Introduce New Items and Contact Commercial Payers to Increase HME Income

Prior to the implementation of the Medicare Competitive Bidding (CB) Program, Medicare revenues typically totaled 35 to 50 percent of an independent provider’s revenue. Because the CB program and its competitive bidding areas (CBAs) include many of the common products provided by the DME industry, countless independent providers were 
effectively locked out of a huge share of the market they had spent years building. Building a robust retail business that is focused on cash payments from patients isn’t a complete solution, particularly for DME providers who operate in areas of the country where potential customers have little access to disposable income. Another solution for these businesses is to diversify their product and insurance payer mixes. Obtaining contracts with many commercial payers is a matter of persistence. If you’ve hit a stone wall in the past, keep trying. Things change. If the Affordable Care Act fulfills its promise of adding millions to the previously closed insurance roles, then insurance networks may open up to new providers—particularly if current industry pressures succeed in putting your competitors out of business. Start by creating a spreadsheet that lists the payer networks you would like to be in contract with, then include the phone number or e-mail address of the person responsible for contracting and the open or closed status of each. Log the date of your last attempt to obtain a contract, and return every three months or so with a new request. At some point your persistence may pay off, but you will never know unless you continue to try. Adding new products is a bit more complex. Before you add a product you need to answer several questions. What is the gross profit margin of the product? What will it cost to add any new personnel that may be required to provide the item, such as a certified fitter, ATP or respiratory care practitioner? How will you build a base of referral sources to support the product? Will you need to hire a new sales representative that has existing relationships, or does the new product complement the offerings ordered by your current base of loyal referral sources? Once you are satisfied that the products you plan to add will contribute to company profits, it’s time to implement a well-thought-out plan that will maximize that profit. First, check your state’s licensure laws to understand if any additional licenses will be required, and, if so, start the process to obtain them. If you plan to offer the 
product to Medicare patients, you will need to check with your accrediting organization to understand the steps 
required for making additions to your accredited product list. Medicare will not pay for a product that is not included on that list. Even if you do not plan to provide the new products to Medicare patients, you will need to have processes in place that meet accrediting body’s standards for the new products for as long as you maintain your accreditation. Typically, this includes product specific policies and procedures regarding storage, handling and maintenance that are 
applicable to the products being added. In addition, the accrediting body will want to see policies that describe the training and competency assessments that you complete for patient care personnel charged with working with patients who receive the product. The accrediting body may also want to review patient documentation forms such as specialty plan of care forms, fitter patient assessment forms, equipment preventative maintenance function check logs, etc. Next, you must ensure that your reimbursement team fully understands the medical necessity criteria for the products you are adding. Rigorous training should be introduced with respect to intake processes, documentation and billing personnel to ensure that the 
company receives full payment for the new products. Product reimbursement cheat sheets and documentation checklists can be helpful in this regard. Lastly, implement your marketing plan. Include the new products in your advertising campaign and make your referral sources aware that you have introduced a new list of products.