Business Solutions

Home Access: Sharing Strengths

What you need to know to build your home access skills and referral network.

• By Joseph Duffy
• Apr 01, 2015

As HME providers recast sections of their business to stay competitive and successful in their highly regulated industry, the need to offer accessible home modifications and independent living solutions is growing.

According to AARP, one in three Americans is now aged 50 or older, and by 2030, one in five will be 65. Among seniors 65 and older, those looking to “age in place” — staying in current homes and communities while they grow older — is 87 percent. Among people 50 to 64 years old, 71 percent want to age in place.

“The home accessibility industry is a rapidly growing and underserved marketplace,” says Jerry Keiderling, President of Accessible Home Improvement of America (AHIA), a division of the VGM Group. “We are an aging America, yet we have a vast population of individuals struggling with everyday tasks at home because of trauma, mobility impairment or progressive illness. Today’s HME provider is already serving this entire demographic, yet there is much more to offer when you think about the entire person and his or her daily life struggles.”

Keiderling says that creating real solutions through product and service offerings is a natural progression for all HME and rehab service providers. As an extension or expansion of these services currently being provided, HME and rehab companies have the clientele, an existing market and the opportunity to be a one-stop shop for all their daily needs.

“This is very valuable in the eyes of referral sources and in the minds of your customers,” Keiderling says.

According to Keiderling, downward spiraling reimbursement, new mandates and regulations, audits and competitive bidding are all reasons that HME providers are looking toward diversification in offerings and revenue streams. The trend to become less and less reliant on “fixed” reimbursement — both federal and state — is becoming more popular every day. Those providers who used to admit to 60 percent revenue ties to Medicare are now aiming to the low 20 percent to 30 percent, he says, and some have bowed out completely.

“These providers are looking for a more cash prevalent business and one that escapes the wrath of federal audits,” Keiderling says. “What they earn, they would like to keep. Accessibility is primarily a cash business.”

Keiderling says that although a formal study has not been done, he has visited many HME providers and finds that there are numerous factors that weigh in on the financial strengths associated with accessibility:

• Location/region
• Primary demographic being served
• Operating as an LLC (type) or as a department of the main business

“All in all, there seems to be a range anywhere from 11 to 26 as a percentage of revenue and gross margins averaging around 60 percent,” he says. “For providers who expand their offerings and keep everything in-house, a one-year start-up with 10 percent additional revenue generated will see about a 40 percent profit margin on this incremental business.” Blair Ferguson, an MN licensed Building Contractor, MN licensed LM Elevator Contractor, MN Licensed Access Specialist, CAPS and CEAC, is the President of Beyond Barriers Minneapolis, LLC. He says that with the aging of the baby boomer generation, it makes a lot of sense for HME providers to seek new revenue streams through home access. However, HME providers who are new to home access should make sure that they are capable of doing it before they jump in.

“Prior to becoming a licensed contractor and founding Beyond Barriers, I worked as a paramedic and saw firsthand many of the environmental challenges that face the elderly and disabled in their homes,” he says. “I felt there was an opportunity to build a business that could help these folks to live safely in their homes by providing improved home access.”

Today, Beyond Barriers currently offers full-service remodeling, including accessible bathrooms, kitchens, entryways and room additions. They also specialize in installed home access products, such as stair lifts, wheelchair lifts, ceiling lifts, and more. Their business is 100% dedicated to home access products and services.

Ferguson suggested the following for HME providers thinking of starting in the home access business:

• Do your homework and check all of the local building codes and licensing requirements in your home state. Many states have laws regulating the installation of home access products. For instance, Minnesota recently passed a law that requires an elevator license to install a basic stair lift or vertical platform wheelchair lift.
• Learn more about the home access market by seeking an industry certification, such as Certified Environmental Access Consultant (CEAC), which is administered by the AHIA, or Certified Aging-In-Place Specialist (CAPS). These courses are a good introduction to the world of home access. However, experience is the best way to succeed in the home access market. That is why we strongly recommend either partnering with an experienced home access provider or hiring an experienced home access specialist.

What is CEAC?

According to experts interviewed for this article, the need for education, training and credentialing for home accessibility is integral to success. Keiderling suggested thinking about how the HME/rehab industry has evolved over the years with the role requirements of ATPs in rehab. Or how having licensed respiratory therapists is a must to not only gain new business, but maintain it as well.

“The Certified Environmental Access Consultant credential is an excellent opportunity for the HME provider to gain a recognizable credential in this field,” he says. “The program confirms the connection between standardized HME practices and knowledge of the individual and their health circumstances, and the world of ADA guidelines and the efforts of the universal design concept for home remodeling.”

Keiderling adds that beyond the CEAC, HME providers should participate in the educational and training opportunities by product vendors. Most vendors will demand product installation or repair training on their specific lines prior to being able to open an account for purchase. These programs are offered in a variety of settings; some online, some at the factory setting, some at the dealer site, and some are offered at industry events and shows.

“From there, the next level of education and training would obviously be to gain a contractor/remodelers license from your municipality, county or state,” Keiderling says. “This level would be required for any type of structural changes proposed for any residence. If the HME provider does not wish to pursue this level, then at least have a relationship built with a licensed and insured remodeler in the area.”

Continuing education is also a necessity. Not only for renewals of credentials and licenses, but for constant awareness of product innovations, changes in funding sources and levels, regulations and opportunities. Offerings in educational formats for home accessibility are becoming more popular and available at local, state and national events that deal with HME or construction. Online venues are also very popular, as they allow for much more flexibility with scheduling and the opportunity to pick and choose your learning itinerary as it relates to individual skill levels and work schedules.

In summary, Keiderling says that HME provider going into the home access business should:

• Educate, train and credential your staff to the levels of their proposed participation.
• Explore the opportunities for resources, expert advice and relative services that are available from your state associations and national membership organizations, such as AHIA.
• Develop a marketing program that’s aggressive and broad in scope.
• Either build a relationship with a licensed remodeler or plan to hire one.
• Evaluate your showroom space and plan on a section dedicated to accessibility.

Darren Corcoran is the Chief Operating Officer of Vets Access, a CAPS and CEAC HME provider that specializes in customized home renovations and services for people who are aging or disabled and want to stay in their homes. The company’s initial focus was helping veterans, a small business that Corcoran’s father started in an effort to give back to his veteran community. In 2009 the company was expanded and today their services are available to everyone in need.

Like Keiderling and Ferguson, Corcoran suggested that HME providers new to home access start with certifications, such as CEAC and CAPS, and partnering with an experienced contractor. In addition, “if you decide to provide home access you will find that not all home access will include HME products; some will be renovations,” he says. “If you decide to only provide HME products then your partnership with the contractor will expand his business with yours. Whatever you decide, understand what your limitations are, and only offer what is within your area of expertise. One product installed properly is better than taking on a project that is over your head and putting your client and yourself at risk.”

To help HME providers understand about the different services of home access, the AHIA put broke home access into five different levels that show appropriate training and types of services offered for particular home access projects. Read through them in the sidebar “Home Access Levels.”

“Accessibility is about the whole person: his or her daily life, place of residence and the safety and comfort, ability and usability of space,” Keiderling says. “We are all familiar with ADLs. These tools, as well as complex pieces of equipment for lifting, transfer, transport and hygiene, make up the world of accessibility products. In addition to products, there is installation, designing workable solutions and remodeling spaces to accommodate and make the goals come to reality. There are different levels that can be sorted and connected to specialties, credentialing, training and licensing.”

Ferguson echoed the importance of the TEAM approach for performing many Level 5 projects. This involves clients, case managers, healthcare professionals, licensed contractors, remodelers and skilled trades (plumbers, electricians, etc.) working closely together to complete the assessment of need, provision of product and the remodeling process.

“It is important that home access providers know what level of service they are capable of performing,” he says. “For any projects above their level of expertise, they should partner with a fully licensed and experienced provider.”

He also says that home access is sometimes marketed to HME providers as a quick and easy way to generate cash sales without the hassle of reimbursement. While health insurance and Medicare don’t typically cover home access services, providers are often faced with navigating third-party payers, such as state Medicaid programs and other outside funding sources. In addition, margins are often tight and competition has increased. HME providers looking for an easy transition into a cash business might be disappointed.

Laying Your Referral Network Foundation

In home access, your referral network is very important to being able to take and complete higher-level jobs that you would otherwise refuse since you don’t have the in-house skill or expertise.

“Local contacts are the key to your success,” says Dave Henderson, Senior Marketing Analyst, EZ-ACCESS. “Networking with local sources that diagnose and refer clients will be one of the keys to building your business. Additionally, finding community events that you can promote your business and educational opportunities to teach those who are aging about some of the opportunities that are available.”

Henderson says having contractors in your network who are able to take care of any home modification needs is a definite plus. Also, having connections with banks, credit unions, and funding sources will help mitigate the financial part of the equation.

For Corcoran, it’s important to tap into community organizations, chambers and non-profits.

“Your manufacturers can generally provide referrals also,” he says. “And larger groups like VGM Group can help in this area. And believe it or not, don’t forget your competition. Offer your competition your services to expand their service area — it will only benefit you too. And you can probably keep your name from being slandered. This has been a strategy that has worked for us.”

Keiderling says if you look at the home access levels, it’s typically at Level 3 when HME providers should investigate outside help. In part, this is when you start dealing with local building codes regarding home access projects.

“In some areas, to put in a modular ramp, there are building codes for that,” says Keiderling. “Other areas don’t require them. You don’t have to be able to recite your local codes but you must have the knowledge and capability to align with them. It’s pretty easy to do. Just call your local city hall or county courthouse and ask them for the local requirements.”

Keiderling recommended that this is a good reason to become part of your local homebuilders association, where you will find knowledgeable people who can help you understand local codes. One example why you would want to understand your market area building codes deals with installing stair lifts. Most states do not require a permit to install, he says, but there are localities within those states that do. So play it safe and know what your market requires regardless of the home access level.

Your referral network grows with business growth, says Keiderling. If you’re doing bar grabs and some modular ramps, and then pretty soon you will likely get a call asking if you handle stair lifts or where someone can get one. That’s when you say you can provide it and then start digging to find the help you may need.

HME providers are using sites such as Angie’s List and Home Advisor to find contractors and other experts. Just as you should be with any new referral, do your homework and feel out testimonials that may be too complimentary or too deflating. Keiderling says that the best test is to only use people you would let work inside your own home.

Ferguson, who is an established home access expert and has been building his referral network for many years, shared his experience of how building his network reflected the home access levels:

• Levels 1 and 2: HME providers will want to make sure that they are familiar with the technical or customer service representatives for the products that they sell. This will help with any questions about operational use or training they encounter while in the field or during the sales process. At this level, HME providers shouldn’t be handling projects that require a large network of tradespeople.
• Level 3: If an HME provider is unable or unqualified to perform a home evaluation or assessment, it would be helpful to have a network of access specialists or clinicians, such as occupational therapists who are trained in home evaluation or client assessment. It would also be useful to have a network of fully licensed and insured handymen or remodelers who are capable of installing products like grab bars and handrails in compliance with local building codes.
• Level 4 and 5: At this level HME providers have essentially taken on the role of a general contractor and should make sure they are licensed and insured properly. They should have a full network of access specialists, clinicians (occupational therapists, physical therapists, etc.), licensed contractors/remodelers, plumbers, electricians, painters, cabinet makers, lead and mold abatement, flooring and tile specialists, etc., in their referral network. An alternative is for HME providers to partner with an experienced Level 5 home access provider who already has a comprehensive referral network of tradespeople and meets all licensure and insurance requirements.

For Corcoran, trade shows, such as homebuilder shows, are a big part of his networking.

“Marketing can be a great tool for increasing sales, but relationships are the best way,” he says. “Know your partners from the manufacturers, referral sources and your subcontractors. Word of mouth has been our biggest networking asset and a good partner with common goals can cultivate a reliable source of work.”

This article originally appeared in the April 2015 issue of HME Business.