The five commandments

Wednesday, September 30, 2009

As 2009 rolled out, there was very little information disseminated to HME providers on the new rules and processes for home oxygen therapy mandated by the Deficient Reduction Act and the Medicare Improvements for Patients and Providers Act, both passed in 2008. Providers faced new and more complex reimbursement policies and decreased reimbursement, not to mention misinformed CMS personnel pitting patients against them. It's no wonder some providers have questioned whether they want to continue in this market.

Many providers built their businesses in the oxygen market. Now, with a few decades of performance history behind us, there are some things we know for certain. Providers are very resilient and tenacious. They have proven abilities to change processes quickly, and, historically, they have taken the high road when it comes to doing the right thing for patients and their families, even if it means, sometimes, not getting paid for it. To continue this "can-do" attitude, there are some practices providers need to embrace going forward.

Commandments for continuing to survive in the oxygen industry:

Know your company's data

This includes patient types, divided by need. What percent of your patients are nocturnal-only? One study shows a benchmark of 38%. This group has been growing and will continue to grow as there are more aggressive efforts to identify patients with COPD earlier in their disease state. This means, in time, these patients will move into another category, where they will have portability requirements. It is important to track what percent of your patients exceed the 36-month final payment. Are you close to the reported industry standard of 22% to 28% of all oxygen patients? Knowing this can help you better define business practices.

Keep up with the science

of oxygen delivery

If you are still delivering an E-cylinder to every patient being discharged from a hospital, it is time for a review course. To survive, it is imperative to accurately match the patient to the oxygen device. This process is based on the severity of the patient's disease state and respiratory mechanics: how much they travel, amount of ambulation during a typical week, how much they're able to lift and required liter flow to maintain an adequate oxygen saturation level.

Manage your revenue

Collect co-pays and deductible payments that are due upfront. This sets the expectation from the beginning that you provide a valuable service and product that you deserve to be paid for in a timely fashion. Waiting to bill patients until the insurance has paid you sets you and your patients up for failure. Years ago, it was not uncommon for a provider to collect 70% of billed revenue; if you are not collecting closer to 95% in 2009, you are in for some very tough times. When purchasing capital assets, take advantage of 0% financing options when available, as well as programs that offer "skip payments."

Obtain information from reliable sources

Stories abound where providers and patients have called CMS for information and received erroneous direction. This problem is certainly not limited to CMS. Ensure the information has been fully vetted by a credible source--i.e. a healthcare attorney, someone who specializes in Medicare billing or a public policy expert. Understanding that CMS also has turnover in its customer service department can help explain why the information given may not be consistent.

Tackle technology

We have had more advances in this field in the last few years than ever before. This is the greatest mechanism to gain efficiencies within your organization. Technology that extends beyond patient product is often overlooked or added too slowly. This includes tools to better track inventory (such as bar coding); electronic medical records (think saving trees and staff time); and global positioning and routing systems for company-operated vehicles.

There are a few bits of good news for providers: serving the pending blitz of baby boomers; being required to make deliveries only every three months; and being able to re-start the payment cycle after 60 months. This, combined with implementing good business practices, makes for continued success in this market. hme

Kelly Riley is the director of The MED Group's National Respiratory Network. She can be reached at