I recently heard that DME suppliers are facing issues with their billing and with the tight margins of the DME industry, many suppliers are searching for ways to bring in extra revenue, and here are the five operational pain points to look into it.
1. Reimbursement cuts:
Obviously, the biggest pain point has to do a lot more work for a lot less reimbursement. Everyone is getting hurt from either losing bids and, therefore, losing patients / referral sources, or winning bids at a much lower reimbursement rate than they used to receive. Either way, it is very hard to make a profit. There are even more cuts on the way.
Private insurance carriers undoubtedly will copy Medicare, as they always have, and reduce reimbursements significantly. I heard from so many DME suppliers how hard it is to make a profit in this current climate, without tons of volume. Even with the volume, the cost of labour for gathering the necessary documentation makes profitability almost impossible to achieve. Adding more revenue sources would be nice, but very difficult when all of your competitors are trying to survive by selling your products too. Cutting costs ruthlessly is the most effective way to mitigate the effects of what is going on now in the DME industry.
2. Obtaining physician documentation:
It takes a tremendous amount of time to obtain prescriptions and other medically necessary documentation from doctors and other medical service providers. Without it, they can’t dispense supplies and get paid from the insurance carrier. The problem is that it’s very hard to get through to doctors’ offices. It can take many calls and faxes to finally obtain the prescription and/or additional documentation. This adds a lot of labour costs and increases the time required to deliver the product. Many companies are eliminating some products because of the time spent on chasing documentation. These products are losers. Obtaining physician documentation is one of the biggest drivers of the outsourcing decision.
3. Dealing with excess denials:
Denials are sky-high these days. This may sound crazy, but the denials are really low. Most of them aren’t aggressively following up on denials for lack of resources and other reasons. If you don’t follow up on denials aggressively, you won’t know how to prevent them in the future. Some of them aren’t posting the non-electronic denials because they don’t have time. How can you know what’s going on in your business if you don’t have the data?
4. Lagging behind in billing:
I can’t begin to tell you how many of them are lagging behind in billing. It is killing their company’s cash flow. Some companies, trying to catch up, take shortcuts, dramatically increasing the denial rate. Making sure all necessary information is correct and uploaded is crucial. Operations have to be as efficient and cost effective as possible in order to stay alive in this industry.
5. Frequent Audits/ Take backs
Each of the claims retroactively denied had prior authorisation. A few of the companies got audited recently. The effort required for the company’s response caused to fall behind in billing. It’s not enough that Medicare made it so hard to bill correctly and realises a reasonable profit; they will audit you too sometimes years later, on issues that are not your responsibility.
I’m being proud to say our team is helping DME companies cut costs significantly enabling higher profitability and operational efficiency for our clients. If you’re experiencing some of these issues that I addressed here, you’re not alone. Do something about it! Think outside the box! Be innovative! Contact us today.