Successful Sleep Resupply Strategies -- HME Business

Sleep

Successful Sleep Resupply Strategies

Helping patients with compliance and effective therapy while helping you create new revenue streams.

By Joseph Duffy
Apr 01, 2012

Successful Sleep Resupply Strategies When discussing a sleep “resupply” business, it’s easy to think solely on the lines of product. A patient receives a product. That product, or a part from that product, is replaced periodically due to wear or expiration, giving a provider a way to create a continuous income stream from a single patient. But growing resupply into a lucrative, integral part of your business means adding more business components, such as education, maintenance, inventory control and marketing.

With sleep resupply, the CPAP mask and headgear are considered mainstay products, but providers should think beyond masks.

“All too often it is only the mask,” says Kelly J. Riley, CRT, RCP, director MED Group, National Respiratory Network. “We need to teach that the other components consequential to the blower ‘have a useful lifetime.’ In other words, they wear out. This is why you see payment rates tied to quantity limits from nearly all payors. Even they recognize that for the most effective therapy these items need to be changed up on clearly communicated time lines.”

Other products to consider for resupply include mask frame, nasal pillows, mask cushions, tubing and filters.

Why sleep resupply?

“A sleep resupply business is an important quality of care initiative that also has the ability to augment revenue, and provide market differentiation for the providers,” says Masoud Vahidi, OSA senior product manager, North America, Fisher & Paykel Healthcare. “Effective treatment requires ongoing attention to the maintenance of the PAP device, humidifier and all the related accessories, as well as periodic replacement of the mask and its accessories due to normal wear (e.g., facial oils breaking down the silicone). Common analogies that may be used to help patients’ understand the need of PAP resupply are routine dentist check-up and cleaning, regular maintenance or servicing of their automobile, changing light bulbs, or dull razor blades. The point being made here is that replacements are a necessity in order to receive the best therapy, as well as maintaining their devices.”

Doug Hudiburg, vice president of Marketing and Sales, CareTouch Communications, points out that making sure patients replace their consumable supplies on a regular basis is a big part, but it’s not the only part. He says it’s really about just staying in touch with your patients. So a good program will also identify any patients who might be having difficulties and also measuring overall patient satisfaction with their therapy.

The goal [of resupply] is to keep all patients compliant with the CPAP therapy by ensuring that they have all of the supplies they need delivered to their home,” says David Groll, CEO of Circadiance. “Additionally, getting non-compliant patients back onto their therapy is an important strategy for a provider to increase their revenue from their existing patient-installed base.”

Are you right for resupply?

Providers that are good candidates for running a resupply business are those who are willing to track patient outcomes and those willing to take a hard look at costs associated with this, Riley says.

“If you have a RT or purchasing director ‘picking packing and shipping supplies,’ that is not a financially wise decision,” she explains. “If you do not have a true patient management system (NO, I am not referring to only an IVR system here) then don’t do it. Again, the goal is to reach out and collect data related to patient outcomes and the financials will then follow that.”

Resupply should be integral for patient compliance and overall good, effective therapy. The provider must continually make sure that patients are benefitting from treatments.

“Many patients do not realize that they are entitled to replacements of their medical devices and accessories and go through many measures to try to use the same equipment over time,” Vahidi says. “I will never forget being at a customer location, training a customer service representative when she asked the patient how the mask was holding up (it had been a year). The patient indicated that the duct tape was working well enough, but it was starting to look a bit worn. And another was when a patient said to a CSR that they were tolerating the CPAP just fine ever since they cut a small hole in the mask! And my favorite was when the patient brought in his mask for a fitting issue and he had his wife sew the waistband of a pair of Fruit of the Loom underwear to replace his headgear that had stretched to a point it couldn’t hold the mask in place. While these are entertaining situations, the take home is unless someone is reaching out to patients to encourage them, educate them, and follow up on their treatment, compliance can be threatened.”

Resupply tools for providers

Many tools exist to help providers with their resupply business, but as Riley warns, take a close look at anybody touting nothing but financial gain.

“We should choose partners whose ‘key offerings’ are in the sleep arena,” she says. “Those are the folks who are in it for the long haul and understand the need for more outcomes data if we as HMEs are going to stay in this product/program offering. Patient management tools are very key.”

Some companies have been able to provide an internal program to ensure compliance and capture orders, says Bob Hoffman, Vice President, Nationwide Respiratory, VGM Group. However, with everything else going on within the HME industry, this function is sometimes easy to put on hold.

“Once a company has over 1,000 active patients, it becomes a daunting task to contact the patients and obtain follow-up information,” he says. “The HME does have options to outsource contacting the patient by either utilizing a live call center or using companies that offer automated calls to their patients. Medsage offers Interactive Voice Technology (IVR), which delivers a personalized message to the patient and the voice can be selected by the provider. Thereby, the companies respiratory therapist can actually be used on the call so that when the patient hears the familiar voice they are much more likely to take the call and participate.”

VGM offers a fulfillment program where all the supplies are warehoused at the VGM Fulfillment Center and shipped directly to the HME’s patient. This saves the HME company the cost of inventory, warehouse space, and labor. Orders are received and shipped the same day and the provider is charged a customary price from each manufacturer.

Your decision to use outside resources to help in building your resupply business should be based upon resource allocation, the ROI you are driving toward and your comfort level with others gaining access to your patient base, Vahidi says.

“Fisher Paykel offers a comprehensive call center training program,” he says. “This program trains CSRs on how to engage with a patient about the need to check their device and interface, and intervene if necessary with common issues. The program is customizable to meet your business needs.”

Circadiance offers a Revenue Recovery Program. Groll says they work with providers to reach out to their non-compliant CPAP patients to get them back onto their CPAP therapy and back into the provider’s revenue stream.

“I believe that partnerships are critical in this area,” Hudiburg says. “HME providers need to stay focused on what they do best, which is to develop relationships with referral sources, and get patients set up on therapy, billing and problem resolution. The place to look for partners is in patient communications, patient management systems, and fulfillment. There are experts in these areas that can really improve a HMEs resupply program and probably end up saving them money in the long run.”

Marketing resupply

Whatever aspect of your business you are marketing, always adhere to HIPAA and CMS regulations when reaching out to a patient. As Vahidi points out, there is information you can and cannot leave on a voicemail, rules associated with mailings and maintaining confidentiality, and timeframes in which you are allowed to contact patients. All marketing materials should be in the form of patient education and product care.

Aside from getting the word out via regular mail, email, websites, and advertising, know that patients are taking your information and talking about it on-line in discussion forums, says Kelly Rudolph, President, Hans Rudolph. He also offers the following advice:

“Dealers need to contact all the sleep labs in their area and make sure they visit them and show them their lines and get the lab to trust that they will take care of the OSA patients that they send them after the sleep study is completed and the patients need a mask assembly, tubing, and a blower,” he says. “Make sure to get good masks in the lab sleep tech’s hands to use in sleep studies and then make sure there is plenty of inventory of the mask so the patients can show up and get fitted right away. Hans Rudolph offers a Sleep Lab Mask Program to help both homecare dealers and the sleep labs.”

“If you want to be good at ‘resupply’ then get good at the initial process first,” Riley says. “The first really should be a natural flow to the other. Having a sleep fair or sleep awareness day or participating at health fairs and conducting screenings to identify people with OSA is a valuable public service. We know over 10 percent (some studies say up to 20 percent) of the U.S. population has OSA and remains undiagnosed. The development of Sleep Health Care Kits was an integral piece of our Maximizing Your Sleep Business. If you could reduce the risk of a stroke for someone wouldn’t you do it? That is the value of these types of events.”

Round Two and Resupply

As the wheels of Round Two of competitive bidding began rolling in February, the experts interviewed for this article were asked if competitive bidding was affecting or would affect the resupply business in some way. “Round one has not had a major impact on the resupply business,” Hoffman says. “Most companies’ CPAP population consists of approximately 20 percent Medicare so there hasn’t been a huge impact.”

Hudiburg says patients have been left behind in the transition from losing HMEs to winning HMEs in the CBAs. It has caused a lot of distraction too, he says. Instead of working to improve patient care, outcomes, and their businesses, HMEs that participate in competitive bidding have to dedicate a lot of time to the bid process. Hudiburg feels that Round Two will have the same effect.

“I believe competitive bidding has been a wakeup call that there was money to be made in sleep, and it is not in the Medicare market,” Riley says. “Now we need to tie that awareness to the desire to build comprehensive programs that promote not only financial ROI, but enhanced measurable outcomes.”

Remember, if done correctly and with the right intent, Vahidi says, sleep resupply can make the following positive impact on your business: