Open doors to new revenue opportunities
As providers deal with the evolving DME environment, the focus is on how to grow revenue in a market where fee schedules are continuing to contract. For many years, revenue growth was primarily focused on finding new referral sources that would then send their Medicare patients and other insurance referrals to DME providers. Providers never really had to worry about growing their revenue because the demographics kept expanding the base of new customers with Medicare patients. But with the implementation of competitive bidding and the new demands of Medicare programs (audits, documentation, face-to-face), many providers are not sure how to grow their revenue anymore.
Millions of individuals will become newly insured under the Affordable Care Act. The focus must be on changing the business model so that providers can build new revenue opportunities.
The cash market for DME is expanding very rapidly. Big-box stores and Internet companies are expanding cash DME items. When we think of cash, we often mistake that for meaning retail. If you create a retail offering that includes location, and, more importantly, the retail sales mindset, you can grow your cash revenue. While a retail offering will help offset some of your revenue losses, there are many opportunities to help your patients identify their needs without a retail location.
Your most valuable tools are your customer list and DME product education. Educating the consumer on the benefits of your products and services is a long-term investment that must be done on a consistent basis with exceptional marketing, excellent sales techniques and consistent messaging. Take a look at what your manufacturing partners have to offer to help you sell more of their equipment, and look to membership services organizations like The MED Group to take advantage of their consumer marketing materials.
Many providers have realized that while the sales volume for Medicare and Medicare Advantage contracts was attractive, the rates created challenges to remaining profitable. Many providers are looking at the thousands of other payers who offer pricing better than Medicare, but will not offer the large number of lives covered by the bigger contracts.
The contracts include PPO contracts, managed benefit contracts and direct contracts.
You should also be searching in new areas for partnerships, which is why relationships and business opportunities with alternate site/long-term care facilities should not be overlooked. Long-term care facilities (LTCs), like providers, are under significant pressure to do more with less and are facing stiffer regulations and funding challenges. Partnering with LTCs in your area to provide programs, solutions and products is an additional avenue to generate revenue for your business.
Nursing homes need programs and education to help them meet their compliance surveys, raise or maintain five-star ratings and help reduce recidivism into acute care.
LTC facilities need education on how your products and expertise can help address their pain points within a facility. This includes mobility seating and positioning, wound care, contracture management, bariatric care, and fall prevention—all of which can have a negative impact on a facility.
The future of DME is bright for providers willing to change their business model.
Wayne Grau is vice president of sales for The MED Group. Reach him at 806-722-2548 or firstname.lastname@example.org.