What exactly should you be concerned about over the next six months post-rural Medicare Reduction? In short, lots. If we can be candid for a moment, this is a frustrating process that doesn’t seem to make a whole lot of logical sense. Perhaps we can help…
Here are 6 month-by-month focal points you should consider in composing your strategy:
Month 1: You have to know what the cuts mean to your business. It’s not enough any longer to understand the high-level percentages of payers. What percentage of your revenue will be reduced by the cutbacks? Look at the past 12 months of production by procedure code and work your way backward.
Month 2: Focus on rebuilding the portion of your labor expense dedicated to servicing Medicare patients. This does not mean CUT people. This does mean that if you find a revenue reduction of 18% will face your company over the next year, you will likely need to slice that into smaller pieces of revenue. A 3% uptick in patient co-pay collections will make that cut less significant.
Month 3: Train your staff to understand and upgrade equipment to match patient need (and budget!). You need to educate your team on which payers allow patient-paid upgrades for better equipment and have a clear way for your intake department to communicate these details to patients. Make sure you follow the rules.
Month 4: Adjust the brands of equipment you dispense by payer. This is quite an undertaking and your P&L will thank you for years to come. Stop dispensing pieces of equipment that cost more to purchase that you are reimbursed. The math doesn’t work, period.
Month 5: Incentivize patient collections for every single employee. Develop a plan. We suggest working with a vendor like Strategic AR to make things easier. If you give your sales team 5% of revenue for the revenue they create for your company, then reward your customer service team for excelling in collections of patient responsibility.
Month 6: Invest in Business Intelligence that evaluates COGS, Revenue, and Payments against each other. Admittedly, this is where we insert a link for you to contact us. Business intelligence is different for each company, but it’s vital to successfully endure these rough times. Some organizations successfully use a series of excel reports and some require a more advanced environment of reporting to help visualize trends in company performance. We’d like to help you define your strategy.