Software Rx

It’s been a bit tough to be a home medical equipment provider the last few years. Medicare reimbursement cuts have hit hard, competitive bidding is on the way and gasoline prices have increased delivery costs. But the reality is that the industry has faced these types of hurdles since the 1980s, when an insurance industry overhaul began to force early discharge of patients from the hospital to the home, accompanied by the need for home medical equipment.

Yes, we have to fight the good fight on a legislative level but, as always, the industry also will need to adapt.

Labor is the largest continuing cost for most HME providers. The business is paperwork-heavy and process-laden. Small providers can be overwhelmed with too few people to get the job done; medium-sized providers face the challenge of adjusting processes for growth; and large providers must be able to scale processes for handling massive amounts of data. No matter the size of the company, all share a common need to operate as efficiently as possible and maximize the productivity of the work force.

Fortunately, advances in software technology can assist providers in improving both areas. Simply put, in a game of survival of the fittest, HME systems software can make the difference between thriving during the challenges ahead — or becoming a casualty of them.

Making Careful Choices

There is a wide variety of software available to providers with an even wider variety of features. Some are available in component form so that you can add features as the business grows and more sophisticated productivity tools are required.

But choosing HME systems software is one of the single most important decisions an HME provider will make in the lifetime of the business, so it’s not a decision that should be made in a hasty manner. The wise business owner will involve the company’s employees to create a list of both “must-have” features and those that would be “nice to have.”

Of course, those “nice-to-have” features are generally where the productivity comes in, and they can quickly morph into “must-have” features as the company grows. Thinking ahead as you choose HME systems software will pay off in the long run.

It is also important to ask for input from employees in various areas of your business operation during the software evaluation process. They can help you spot potential problems with software, like features that may look good during a demo but aren’t very practical when it comes to getting the day-to-day job done.

To get started identifying your company’s needs, let’s go over some of the basics in each category that you won’t want to overlook. Then we’ll review some productivity enhancements that will help automate processes as your company grows.

Reimbursement

Most HME software billing systems cover the basics of billing a claim fairly well, but you’ll still need to do your homework to make sure the features are present that will ensure billing and collections are efficient processes.

First, look for the capability to bill Medicare, Medicaid and other payers with whom your company contracts electronically. The more claims you can file electronically, the better your cash flow position will be.

Other mandatory features include the ability to print certificates of medical necessity and physician order forms, and to track both CMN and prior authorization requests from the computer system. A system that lets you sort documentation tracking reports by date requested and by physician will help your staff stay on top of the documentation process. In fact, it’s nearly impossible to run an efficient documentation process without these capabilities.

When reviewing a system’s accounts receivable reporting capabilities, evaluate the various data sorts and filters that are available. You’ll want a system that allows collections staff to make the best use of their time no matter how you organize the collections process, so look for sorting and filtering of AR reports by high dollar to low dollar, by product and by payer, at a minimum.

There are a myriad of software productivity enhancements available for the reimbursement area of your business. CMN and physician orders that can be faxed directly from the screen of your computer will give you a lead in getting documentation returned.

Software systems that can pull in Electronic Remittance Notice files can help you analyze denials and zero in on process problems, automate cash posting, print single patient estimation of benefits (EOBs) and automatically populate insurance payer appeal forms.

Document imaging can cut down on the need for pricey storage files and office space. It can also enhance the productivity of collections staff members by allowing them to pull up the exact document they need at the click of a mouse rather than finding and searching files by hand.

Think about the efficiencies gained by having all of your patient file documents available at each employee’s desk at anytime. Offices of multi-branch providers especially can benefit from a central record-keeping process. When everyone has access to the same information within seconds, real efficiencies are gained.

Inventory Management

Mandatory accreditation is coming soon, which means providers will have to have accurate location tracking of serialized equipment, oxygen lot number deliveries and equipment maintenance records. Capital equipment is a huge investment for an HME company, so make sure any system you choose also does a good job of tracking equipment purchase costs and depreciation.

But remember that you can only get out of a system what you put into it. Consequently, it’s critical that you assess the data fields available for input. If, for instance, you’ll want to analyze inventory purchase and shipping costs, gross margin and equipment utilization data, check to see that the system includes entry points for the data needed to make those calculations. And, ask to see samples of the reports generated.

A perpetual inventory system is a feature of most HME software programs, and is an absolute necessity in order to maintain “just-in-time” inventory management. This feature allows you to keep minimum and maximum levels of stock under control and preserves cash that would otherwise be eaten up by inventory that isn’t being utilized. And, instead of manually counting inventory monthly or quarterly, inventory counts can be reconciled at the end of the year.

In addition, software with a perpetual inventory system should be able to produce routine reports that tell employees what to order to keep stock at minimum and maximum levels. Purchase order management that ties into your inventory system will further enhance efficiency when it comes to keeping the proper products on hand. It will also reduce redundant data entry when entering shipments into inventory.

Providers can further enhance productivity in the area of inventory management by utilizing bar-coding. The advantages include reducing human error inherent in handwritten serial numbers on delivery tickets, real-time inventory tracking and automation of the delivery confirmation process. Those duties alone might require a full-time employee for some companies.

Sales and Marketing

Sales and marketing reporting also should be an important consideration when evaluating HME systems software.

In order to develop and maintain a successful marketing strategy, you’ll need accurate and capable sales reporting from your system. Typically, these reports include sales by sales representative, sales by referral source, sales by physician and sales by product. With this information, you can develop a strategy to target referral source and product marketing efforts. You can also assess the success of individual sales representatives and their techniques.

The Internet is ubiquitous in the business world today. Some of your referral sources would prefer to sit down in front of the computer and complete a secure Web form that sends your company a referral rather than spend time on the phone providing the information necessary to order products for their patients. In addition, they will appreciate the written confirmation of the order they will receive back via e-mail to document that the order was placed.

If your company has not yet developed a Web site with these features, it may be a project worthy of consideration.

You can also give your sales and marketing efforts a real productivity boost by introducing wireless handheld electronic CMN and ordering tools to your best referral sources. With a wireless handheld device — which transmits the referral and required documentation in one easy step — in the pockets of your prime referral sources, why would they order from anyone else?

Operations Management

When it comes to HME system software’s capabilities in the area of operational management, reporting features are key. While operations personnel will no doubt access many reports in the areas we’ve already covered, summary reports must provide the crucial information needed to assess overall operations and make decisions on a daily basis.

Look for reports that reveal cost of goods sold; taxable versus non-taxable revenue; gross margin by product and by payer; current inventory valuation; product and payer mix; cash receipts; and adjustments and write-offs by category, to name just a few.

When it comes to reports, a minimum requirement is that data should be exportable to Excel so that you can perform your own manipulations, calculations and data sorts. You can then load multiple spreadsheets at once and link them, giving you a simple-to-use report-writer that everyone on your management team can understand.

Larger companies may benefit from real-time data generated by more sophisticated report-writers, but if you invest in one of these as an add-on to your system, take the time to learn how to use it for maximum effectiveness. Typically, system report-writers can be powerful tools to provide in-depth economic intelligence about your business, but they are useless if you can’t use them correctly.

With gas prices continuing to rise, it could make sense to add a mapping and global positioning system to your fleet management process. There is money to be saved every day by maximizing the efficiency of deliveries and keeping delivery personnel on track.

Finally, when assessing various software systems, evaluate how the system will assist in helping your company meet government and accreditation compliance guidelines. Will it track whether the proper information has been provided to patients? Will it help schedule your routine follow-up calls and allow you to print reports that will help keep them on schedule?

Assessing Costs

Once you’ve completed your review of the software products available and narrowed down the choices, it’s time to assess the total cost of ownership of the systems your company is considering. Ask if the software is licensed by company, by individual user or by simultaneous user, as this will determine how many licenses you will need to purchase initially — and whether you will incur more license fees as your business expands.

Factor in the cost of training if it is not included in the purchase price. And, be sure to inquire about support fees. Ask how they are calculated and whether fee schedule updates and software revisions are provided as part of the support fee, or at additional cost.

Another important consideration: Find out whether the software will work on your present hardware or if the system will require a substantial hardware upgrade. It is estimated that the bulk of PCs purchased today are unnecessary; that is, new computers are purchased as the old PCs’ performance has degraded. But many performance problems are caused by performance-robbing viruses, spy ware and ad ware.

To combat the situation, make sure your PCs are equipped with antivirus, anti-spy ware and ad ware software. Keep these utilities up-to-date so as new bug strains are developed, you have the ability to fight them. This will keep your PCs performing as they should and eliminate the need for costly, frequent equipment upgrades.

With a careful assessment of your company’s needs and a thorough evaluation of the systems and features available, you should be able to find a system that meets the needs of your business right now and that can grow with your company as it expands.

Roberta Domos, RRT, is the owner and president of Domos HME Consulting Group, a national HME consulting firm based in Redmond, Wash. She may be contacted by phone at 425/882-2035 or through her Web sites at www.hmeconsulting.com or www.hmeaccreditation.com.