase. “What we’ve done is allow what we refer to as ‘multiple statuses in workflow states’ that can be associated with a particular type of rental equipment,” Schaer says. “For example, inventory may show that you have 100 hospital beds at one location, but how many of them are available to be shipped out that day? If 20 are still being cleaned and maintained, you need to know that before you promise to fulfill an order.”

Beyond the availability of inventory, even more additional data is gathered by the TIMS software to ensure that the rental program is as streamlined and productive as possible. Schaer goes on to explain that the system provides companies with multiple locations an overview of stock that allows it to be shifted between sites when necessary. Usage is also monitored, so that if you have one location that leases those hospital beds more frequently—say, it’s near a hospital with which the HME has a referral relationship for discharged patients—and another in a more rural area with less turnover, then you can adjust your inventory accordingly.

Predictive analysis is another valuable tool the software provides, giving HMEs insights into how long, on average, a certain type of equipment is generally in use by patients, how long cleaning, maintenance, and repair usually takes, and how long each unit tends to remain idle. “This software allows you to measure and monitor how well you’re utilizing this valuable resource,” Schaer says. “You can find out if a piece of rental equipment is collecting dust when it should be collecting revenue.”

Benefits Abound

In addition to being a healthy new revenue stream, rental programs—and the software that helps them function efficiently—provide other benefits as well. Kent Barnes, who is senior vice president of sales and marketing at TeamDME!, recalls a client who wanted to open a retail-only HME/DME company. “He wanted to rely entirely on point of sale revenue,” he says, “but he eventually realized that he needed something to actually pull customers into his facility, and the perfect hook turned out to be a rental program.”

Barnes also points to the many ways in which the data compiled by inventory management systems helps business owners understand how their company is operating at both the micro and macro levels. If more seniors were moving into a particular area because of a new retirement village, for instance, the number of portable oxygen systems—with lighter materials and better designs for more active lifestyles—being rented may rise. Rental software would flag that phenomenon and allow the HME to take advantage of the opportunity for increased revenue while at the same time meeting the needs of the community.

From the beginning, Barnes says that TeamDME!’s software has focused on inventory. “There was a time when people didn’t pay as much attention to what they had on their shelves as they do today,” he says. “But in challenging economic times one of the best ways to trim operating costs is to decrease your inventory, or at least manage it more efficiently. The key these days is just-in-time inventory, but that’s something you’ve got to watch very carefully so that you don’t run out of stock and lose your customer’s confidence. At the same time, you don’t want equipment sitting unused and costing you money.”

The TeamDME! rental software module also addresses cash flow, allowing the HME/DME provider to set whatever payment parameters best suit a particular account or piece of equipment. “You can set your system up to bill at whatever frequency you’d like,” he says. “You can set it up on a daily, weekly, or monthly basis for someone leasing a wheelchair who’s visiting town on vacation, and you also establish what we call ‘billings allowed’ depending on how many months you can rent a particular item before it’s considered purchased. That will be a different period depending on both the equipment and the payer, such as Medicare or Blue Cross. Then you have the option of automatically converting it to a purchase at the end of the 10- or 13-month period, or you can do it manually so that you’ll be able to make sure all the payments have been made first ”

Barnes goes on to explain other benefits, including setting reminders for when some equipment must be serviced—which can occur in the home. “Our HME/DME customers will have patients who lease certain items for months and years at a time, so they’ll sometimes need to visit their home to replace filters and conduct other general maintenance from time to time. Our system alerts them whenever it’s time to do so.”

As for items being returned to the branch, the software immediately begins tracking the inventory through the cleaning/maintenance cycle on its arrival. “Once it’s been returned your system will automatically generate a service ticket that accompanies the item to the clean room and follows it through all the stages of the process until it’s ready to be leased again,” he says. “So you have this history of everything you’ve done to every wheelchair, hospital bed, or concentrator you rent as proof of your good intent, and it even helps you learn about how long you can expect certain items to last. There will come a time when the cost of keeping something in good working condition doesn’t justify the revenue it’s bringing in, so this software will help you to identify that point.”

Better Beta

Both TeamDME! and Computers Unlimited rely on close relationships with their customers to bring new software features and capabilities to market. “We keep a running journal of every single question people ask us over the course of the year,” Barnes says, “and we’re constantly thinking of ways to address their concerns. Many of their suggestions actually make it into our new software releases.”

Scott Eastman of Keene Medical—which now utilizes TIMS software throughout its operations—has had a front-row seat to this process. “We first adopted their software in 2005, and we’ve already worked with Computers Unlimited twice beta testing new modules. Not only does that allow us to provide the developer with important insights straight from the front lines, but it positions us at the leading edge of new technologies as well. We love having the opportunity to provide input directly from our experience, and we really enjoy our relationship with Computers Unlimited.”

According to Eastman, Keene will soon begin its third beta test project with the company, this time on advances that have been made to its rental management module. “They put a lot of time into constantly improving their product, and we value and appreciate that. We have 12 sites, so managing all of that stock efficiently is really critical to the success of our operations.”

Schaer, of Computers Unlimited, says their R&D efforts are highly structured, and include a great deal of customer involvement and input. “We have a steering committee, for instance, which is made up of a select number of our key clientele that are experts with our system and well-established in the industry,” he says. “We also hold a user’s group meeting each September, which gives us the opportunity to showcase some of our accomplishments and begin discussing plans for future developments with our customers.”

As for the stages involved in introducing a new product, Schaer says that once the primary design work has been completed, there is a process of merging it with adjoining software modules that is both aesthetic and functional in purpose. “Module by module we’re improving the user interface and experience, making sure the different programs resemble, complement and sync with one another perfectly,” he says. “Once we’re sure everything is running efficiently, the beta test begins, which allows us to continue fine-tuning the system in its entirety.”

This phase leads to what is known as “ripple work,” which has to do with the integration of the system. Computers Unlimited will work with its customers to examine how all of the modules interact with one another—picture the effect caused by tossing a stone into a pond. “Everything is connected,” Schaer says, “so we’ve got to make sure that the module we’ve updated doesn’t cause unintended problems with business intelligence, or financial reporting, or inventory control. It’s a fairly intensive process, but the reward is an end product that is reliable, integrated and flexible.”

Internally, the company has “showcase meetings” every three weeks during which progress reports are issued and estimates made as to when the product launch will be, or whether they’re on track to meet it if it has already been established. These lead to the “burnout charts” that further hone the process as the launch date nears. “For this new rental module, we’re aiming for widespread availability at the beginning of 2014,” he says, “and we’re right on target to meet that goal.”

Experienced beta testers such as Keene also have procedures in place, such as webinars they offer to their employees at all locations prior to the beginning of the testing phase. “You don’t want everyone walking in saying ‘what in the heck is this?’ after all,” Eastman says with a laugh.

Records Required

With an operation the size of Keene’s—a dozen locations leasing everything from wheelchairs, hospital beds, ventilators, CPAP and IPAP equipment to IV poles, patient lifts and pressure pumps for mattresses—Eastman says the benefits of leading-edge rental management technology are many, and that it goes far beyond simply being able to manage your inventory.

One example he gives involves recalls. “You never want that to happen, of course, but when it does you’ve got to be able to act quickly,” he says. “With our TIMS software program we can determine exactly where each piece of equipment being recalled is located so that we can contact the patient and replace the item immediately.”

Other benefits include records required for accreditation. “We’re accredited by CHAP, for instance,” he says, referring to the Community Health Accreditation Program, “and they’ll want to see all the records for cleaning and maintenance of our rental equipment when they review for reaccreditation every few years.”

Companies of all sizes will appreciate the extra attention paid by TeamDME! to keep the revenue stream flowing. “One thing we spend a lot of time working on are front- and back-end denials,” he says. “If payment is being denied, we work hard to identify the problem. Is the wrong modifier being used, or the wrong product number? We conduct literally thousands of ‘scrub edits’ to make sure the claims our software is generating are right the first time so that payment won’t be delayed. We’ve even contacted a payor on behalf of a client to find out why a particular claim was being denied, and they finally admitted they really didn’t have a valid reason, so the problem was eliminated.

“Sometimes you’ve got to go that extra mile to make sure your clients are getting what they need from your product,” Barnes says, “and I think that’s something we’ve always been known for.” 

Learn More Online

Computers Unlimited/TIMS Software
www.timssoftware.com

Keene Medical Products
www.keenemedicalproducts.net

TeamDME!
www.teamdme.com