Exploring the IT Options

How should DME pharmacies approach their technology options when it comes to integrating billing and management systems for the DME side of their businesses?

• By Holly J. Wagner
• Apr 01, 2018

Over the past decade, providers of durable and home medical equipment have witnessed an explosion of new software systems designed to optimize not only their billing, but just about every aspect of their businesses. For pharmacies that also specialize in DME solutions, integrating some of those cost-cutting IT efficiencies can be a tantalizing prospect.

However, adding DME/HME software to an existing retail pharmacy involves some challenges. To begin with, most HME software providers have built their products around that side of the business, with pharmacy software as an add-on module. That doesn’t mean the pharmacy module is any lower quality, but it does mean the DME software might not be immediately compatible with what you are using now.

“You would need to have something that was able to be integrated. If you are running a legacy pharmacy software system, I am not aware of any that would integrate right out of the box,” says Steve Rogers, vice president of product management at HME software company Brightree LLC. (Brightree is rolling out a pharmacy module for Infusion pharmacies, but no broad offering for retail is planned.)

That leaves a small retail pharmacy with several options to manage DME, from good, old-fashioned manual management, to operating parallel systems, to getting a DME software provider to work with your pharmacy software provider to create a DME module for you, to a ground-up software transition to a new system that more easily accommodates both lines of business.

Each of those options has attendant costs and benefits to weigh. The business owner has to ask: Where are my business and my software in their life cycles? Do I have the client base to make this worthwhile? Can I grow the base for DME with broader offerings or marketing? How much will upgrading disrupt my business?

“Whatever integration that you choose needs to offer you flexibility for your product areas that you want to target, but you are not having to maintain two separate files for each patient. It needs to be able to save you time,” says Daniell Crane, training and support specialist at Universal Software Solutions Inc., which offers DME and pharmacy solutions.

The following are some considerations to help you make the right choice for your business:

Manual Labor

If the pharmacy doesn’t plan to bill Medicare Part B or private insurers, it may make more sense to stick to manual DME management and a straight retail model. This is both the lowest-cost and often the lowest-benefit option. There’s no investment in new software or extended accreditation, but you have to manage the DME business using your existing tools and you’re limited in what products you can offer.

Which is why most small pharmacies moving into DME opt for Medicare Part B and insurance billing, but that also comes with caveats. Part B billing is more complicated, partly because Part B is more subject to market and political pressures. [See The Perils of Part B]
“It depends on how much DME business a pharmacy handles. If you have a large department — particularly if you handle both rentals and sales — you may need a dedicated DME system,” says Lynn R. Edens, a training technician for HME software company QS/1. “DME software provides a number of advantages. First, it simplifies Medicare Part B billing and compliance. Second, it makes management of your DME more efficient. It also can expand services to your customers: If you can provide a nebulizer to a patient, it’s likely you can also provide prescriptions for inhalation drugs. Likewise with insulin and diabetic supplies.”

Expanding with DME offerings helps you keep the customer shopping at your business, and makes it especially important to monitor your client records for which DME products they are likely to need. If you plan to do volume with Medicare and insurance billing, it adds a degree of recordkeeping and compliance difficulty that is probably too complicated to manage manually.

“The patient coming to you for pharmacy now has a need for other products,” Rogers explains. “If you are selling the DME equipment retail is one thing. If you are billing Medicare and commercial payers, you want an up-to-date system that is able to keep up with regulatory changes.”

Parallel Systems

Some of the reasons running parallel systems is not optimum are obvious: it takes a separate system, which isn’t cheap and involves training, management and duplicate entries of patient records, since the two systems won’t be able to communicate with each other.

“The HME process is so different from the way pharmacies do business. Medicare Part B billing is more complex with greater compliance requirements. For example, dates for prescriptions must be updated from date of service to the pick-up date, documentation is more stringent for auditing purposes and claims submission must be held until the required patient and physician documentation is signed and on file,” Edens says.

The decision would depend on how aggressively you plan to pursue DME and whether that justifies the cost of automating your DME business or updating to an integrated pharmacy/DMEPOS system.

“When you are dealing with the HME piece, the needs are very similar [to pharmacies]. They are going to need to control inventory and have software that takes into account regulatory requirements and billing,” Rogers says.

Billing is one big reason to think hard about adding DME software. Pharmacies are accustomed to adjudicating claims in seconds on their existing systems. DME often does not work that way.

“A retail pharmacy’s workflow cycle is much shorter, from receipt of prescription to the claim adjudication and, ultimately, dispensing the medication,” says Jason Jacobs, COO of post-acute software company VirtueRN. “The pharmacist has the ability to immediately see if the claim will be paid and what will be paid by the insurance carrier prior to dispensing a medication. They have the ability to reverse the claim if the margins are poor and not dispense the product for the amount being reimbursed. DME providers do not have the ability to do this.”

What that means in information technology terms is that handling DME may seem backward to a pharmacist or pharmacy tech.

“Pharmacy does all the records and documentation ahead of the purchase. For DME it is done afterward,” Crane says. “In the pharmacy world, before the patient gets to you, you know the product is covered. You collect from your patient before you ever hand them anything. DME is the opposite. We call it ‘bill by face.’ You don’t know sometimes until months and months down the road if you will get paid” by Medicare or an insurer. “Sometimes your claims never get paid. The patient is gone and you never get paid for it. It is a scary adventure. When you add pharmacy to DME there are more rules and regulations to follow but you know you’ll get paid.”

Get Your Software Vendors to Cooperate

If you are married to the system on which your shop is running today, ask your provider if they have a DME module you can add to it. If your provider does, it might be worth the upgrade, but unfortunately, most don’t. The next option is to ask the DME provider if they will work with your pharmacy software providers to create an interface with your legacy system.

“There can be barriers and legacy issues integrating any software. The existing software provider’s willingness to support their platform for integration can sometimes be a challenge, particularly if the platform is older,” Jacobs says. “Whatever system of record that pharmacy has, it really boils down to the company that sold [you] that system … Some will integrate with any solution. There may be a charge that some tech companies pass along, but it varies from company to company.”

To make your pharmacy and DME software work together, “You would have to add on a DME module, or you might have to have an entirely different software program that has an API (application program interface feature,” Crane advises. “It would be really difficult to find a product that is affordable and meets all the needs.”

The most important component in his scenario would be a shared patient database, so both systems work from the same set of patient records.

“When you think about how your information is stored in a database, you have all this information that you are backing up and maintaining,” Crane says. “There may be new database information that might have to be updated. If it is entirely new, then you have two databases.”

However, that doubles the opportunity for errors.

If integration with your existing system is possible, it may be expensive, so be sure to weigh the costs and benefits carefully against the other options.

Start from the Ground Up

Starting from scratch with a new system is a big decision, and where you are in the life of your business and your existing software makes a big difference.

“Regardless of how much DME a pharmacy handles, the keys are Medicare Part B billing and compliance. It’s important to be able to share patient and doctor files and avoid duplicate entry as much as possible,” Edens says. “If you’re acquiring DME software, it’s important that it interface with your pharmacy software like our own SystemOne does. Our NRx pharmacy software also has built-in tools available to aid Medicare Part B billing and compliance.”

If you are just starting up, a combined or modular system is probably your best choice.

“It avoids miscommunications and allows monitoring of meds. It can catch conflicting prescriptions,” Rogers says. “The physician systems all have that ability, to look for contra-indications or conflicts.”

Often providers will offer a software as a service (SAAS) model that’s similar to leasing a car – you get the product for a monthly fee, and the provider gives you the software, maintenance, updates and tech support as part of the deal.

For the small retail pharmacy, “SAAS is the way to go,” Crane argues. “You might pay a little more monthly but you don’t have to make a big down payment. The price difference is astronomical…and your staff doesn’t have to do as much training and maintenance.”

Jacobs adds, “A SAAS offering is ultimately a better investment for the pharmacy. Cloud-based systems reduce costly and potentially unreliable infrastructure requirements for the pharmacy.”

If you are nearing retirement or winding your business down, it might not be worth the investment in a new system, training and business disruption of the transition.

Most businesses are somewhere in between, so the cost-benefit analysis will depend more on where your existing system is in its life cycle and how aggressively you want to pursue DME business. If your current workflow system is on track for an upgrade anyway, a new, combined or modular system may be the choice that gives you the most room to grow.

If your system has been around for a decade or more, chances are that newer products available now will have more or expanded features such as reporting, inventory management, combined billing, point of sale and credit card processing. That alone may make the upgrade worth the investment.

“There are several software products directed specifically at the DME market,” Edens says. “Most are geared toward the stand-alone DME retailer. Our NRx pharmacy system has built-in DME compliance and billing tools for pharmacies that don’t have separate DME departments.”

When choosing a software provider, you also need to think about how the transition will affect your daily operations. “How disruptive is this to my day-to-day operations? Does the technology company have a streamlined implementation process? “ says Jacobs.

Why it’s Worth it

DME software can make a lot of processes easier for a retail pharmacy and help create or add to access to automated billing of Medicare and private insurers. That lets the pharmacy offer products and services that help keep customers, and keep them happy. If you do it right, the patients won’t notice anything but improved customer service. For you, it can really streamline business processes.

“Integrating pharmacy, DME and point-of-sale enable a pharmacy to share patient, doctor and vendor records, creating data entry efficiencies while reducing errors,” Edens explais. “It allows better management of inventory and customers are better served because a single transaction can process pharmacy, DME and OTC items – or bill them in a single statement. Likewise, only a single signature at the POS is required for prescriptions, HIPAA, counseling, Medicare Part B documents and credit card transactions.”

Expanded product offerings can help keep customers by saving them a trip to another store for their DME.

Integrating DME software may increase the pharmacy ability to serve as a “one stop shop,” Jacobs says. “The patient can pick up diabetic medications as well as test strips and meter all in one location.”

In addition, he notes, “Integrating DME software into a pharmacy’s business can improve communication and impact the overall DSO (days sales outstanding) of the business. It may also create niche business opportunities for the pharmacy, such as hospice and long term care.”

This article originally appeared in the DME Pharmacy April 2018 issue of HME Business.