In today’s HME world, it is clear that diversification is a primary directive from senior management teams. Modus operandi includes continually searching for alternatives to payer and product mix, so as not to languish in the status quo. When there’s an opportunity, HME businesses no longer snub the ideas they once thought beneath them. For example, if supply companies were something left for the newcomers, they are now welcome revenue sources to ensure repeat business. For HME veterans, diversifying away from Medicare has taught them to focus on their true costs, something that is more and more challenging with Medicare patients. Specifically, it is somewhat complex to forecast how much money you expect to keep when you are faced with Medicare’s aggressive audit tactics that render decisions on medical necessity in a seemingly arbitrary manner. This leaves the Medicare provider in a vulnerable position, something that has caused some providers to exit the Medicare market. Regardless, it has taught the industry an invaluable lesson that reliance upon one payer is less than desirable, especially with items that are constantly subject to pre- and post-payment audits.
Diversification and Collecting Your Money
With the perpetual Medicare audit struggle, many providers have turned to private-pay revenue. Although cash/retail revenue has notoriously made up a small percentage of overall income, for some HMEs the retail momentum has generated a creative way to garner profit. Also notable is that as patients/customers incur additional costs due to shrinking insurance coverage, the emphasis on how much and for what they will pay is much more significant. With their vested interest in their bottom line investment, the customer expects to know what exactly they are paying for when they receive a product.
Bill Pay Portal
When conducting a recent product research comparison for a client, I found that all of the websites included an online payment portal. This is now the expectation rather than the exception. Further, if the customer has a question about the product or the payment, most portals also offer an online chat capability. No different than many retail websites, businesses should also offer this level of service or, minimally, provide an immediate email/phone response to submitted questions. As brick-and-mortar retailers yield to online shopping networks, HME should take advantage of the customer’s familiarity with Internet shopping, especially as baby boomers become Medicare age.
Although retail, website sales and diversification all require a concerted effort by upper/executive management to constantly evaluate strategic direction, it is not something that should preclude employee input. On the contrary, use staff to educate the executives on the day-to-day quagmires/operational issues of running today’s HME business. In fact, you can learn the most interesting stories from the employees who are constantly addressing the customers’ questions and concerns. Employees’ customer interactions might even lead to the next big product you introduce. A by-product of engaging the staff in discussions about the company’s direction is making them feel valued. This can translate into improved employee retention rates in addition to great ideas that you might implement. For many, this type of collaboration is the key to success. All in all, as HME providers continue to search for new ways to garner revenue and to rely less on Medicare and other third parties, some will turn to retail/private pay opportunities. All the while, companies will hone in on more efficient ways to collect money such as online bill pay options. Regardless of the method you choose to stay solvent, engage your staff in the process. And create a win-win situation in a Medicare/third-party culture that often feels like an uphill battle.