Providers get smart

Sunday, November 30, 2008

YARMOUTH, Maine--Providers spent the last months of 2008 tightening their belts in preparation for a 9.5% nationwide reimbursement cut that goes into effect Jan. 1.
A Medicare bill passed in July delayed national competitive bidding for 18 to 24 months in exchange for the cut, which covers products included in Round 1 of the program. Certain high-end rehab items were excluded.

To survive, providers are making smarter use of technology and implementing process improvements to reduce overhead costs. Provider Don White said better routing technology and careful planning will allow him to continue caring for 7,000 to 8,000 oxygen patients.
“We are proactive about putting patients on delivery schedules,” said White, CEO of Associated Healthcare in Amherst, N.Y. “We will call them to ask ‘Do you need tanks on Thursday?’ We used to wait for them to call us.”

Provider Todd Tyson says between the reimbursement cut and the oxygen cap, he’s got to make up about $1 million in revenues. One area of renewed focus: CPAP compliance and replenishment.

“We have software which calls our patients,” said Tyson, president of Hi Tech Homecare in Marietta, Ga. “But we only have success connecting with about 20%, so we will add a live call for follow-up and see if we can reconnect with some of these patients.”

Other providers were taking a hard look at their product mix.

“We are looking at expanding into different venues,” said Eric Parkhill, vice president of Home Medical Professionals in Atlanta. “We are putting a big emphasis on self-pay items. We’ve also dropped a few product lines that were unprofitable over the last 18 months.”
When it comes to products they keep in stock, providers are also shopping smarter. Kevin Robison, DME manager for Knueppel Healthcare Services in Racine, Wis., keeps his eye out for specials and has often found better deals through distributors than manufacturers.

“It seems as though manufacturers are reluctant to enter into committed pricing,” he said. “Years ago, I had the luxury of having consistency of product. Now, I’ll dance between (manufacturers and distributors). It’s not what I like to do.”