Turn Your Repair & Maintenance Headaches Into Revenue
- By Deborah Cooper
- Jan 01, 2007
As all the industry knows, the Centers for Medicare & Medicaid Services (CMS) announced changes to oxygen payments last Nov. 1, 2006. Within the ruling are provisions for the repair and maintenance of equipment. However, there is a gray area concerning what happens after a beneficiary owns the equipment. If transfer of ownership occurs after three years, but the provider is still responsible for equipment maintenance for five years, what happens in between?
One man who has been thinking about this challenge is Dick Fuller, who has been the director of MED Certified Repair Centers for the past five years. Currently, the bulk of the repair burden is involved with oxygen concentrators, he explains. Secondary to that is maintenance on liquid systems. “Concentrators are a fairly complex package for everything to be working just right,” he says. Therefore, “preventative maintenance is critical. The provider is faced with a choice — send it in for repair, or determine how far to go to fix it.” Fuller adds that with the prevalence of the five-year warranty offered by most manufacturers, the trend has been for the provider to do less in-depth repair than they had in the past.
That trend is set to change. With CMS’s provisions “there are compelling reasons to offer more service and repair going forward,” says Fuller. Determined to see the silver lining in CMS’ rulings, Fuller sees several revenue opportunities for providers in the repair arena, especially with preventative maintenance, which “is a cash opportunity for the provider.” He suggests that providers put together a “preventive maintenance” contract for end-users. One way to do this is to study the frequency of repair on concentrators and offer, at minimum, a preventative maintenance contract, where for a certain dollar amount, the provider will go out a set number of times per year to do routine maintenance. An additional benefit is that it would help preserve the terms of the manufacturer’s warranty. To be effective, the provider should focus on educating the consumer that the machine needs to be maintained properly to run efficiently, and if it’s not, then stress that the beneficiary would be responsible for repairs. Given the choice, many consumers would prefer HME professionals to check the equipment.
Initial delivery and setup are good times to offer a maintenance contract, advises Fuller. And, once established, these home visits can be scheduled in a more efficient manner that best fits the delivery route, than if an emergency repair call was made.
Referral sources are also likely to look favorably on providers who offer this kind of service. “I think whoever is the funding referral source would give some preference to the provider who would be prepared to take care of post sale service requirements,” says Fuller. It’s a way to distinguish one business from another. “I wouldn’t be shy about arranging meetings with referral sources to help them understand how the rules will change the game a bit, how preventative maintenance will be critical, and how you are prepared to go the extra mile.”
If you are already considering your repair and maintenance responsibilities, don’t wait to make changes. “I think if I were running a business, I would assume the change in ownership is happening in 13 months. It is a remote possibility. I would do it just so I am ready to go in advance,” says Fuller.
Fuller acknowledges that with all of the legislative changes occurring in the industry, this may not be at the top of a provider’s list. But, he says, it’s a mistake to ignore potential revenue from service operations.
The bottom line? “There are hidden advantages to some of the changes from CMS. Use the situation as a way to differentiate the company and more effectively manage operations in the repair shop.”
This article originally appeared in the Respiratory Management Jan/Feb 2007 issue of HME Business.
Deborah Cooper is the former Respiratory Management editor.