Create 'wiggle room' in profit margins
ATLANTA – Keeping an HME company in the black is a daunting proposition in the hardscrabble business environment of recent years, but four of Medtrade’s best instructors say it can be done despite the pitfalls providers constantly face.
Gaining “wiggle room” with margins and improving cash flow can be a reality if providers focus on two key areas, they say: reducing days sales outstanding levels and leveraging technology. By ensuring that deductibles are collected, claims are consistently clean and billing systems are proficient, providers should see the maximum amount of dollars owed to them, seminar leaders contend.
Upfront collections remain “low hanging fruit” for providers to boost their cash flow, says Andrea Stark, reimbursement consultant with MiraVista.
“No one is doing well enough unless they have effective protocols on collecting deductibles,” she said. “The providers with the higher collection rates make sure that there is a credit card number on file for rentals and resupply. We’re starting to see more of this, but it is not something the industry as a whole has done. Too often providers would skip the upfront collection as a courtesy and leave it to the back end to handle, where collections are much harder to get.”
To be sure, providers that emphasize co-pay collections up front with patient pay portals “are seeing a drastic reduction in outstanding patient accounts receivables,” agreed Miriam Lieber, president of Miriam Lieber Consulting.
To keep DSO levels from rising, Lieber said providers should diligently work their denials on a daily basis, eliminate timely filing denials by prioritizing billing and appeals by contract term, and reduce the over-120-day columns on aged accounts receivable reports.
“In addition, many companies are working the top 20 to 25 accounts to bring in the largest dollars more expediently,” she said.
Jane Wilkinson-Bunch, president of Jane’s Healthcare Consulting, notes that HME providers have a reputation among their peers as being technology challenged, but maintains that through diligence and education, companies can drastically improve their performance.
“First of all, most providers have not been appropriately trained in all aspects and programs within their software and are not even aware of all the functions it can provide,” she said. “That said, it is still ‘junk in, junk out’ with regard to billing systems. Ensure your staff has received proper training, know what reports to run weekly and monthly, allow your system to do the work and stop doing so many handwritten reports that the software can do for you much more efficiently.”
The importance of staff training on billing systems cannot be emphasized enough, said Sarah Hanna, president of ECS Billing & Consulting North.
“Many providers skip the important step of implementing a regimented training program,” she said. “Just sitting and observing another person’s work doesn’t mean that the new employee is receiving what they need.”
Provide for extensive Q &A time, test for competency and audit the staff’s work product to measure progress and understanding, Hanna said.
“Leveraging technology to set and monitor goals, productivity and accuracy can allow companies to see problems before they become an A/R headache,” she said. “Set goals for what staff should accomplish weekly, tabulate if they meet, exceed or underachieve, and look at collection rates by team member to verify their accuracy level.”