How Efficient Are You?

HME providers today are working harder and harder to earn less money. Reimbursements are headed down, and there are more obstacles to getting paid — from changing policies to the looming threat of audits. The general costs of doing business are also climbing, with higher gasoline prices just one example.

No wonder the technology sessions and booths at Medtrade Spring were crowded with providers looking for ways to boost productivity and efficiency. In a business climate that’s not for the faint-of-heart, at least one bright spot is the availability of tools that make it easier to cope.

How efficient are you? It’s a question every provider must ask themselves in 2011, and continually and repeatedly forever after. HME companies can no longer afford to miss opportunities that can help maintain margins. “Good enough” no longer cuts it, and the stakes are higher than ever.

“Clients are looking for ways to improve their efficiency, and they say it is no longer an option but a necessity,” says Kent Barnes of TeamDME!, which offers software for DME, respiratory and infusion businesses. “The general consensus is that we will all have to do more with less to stay in business.”

While some providers are jumping on every new software feature that can improve their operations or save even a penny, others have a way to go.

Ed Bauer, national sales manager of Noble House, which caters to small- to mid-sized companies, says while he encounters providers at various stages of technology adoption and automation, many of the company’s clients are now trying to streamline their operations.

“I think technology is a leveler for the playing field,” says Kevin Weinstein, vice president of marketing for ZirMed, which has a suite of revenue cycle management solutions. “Larger players may have had a competitive advantage in the past, but that asymmetry has gone away. Now other [providers] can participate on a more level playing field.

“Efficiency is no longer just for large players,” he says. “We can leverage technology to get those same results for a smaller enterprise.”

If it all sounds too complex or you think updating or acquiring technology requires too much of an investment, get over it, industry consultants and vendors say. If you’re not absolutely maxing out your company’s efficiency through your infrastructure — not only software but employees and processes — it could be tough to survive in the years ahead.

Improving Productivity

“When I go out and visit an HME, the first thing I do is an operational assessment,” says Bruce Brothis, president of Allegient Billing and Consulting. “What is the workload? Who are the people? Are they missing opportunities? Are they overstaffed?” Brothis adds that for HME providers, technology and operations are “joined at the hip.”

One measure of productivity is the amount of revenue per FTE (full-time equivalent) employee. Between $100,000 and $120,000 per FTE might have been sufficient 10 years ago, but providers now need productivity around $150,000 per FTE to help offset continuing reimbursement cuts, says Roberta Domos of Domos HME Consulting Group. Making the most of existing software or adding new technology can help in meeting that benchmark, she says.

Another way to boost efficiency is by maximizing the benefits of the human-machine interaction.

Barnes of TeamDME! says a simple example of the concept is computer monitors, and he urges providers to invest in larger monitors and/or dual monitors. The larger views can help increase productivity by 15 to 30 percent, and help to reduce errors by 20 percent. They can also help to reduce stress. He suggests dual 20-in. monitors or a single 24-in. monitor.

However, Barnes notes, “Don’t get too large, because bigger is not always better in this case.”

Don’t Overlook Any Area

Here are some places the experts say to look in the business efficiency hunt.

Get it right the first time. Brothis points out that ensuring the accuracy of patient intake information can be a huge productivity-booster.

Not getting good patient information at the outset will have a ripple effect throughout the company’s processes. Verifying patient eligibility, even in the case of private insurers, is critical, and providers should take advantage of electronic eligibility verification offered by clearinghouses or network service vendors.

Spending excess time on the phone confirming “same or similar” is one sure way to destroy productivity, he notes.

Zero in on reimbursement processes. Reimbursement costs provide a great opportunity for automating to improve productivity. For example, software can help providers manage and respond to Medicare-required events at given points in a patient’s care, such as a new physician evaluation or a new prescription.

Providers should use their software’s features to create an efficient process that can ensure events happen at specific trigger points, says Domos. The system should be set up to hold a bill for any additional documentation that is needed, such as a physician visit or compliance data for CPAP.

“Because Medicare is auditing so much, there is no margin of error, so providers have to step up the game,” she says. “The whole documentation piece is critical. It’s easy to forget that a patient needs to go to the doctor 11 months later, but software can help. To do it with existing staff, you will need more automation.”

Send it electronically. Use of a claims clearinghouse is another good way to gain efficiencies, says Brothis. Providers can send one electronic file to a clearinghouse for several insurance providers and the clearinghouse sends claims electronically to various payers.

Domos thinks clearinghouses should provide the capability to attach a scanned image to an electronic claim. “They say they’re working on it,” she says.

Automate inventory management. This is another glaring soft spot for many companies, consultants note. But various software programs/systems can automate inventory management and control with bar codes and scanning to track lot numbers and individual serial numbers.

Focus on documentation. Mickey Letson, CEO of Dream Software, says e-prescribing systems automate the process of ensuring that the proper documents are collected before orders are filled. The system lets you know you will get paid before you deliver the product.

“With these margins, you can’t provide equipment and not know if you are being paid,” he adds. E-prescribing automates the collection of documents, and the software is continuously updated to reflect Medicare changes. Web-based e-prescribing software is free for physicians.

“The need to collect documentation will kill more companies than competitive bidding,” he predicts.

Domos does point out that a downside of e-prescribing software is that physicians can see all the area HME companies, including competitors, when they go into the software’s website. Companies that want to be the “provider of choice” don’t like the idea of being listed alongside others that may not even market to a certain doctor, she says.

Time to Go Paperless

“Handling paper is very expensive,” says Esther Apter, CEO, MedForce Technologies, which provides document imaging and (recently launched) process management software. “People don’t realize how expensive it is, and you handle an individual piece of paper more than once.”

It takes about four minutes to retrieve a docment from a file cabinet, and the cost of filing and refiling documents can be substantial; they are often misplaced or misfiled. Apter also reminds that leaving paperwork including patient information out on a desk is a HIPAA violation.

Document imaging cuts down on all of that, helps to reduce days sales outstanding by enabling providers to follow up on claims faster and aids with audit compliance, she points out.

Should a hard copy be kept of scanned documents? Apter says probably only if it contains an original signature; otherwise a scanned document is as good as an original, especially if the “original” was actually faxed from a doctor’s office (which makes it also an “electronic” version).

In terms of cost, Apter says document imaging, like most technology, has also become more affordable.

“The first scanner I bought, I paid almost $4,000,” she says. “You can now buy a very decent scanner for a few hundred dollars. Generally, technology has become more affordable and available to smaller companies, and it’s much more expensive to manage and maintain paper than to invest in document imaging.”

Document imaging may not save time when an image has to be scanned instead of filed, but when reimbursement staff is working on the collection end, they can retrieve the document more easily, Domos adds.

Noble House President Richard Mehan says he is beginning to see “a big move” toward the paperless office. Yet, at Medtrade Spring, only a third of the attendees at a panel session on technology raised their hands when asked if they were currently using document imaging.

If you don’t do anything else, Brothis emphasizes, make the switch. Document imaging has “come a long way,” he says, and being paperless is a win all around: It enables providers to be more efficient and save money while not dealing with rows of file cabinets. What’s more, he says, use of document imaging can translate into a savings of one or more FTEs.

Barnes estimates that going paperless could save up to 3 percent of a provider’s annual revenue.

Choosing the Right Software

From cradle-to-grave HME systems to all the steps and business areas in between, there are plenty of software products to pick from. To choose the right software, Domos recommends drawing up a list of required feature sets to use when viewing a demonstration.

“Make sure all the features are there that are important to you and that you know how they work in the system,” she says. Implementation support from the vendor is also critical. “You can’t rush the decision about a software purchase,” comments Domos. “Make sure you know what you are looking for. You know what your pain points are. Ask the vendor to show you those things.”

She also suggests tapping into HME discussion groups on LinkedIn or other websites, talking to consultants and even asking non-competing colleagues which software they prefer.

“Call me greedy, but I want a total package with more canned reports and stronger inventory control,” says Domos, adding that another part of choosing software needs to be clarifying its implementation plan with the vendor.

There is also the bugaboo of competitive bidding, and Brothis says industry vendors are working to make their software compatible to the climate. For example, a provider who has patients for a product in a competitive bid area and other patients for the same product outside the CBA needs a system that can accommodate different allowables in each situation.

“Right now the market for that is small,” he says, “but Round 2 takes the market up to 100 [areas], so they will have no choice.”

Another choice is whether to use a Web-based system (provided by an application service provider, or ASP) or to buy software outright. The ASP model doesn’t require a big upfront fee, and the provider “rents” the software at a monthly rate. The ASP can also provide backup and technical support. The downside may be greater expense over the long term.

Whatever software/system you choose, “if you ask for references, you are going to get only good references,” says Brothis. “Ask the [vendor] for the names of one or two companies that no longer use their software. If a company tells you they never lost a client, hang up the phone.”

It is also helpful to find a nearby non-competing provider where you can visit to see how they are using the software.

Use Features to the Fullest

“When I visit a business, we sit down and meet to figure out a process to improve the business, then how we can accomplish it with the current software,” says Domos. “If there is a key feature missing from the software, then maybe it’s time to look for new software. But sometimes it’s just that new employees don’t know how to use their old software.”

Providers should think about how to set up any software to maximize efficiency, Domos advises. “Various software does things in different ways. Providers may know a feature is there, but may not know how to implement it to improve productivity,” she says.

“As a whole, I would say that most providers do not use their software programs to the fullest,” adds Barnes. “A lot of times you have fragmented implementation that creates challenges in fully utilizing a system.” If a system has poor usability, a company might just give up on trying to navigate it.

Ease-of-use is critical, agrees Bauer of Noble House. Entry-level billers, for example, need to be able to acclimate to new software easily. There are a number of software programs that do basically the same things, but navigating through any of them with minimal effort is key, he says.

Setting up software right in the first place is also crucial, Domos says. For instance, it may be a lot of work to load the fee schedule correctly, but that beginning effort can save time in the long run, especially for payers you bill frequently. If you need it, don’t hesitate to get help from the vendor or a consultant to make sure your software is implemented correctly.

Throughout their operations, Domos continues, “Providers need to sit down as a team and determine where there are opportunities for process improvement, which is step one. Then they need to look at the tools they have available to see how they can accomplish the needed improvement.”

She suggests that a conference call with the company’s software vendor(s) might help to make sure that employees and managers are utilizing the software correctly and know how to take advantage of all its features. Quick-view tools like dashboards and overview reports can be especially helpful in managing the business.

How Well Are You Doing?

Historically, the HME market has had “disproportionate transparency,” says Ben Wheeler, vice president of business development for RemitData. In other words, he explains, with access to industry data that point them to target companies based on claim trends and common errors, etc., Medicare auditors and regulators have had more information than providers.

RemitData offers a bit more balance in analyzing providers’ claims data to show how their denials compare to others in their state, and nationwide. That’s important in the current audit-heavy environment, Wheeler says.

You need to know if your denial rate is high, and you need to know if it is high compared to those of other providers. If you’re above the average level, you need to find out why and fix the problem, he cautions, because auditors will see it, too.

“If RAC or ZPIC auditors identify a certain modifier that is being overutilized for a certain type of claim, that same information can help a provider prepare proactively for a possible audit,” says Wheeler. Knowing audit triggers across the broad landscape, and how a company’s metrics compare with those triggers, can help direct its resources, he says.

Companies with multiple locations can identify, for example, whether a particular location is an “outlier” related to a certain metric, which could indicate a problem before it becomes a revenue drain — and before an auditor comes calling.

The metrics can also help providers assess their success compared to the market as a whole.

“If the overall denial rate is 15 percent, you might mine your own data and find your denial rate is 20 percent. You might have gotten it down from 30, but now you know there is 5 percent still on the table,” Wheeler explains.

Analyzing reimbursements, in fact, can provide the “ultimate report card” of what’s happening in a company’s revenue cycle, whether related to billing software or the overall business environment, he says.

“There is more fear and uncertainty than there has ever been in the market,” states Wheeler. “Reimbursement cuts have been a topic for 10 years, but things are changing more rapidly than ever,” he says, and providers should know where they need to improve.

Look at Everything That Can Help

While billing is a huge focus, don’t neglect any piece of your operation that could be made more efficient, these technology experts urge. A prime example is delivery management, where technology offers additional opportunities to bump efficiency with tools like GPS systems and routing software.

Brothis says it’s mostly larger HME companies that have embraced the latter. “You don’t see that much with the lion’s share of the market,” he says.

But with the cost of GPS systems coming down, Domos says, they offer an excellent return on investment. If you want the fastest returns, those come from document imaging and barcode scanner/inventory systems, she says. She also sees an opportunity for better efficiency with the emergence of iPads and cheaper Netbooks and small tablet computers.

Not only does technology enable companies to be more efficient, these experts point out, but as it advances, access to information and its transfer will only continue to speed up. Those HME companies who don’t keep up could be left on the sidelines.

“What I’m starting to see is continued automation of the transfer of data among providers, payers and vendors,” says Mehan of Noble House. Systems automate the billing from providers and payers, and automate the purchase of equipment from manufacturers and distributors.

Using technology to create efficiencies is a big component of being more successful, and being able to compete, Barnes comments. “Technology will need to deliver access to information so employees do not lose valuable time or have outdated information when trying to make informed critical business decisions,” he says.