Business Technology in the HME Arena

HME providers should be embracing information technology. After many years of prognostication about how information technology could change health care, a transformation is finally under way. Since the July 1 deadline has come and gone, providers are now grappling with the difficult financial realities of the second round of competitive bidding. A new era of health care is emerging—with providers, payers and patients winning in the end.

This change is part of the Obama administration’s efforts to rein in Medicare overspending and supplier fraud. A pilot program was initiated two years ago in nine metropolitan areas which resulted in a reduction of Medicare costs by 42 percent, or $202 million. The national program is expected to save $42.8 billion over the next 10 years, as reported by the Centers for Medicare & Medicaid Services (CMS).

To cope with these pressures, HME professionals should be working diligently to keep operating costs in check. They should also ensure that their organization’s information technology is helping them prepare for the future during this time of intense change and payment uncertainty. Information technology should now be at the center of your organization’s strategic plan.

This turbulent financial climate is just one of several pressures simultaneously hitting providers. They also need to prepare for the imminent shift from ICD-9 to ICD-10 coding. While ICD-9 was comprised of 13,000 codes, the new ICD-10 consists of more than 68,000 codes. The new coding system has the potential to reveal more about quality of care. This data can be used in a more meaningful way to better understand health complications and better track patient outcomes. In addition, ICD-10 incorporates greater specificity and clinical detail to provide information for patient care decision-making and subsequent outcomes research. With the October 2014 deadline approaching, time is quickly running out. Providers should consider the future impact of ICD-10 assessments and whether they will be able to crosswalk from ICD-9 to ICD-10, and when they might be able to complete business updates.

While the financial struggles and the move to a new coding system present significant challenges, it is the shift toward new payment models that may prove to be the most difficult. Providers must realize that they will have to adapt their revenue cycle operations and technologies to deal with these changes in the payment model resulting from the Affordable Care Act.

In the future, providers must understand that reimbursement will be more closely tied to patient care outcomes. It is expected that health information exchanges, mobile apps, and analytic and remote patient monitoring will come into play to ensure more positive outcomes. Providers will need to have the ability to track accountable care, pay for performance and develop other value-based purchasing models to demonstrate their value to payers.

It is difficult to pinpoint exactly how providers might support new payment models and how or when they might be incorporated into their information technology systems. However, it is certain that big changes are looming, and providers need to start preparing now for the future. Revenue cycle processes and workflows are receiving unprecedented attention since providers have begun to make efforts to maximize revenue and address inefficiencies and shortfalls in reimbursement on a timely basis.

Also, with the seemingly relentless pre- and post-payment audits from Medicare, it is vitally important that providers’ software systems stop companies from transmitting inaccurate claims. Software should help streamline an audit response and make processed claims easier to track or follow up.

With the recent bursts of consolidation of several companies throughout the HME software market, providers need to ask themselves if their current software provider will be around to help navigate the changes and challenges ahead. It is important that HME professionals become proactive when it comes to your organization’s information technology, because it is your company’s lifeblood—it is what will help you survive.