Bracing for the change
WITH JIM PHILLIPS
Q: With all the talk about reimbursement changes and the battles in Washington, what should I be looking at in my own business to make sure I'm prepared?
A: There are many things that you should be looking at to make sure that you've prepared for possible changes.
1) Watch your accounts receivable. It's impossible to be too close to your A/R. Set up reviews with your staff on a weekly basis to make sure nothing is being missed. Review all procedures and files. Don't wait until there's a problem to look at it. Cash now more than ever is king, and it could be tied up in your A/R, so watch them.
2) Work on a good business mix, both on the payor and customer side. Know where the business is coming from and be aware if you're getting too heavy with one payor, that they may put your company at risk, know who they are. Look at what other opportunities are out there in the home care market that you don't service, retail, sleep, etc.
3) Financing, pay attention. Watch your inventories and use financing where it works for you and can preserve your cash. There will be plenty of needs for your cash, so use financing where you can match the cash flow of your equipment to the reimbursement stream. If you're a respiratory HME, use 36 months on your concentrators and cylinders. If it's rehab, keep it 12-18 months. Don't be caught with payments on equipment that already capped out.
Jim Phillips is president of VGM Financial Services. Reach him at (319) 235-6727.