Attendees scratch surface at Business Summit

Friday, September 30, 2005

CHICAGO - The purpose of the HME News Business Summit wasn't just to present raw data for providers' consumption.
It also strove to point them in a direction where they can find data on their own, process it and use it for their own business strategies.
The one-and-a-half-day program featured 18 speakers, each of whom covered a particular aspect of the data gathering/utilization theme. While it's impossible to mention every salient point from the presentations, here are some highlights:
National claims data shows that one in five claims is denied, which indicates "staggering inefficiency," because it translates into a major loss of productivity, said Bently Goodwin, president of Memphis-based RemitDATA.
Claims denials were fairly consistent across all regions of DMERCs, between 17% for Region C and 22% for Region D. The highest denial rate is for infusion claims at 45%, followed by rehab at 28%, DME at 23%, respiratory at 15% and diabetes at 12%.
The biggest reason for denials? Duplicate claims. "This is a huge problem," Goodwin said. "Companies do this to 'follow up real well,' but it actually creates extra work for the staff."
National competitive bidding will be reality and providers need to start thinking about how they're going to bid, said session co-presenters Wallace Weeks and Tom Pryor. According to their calculations, the average $2 million HME company has a 7% margin and gets 37% of its business from Medicare.
"If all of that company's Medicare revenue is derived from products that are at-risk for competitive bidding and the company loses the bid, that company's revenues will fall 28.3%," said Weeks, president of the Melbourne, Fla.-based Weeks Group. "That's pure and simple math. If you do nothing else, calculate your risk."
Pryor, president of Arlington, Texas-based Integrated Cost Management Systems, advised companies to use an activity based cost formula for determining the length of time it takes for specific tasks. Pryor reported that the average cost per minute for order intake is 32.5 cents. If the task takes 20 minutes, the average cost is $6.51.
This formula will help each company determine its excess capacity, which Pryor called "the waste you aren't reimbursed for - the biggest non-value-added cost you have."
Patient satisfaction is "paramount to what we do" as HME providers and evidence-based outcomes are the hard data the industry can use to gauge its performance, said Vernon Pertelle, corporate director of respiratory & HME services for Lake Forest, Calif.-based Apria Healthcare.
Together, patient satisfaction, clinical and economic outcomes provide "the complete picture" of HME services for CMS and policymakers. Until the industry can quantify its advantages over acute care, it will continue to be "an easy target" for Medicare cuts, he said.
The Internet is a font of information for demographics and hospital discharge data - if you know where to look, said Eric Kline, CEO of Pensacola, Fla.-based Elint Technology. The Healthcare Cost & Utilization Project (, American Hospital Directory ( and WebMD ( contain all types of statistics germane to the HME business, Kline said.
Another site, Google Earth, also offers multi-dimensional satellite views of any location on the map.

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