Q & A: Aiming for a Cumulative Effect

• By Lunzeta Brackens
• Nov 01, 2008

A quick deluge vs. a drop at a time: There’s more than one way to fill an empty bucket, just as there’s more than one way to make up the considerable revenue gap that will result from Medicare’s upcoming 9.5-percent funding cut for product categories that were part of competitive bidding’s now-defunct first round.
Three industry experts who participated in question-and-answer interviews with Mobility Management suggested that one way to cut costs and save money is to wisely invest in systems or knowledge that will ultimately help businesses to run more efficiently. This section is capped off by commentary from SCOOTER Store founder Doug Harrison, who believes that surviving the impending Medicare payment cuts is definitely achievable for suppliers willing to honestly assess all parts of their businesses and create a cumulative financial plan.

The Importance of Proper Documentation & Billing

Q&A with Marvette Wallace, National Seating & Mobility

Is it possible to save money by spending money? Yes — for instance, if you choose to invest in a funding expert such as Marvette Wallace, a former Centers for Medicare & Medicaid (CMS) Region B DMERC ombudsman who is now director of Medicare for National Seating & Mobility.

As such, Wallace conducts internal training to ensure NSM billing & collection staff and pre-screen and branch staff stay up to date on all policy changes and clarifications; performs training or information sessions for clinicians and referral sources in the field at the request of NSM’s RTS staff; and handles all claims appeals made to Medicare, including reconsiderations, ALJ hearings and any in-person reviews. Wallace is the lead on Medicare audits, providing back-end support and following up with resolution. She also leads all appeals as a result of audit findings and is responsible for staying current on all Medicare policy and clarifications related to rehab equipment.

Mobility Management asked Wallace about her responsibilities and strategies given this current rehab funding environment.

Q: What are your goals as you work with your NSM colleagues?

A: My goals include presenting face-to-face educational events for all NSM branch staff at their respective locations. We are a large company, and education, especially when you are training on a complex subject, should be provided in various forms. People benefit from actually having information presented to them, and then the information that was presented should be reinforced to them by other media.
My goals also include face-to-face presentation sessions (for) clinicians and other referral sources. These are important so that their Medicare patients will have NSM staff and the physicians, therapists and office staff explaining the requirements. With Medicare’s PMD (power mobility device) documentation requirements, the clinicians’ understanding of their role is vital in insuring that the ordered equipment meets the LCD (local coverage determination) payment coverage criteria and that the medical record supports this. The PMD policy states, “Suppliers are encouraged to help educate physicians on the type of information that is needed to document a patient’s mobility needs.” CMS has put this burden on the shoulders of the suppliers, so we at NSM want to make certain that we carry it well.
I also have a goal of supporting and educating our billing and collecting staff; to that end, we have regular training sessions. This also falls right in line with my Medicare appeal responsibilities: If you bill it right, then you are less likely to have to appeal a common billing error denial.

Q: Obviously, having a CMS specialist on board is an investment on NSM’s part. Why is this sort of investment particularly smart given today’s funding climate?

A: As I previously stated, the medical record documentation requirements by CMS for mobility equipment are huge. As we know, Medicare audits can break a company, so it is very important to ensure that your client records are accurate.

Q: Do you think DME suppliers will continue to need this kind of internal funding support and mentoring going forward? In other words, should we expect the current rehab funding challenges to continue, and therefore, should we expect the need for training and education to continue?

A: Yes, I think so. CMS continues to update and change coverage regularly.

Q: We’ve sat in your presentations to NSM colleagues, and you have a very positive attitude. How does that help?

A: Thank you so much for the compliment. As you can imagine, when anyone hears or sees “Medicare training,” they do not think, “Oh, this will be fun.” So I am positive and animated. It is its own world to sit and speak on Medicare coverage and billing, so if I want anyone to listen and remember, it has to be presented positively. Just explaining that the power wheelchair policy is called the “Power Mobility Device Local Coverage Determination and Policy Article” will make anyone’s mind wander, so with God’s mercy and grace, I try to make it lively.

Q: What advice could you give other DME suppliers who are having trouble with funding sources or are confused or frustrated with CMS?

A: Get yourself access to information. It is the most important thing I can say. When I worked as a Medicare ombudsman, I learned that the average rate of change in the Medicare program is every four minutes. That can be overwhelming, so suppliers must be dedicated to obtaining the most current and accurate information. Join CMS and DME MAC contractor listservs, subscribe to industry publications, and join organizations that will provide you with up-to-date information. You cannot afford not to know.

Evolving Education to Meet New Needs

Q&A with Sara Bauer, The VGM Group

Even while cost-cutting is the continuing mantra for HME mobility and rehab suppliers, education remains a professional necessity, not just to fulfill Medicare requirements, but also to stay informed about the regulatory changes, funding requirements, quality standards and new technology that can impact a business.

At the same time, escalating airfares and hotel prices can make travel a real drain on a supplier’s budget. The VGM Group’s Sara Bauer, VP of education, discusses how to make education more budget friendly.

Q: Why is continuing education so important to HME providers today?

A: It is critical that HME providers invest in their employees through continuing education. The ever-changing reimbursement rules and CMS regulations necessitate ongoing training.

Q: How does online education help providers? What benefits does an online curriculum/program offer versus traditional face-to-face education?

A:Online education is a smart solution for providers. Employees can choose a time convenient for them to log into a Web site that delivers education right to their computer screen. What’s best, most online education tools provide employee tracking and reporting capabilities. Online access to employee records is an added benefit for companies who are seeking accreditation.

Q: Let’s talk about regional educational opportunities, i.e., courses given in providers’ own neighborhoods or close by. What advantages does this format offer versus online formats and versus national conferences/tradeshows?

A: I think there will always be a need for face-to-face education. No matter how streamlined and synchronous we make it, the online learning world will never completely take the place of the live instructor-led experience. That’s why VGM offers regional educational shows, and why we continue to host the annual Heartland Conference. There are some topics that are best taught in a live classroom format. Also, there is tremendous value in allowing providers to get in the same room together to learn a subject matter, to network with one another, and to learn from not only the instructor, but from each other.

How Investing in Software’s Efficiencies Can Save Money

Q&A with Jeff Dimm, SoftAid

At a time when they’re watching how they spend every dollar, HME suppliers may be reluctant to invest in new software systems. But Jeff Dimm, national sales manager at SoftAid Medical Management Systems, explains that such an investment can in essence pay for itself by saving a supplier both time and money in the future.

Q: Why is investing in HME-specific software a smart idea? How can doing so actually save providers money in the long run?

A: In its simplest form, and for the most basic of operations, software in general is designed to automate tasks and track data. There are many levels to this and many good packages on the market today for HME/DME providers.
That being said, automation saves time. This of course is one of the simplest explanations of how HME/DME software can help you save money, and that is by creating more time at the end of the day.
Take the most generic of tasks, looking up a patient to see what serial number wheelchair they may have on rent. That process seems simple enough; however, studies have shown that manually accessing this data can range from four to seven minutes. Having software that tracks your inventory can accomplish this task in mere seconds.
In the short term, this may seem insignificant; however, over the course of just a single month, that time can greatly add up. Efficiency is the key to creating more time, and good software is the key to becoming more efficient. This gives HME/DME providers more time to generate more referral sources to grow their business, or adapt faster to changes in Medicare rules, alleviate a good percentage of human error in the billing process and so much more. In most cases the software will pay for itself within the first year or less of purchase.

Q: Describe the various functions of HME-specific software: What can it help a provider to do as far as different business operations?

A: HME/DME software comes in many different shapes and sizes. For that reason, it is easy to get lost in the hunt for a new software package.
Software can help a provider do so many different things, and features are plentiful in this market. In relation to business operations in the HME world, we can reasonably expect software to keep track of patients, accounts receivable, deliveries or mailings of supplies, rentals, orders, billing and so on. As a minimum, the provider should look for a couple of key features and then perform a cost base analysis for added features the provider may want, while also keeping in mind that they may grow to need some of those extra features offered by vendors in the future:
Patient Intake — or some level of patient tracking, at the very least taking in enough patient data to generate a claim.
Order Processing — There are many ways to express what an order is; however, in keeping things simple, an order can be a triggering event to move and track inventory, tie an item to a patient and to a claim. This “Order” can then also be used to define a workflow for internal operations of the provider, especially in dealing with inventory, thus creating better efficiency.
Inventory — This is a key item for most HME providers, but there are so many different, good approaches to this that it can sometimes be a confusing feature for a provider. A good basic system will afford the provider the ability to at the very least tie an item to a patient; track any maintenance that may be required on that item; swap that item if it becomes damaged or needs repair; keep a record of the acquisition costs and depreciation of the item; be able to report inventory levels in real-time; and be able to generate many inventory-based reports. Finally, the software should be able to provide the ability to generate some level of Purchase Order tracking for inventory acquisitions.
Claims Processing — the ability to generate a clean claim, transmit those claims and process payments for those claims. More in depth and very important to the HME provider is the ability to do rentals, supply reorders and reoccurring claims. In the claims processing arena of software, these three specific items are what will make or break the life cycle of a software package and its usability for the HME/DME provider.
Reporting tools -– to report on various aspects of each of these features I have mentioned.
Remember, these are just the minimum features a provider should look for, and obviously we could have gone into much greater depth, because there are so many different options, variations and levels of the above-listed features from so many software vendors. However, at minimum, these key features will make a provider happy with a software package, while making them a more efficient business.

Q: In addition to taking care of business operations, how can HME-specific software help improve a business’ accuracy, punctuality, etc.? In other words, how does the software help a business run better?

A: HME providers generally have an office, maybe even a warehouse, and employees with certain duties. This could range from drivers for deliveries to maintenance personnel, office personnel, billing personnel and even sales reps, all of which are tools for their business model. In my experience, no two providers operate the same.

Software provides a common thread for communication and in most cases instant access of information exchange between these personnel and/or whole departments, depending on the size of the provider. Software can greatly limit the amount of human-related errors in all aspects of the provider’s business. In a lot of cases, software can even create new workflow processes that HME business owners did not have or recognize the need for prior to the implementation of software. All of which takes us back to efficiency: The more efficient you are internally, the more effective you become at providing service to your patients, and the better your business runs.

Q: Assume I am a provider who is not particularly software or technology savvy. How much time/investment can I expect to spend to learn these systems? Will I typically need to hire outside consultants to teach me? Will I typically need to purchase specialized hardware, new computer systems, etc.?

A: Because of the immense variables involved here, I will go by a typical rule of thumb, based on systems ranging from one to 10 users. Anything above that will depend on the software vendor, what the software vendor’s internal resources are and so on.
Investment of Time — A typical implementation schedule, meaning from the time of the purchase to go-live status for the one-to-10-user scenario is about 45 days. This can be extended if the HME provider is new, or a start-up, or needs to apply for a Medicare number, sender ID or things like this.
A good software vendor will have an outline already presented to the HME provider of exactly how the process will take place. A provider that is large or has multiple locations can expect a longer implementation time frame; however, the process is or should be the same.
Something very important to point out here is that implementation is not simply learning the software or how to use it. There is also getting it set up properly and having a general idea of how you’re going to operate using your new software: Are you going to change any aspect of your daily operations, and will the software need to be set up for that? I have found in a lot of cases a general expectation of “buy today and use tomorrow” exists, and no matter what a provider is told, that simply is not the case.
Outside Consultants — Typically, speaking to an outside consultant is not needed for software or getting your software up and running. A good vendor will provide these services at no cost to the provider; however, if the provider is new to HME, then an outside consultant is a good idea to help maneuver through the pitfalls of starting an HME business.
Please keep in mind, though, that it is up to the software vendor to train the provider on how to use the software, even how to use the software for the provider’s specific area of HME — in our case, mobility. It is not, however, the vendor’s responsibility to teach the provider how to bill; this is a very common misunderstanding between providers and software vendors with regards to training.
A provider should have on staff a good billing person if the provider plans on billing in house. If the provider does not, then here is a scenario that I would say an outside consultant would be good to have on staff until the provider becomes comfortable with the entire billing process or hires a biller.
Computer Hardware — The internal infrastructure of an HME provider can vary greatly. Using our earlier rule of thumb of a one- to 10-user installation, a provider can usually get by with hardware already on hand, as long as it is not greater than two years old.
This could be a matter of great debate; however, a software vendor’s package or platform is generally more related to its ability to operate on certain “operating systems,” and operating systems run better and faster on newer hardware. There is also the need to take into consideration the provider’s method of deploying the software: Will the provider be running on a client/server type of infrastructure or a peer-to-peer type of environment? Each of these has its own set of pros and cons. Smaller installations will require less, and the reverse is true of larger installations. Last but not least, usage is a factor as well. The “harder” a provider will task the software program, the more “horsepower” the computer hardware will need.
Each software vendor is different and has their own set of requirements, but HME providers should not be scared of having to purchase all new computer equipment. In most cases, the hardware they already have will suffice, and above all of that, a good software vendor will help guide them with regards to all of this: Hardware, Training and Implementation.

Cutting Costs Not an Impossible Task

Q&A with Doug Harrison, The SCOOTER Store

The SCOOTER Store, headquartered in New Braunfels, Texas, has attracted an enormous amount of criticism in the past for everything from its mainstream advertising efforts to its recent winning home oxygen bids in the Medicare program’s first round of competitive bidding.
But due to its sheer size, The SCOOTER Store has also had to weather funding reductions on a much bigger scale than many of its HME peers, and as such, has had to implement major cost-cutting moves before. Founder Doug Harrison discusses his take on the upcoming Medicare reimbursement cuts.

Q: When you heard about the upcoming cut, how did you address it? Did you create a detailed strategy for the entire company? Or was your strategy less formal?

A: We selected and initiated our Q3 strategic initiatives assuming
that round one of NCB (national competitive bidding) was happening. We had no choice but to immediately change direction when the news came out about a short delay in NCB in return for a 9.5-percent price cut. My top managers got together and brainstormed ways to survive yet another cut. Our strategies involved growing the profitability of every revenue channel, while simultaneously reducing costs.

Q: What does your strategy entail? What departments, methods and changes are involved?

A: While this was not a simple task, it pales in comparison to surviving the 27.5-percent price cut that the entire mobility industry suffered in 2006 following CMS’ catastrophic recoding project. Our strategies to combat the 9.5-percent are scaled-back versions of 2006 strategies. The biggest difference is that we will survive this cut without a layoff.
In 2006 we cut every possible cost, including a layoff — a business owner’s last resort. We reduced and eliminated benefits for our staff, skipped annual raises and cut back virtually all other fringe benefits. We drastically reduced all temporary and contract employees as well.
On operating costs, we tried to renegotiate every possible contract and/or purchasing agreement. Although many vendors were not willing to make any concessions, many still wanted our business, even at a lower price. We can’t afford to stop selling to Medicare beneficiaries because we are getting a lower (reimbursement). We hoped that all of our suppliers would come to the same conclusion.
And, I’m not just talking about the product suppliers; I mean every person or company to whom we send money for anything. We asked them all to cut our costs.
Additionally, we ran competitions for employee-owners (we are 40-percent owned by our employees) to find and implement cost savings ideas. For the ideas that we knew we could implement, we even offered small cash awards to the employee-owner that came up with the idea.

Q: Have you already started implementing your strategy? If not, when will you?

A: Yes. I think it’s impossible to create an additional 10-percent profit overnight. We started planning as soon as the news came out, and started implementing changes as soon as we had some plans.

Q: How are you presenting these changes to your staff, referral sources, end-users, etc.? Certainly, these are trying and somewhat scary times for the industry, so — how do you present these changes in a way that will make people feel as secure as possible?

A: We called a company-wide meeting to tell every employee-owner about the (imminent) 9.5-percent cut. Following the 27.5-percent cuts in 2006, I don’t think our employee-owners were scarred at all. Many other parts of the DME industry did not suffer through the drastic price cuts like the mobility industry did in 2006, so this might look like an impossible task — it’s not.
However, I’m not saying that it will be easy. Many mobility companies did not survive the 2006 price cuts. I think the mobility suppliers that did survive accepted the reality of the situation, rolled up their sleeves and got to work. The ones that ignored the situation, crossed their fingers and hoped somebody else would make this magically go away have found life after the price cuts to be impossible.

This article originally appeared in the November 2008 issue of Mobility Management.