Business Growth Opportunities for DME/HME Providers

1. Business Growth Opportunities for DME/HME Providers Rhonda Hines Division Vice President – The MED Group This webinar was created as of the date set forth and is based on regulations and information that existed at the time. The content is for your informational purposes only and does not constitute legal or regulatory advice. You should not act upon this information without seeking advice that is specific to your business and situation.

2. Introduction • Constant changes in today’s healthcare industry make it difficult for providers to remain profitable and reconsider their traditional approach to acquiring new business, payers, and other sources • Today’s presentation will focus on helping providers grow their business by: • Managing their Payer Portfolio • Understanding the Market • Diversifying their Product Offerings

3. Payer Portfolio Management

4. What is Your Company’s Payer Strategy? • How does your company decide which payer contracts to participate with? • Do you take all payer contracts simply because your competition does? • Do you just sign a contract to accept all patients? Or, do you even attempt to negotiate rates? • Do you understand your referral sources?

5. What is Your Company’s Payer Strategy? • What would happen if you only agreed to payer contracts which are profitable for your company? • What would happen if providers stopped accepting unprofitable payer contracts? • Would you build negotiating leverage? • Would payers adjust reimbursement?

6. Overview of Payer Trends:Past Present  Future • In the past, all payer contracts were written similarly and most offered reasonable reimbursement rates which allowed for a decent profit margin. • Focus was primarily on government payers (Medicare and Medicaid) • There were limited commercial payers in the space

7. Overview of Payer Trends:Past  Present  Future • Today’s changes which have made it difficult to remain profitable include: • Changes in Medicare reimbursement • Surety Bond requirements • Additional licensure • Theft policies • Accreditation • Other? • As a result of reimbursement challenges in today’s industry, DME providers are being forced to reconsider their traditional approach to payers

8. Overview of Payer Trends:Past  Present  Future • There are many strategies which can help providers discover payer opportunities and maintain profitability: • Diversifying your revenue sources • Understanding patient verification processes • Reality of collecting copays • Utilizing the benefits a network can offer: • Resources for research of covered lives and clients • Sales and marketing tools for marketing in service areas • Focus on diversifying your payer portfolio and how to implement best practices.

9. Understanding Different Payer Types • Types of Payer Contracts in HME Marketplace: • Managed Care Organizations (MCO) • Preferred Provider Organization (PPO) Networks • Benefits Managers • Medicare Advantage Plans • Medicaid • Worker’s Comp • Auto • Self Funded • Other?

10. Managed Care Organizations (MCO) Contracts • Offer a variety of health plan options (i.e. HME, PPO, etc.) to employer groups, individuals, and others • Health plans have the option to be customized, allowing for different co-pay or co-insurance levels, network access levels, and coverage levels • Dictate medical policy and criteria, charge premiums to beneficiaries, and determine coverage/benefits • Are the payer of claims – claims should be submitted directly to the MCO, who will then submit a remittance • Often have lower reimbursement rates

11. Preferred Provider Organization(PPO) Networks • Offer patients access to primary (in-network) and secondary (out-of-network) benefit levels for a wide variety of insurance plans • Are NOT the payer of claims and do not typically handle payment or collection of premiums from patients • Can be thought of as a “re-pricer” of claims – a primary insurance will send a submitted claim to the PPO to re-price to MED’s contracted rates. The PPO sends the re-priced claim back to the primary insurance company, who then distributes EOBs. • Often have higher reimbursement rates, but patients may have a higher co-pay and/or deductible

12. Benefits Manager Contracts • Independent Third Party Administrators (TPAs) which offer cost savings and reduced administrative burden for MCOs • Often handle authorizations, claims adjudication, and remittance on behalf of the MCO • Usually manage the provider network and set the provider’s fee schedule • Follow the MCO’s standards regarding set medical criteria and benefit levels • May have lower reimbursement rates, but may not require you to collect patient co-pays

13. Medicaid Managed Care Programs • Medicaid Managed Care Programs allow Medicaid health benefits and other services to be delivered via contracts with MCOs and state Medicaid agencies • States can lower costs and more efficiently manage utilization of health services by contracting with various MCOs • Contracts with other Medicare Advantage

14. Medicare Advantage • Medicare Advantage is a PPO plan which could provide Medicare Part A and Medicare Part B benefits to those enrolled • Claims are processed through a commercial insurance company, rather than Centers for Medicare and Medicaid Services (CMS) • The insurance companies who process Medicare Advantage claims receive compensation from the federal government, and assume the risk for the patient population they serve. • Not restricted to competitive bid contracted suppliers

15. How to Determine if You Can Take a Patient: Example 1 • A patient comes into your business and presents a United Healthcare insurance card. You check the card and find two logos: one for United Healthcare (the primary insurance) and one for MultiPlan (a PPO network). Front of card may have Primary network logo Back of card may have Secondary network logo

16. How to Determine if You Can Take a Patient: Example 1 • Your company does not accept United Healthcare, but does participate in a PPO agreement with MultiPlan. • The next step is to call the phone number listed on the insurance card to verify benefits. (which should be part of your every day processes and best practices) • Give your company’s name and tax ID number when calling to verify benefits. Let the representative know that you do not have a contract with United Healthcare, but are trying to access the patient’s benefits through MultiPlan. • Since the insurance card does not indicate which benefit level the patient would be accessing, you must ask if in-network or out-of-network benefits will be accessed.

17. How to Determine if You Can Take a Patient: Example 2 • A patient comes into your business and presents a United Healthcare insurance card. You check the card but do not find any logos other than that of the primary insurance’s. • Your company does not accept United Healthcare, but does participate in one or more PPO agreements. • Some insurance plans may have a PPO network option but do not display the PPO network’s logo on their cards. • The next step is to call the phone number listed on the insurance card to verify benefits.

18. How to Determine if You Can Take a Patient: Example 2 • Give your company’s name and tax ID number when calling to verify benefits. • Let the representative know that you do not have a contract with United Healthcare and do not see a PPO network logo on the insurance card, but would like to verify if the patient has access to secondary network benefits through their plan. • Ask the insurance representative which network the employer/group uses to access secondary network benefits and re-price claims.

19. How to Determine if You Can Take a Patient: Example 2 • If the insurance representative determines that the patient has access to secondary network benefits through a PPO network your company participates in, follow the process for verifying benefits. • If the insurance representative determines that the patient has access to secondary network benefits through a PPO network your company does not participate in, you are not be able to provide service using the patient’s insurance plan. • If the insurance representative determines that the patient does not have access to secondary network benefits, you are not able to provide service using the patient’s insurance plan.

20. Understanding the Marketand Patient Referrals

21. CMS Data Analysis Information/Dx • The CMS Data Analysis Information/DX Tool (CMS Data Tool) can help grow your business by targeting more referrals • Key uses for data: • Market place analytics & Sales management • Which Doctors do I need a focused sales/marketing effort? • What Doctors are prescribing DME equipment based on certain diagnosis that I specialize in? • What market share do I have with a specific doctor? • How well is my sales team performing based on targeted activities? • What market share do I have by particular product category (i.e. sleep, oxygen, etc.)?

22. CMS Data Analysis Information/Dx • Geographic growth analytics • What adjoining cities/regions have significant growth opportunities by particular product or diagnosis? • What competitors exist and what market share do they have with Medicare referrals by HCPC and/or diagnosis?

23. CMS Data Analysis Information/Dx

24. CMS Data Analysis Information/Dx • MED Primary Membership • Data available to members who have signed primary status with MED Group. • Align all purchases with business partners who are also with other buying groups to MED as long as equal or better pricing with MED contract. • CMS Primary Membership • Login to MED Group Reporting portal • Q1 – Q2 2016 data • HCPCS and Diagnosis by NPI • Searchable by state, city, and/or HCPCS • Filter columns as needed • # of claims

25. CMS Data Analysis Information/Dx • For example purposes: • Selecting Texas as the state, San Antonio as the city • Select E0601 as the Procedure code

26. CMS Data Analysis Information/Dx • For example purposes: • You will see numerous listings which you can sort by any column, then export the list as needed. • Scroll to Dr. Rafael Santiago • Results: 588 claims for Obstructive Sleep Apnea

27. CMS Data Analysis Information/Dx • Cross Verification / Market Opportunity • Login to payer website to research participating Doctors

28. CMS Data Analysis Information/Dx • Search for Doctor of Facility

29. CMS Data Analysis Information/Dx • Select MultiPlan (back of card)

30. CMS Data Analysis Information/Dx • Select Doctor as Provider Type

31. CMS Data Analysis Information/Dx • Enter City, State and Doctor Name

32. CMS Data Analysis Information/Dx • Participating Provider

33. CMS Data Analysis Information/Dx • Check your rates with different payers to determine which referral sources to target • For this example, with MultiPlan for E0601 which Dr. Santiago prescribes, reimbursement is $110.00 monthly • CMS Data guides and helps to forecast if you are receiving all of physician’s business or if there is missing opportunity

34. CMS Data Analysis Information/Dx • Frequently Asked Questions • Q: Are the Dx codes the primary diagnosis or all diagnosis on the submitted claim? • A: From CMS, only the primary diagnosis is included in the data sets. • Q: Does the data include denied claims? • A: No, only paid claims by CMS are represented in the data sets. • Q: Can the data also show info about DME Suppliers with the claims? • A: 3Q15, 4Q15, 1Q2016 data includes Supplier NPI option

35. CMS Data Analysis Information/Dx • MED Primary Membership • Data available to members who have signed primary status with MED Group • Align all purchases with business partners who are also with other buying groups to MED as long as equal or better pricing with MED contract

36. Product Offerings

37. Product Diversification and Sales Force • A well trained and knowledgeable Sales Team is key to making a diversified product portfolio profitable • Your Sales Team should establish “Best Practices” in order increase product knowledge and: • Establish a rapport with the customer • Ask questions to gather information • Ask questions to identify possible objections • Demonstrate products to customers • Ask for the sale and close

38. Product Diversification and Sales Force: Establish Rapport • How does your Sales Team build a good rapport? • Ask questions • Identify needs • Establish trust • The majority of customers already know what products they are looking for, but they depend on you and your Sales Team to be the experts and guide them in selecting the best product. • Engage the customer in the sale. Don’t overload them with information • Rattling off information does not gain a customer’s trust

39. Product Diversification and Sales Force: Gather Information • Ask questions to gather information to assist with making product suggestions that lead to closing a sale. • The customer must perceive you as an extremely competent and expert advisor • Best practice is to ask questions about a customer’s situation • Don’t assume you know what product(s) a customer needs based on the customer’s outward appearance • Continue to ask questions to gather information and build rapport

40. Product Diversification and Sales Force: Objections • Objections are the customer’s reasons for NOT purchasing an item. • Biggest objection is FEAR. A customer may know what they want, but may be afraid to explore the features and benefits of a similar/newer products • Overcome a customer’s objections by demonstrating product knowledge and showing how the product can benefit the customer in the long run. • Listen to the customer • Repeat their concerns to them • Question the importance of their objection – how it impacts them • Answer their objections • Confirm that you have answer their objections sufficiently

41. Product Diversification and Sales Force: Product Demonstration • Show customers the different products so they will have a better understanding of the Features vs. Benefits of each product. • A Feature of a product is a distinctive attribute, aspect, or unique physical characteristic of a product, which can contribute to the function or aesthetic of a product, and leads to an added benefit for the patient. • The Benefits of a product are the results or perceived factor which satisfies what a customer needs or wants from a particular product. • What the features of the product will do for the customer. • Patients focus more on benefits, since the benefits of a product will aid in creating convenience for the customer, and satisfy the customer’s wants/needs

42. Product Diversification: Good  Better  Best • Develop a “Good  Better  Best” technique • Good = basic product from selected product line with little to no additional features. Probably least expensive model which offers little benefits. • Better = additional features of a product. Medium cost with added benefits. • Best = top of the line product with all possible features included. Highest cost with most benefits. • You should carry multiple products within a selected product line and demonstrate the advantages vs. disadvantages of each product within a particular category. • This ensures the customer really understands what they are getting from the best possible product

43. Product Diversification and Customer Value • In order to diversify your product offerings, you MUST first understand the value of your customer(s) • What is the long term value of a customer? • Businesses too often only look at value of a customer as a “one-time” event • The Home Medical Equipment (HME) industry is unique because of the long term relationships we have with our customers. • Ask yourself, “How much value can your company bring a customer over the next 10 to 20 years? – How can we, as a provider, offer enhanced patient care?”

44. Single Product Offerings to Full-Service SelectionsPast Present  Future • Traditionally, the DME industry has focused mainly on the “reimbursed” items provided to customers at the request of referral sources.  • These items were usually the “big ticket” item and the margin on these items was the lifeblood of an HME provider.  Complementary products, many of which are not reimbursed, were not brought to the patient’s attention. 

45. Single Product Offerings to Full-Service SelectionsPast  Present  Future • Compression on both government and commercial insurance fee schedules have eroded the profit margins on many of the reimbursable items which companies were built on.  • Providers must find greater cost efficiencies in operations and additional opportunities for revenue. 

46. Single Product Offerings to Full-Service SelectionsPast  Present  Future • Focus should be on Provider Enhanced Patient Care (PEPC). • Your company should develop tools and techniques needed to implement a culture shift within your organization • Allowing your organization to function as a trusted advisor for your patients and opening opportunities for incremental revenue growth. 

47. Provider Enhanced Patient Care • Providers want to: • Fulfill every equipment need of their customers. • Make sure their customers are aware of all equipment & supplies available that can enhance their quality of life. • Make certain that they are the most knowledgeable and reliable providers of that equipment. Brining value to the patient and caregiver = Growing your business

48. Provider Enhanced Patient Care • What is the smartest way to increase your business on an incremental basis? • Increase average sale per customer? • Offer enhanced product offering, which is considered an up-sell. • Up-sell – encourage customers, based on their needs, to upgrade or add on to existing products • Educating customers on additional options available. • Increase the number of sales per customer? • Which is offering multiple products which address specific need. Considered Cross-Sell • Cross-sell – designed to sell additional complementary and helpful products to the SAME customer • Must have relevance to solve a problem or need and make the patient’s life better

49. Provider Enhanced Patient Care • Team works together deliver product education and develop a better understanding of your patient’s existing and potential needs, resulting in more sales opportunities. • Patient Liaison: before and after offers product recommendations and, when possible, closes a sale over the phone • Deliver Technician: provides on-site education, demonstration, assessment, and recommendations • Team Facilitator: The team leader across all roles and company departments • Team can better identify patient’s needs in all areas of care and recommend/cross-sell products based on patient needs

50. Provider Enhanced Patient Care • Develop a team of customer’s points-of-contact to create quality control checks and better value for the customer • Referral Source • Patient Liaison – intake • Delivery Technician • Patient Liaison – follow up A Team Approach  Enhanced Patient Care = Business Growth Opportunities