Problem Solvers

Offering More than just Pizza

Why referral sales have become more nuanced.

• By David Kopf
• Jun 01, 2011

Referral sales have always played a central part in HME provider businesses. Physicians and other healthcare professionals are key partners in driving patients to HMEs, and HMEs, in turn, aim to be critical partners in the patient's continuum of care. Truly, HMEs don't simply deliver "bent metal" DME to homecare patients, but offer expert insight, followthrough and service, along with often complex medial devices to patients.

With that in mind, referral partners have come to depend on HMEs to ensure positive outcomes in the homecare setting. That said, the game has changed. Previously, that was enough, but the implementation of Round One of competitive bidding and the increasing volume of pre- and post-payment Medicare audits have made dealing with referral partners much more tricky. Now partners are confused about which partners they can go to and for what equipment. They are being told that they need to provide more detailed documentation before claims have been processed. Now they're asking themselves, "What happened to simply getting free Chinese food for lunch from the guys at the oxygen company?"

This massive change in the way HMEs must work with their physician partners has made referral sales and service a much more nuanced undertaking. Now providers much truly be partners with their referral sources, and educate them on the changes in Medicare funding they are indirectly experiencing. It's a tricky prospect, and pizza won't cut it any longer.

To discuss the changes providers are experiencing in referral sales and how they can address them, HME Business sat down with two industry experts:

Ron Bendell, president of well-known industry member service organization and buying group VGM & Associates. Bendell understands the industry inside and out, and his organization provides a wide variety of business insights and services to providers.

Ty Bello, RCC, the president and founder of Team@Work LLC, which provides sales coaching, training and professional education to the HME industry. Ty is an expert in HME sales and marketing and speaks and writes heavily on the subject.

In this current funding climate, how has the nature of referral sales changed?

Bello: It's not your grandmother's or grandfather's HME company any more. And it's not the old referral source, either. It's changed. They're busier in their office, and we're busier with more requirements that we have to bring to them in our paperwork. And although our processes are easier for them to get the referrals to us, now we're requesting other things on the back-end of it that we didn't have to request in the past.

So, we have to be a more rounded sales representative. Not only should we know our products, not only should we know our services, we should also have a very good understanding of the Medicare, Medicaid and other private insurers' requirements as it relates to certificates of medical necessity and diagnosis codes. And, we obviously have to stay within the confines of the letter of the law and we cannot fill out paperwork for them. We cannot do those things. So we have to help them figure out ways that they can do it in their system. We have to partner with them in many respects.

And we need to show them that, first of all, it's not us; don't kill the messenger. We need to tell them, "This is the same place where you get your bills paid from people seeing you in the office, we get our bills paid, and this is what they're telling us."

Is there an educational obligation on the part of the providers to help the referral understand these changes? Are the referral sources expecting that from HMEs?

Bello: I'm going to be honest with you: I think the referral community is going to want to throw us out of their office, because we're adding work for them. But again, don't kill the messenger. We don't have a choice, and I warn referral sources that, "if you have someone coming in here and telling you that they can complete all your paperwork, be careful for the simple reason that it is illegal."

Is that something that you're seeing?

Bello: I can give you since the beginning of the year at least a dozen examples of HME companies doing just that. I'm not saying it's the owner, I'm not saying it's the manager, I'm not saying it's the billing person — I'm saying it's the sales rep, and the owner doesn't know they're doing it. The sales rep is under the pressure of getting the paperwork back, but they know what they're confronted with at the physician's office: major problems; the office doesn't want to do it. So what do they do? They fill it out for them.

So is it fair to say the onus is on HME management to educate the sales force and enforce some rigorous self discipline, even if it risks a sale?

Bello: I think so. I really do. And the big thing is that, think about it, have you been in a doctor's office and it hasn't been busy? They're overworked. They're busy as busy can be. Now we're adding more to that workload? I understand where they're at. But we don't have a choice.

Given that overwhelming pressure to obtain deeper documentation from already overworked referral partners, how can providers smooth the dent that is bound to put in the relationship?

Bendell: There are a couple ways. First off, the traditional role of just showing up to take an order has changed. You need to become more of a partner in care along with the doctor in how you're going to take care of the doctor's patient, you're going to feedback information to them; keep them updated on the status of their patient and how they're doing — and that is all because CMS has placed these new rules that you're going to be asking for this documentation.

Those providers that are getting orders today and not getting the proper documentation? They might be getting orders today, but they're probably going to get audited and they're probably going to run into problems. So to say, "The other guy's not doing it, so I can't do it," is not the long-term fix.

It's feeding back the positive outcomes of the patients you're taking care of; ongoing communication with the referral sources about new programs you might have developed to take better care of the patient. It's building a partnership.

It almost sounds like service is actually sales.

Bendell: Service, but I think HME providers historically have already done an excellent job of taking care of their patients. But the problem is, now, as healthcare is obviously under pressure from funding sources, and more and more information is being required for reimbursement, whether you're an HME or whether you're a physician, you need to build a partnership with your referral source by giving them the information you need, and in exchange they give you the information you need.

... So you need to understand what their goal is for the patient. You need to understand how you're going to meet those goals. You need to communicate back to the referral source on what you're doing so that you're making their patient better and their job easier with a better outcome for everybody.

So if this is couched in forming a win-win relationship, obtaining the paperwork will naturally become easier.

Bendell: Exactly. Once again, you're not saying, "Hi give me the order, and by the way you need to give me this." It's more, "Hi, how can I help you meet your goals for your patient? How can I provide better outcomes for your patient?" Then it becomes an easier ask to say, "And by the way, I'm going to need this documentation in order to promptly bill for this."

Are referral partners looking for that partner in care?

Bendell: I would think the professionalism of hospitals and physicians would have to have to appreciate a more professional approach, rather than "Give me the order, and I left you a dozen donuts."

How does marketing factor into this modern era of referral sales?

Bello: The modern era says that we have to be well versed in not only our products and services, but also in CMS. We can no longer go out there on whim with no strategic marketing plan relative to the services and products that we know are most prevalent during different seasons during the year.

We have to ramp up our marketing effort, and marketing is completely different from sales. Sales is our effort to try and go out there and sell and get the referral source to call us. Marketing is what are we trying to sell them. Marketing looks the products and the services and educates the referral source and builds a relationship with them based on that education.

So what are the elements of an effective marketing campaign in not only creating and affirming those bonds, but in getting them to work agreeably in the new funding landscape?

Bendell: You still have to make use of your traditional brochures, your website or your newsletters back to not only your patients but your referral sources, but it needs to go beyond that. But I'm going to say it again: you need to couple that with a professional approach with feedback about how the patient is doing. In the old days, if the referral gave you the order, unless the patient calls them up or until their next appointment, they didn't know how things were going.... I think if you want to gain the trust of the referral source, you have to be proactive and feedback the information.

Bello: I think it's a holistic approach. Marketing talks about seasonal- or disease-specific products and services. I think it gives them information about those products and services, which would include everything from specification sheets to trouble-shooting information.

And then I think it goes to the next level and that is education on the disease process. This would come from other reliable sources like the American College of Chest Physicians, the National Society of Chronic Obstructive Pulmonary Disease, and things like that. We have to go deeper and do a little more research. But then, it's also marrying those products and services and disease processes with the actual patients that the referral sources see, and drawing a picture between the two.

This article originally appeared in the June 2011 issue of HME Business.