Business Solutions

Managing Multiple Payer Relations

Our annual roundtable with the HMEB Editorial Advisory draws one almost unanimous conclusion: providers must diversify and learn how to deal with multiple payers and revenue sources.

• By David Kopf
• Oct 01, 2019

How good are you at working with Medicare? Well, imagine having to do that several times over. Each year, the Editorial Advisory Board of HME Business graciously contributes some of their time to share their insights into what key trends they think providers should be incorporating into their strategic business planning for at least the near term.

This year, there was one undeniable trend shared by many of the board members: providers are going to need to diversify their revenue sources beyond the Medicare-plus-some-retail approach that has become prevalent in the industry, and really start specializing in managing relations with multiple payers and revenue sources. They must learn how to work with a mix of Medicare/Medicaid managed care organizations, private payer insurance carriers, facilities-based care providers such as skilled nursing facilities, and health plans.

Bearing that in mind, they will need to learn how to better negotiate with those various payers; they will need to learn how to interact with patients and referral partners more effectively; they will need to learn new business management techniques; and they will need to learn more about the resources that will be around to help them do this.

And, while all this is happening there will be some important regulatory and legislative issues pertaining to Medicare’s DMEPOS program that they will still need to monitor and address, as well.

So, without further introduction, let’s dive in and learn more about what the board members have to share:

SEEK DIVERSIFIED PAYER SOURCES

Steve Ackerman, CEO of Spectrum Medical Inc.

As this issue goes to press, the bid window for Round 2021 of competitive bidding will have closed fairly recently on Sept. 18, and Ackerman says he worries that his fellow providers will sit back on their hands with a “wait and see” attitude.

“I feel very strongly that now is going to be the time to really prepare, and to shore up systems, and review expenses, and root out waste and continue activities that you diversify from Medicare,” he warns. “Because there’s still going to be 16 months of unsustainable prices that can kill any business in that timeframe, particularly, ones that have been weakened by three years of cuts. So you can’t take your eye off the ball right now.”

Rather, providers need to have a business plan that treats getting a Round 2021 bid contract like icing on the cake, he says.

“People need to continue to do what they’re doing to make Medicare a balanced part of their revenue stream rather than something that they depend on,” he urges. “For the first time in six years, we may see an increase in price, but how much of that is going to be uncertain, and it’s going to be a year and a half before you see a check on that.”

That 18-month gap is also a good time for providers to invest in not just their business, but the industry as a whole, he adds.

“It’s also a good time I think now to get involved with the industry because things are slowing down a little, there’s less direct lobbying going on at CMS, but there are still plenty of operational issues and regulatory issues that need to be lobbied,” he says. “And if people haven’t joined a AAHomecare or VGM or other organizations that are doing good work moving the regulatory agenda ahead, it’s a good time to throw your hat in the ring and be a part of that effort.

“So, my message overall is don’t let this time be wasted between now and when the bids are announced and the bids are implemented, it’s still a good time to shore your business up and to make sure that it’s going to be sustainable no matter what happens during the bidding process,” he adds.

PAYER RELATIONS TOP THE AGENDA

Tom Ryan, president and CEO of the American Association for Homecare

Speaking of getting involved with associations, if you stop Tom Ryan and ask him what the American Association has going from a legislative or regulatory point of view, he can rattle off a variety of agenda items: the push to get co-sponsors for the House bill that provides relief to non-bid, non-rural areas; or complex rehab legislation; or the drive to remove non-invasive ventilators from competitive bidding. But Capitol Hill isn’t the only thing on AAHomecare’s agenda these days.

“I think what has become prevalent on our minds, and to some surveys we have done, is that there is a lot going on in the world of payer relations,” he says. “As a matter of fact we had a very good well attended Payer Relations Council summit [Aug. 27] and we realized that there are more challenges in the managed care area, and we want to be your partner and help to fix those challenges.”

With the addition of Laura Williard to head up the association’s payer relations back in 2016, it was clear that managing various payer relations was a challenge AAHomecare knew providers would have to address. More recently, the association formed its Payer Relations Council in July to focus on non-Medicare payer relations, such as Medicare Advantage, Medicaid, Medicaid Managed Care Organizations and commercial plans, and that council just had its aforementioned meeting.

Essentially, the association has been laying the foundation to help providers deal with the fact that, as businesses, they will have to view funded revenue as a wide spectrum, and they will need to know how to tap into that spectrum. Why? There’s a business imperative due to funding cuts and retail competition. Where Medicare might have accounted for 50 percent of providers’ revenues, that portion is now more like 20 percent.

“With the advent of more mandatory managed care — on both the Medicare and on the Medicaid side — you’re seeing more and more of the private payers becoming part of the total revenue payer mix for our providers,” Ryan explains. “So, therefore, the association had to evolve and be your choice and your voice on the state level as well, from the payers’ standpoint.”

In many respects negotiating with Medicare has essentially primed the association to do engage in the same type of negotiating with other payers. In fact, it’s already started happening, according to Ryan.

“For the first time ever, we’re having a major payer actually flying into Washington with their executive team and meeting with myself and Laura and David, and we have a good agenda,” he says. “And again, it comes down to patient protections and reimbursement that’s sustainable for the provider at the end of the day.”

START CLIMBING THE MANAGED CARE LEARNING CURVE

Jeff Baird, Esq., chairman of the Health Care Group at law firm Brown & Fortunato, P.C.

Providers must learn how to deal with third-party payers, and in particular commercial insurance companies that sponsor Medicare Advantage plans and Medicaid Managed Care plans. (In fact, this is a topic that Baird, recently spoke on for “Managing the Manage Care Opportunity,” an HME Business webinar that is available as an archive at hme-business.com/webinars.)

Managed Care is quickly becoming part of everyday business for HME providers. Approximately 35 percent of Medicare beneficiaries are signed up with Medicare Advantage Plans, while roughly 70 percent of Medicaid beneficiaries are signed up with Medicaid Managed Care Plans. Moreover, these percentages are increasing.

“Over the last 10 years or so, the DME industry understandably has been focusing on what to do with competitive bidding, what to do with post payment audits, things of that nature,” Baird says. “And the industry just didn’t pay any attention to the growth of Medicare Advantage plans and Medicaid Managed Care plans, and they snuck up on us.

“And all of a sudden, we as an industry, we’re finding out that more and more of our patients are being serviced by these insurance companies, and if we’re not in network, then we can’t take care of the patients, and that’s a problem,” he continues explaining. “And so I see as a big challenge for us as an industry is to understand how Medicare Advantage works; understand how Medicaid Managed Care works; understand how to have the best chances of being admitted to the supplier panels sponsored by the Medicaid Managed Care plans and Medicare Advantage plans. And then after that, can we live with the reimbursement that they pay?”

Baird notes that the challenge of obtaining, negotiating, working with these insurance companies is foreign to most of DME suppliers, because it has not been in the DME space until just recently. That means providers don’t have much experience in terms of working with these third-party payors. That said, it’s not rocket science and the work pays dividends.

“Once a DME supplier is on a panel and has signed a contract with a third-party payor, then it is a lot easier working with that third-party payor than it is working with traditional Medicare or traditional Medicaid,” he explains. “So, it’s actually simpler working with these commercial insurance companies.”

INSTALL AN ‘OPERATING SYSTEM’

Ty Bello, president and founder of Team@Work

When it comes to juggling multiple payers, maximizing multiple revenue streams, and yes, still trying to make the most of Medicare and Medicaid opportunities, providers need to implement management practices that help them flexibly manage all that.

Specifically, Bello says providers need to start thinking about an “operating system” for their businesses. And it turns out they don’t have to start from the ground up — there are some proven systems of strategic business management that apply to HME.

“There are multiple systems that are out there and many people have heard of these,” he says. “They’ve heard of Traction which is an entrepreneurial operating system. They’ve heard of the Four Disciplines of Execution or sometimes called 4DX, and some of them may even heard of the Rhythm System. Now, those are all business operating systems and all focused on ever so slightly different things, but overall similar.

“I’m somewhat interested in which one providers use, but more importantly, use something,” he implores. “Please use something. Each one of these has its own specialty area, but again, all are very, very similar.”

In terms of selecting a system to run a business, Bello says providers should consider several things. One, is this system currently being use in similar businesses in our industry. Other home medical equipment businesses, respiratory and complex rehab businesses? Second, can they implement and use this on their own after being educated on it. And, third, have the people using this system used it in their own business.

And with Round 2021 bidding buttoned up, now is the time to get cracking, he adds.

“This great opportunity,” he says. “The bid window is closed. We’ll know in a few months who won, who did not win, what the numbers are, etc. What are you doing between now and that time to set in place a business plan, a strategic business plan and system that works continually whether you win or don’t win? Because then you’ll have a system to thrive regardless of that outcome. Now’s the time; this is the training that takes place before the big event.”

DEMONSTRATE YOUR VALUE

Sandra Canally, RN, the founder and CEO of The Compliance Team

When providers get out into the marketplace and talk to prospective payers, networks, referrals and other revenue sources, they must square away some time to think carefully about how they can communicate the value they provide in their community’s continuum of care.

“They need to really demonstrate to the prescriber and to the payer why their companies should be on their network,” Canally says.

The answer is not always simple. For instance, a diabetic provider can simply provide supplies, glucose monitors and insulin pumps, or it could consider all of the companies that are involved with diabetes and the care of the diabetic patient, and then think about how it can truly enhance that care.

“Why not add diabetes self-management training, where you have the capability of doing classes for the Medicare beneficiary to better educate, better manage and control their diabetes?” she suggests. “Then you would have that added offering or service to then take to Mrs. Jones’s doctor to say, ‘We’re now offering this service.’ It’s through all of these integrated care models where you’re sharing the information and the care coordination with the prescriber and the payer that will make all the difference in terms of moving forward.”

And that’s just one idea for one category. Provides can take that a step forward. For instance, there is a good deal of patient data being reported to payers and physicians, but many plans are also wanting to hear about patient-reported outcomes, instead of just clinical outcomes, so if a provider can help facilitate that process, it then demonstrates its value, Canally says.

Of course, some provider might balk at having to provide extra service in a market with declining reimbursement, but Canally says this type of service is what will get the contracts.

“This is an opportunity to get your reimbursement up to where it needs to be,” she adds.

ENHANCE YOUR ENGAGEMENT

Rob Boeye, executive vice president of HME for Brightree LLC

Of course, part of that effort to leverage patient relationships to make a difference with payers and partners must include the sorts of tools that help providers foster patient engagement. This helps automate repetitive processes, such as sending out appointment reminders, requesting insurance updates, and communicating delivery and orders status.

The upsides are clear in terms of operational cost savings, patient convenience, care outcomes, and payer relations. And, there are technology tools out there to do it, Boeye says (his company definitely makes those tools), but it’s not as simple as flipping a switch.

“How do we get patients to adapt and actually use them? How do we get them to scheduling? How do we get them to update their insurance cards? How do we get them to potentially show us a video of the product that they currently have, so that a provider could diagnose and potentially even solve an issue as opposed to sending the truck on the road,” he says. “All of those things are available right now from companies on the applications. Where I’m seeing the biggest struggles is with truly where does that provider convince that patient to actually utilize this app?”

That said, providers’ efforts to get patients to use patient engagement tools could be benefiting from an increased desire for self-service among U.S. consumers. Think about it: we currently use our cell phones to order tonight’s dinner and get updates on our prescriptions. Providers need to think about how they engage with patients in similar way, Boeye says.

“With a patient engagement app, that is really going to automate and simplify how they connect with their patients,” he explains. “I think they need to look to consolidate all patient interactions really into one secure platform. That’s going to empower care and free up resources and create opportunities to accelerate cash flow.”

TELL A STORY

Wayne Slavitt, founder and CEO of Mobül: The Mobility Store

And then there’s in-person patient engagement. Many providers have made major transitions to retail sales, and for Slavitt, a retail-only provider, he says that providers need to think about how their staff and stores help paint a picture in patients’ minds — they need to tell a story.

“I talk about ‘the story’ a lot,” he says “When we’re considering taking on a new vendor, for example, one of the first questions I ask is, ‘Where does your product fit in with our ability to tell our story?’ Because when a customer comes in, we tell them a story. You know, ‘We have this beautiful chair at this price, and we have these features on this one,’ and if we’re going to bring in another product that’s so similar to something we’re already selling, then that’s only going to confuse a customer.

“So we oftentimes have to ask the vendor, ‘Tell us how your product fits into what we’re trying to sell. How is it going to affect the story? Is it going to make it better? Is it going to make it worse? Is it going to be confusing?’” he adds.

Slavitt’s entire store is set up to tell that story. A sizable section of the store is made to resemble a home with different rooms. In each room a range of products is displayed so that they can show how they fit into customers’ lives. Then staff can lead customers through the store and the products and let the environment and the wares help them tell that story.

“We love walking through the store with customers,” he says. “We like showing them a range of products. The story has become such an important part of what we do.”

SHAKE THE TREES

Ron Resnick, president and owner of Blue Chip Medical Products

At the end of the day, job one for providers is to create new business, Resnick says. Providers must do the homework and find the new opportunities, whether it’s a nursing facility, health network, or whatever.

“The dealer has to get out of his office,” he says. “He has to get out of his retail store, and he’s got to go out and market. They can’t be too busy to sell.”

And Resnick adds that vendors are invested in their providers’ success and will help facilitate that new business development if they can. His company specializes in helping facilitate educational meetings between providers and potential funding or revenue sources.

“We go out and we hold their hand and we take them into places where we talked about calling on institutions, whether it’s long term care facilities, hospice,” he says. “And, maybe, in some of the areas, their reimbursement may not be great but, you don’t know until you go out there and you work it.

“We go out and we help educate the dealer and then educate the facility, because they may not have the knowledge or the expertise in a particular area like we do in our market,” he continues. “When we go into a facility, my job is to educate, not sell. The education sells itself. Then they say, ‘We want to work with that company providing it because they have the right know-how and the right products.”

This article originally appeared in the October 2019 issue of HME Business.