Vol. 14 •Issue 9 • Page 28
Ten Tips to Boost Reimbursement in Home Care
I have found it strange that home medical equipment businesses are one of the few industries that don’t ask for the money up-front.
When discussing the subject of collecting money from the customers and the insurance carriers that we deal with on a day-to-day basis, many questions pop up as to what the best procedures are for collecting outstanding funds.
Most companies have started to ask for the co-payments, but little pressure is placed on the customer if the co-payments aren’t made at the time of delivery. There isn’t a physician office or a clinic that I have been in over the last several years that doesn’t have a sign posted that stipulates payment is due upon services rendered. Still, companies aren’t efficient at the collection of the patient’s co-payments, which makes it even more pertinent that companies watch their DSOs (days sales outstanding) and collect from the insurance companies with the first bill sent out for the companies to process.
There certainly is no one method to make all of the money flow into the door of the HME business, but there are several keys that seem to work with the more successful collection processes that are being used within our industry today.
• 1. People are by far the best resource that a company can have working in the billing and collecting department. Although this isn’t an eye-opening statement, there are still companies that want to hire anybody who can fill a slot on the phone and can turn on a computer. Don’t settle for low standards. When hiring, set high education qualifications. That way, you’ll know the people in these jobs are motivated by accomplishments that they’ve made to better themselves.
You may have to pay these people more, but it’s worth it. For every one day a company can keep down the DSOs, the extra salary is paid for in better cash flow for the company.
• 2. Keep customer service separate from the reimbursement side of the business. For some small companies in our industry, this is hard to do. But make it a priority to take distractions away from the people who process your claims. This will lead to a more productive process and ensure that “clean claims” are sent out to the insurance carriers.
• 3. Develop a training program that will cover the aspects of the billing and collection process. These programs should include the resources that are available in your organization. Have a mentor assigned to help these new employees achieve goals, and have these mentors share in the success of the new workers’ growth. Training and updating processes need to be ongoing and not just for new employees. The company that believes they have an answer for everything won’t be able to adjust to the constant changes in the industry.
• 4. Hold monthly meetings on all the denials that have been received back from the carriers for that month. This can be done in a group setting. There needs to be accountability with each department as to the payer groups that are serviced by the company. This will allow trends to be monitored and corrected before it goes too long in the collection process.
In the cash collection process, companies start to struggle when the standard isn’t challenged as to how long it’s acceptable for the claim not to be paid. Don’t have a staff that’s complacent to the fact that one out of every two claims is always denied. Promote a staff that can think of ways to improve the billing and collection process. Would it be acceptable to the employees to have one out of every two paychecks denied?
• 5. Review outstanding, unbilled revenue days. Monitor the billing process to identify the time it takes to get the insurance documentation needed to send the claim off to be processed. Develop procedures that can be followed to limit the time it takes to get the documentation back for the physicians. Keep a pending file that should be reviewed each week for all claims holding, and have an individual who will take ownership of the outstanding documentation that’s needed for the claims processing to continue.
• 6. Know your insurance carriers before any contracts are implemented. Know what the cost of business for the services provided will be for the company. Not all contracts are created equal and are good business. Be prepared to walk away from a payer source that won’t pay the claim the first time on the majority of the claims that have been submitted by the rules that are set forth in the contract. Don’t hang on just because the number of referrals is good, even though the claims take 120 days to collect.
• 7. Join and participate in trade group organizations. There’s a wealth of knowledge and information shared in these groups and any fees that are invested are more than paid back in the information that’s given from these groups. The networking that’s done in the trade group meetings can be invaluable in the instruction to the management staff of the organization.
• 8. Set cash amounts that if the labor, time and effort isn’t going to cover the amount that’s to be collected, then the claim will become an automatic write-off and isn’t to be worked on further by any individual. Why spend the effort in the collection of a $40 account when there are several accounts more than $500 that should have been paid?
• 9. Start creating an action plan to go to a paperless system. All files should be scanned into a database for easy access. This will make working and billing claims faster because no employees have to leave their desk to find a file. This also helps with the tracking and sorting of data from different billing processes to verify that there’s a timely manner in which the payments are coming into the business.
• 10. Take the time to use technology to the company’s advantage. The E-CMN process — technology used to electronically process Certificates of Medical Necessity — has seemed to work well in obtaining the information needed to send out the claim. If there isn’t a system in place to electronically bill, then convert to the paperless method of billing.
There are always simple answers to the billing and collecting procedures, but there are rarely simple fixes to the problems. With the respiratory medications and oxygen cuts now in place, the need to collect for the equipment and services that we provide are essential in the future for the survival of companies in the HME industry. (See Sidebar.)
Use resources wisely and collect the funds for the quality services that are provided to our customers that we serve. The majority of the industry can’t survive the continuation of reimbursement cuts without ongoing adjustment to our billing and collecting process.
Timothy L. Safley, RCP, RRT, MBA, is director of respiratory development for Advanced Home Care, Greensboro, N.C.
HOME CARE COMPANIES ON ALERT
The home care industry will look much different in the upcoming years due to the Medicare Modernization Act of 2003.
Not only did it call for reductions in the oxygen reimbursements for the next several years, it also drastically reduced the amount that Medicare would allow for the delivery of aerosolized respiratory medications.
In addition, this law established that home care providers would have to be accredited by a national organization within the next several years if they wish to seek reimbursement from Medicare for durable medical equipment products and services.
The final blow was that the providers would have to go through a competitive bidding process that will determine who the suppliers will be that can provide service in a specified area.
The oxygen cuts were expected, but the cuts in the respiratory medication market were drastic enough that most companies were preparing to eliminate that service because the Medicare allotment was less than the cost of doing that business. This was going to keep thousands of Medicare beneficiaries from receiving their medication.
At the last minute, Medicare allowed companies to add on a dispensing fee that would cover the cuts in the medication reimbursement amounts and continue the home delivery of these medications. However, Medicare has reevaluated this fee and has stated that this could be readjusted or removed for the upcoming year.
The cuts are having a huge financial impact on the industry, but now these companies have to find the resources — financial and human — to gear up for the accreditation process.
A HME News survey in July noted that of the 23,000 HME suppliers, only 6,500 were voluntarily accredited at this time. In other words, less than 30 percent would now meet the Medicare standard for being able to supply equipment or services to their beneficiaries. This is an incredible amount of providers to get through the accreditation process.
To complicate the matter, competitive bidding has been added to the mix as to which companies will be approved for providing services to Medicare patients. Competitive bidding will be gradually phased in, starting with 10 of the largest metropolitan statistical areas in 2007, 80 of the largest areas in 2009, and additional areas after 2009.
Most HME companies serve the aging population (which is the Medicare population). If these companies are virtually eliminated from the provider listing, then they’ll no longer continue to grow or even maintain their customer base. This becomes an even larger reason for providers to allocate resources to the process of accreditation.
The HME industry is waiting, adjusting and reacting to the new changes, whatever they may be.
–Timothy L. Safley, RCP, RRT, MBA