HME computer software allows HME providers to automate much of their business and to combine HME-specific and accounting functions into a single system. If they are to survive in the coming years, providers have no choice but to take advantage of software and the time- and cost-savings it accommodates.

"With it becoming more competitive and with the cutbacks in Medicare and all that (HME providers) are having to manage their companies much closer than they did," said Phil Cody, vice president of Dynamic Energy Systems, Plano, Texas.

Software can help providers perform most HME-specific and general business tasks. Providers once needed two or more software systems to run their businesses. One performed HME-related functions, such as claims submission and order processing, and another program performed accounting functions, such as general ledger, payroll and accounts payable. Today's software companies have combined these functions into one package, which reduces time and work for the provider.

"This industry has made great strides even in the last year as far as automation. It was really far behind up until about the last year from a provider's standpoint," Cody said. "A lot of the companies that have software out there have not in the past utilized it to its fullest potential, but they are starting to."

Benefits and Options

Providers must use software to its fullest potential to accrue the most benefit. It makes no sense to spend several thousand dollars on a system and not use every benefit. Software can help providers compensate for some lost revenue from reimbursement cuts by reducing staff time and costs through automation. Certificate of Medical Necessity (CMN) tracking, electronic claims submission, rental tracking and electronic billing can be done by computer, which reduces staff time and expenses. Providers can submit claims to their Durable Medical Equipment Regional Carriers (DMERCs) electronically via software, and the software keeps providers current on the status of each claim, said Rick Long, president of Nashville, Tenn.-based Team DME. The DMERCs subsequently can directly deposit payment into the providers' bank accounts. Data also can be automatically transferred to management modules, which include accounts receivable and accounts payable management and inventory control. Providers can use bar coding to track inventory through receipt at the warehouse to shipment to the patient. This automation increases efficiency and allows providers and their staffs to spend less time pushing paper and more time pushing products.

"There is no duplicate data entry work. The information put into the ordering system flows through to the accounting modules and the general ledger," Long said. "That eliminates some staff time and some problems that could come up."

Government-inspired paperwork causes providers to spend a lot of time managing information, which is an area where software uniquely excels. Reimbursement is tighter than ever, and a few lost CMNs or lost claims during the year can mean the difference between finishing in the red or in the black in certain areas. Software automation tracks all sales and claims and helps prevent any from being lost in the paperwork shuffle. Features such as inherent Medicare billing codes makes sure claims are submitted correctly the first time and saves time and money spent correcting mistakes.

"If (HME providers) are having to (track CMNs) manually, it is easy to let some of them slip through the cracks," said Heather Benzi, sales and marketing manager for OmniSystems, Greenville, Texas. "I think in general providers are looking for ways to simplify their business. If they are trying to (track CMNs) manually, it certainly is not simple. There is just too much. It is just too overwhelming to keep track of everything and keep the profit going if they are trying to track that manually and grow their business."

Spencer Kay, president and chief executive officer of Fastrack, Pineview, N.Y., said software also helps providers stay within Medicare regulations and prevents costly mistakes. For example, if Medicare allows an item to be rented for 15 months, a provider would not want to accidentally bill Medicare for a 16th month. Most HME software systems include internal Medicare customization that prevents these kinds of mistakes and billing beyond the allowed period.

"These are serious issues. Medicare may not look at it as a mistake. They look at it as a possibly fraudulent claim," Kay said.

Available Systems

HME software basically can be classified into low- and high-end systems. Systems differentiate primarily by integration, number of allowed users, capabilities related to provider size, billing and order copying, Kay said. High-end software may be completely integrated so data entered for one patient in one software module will automatically be replicated throughout the system, and it may include features that automatically check claims for errors. Some high-end software also contains features that can automatically generate monthly orders for recurrent patients, Kay said. Prices range from several thousand dollars to six-figures, and systems in each price category differ little from company to company.

"In this industry, as far as software goes, we all pretty much advertise that we all do about the same thing," Cody said. "That is what you do when you automate an industry. Everyone is trying to address that same situation and the same needs out there."

When shopping for software, providers need to carefully examine their needs and expectations for the software. A one-store provider with 10 employees is not going to need the same package as a national chain. Long advised providers to shop from DMERC-certified vendors whose software can meet both HME-specific and other needs. An important consideration is to find a package that allows the provider to use only one system for all of his or her business needs. Some providers begin with general accounting software and graduate to more advance systems, he said.

"After that start-up year, (HME providers) generally get wise to the fact that they can save a lot of time by having an HME-specific package," Long said. "That saves the company overall so much time and money that there is no reason not to (buy software)."

Future Expectations

The HME industry is behind the rest of the word in terms of computer technology, but providers should expect few major changes in software. The latest buzz is that HME software is moving to a Microsoft Windows platform, which is one of the most popular business operating systems. Benzi said efficiency improvements change more than major product innovations.

"I don't see any major shifts in how our clients are doing business or how software vendors are doing business," Long said. "The features have been there. It is just a matter of convincing your customers to use them."

The Internet's role is expanding, and the days of exclusive electronic claims submission is not too far away. Internet technology is constantly changing the way people do business. People tend to think of the Internet in terms of commerce, and that is coming; but, providers should examine ways to use the Internet in business operations. Internet connections allow easier access to systems from remote locations, and providers can use the Internet to access their systems from a patient's home or to allow some employees to work from home.

Patients in the future will have smart cards, which providers will swipe like a credit card and ascertain patient information through their software. The smart cards can contain information about patients ranging from their likes and dislikes to their ordering history. Radio frequency technology is being developed for inventory control, Kay said. A small microchip can be attached to each item in the store or warehouse, and it sends information to the computer. Information might include, price, date received and expiration date and it notifies the computer when the item is shipped from the store or warehouse giving providers real-time inventory control and instant information.

A popular maxim is that health care is changing, but it is not changing nearly as fast as computer technology. The bad news is that providers have to devote more time than ever staying current, but the good news is that each computer advancement ultimately saves them time and money.

Sidebar: The Internet Expands Markets

Home medical equipment (HME) providers are no longer limited by geography. The Internet and the World Wide Web have opened a virtual market to providers, who now have access to customers all over the nation and all over the world. HME providers can use a web site to advertise and sell specific products and to advertise their stores to customers limited only by shipping capabilities.

David Mallis, president of HomeCare Medical Enterprises, Claymont, Del., turned an informational web site into a profitable enterprise that brings business from across the country. Mallis created the site two years ago for lead generation and to provide information to the public. Today, he gets product requests and ships products and product information across the United States.

"In order for a web site to be successful, you need really to have on there only things you can ship UPS across the country," he said. "If you ship someone an electronic wheelchair, how are you going to service it?"

Mallis's web site at www.everythingmedical.com primarily focuses on less expensive items such as diabetes, ostomy and urological supplies, incontinence products and aids to daily living. Electronic commerce is not yet mainstream, and few people feel comfortable buying expensive items over the Internet, Mallis said. It is important to develop a virtual trust between the provider and the patient, especially if they are states apart.

The web site began as a place to provide information to patients about different conditions. Patients email the store for information via the web site, and they receive a standard 10- to 15-page packet of condition- or product-specific information, which includes information from the National Institute of Health, product manufacturers, articles and other sources. Mallis turns some of those inquiries into sales and sends information and products to customers far from his Delaware home.

Mallis said his page averages approximately 100 product inquiries per week, and it has sometimes reached 100 per day. The site generates many more daily hits than that, but hits are less important than serious product inquires.

"Hits don't mean a thing. Hit is just someone that visited your page and kept going. You can do things to dramatically increase your hits, but that is not going to sell products," he said. "The main purpose of our web site is to generate product interest by sending out information and literature packages."

HomeCare Medical recently opened an on-line store, in which visitors can browse items and put them in a virtual shopping cart, which is a format used by many large on-line retailers.

A successful site should be simple to use and professionally designed to attract and retain customers, Mallis said. Repeat business is just as important on the Internet as it is in a retail store.

"Don't get into fancy graphics that slow download times," he said.

Web sites can be expensive and time consuming, but Mallis' site has resulted in enough sales to justify the time and expense. Providers need to weigh the expense of hiring professionals to do all of the design and maintenance versus the cost of the provider's time spent updating the site. Web site hosting costs approximately $100 per month for a full-service e-commerce site, but a simple site costs approximately $25 per month, he said. Mallis said he spends approximately two hours daily on web site-related matters, and design and maintenance costs to hire a professional average between $50 and $100 dollars an hour. Mallis advised finding a high school or college student to update the site. Each provider must determine what time he or she has to dedicate to the site and how much money can be spent on professional help.

Even if a provider is not yet sold on electronic commerce, a web site is an excellent and relatively cheap forum to provide potential customers with store and product information and to advertise the store. A simple site to let customers know the store exists is an excellent public relations and marketing tool.

"The original philosophy of the Internet was as a source of information. It is just now getting to the point where it is becoming a viable medium for electronic commerce and selling directly," Mallis said.

The Internet will not be the pet rock of the new millennium. It is here to stay and can only grow. Successful providers will take advantage of the new medium and be a the forefront of e-commerce, which will constitute a much greater percentage of sales in coming years. - K.S.