Provider reaps repair revenues

Sunday, November 30, 2008

CHARLOTTE, N.C.--Network Medical has experienced a 15% uptick in revenues in the past few months, due to rehab companies that have thrown in the towel. President Rick Perrotta hopes the boost to his repair department can help his company avoid the same fate when the 9.5% nationwide reimbursement cut takes effect Jan. 1.

Network Medical Supply retooled its business model two years ago, when CMS enacted a reimbursement cut of 27%, on average, for power mobility devices, Perrotta said. Its strategy: Make up for lost revenues by emphasizing service and repairs, he said.

“It used to be that we were about 75% equipment and maybe 25% repairs and now we’re probably 60% repairs and 40% equipment,” Perrotta said. “It’s worked pretty well, but at the end of the day, we’re certainly not making the same kind of money that we made three or four years ago.”

Still, business is steady. A new television ad highlighting the company’s service department has brought in several calls a week, including calls from people who bought their wheelchairs from other providers, he said.

Billing Medicare for repairs can be tricky, Perrotta said, but it’s not impossible if you learn the rules. Network Medical has a 60% success rate.

“We spend an ungodly amount of time on internal procedures to make sure we’re billing right,” he said. “A lot of outfits out there are billing things three, four times before they get it right and that’s where they’re really spending a ton of money.”