e-CMN vendors kick sales into high gear
ALEXANDRIA, Va. - The fledgling market for e-CMNs sprouted some new wings in late February after AAHomecare, Trac Medical and bConnected cut a nine-year deal that may finally engender widespread acceptance of e-CMNs among HME providers.
Advanced Home Care’s reimbursement specialists, Kelly Jackson and Kim Brummett, welcome the dawn of the e-CMN era.
The deal pulls together Trac Medical’s CareCert e-CMN, back-end functionality from bConnected, the use of the USPS Electronic Postmark and the all-important green light from AAHomecare, which has been exploring the possibility of an e-CMN solution for its 800-member base for several years.
AAHomecare members will pay $1.80 to $3.00 per transaction for either an e-CMN or a Written Order of Verbal Communication and a licensing fee of $36 to $50 per location per month. A paper CMN, according to an activity-based costing analysis by one HME company, costs about $20 to process.
The deal has the potential to create an enormous new revenue stream. AAHomecare, whose membership includes Apria, Rotech and Lincare, believe that its members process about 52 million CMNs and Written Orders per year. If all the existing paper CMNs and Written Orders underwent an electronic transformation over the next two years, the annual revenue generated by the contract would tally to $56 to $94 million annually, not including licensing fees.
The ramp to eCMNs may tilt upward rather quickly if the national HME companies begin migrating toward the new technology this summer. Apria in late February signed an eCMN deal with Trac Medical.
At Advanced Home Care in High Point, N.C., Joel Mills, who is also the current chairman of AAHomecare, expects that 30% of his company’s CMNs will be processed electronically a year from now, and that 60% will be converted two years out.
“The issue is physicians,” said Mills.
However attractive the e-CMN may be to the HME provider from a cost standpoint, the willingness of physicians to respond to e-mails and process e-CMNs using an electronic signature is one reason why HMEs don’t believe they’ll retire the old paper system so fast.
And that’s why Mills said AAHomecare wanted to throw its bulk of membership behind the same solution.
“It became clear that if different companies were doing this we wouldn’t receive the key, which is physician adoption,” said Mills. “We need lots of companies talking about the same thing because they won’t adopt it if it isn’t easy.”
In addition to the Trac Medical and bConnected project, at least two competing e-CMN solutions are vying for business from HME suppliers: eClick MD and the Healthcare Management Group, a Medline affiliate. (See related story below.)
While physician adoption is widely regarded as the principal inhibitor, the sluggish pace to acceptance by the provider community was stalled by a suite of sometimes competing interests that took time to resolve.
Trac Medical has been rearing to go on e-CMNs since at least September 2002 when CMS issued a Program Memorandum that granted the official go-ahead.
By then, AAHomecare had identified the e-CMN revenue stream as one that it could tap as a benefit to its membership base’s ongoing political activities.
Additionally, AAHomecare’s largest players, notably Apria Healthcare and Rotech Healthcare, desired a solution that would marry easily into their internal systems, which Trac’s system would not do.
Enter bConnected, a business process management company that laid a technological pipe that has enabled Rotech to write purchase orders from inside their legacy system.
“We have contracted with bConnected to rebuild a majority of the technology platform that our solution sits on,” said Randi Neal, vice president of operations at Trac. “And provide those pieces to ensure all of the openness and ease of access that AAHomecare wanted.”
Those pieces, according to bConnected President Frank Bergen, will be invisible to users but will power the next generation of CareCert, which should be available by summer.
The new nine-year deal includes a profit center for AAHomecare.
“We’ve worked out a royalty sharing agreement to share nominally by some of the revenues generated by AAHomecare,” said Mills. “Those revenues will help AAHomecare’s cause on Capitol Hill.”
Mills is also hopeful that the deal will drive new members into the association.