- By David Kopf
- Apr 15, 2008
With regulatory pressures making for a rocky road, providers
are trying to find ways to keep their businesses in the fast lane. As
competitive bidding threatens to drop the ceiling on margins and perhaps force
providers to almost reinvent how they do business, finding new efficiencies,
cutting costs and discovering and maximizing new business opportunities are the
name of the game.
Besides, when you get right down to it, providers simply have too much to do
when it comes to running their business. From servicing customers, to staying
on top of billing, to getting new patients, they are already redlining.
“The biggest thing we’re hearing from the providers is ‘I want to focus on
patient care and growing our referral basis,’” says Dave Cormack, CEO of
network-based HME systems provider Brightree Inc., which recently signed a
10-year agreement with the VGM group (see coverage in our news section, page
8). “They say, ‘Competitive bidding updating prices tables, etc. -- It’s
Naturally, providers are considering how they can fine-tune their back office
operations in order to keep things humming in fifth gear, and HME software
systems are becoming a key element in that strategy.
“It’s a way to reduce operating costs, it’s a way to improve customer service,
it’s a way to increase productivity, and it can also be used to generate new
business,” says Spencer Kay, President and CEO of Fastrack Healthcare Systems
Getting Paid, Medicare & DSOs
Of course, one of the central reasons for installing a dedicated HME system is
simply to get paid. Billing and funding require dedication and continual
checking to ensure providers get funded. Any way to automate collecting is a
That starts with ensuring data being entered into the system is clean. Clean
data means clean claims, says Ed Bauer, Sales Manager for software systems
maker Noble House.
“Day’s Sales Outstanding (DSO) can best be minimized by
ensuring that clean claims are submitted electronically,” Bauer says. “A
provider’s billing process -- that is, his software product -- must therefore
by simple, complete and easy to use. The proper facilities for denial
management also comes into play to reduce DSO.”
“Today’s systems should provide robust and complete upfront intake and
validation of key information to ensure that denials are kept to a minimum,”
says David Schaer, Director of Product Management and Marketing for HME systems
firm Computers Unlimited.
And, when providers are running reports, the accounts receivable features of a
system should let them “slice and dice and make julienne fries out of all their
AR,” says Ted McGrainer, director of HME services for HME systems firm CPR+.
(Prior to working with CPR+, McGrainer was the director of reimbursement and
head of IT for a mid-sized provider in Ohio.)
The system should let providers collect their receivables data and put it into
a workable list according to any criteria based on what they want to work on at
the moment, says Jeff Johnston, who co-owns software maker CPR+ with Stuart
Crane (Johnston and Crane founded the firm together in 1991). Moreover, it
should be generating multiple reports so that multiple people can work on them
at the same time.
“Plus, they’re doing all this on-screen, rather than printed out paper,” he
says. “This increases efficiency. Having the ability to retrieve that
information electronically is really going to maximize the efficiency of the
But even before a provider is going through their accounts receivables, their
system should also be alerting them to any important events related to
receivables management and similar funding issues, Cormack says. Systems
shouldn’t wait for the provider to discover denied claims and similar issues
when they run a report; it should make sure the provider is aware of that
“We call it a push system,” Cormack says. “We push exceptional data to the
users as opposed to them pulling data and trying to figure out what’s going
And if a system can incorporate key service providers into the arrangement, all
the better. For instance, Brightree’s network integrates outsourced insurance
billing providers so that Brightree users can get updates from their billing
contractors with a click of a mouse.
Furthermore, the automation of updates on other pieces of third-party billing
data, such as pricing tables from Medicare is equally important to ensure
providers are billing for the proper amounts (this goes back to ensuring
correct claims are filed the first time around), Cormack adds.
Automation & Efficiency
Besides staying on top of revenue, software systems can help providers cut
their costs by creating new efficiencies through automation and streamlining
For example, providers often encounter patients who are not clear on what their
coverage is and the provider might have to research that for them, or perhaps
initial data, such as an incorrect birthday, might get entered into the system,
which, needless to say, would risk a rejected claim.
“It’s all about GIRTT - get it right this time,” says Edward Kutt, general
manager of long-time HME systems maker HIPAA Billing Systems, which makes
Diabco. “You have to do the front-end work. Software can check that in two
seconds and say who has coverage and who doesn’t. It will tell you who should
be the billing contact, and give you all the correct address information.”
Getting documentation correct will help a provider clearly understand a
patient’s reimbursement and help them make informed decisions about what
products to recommend to the patient, as well, McGrainer says.
This is especially critical when dealing with large volumes of customers who
need urgent answers that customer service representatives might not know at a
moment’s notice. “We’re really looking at maximizing the efficiency of the
process to let the software do all the thinking, if you will, for the CSR, so
that the CSR doesn’t have to be a reimbursement specialists,” McGrainer
Likewise, regenerating frequent tasks at the click of a mouse can save
countless hours. “You can improve efficiencies so that you can do a reorder in seconds,
rather than reinventing the wheel every three months,” McGrainer says.
HME systems can also help providers automate customer communications, such as
for refills and similar repeat orders. Not only does this reinforce patient
relationship, but it can also drive additional business from their existing
customers considerably, Cormack says.
“For example, if you have CPAP patients and they need to replace masks every 90
days, you could be leaving money on the table to if you didn’t ask them if they
need to replace their mask within the timeline,” Cormack explains. So a system
can generate an alert to the provider to have staff call that individual, or
that process also can be automated so that an automated call goes out to the customer,
prompting him or her to press a certain number if he or she would like to
Moreover, the volume of customer communications for even a small provider can
be a bit daunting. A provider can have 1,000 to 2,000 patients that need to be
contacted on a regular basis, Kutt says. “There’s just no way to contact 2,000
patients on an individual basis - there’s only the automated way,” he says.
Is that a bit impersonal in what is a very personal line of business? It can
be, Kutt says, but at the same time it keeps that relationship warm when an
overburdened provider is unable to place a mountain of cold calls. “It does
give the patient a sense of being a customer,” he says.
And, if providers have tech-savvy patients, a HME system could also generate
emails, depending on their communications preferences.
“Keeping inventories at optimal levels at minimal cost helps today’s provider
to better compete at a time when every dollar counts,” Bauer says. “Inventory
control must be complete and seamless to the daily billing process.
“Having an integrated software solution that includes a robust inventory
control and tracking capabilities from order entry, delivery and ongoing repair
keeps operational costs low and provides the tools and information to
management all assets that the common provider sells,” Schaer says.
The ability to support bar coding is also important to inventory management,
Kay says. The ability for provider staff to easily update their inventory
systems by simply scanning a piece of medical equipment every time it comes in
and out of the warehouse reduces significant staff overhead and slashes
inventory management time, he explains.
Furthermore, Kay adds that bar coding can be leveraged even further when it
comes to drivers. Any time the wrong device is delivered or picked up,
significant time, money and manpower are racked up, when a simple swipe of a
PDA or wireless device with a bar code scanner could have avoided the whole
mess. “Making mistakes with drivers is very expensive,” he says.
“Understanding past sales and trends helps the provider to better understand
future direction and options,” Bauer says. “Having access to all sales
histories is a must for developing both summary and detailed views of past
performance and therefore future direction.”
“Having robust and easy to use data analysis tools to provide valuable insight
into day to day business operations is a key requirement for today’s business
systems,” Schaer says. “Applying this technology to sales and reimbursements
can help providers can smarter marketing decisions based upon sales analysis
uncover trends in reimbursement rates by procedure code for example.”
Obviously, a key opportunity for providers is retail sales. While providers
revenues might have been split between 80 percent coming from Medicare and 20
percent coming from elsewhere, the industry is expecting a massive shift. “I
tell you, that is going to have to flip,” Kutt says.
Transitioning to cash sales make sense and a provider’s software system should
help them do that.
“Today’s billing products should include Point of Sales features that
complement insurance billing practices,” Bauer says.
And that can come down to adding simple retail purchasing tools, that
providers might not necessarily have had in the first place.
“Implementation of POS with credit card processing is a
great way to increase revenue and cash sales opportunities to help outset cuts
in reimbursements rates,” Schaer adds.
In a cash sales environment, providers should also consider how they can
creatively leverage HME systems to get the money up-front, rather than wait on
billing. For instance, rather than bill customers for small amounts of money
after a delivery, handheld credit card scanners can be used at the time of
delivery, Kay says.
"It’s incredibly hard to collect small amounts of money,” he explains.
“But the driver can collect it.”
Internet or On-Site?
Where the software runs and the data is stored is an important consideration
for HME systems installations. Some systems are installed entirely at the
provider’s location and others are online systems, through which providers
access and run their operations.
Both have their advantages. The decision might come down to the size of the
provider business. While running on-site systems and servers makes sense for
larger providers or ones with diverse businesses of multiple locations, others
with more limited resources or a smaller scale/scope of busienss are
considering hosted systems that they access over the Internet as an option.
Naturally, a hosted system makes a lot of sense for those providers. With
Internet access nearly ubiquitous and patient data secured by heavy encryption,
the ability to run your business from virtually anywhere also has appeal, Jay
says. “You can log in from anywhere - from the home, from the library, from the
coffee shop,” he says. “I believe this is a trend that will continue. The
software as a service model seems to be taking hold in many industries.”
The two major reasons for that are money and time, says Jay Williams, national
sales manager for QS/1 Data Systems, which provides both hosted HME systems and
systems providers install on-site.
“A huge advantage of the internet versions is that you don’t have to keep
buying the latest computers or the latest version of windows,” he said, adding
that Internet systems also backup data for providers, another important
That back-end maintenance is key, agrees Brian Williams, director of sales and
marketing for CAU Inc., another provider that produces online and on-site
systems for providers. Brian says that besides the convenience of having a
hosted system run backups and automatic upgrades to a system, that stored data
could be critical in the case of disaster recovery.
In fact, that is a key feature that attracted member service organization VGM
Group to hosted system provider Brightree, Cormack says. Stored backups were
exceedingly important during Hurricane Katrina, when a significant number of
VGM members in affected areas were able to continue billing, since their data
systems were hosted remotely, says Ron Bendell, President VGM & Associates.
“That really pointed out the importance of having a Internet based system where
data is stored in other parts of the country,” he explains.
On the flip-side of the coin, the Internet-base approach might not fit every
providers’ model of business or workflow. For provides who might be juggling 10
tasks at once, using a page-by-page web interface, rather than something that
lets them toggle between multiple windows and dialog boxes, might get a little
constricting, Johnston says.
“It has to be easy to use and let you get in, get what you need and work
efficiently with the screen,” he says. “And it has to be interruption-friendly.”
In other words, the software has to let provider staff very easily handle a
small task that momentarily crops up, and then return to whatever they were
doing before. Plus, software allows for easy customization and adding short
cuts and hot buttons that would be tricky to add to a web interface.
Moreover, an on-site system can be much faster than a web-based system. That
said, there are options to strike a compromise between the two approaches. For
instance, QS/1’s Internet offering includes a “thin client” that stores
additional information a web browser wouldn’t in order to speed up performance.
“Instead, your just pushing data across the Internet; you’re not pushing
screens across the internet,” Brian explains. “Our client has all the screens,
so when you have to paint a screen, that information is coming form your
computer, which is faster.”
First and foremost, the key is to get a bona fide HME system in place, rather
than trying to cobble together a home-grown system, Kay says. He adds that
system that is modular is often a good idea, because it allows providers too
add new levels of functionality as they add new facets of their business.
For instance, a provider might not need cash sales capability at the moment,
but later down the road, might need their system to support retail
transactions. A software system that can simply “plug in” that capability
without having to integrate new, third-party software would be ideal, Kay says.
Once the system is in place, the key is to maximize a software installation.
The implementation should reach every possible aspect of the business.
“It’s about automation and efficient,” Kutt says. “Software is the heartbeat of
your company. You have to utilize it and get every little benefit out of your
Kutt chalks this up to an ironic educational barrier for providers: They are so
busy, that they often don’t find the time to learn how to use systems that can
save them countless hours.
“Providers don’t understand the losses that software can save them,” he says.
“They can only do so much in one day, but they’re sometimes not putting the
horse before the cart. We have a system that can call 500 patients in one
hour... you can’t hire someone to call 500 people in one hour.”
“Providers must make a commitment to install, learn and implement a new
software solution,” Bauer says. “This commitment must be conveyed to all
necessary personnel so that the maximum benefit of the chosen solution can be
achieved in the shortest time.”
A close relationship with your software vendor is also critical. That way a
provider can ensure that their business is fully leveraging its software tools,
staying current and that staff is on that agenda.
“Ensure that the software provider has adequate staff to fully implement, train
and support the end users,” Schaer says. “Training and support are key.”
That relationship might also create new functionality a provider desires from
their software system, too. For instance, Johnston
says CPR+ maintains an HME provider committee to help stay aware of provider
needs and prototype new enhancements. That kind of approach is a win-win for
the providers and the software vendors, he explains: “It just makes the case
all the more crucial that the HME provider needs to have a close relationship
wit their software provider.”
This article originally appeared in the April 2008 issue of Mobility Management.