Preferred embraces new normal for DME

Thursday, May 24, 2012

TYLER, Texas – It used to be if an HME provider had a payer mix that was 65% Medicare, that was a “good thing,” says provider Steve Slayter.

“That’s not going to be the norm any more,” said Slayter, vice president of operations for Preferred Home Medical. “That used to be a good thing, but when your cost of goods and gas either remain the same or go up but your reimbursement keeps coming down, you’ve got to think outside the normal DME box.”

So in March, the provider remodeled its warehouse into a 2,500-square-foot retail sales floor complete with a host of new products and “beautiful” displays that showcase how equipment is used in the home, Slayter said. 

For example, a walk-in shower lets customers gauge its width, and what they would need to do to get a wheelchair in and out of the shower.

“They can actually see if it’s going to work for them,” said Slayter. “A lot of the time they get home and they realize it’s not going to work.”

In its first six weeks, Preferred has already seen an increase in traffic. The provider also holds in-services for referral sources in the new space.

“They can see exactly what we offer, have a little lunch and get an in-service on equipment or whatever else they are interested in,” said Slayter.

In addition to offering a full line of HME and respiratory services, Preferred does high-end rehab. To that end, the provider has added home ramp systems and is preparing to offer vehicle modifications, said Slayer. He hired someone with a background in that field to oversee that division and coach them along.

“We are still really green in that, but it looks pretty promising,” he said.

Preferred started out in 1992 with five employees. It has grown to 42 employees and three locations—Tyler, Palestine and Longview—which each serve about a 100-mile radius. The provider, which is not in Round 2 of competitive bidding, used to service the Dallas area but stopped when Round 1 came around. Still, Slayter knows he can’t duck the bid prices forever.

“We’re looking down the road,” he said. “Inevitably, reimbursement will be cut and we need to start adapting now.”