Reimbursement:
Brace For More DME Cost-Containment
Published on Tue Apr 19, 2005
DME benefits manager aims to help health plans trim spending. Durable medical equipment providers soon could find it harder to get reimbursed by insurance companies - but when they do get paid, the checks could arrive much faster.
That's because government payors aren't alone in looking to trim spending on DME: A new company wants to help private insurers reduce DME costs while bringing greater efficiency to the sector.
Apropo Benefits Management of Eugene, OR last month announced it soon would begin offering specialized services in DME benefits management for commercial insurance carriers, managed care organizations and managed Medicare and Medicaid programs.
While pharmacy benefits management programs have become commonplace in the health care industry, Apropo's is the first national program to focus on DME. "No other companies are doing this," observes research analyst Alpesh Gandhi with New York-based marketing consulting firm Frost & Sullivan.
About five years ago, Apropo's founders through their work in other areas of health care began noticing surging DME expenditures. "The cost curves for DME were probably steeper than any of the other sectors, even pharmacy," Apropo CEO Terry Coplin tells Eli. "So we started looking into it."
They found there had been an explosion of new, unproven products available to DME suppliers. They also noticed increasing consolidation of the industry combined with growing government interest in the sector. In addition, health plans had not focused on monitoring and controlling DME costs, in part because individual DME purchases represent relatively small dollar amounts. What's In It For You To be successful, Apropo is going to have to bring value not only to patients and insurance companies but also DME providers, Coplin says.
For example, Coplin was struck by the DME sector's business inefficiency. He hopes to help rectify that by coordinating the work of insurance companies' authorization and claims departments.
"DME providers currently are running accounts receivable in excess of 80 days," he reports. "I think with the systems changes we'll be recommending to insurance companies, we can reduce that to somewhere in the neighborhood of 30 days."
In addition, Apropo will also offer providers and the insurers they work with information on product efficacy and outcomes. Many new products are aimed more at patients' comfort and convenience than their medical needs, such as plush wheelchair pads billed separately from the wheelchair, Coplin notes.
Insurance companies' decision-making proces-ses for DME have too often lacked consistency because their medical management departments' have little knowledge of the sector, Coplin says. By educating them about DME, Apropo hopes their decisions will be more predictable for DME providers. Some DME Utilization May Increase Seeking the best price and taking a hard look at authorization of services and supplies is an important part of what Apropo will do, Coplin [...]
