Falling into Place

Our annual BIG 10 list yields both new and maturing trends that will shape HME’s strategic landscape for 2018.

HME Big TenEvery January, HME Business outlines 10 key trends that will impact the year ahead. Like puzzle pieces falling into place, 2018 is starting to form a picture of a year that will see ongoing trends further unfold, as well as new issues come into focus.

This year’s Big 10 includes:

  1. H.R. 4229 and Protecting Rural Access
  2. Remote Patient Monitoring
  3. Accreditation Renewal
  4. Billing Non-Assigned
  5. Deeper Retail
  6. e-Commerce
  7. Distributed Provider Operations
  8. Revenue Diversification
  9. Mobility Market Growth
  10. Medicare Red Tape Relief Project

If anything, the 2018 edition of the Big 10 shows a maturing industry that has become accustomed to change and is willing to capitalize on new opportunities while chipping away at ongoing problems. Gone are the days of reactionary panic. They have been replaced with more detached, strategic thinking.

So, without further introduction, let’s dive into how these trends will shape HME during 2018:

H.R. 4229 and Protecting Rural Access

In early November, Reps. Cathy McMorris Rodgers (R-Wash.) and Dave Loebsack (D-Iowa) introduced into the House the Protecting Home Oxygen & Medical Equipment Access Act, a bill that would provide relief to rural and non-bid areas that had been impacted by the national expansion of competitive bidding, as well as rectify the “double-dip” cuts on oxygen. Cataloged as H.R. 4229, it has two specific thrusts:

  • It would effectively roll back the second round of cuts for non-bid area suppliers, effective retroactively to January 1, 2017 and through 2018.
  • It would address rate cuts caused by the misapplication of a 2006 budget neutrality offset balancing increased utilization for oxygen generating portable equipment with lower reimbursement for stationary equipment.

From that point onward, the industry has been in a fast-paced push to get as many co-sponsors as possible before the end of the year. In fact, as this issue of HME Business goes to press, Congress is leaving Capitol Hill for its holiday recess and the bill has 90 co-sponsors. 

That’s a good sign that the bill has solid momentum behind it. The key will be for providers to work with their state associations, the American Association for Homecare, and organizations such as the VGM Group and MED Group to continue the advocacy work needed to get H.R. 4229 to a point where it has a groundswell of Congressional support. 

Some useful resources: The full text of the legislative language is available at bit.ly/2gZ5rOD and the bill can be monitored on the Library of Congress site at bit.ly/2znFN0j. Providers lobbying their lawmakers on behalf of the bill can obtain issue briefs on rural reimbursement relief at bit.ly/2AbhAsh and the O2 “double dip” cuts at bit.ly/2z9rdtI

A quick view of the 2018 congressional calendar (found at bit.ly/2iXf7ds) shows that Congress will be in session more days this year, and January offers a solid opportunity to keep the bill moving with lawmakers returning on Jan. 3. 

Senators and Representatives are ready to work in 2018. Providers backing H.R. 4229 should take advantage of that.

Remote Patient Monitoring

Remote patient monitoring and management is playing an increasingly critical role when it comes to post-acute care and forging long-lasting patient and referral partner relationships. That trend will only continue to broaden in 2018.

Let’s take a look at some numbers. To begin with, we already know that in the post-acute care landscape, sleep is the epicenter of remote patient monitoring. How big? At the outset of the 2017, sleep therapy equipment manufacturer ResMed reported that 1 billion nights of sleep data had been downloaded using its AirView remote patient monitoring platform. That’s just one vendor. Factor in all the CPAP makers, and you can quickly get an impression of the scale involved with only the sleep segment of the market. 

Globally, the number of remotely monitored patients grew by 51 percent to 4.9 million during 2015, according to researchers Berg Insight. Looking ahead, Berg reports the number of remotely monitored patients will grow at a compound annual growth rate of 48.9 percent to reach 36.1 million by 2020.

Where HME is concerned, connected medical devices, such as sleep therapy equipment, accounted for a whopping 71 percent of total remote patient monitoring revenues in 2015, according to Berg.

The fact that HME is at the center of that growth is critical. With sleep as the foundation — or, better yet, launch pad — for remote patient monitoring, other categories will take off. There are various sectors of post-acute care that are starting to see remote patient monitoring take root and expand, and those represent key opportunities for HME providers to get involved. 

For starters, diabetes care is a big opportunity. Already we are seeing glucometers that use wireless technology to update patient performance metrics. Another opportunity for increased remote patient monitoring in the HME industry is the respiratory care sector. Already some manufacturers, such as O2 Concepts, are remotely monitoring POCs for diagnostic and maintenance information, but from there, we can see the foundation being laid for physicians, RTs and other clinicians involved in the patient’s care to start using collected data to engage in targeted outreach and help improve compliance.

Ultimately, remote patient monitoring represents an enticing and rewarding blend of technology to help patients while providing a solid business case for HME providers’ continued — and expanded — role in the post-acute care market. The key is getting in on the ground floor. Providers of sleep, diabetes and oxygen products will want to monitor this trend during 2018.

Accreditation Renewal

This year marks a major year for accreditation renewal. As Sandra Canally, RN, president of deemed Medicare accrediting organization The Compliance Team, points out, the last time a large bulk of providers were accredited was in 2015, so given accreditation’s three-year renewal cycle, 2018 is going to be another big year.

If you didn’t get out in front of this in 2017, now is the time to hustle, because accreditation renewal takes work and time. Fortunately, nothing has really changed from a CMS perspective.

“They’ve summarized some things there, but in terms of the actual quality standards that all the accrediting organizations need to adhere to nothing has really changed,” Canally says. 

This means that providers must work on the fundamentals. They should start reviewing their policies, and making sure that the processes that they have in place match their policies. In many cases, providers will be in compliance with their AO’s standards, but their procedures might not match up simply due to oversight and other factors. This “renewal season” offers an opportunity to fix that common mistake.

“Everybody should be reviewing their policies on an annual basis just to see if anything needs to be changed,” Canally notes. “Especially if they’ve had new staff come on board older staff that’s been with them a long time maybe retire or whatever, they want to make sure that they are matching what they say they do.”

Also, it’s important to keep in mind how essential Medicare accreditation is from a broad business perspective. While Medicare accreditation means an HME can bill DMEPOS claims, other payers use it as a gold standard. So even if a provider isn’t doing much Medicare, it still needs to use that accreditation to ensure it will pass muster with private payers and health plans. 

“Accreditation covers more than Medicare,” Canally explains. “We see a lot of Blue Crosses, a lot of managed care—the Aetnas, the Cignas, the big guys—will not only contact the accreditor to verify the dates of accreditation for a particular DME, but they will also drill down the product lines that they’re accredited for. In other words, they’re mimicking Medicare.”

Billing Non-Assigned

Because of competitive bidding and other funding pressures, many providers are starting to bill non-assigned. 

Essentially, the provider elects to not participate in the Medicare program and provides equipment on a non-assigned basis. This means the provider won’t accept Medicare’s allowable funding, and is instead collecting directly from the patient. The provider then files the claim with Medicare on behalf of the patient, but the Medicare reimbursement goes directly to the patient. This means that the provider can change more than Medicare’s rate for that particular item, and gets its revenue from the patient. 

This is a trend that has been growing increasingly popular, particularly in more rural areas where providers have low volume and have been disproportionately hurt by the national expansion of competitive bidding. We can expect this to continue to expand during 2018.

But, for providers considering billing non-assigned, there are some key legal considerations, according to Jeffery Baird, Esq., chairman of the Health Care Group of Brown & Fortunato, P.C.

“If a provider wants to charge less than the Medicare allowable, it has to be aware of a statute that says that the supplier cannot charge Medicare substantially in excess of the supplier’s usual customary charges unless good cause is shown,” Baird says. “Now what does that mean? Well it’s not clear what that means. We’ve not had any real clear guidance by the government.”

That uncertainty should sound familiar to any DMEPOS provider. Also, it’s important to note that none of this applies to providers with competitive bidding contracts providing items covered by that contract. In that case the provider take assignment for the bid rate.

Moreover, providers can’t discriminate against Medicare beneficiaries, meaning that they can’t opt to supply inferior products to Medicare patients and far better options for other patients.

Lastly, while billing non-assigned, “the supplier still has the responsibility to collect documents to justify medical necessity,” he says, because a claim can still be audited. If the claim is recouped, the provider must refund CMS for the reimbursement and the patient for the difference.

Deeper Retail

Retail sales have been a priority item for providers for years, but it’s time to take things to the next level. It’s not enough to have retail sales, providers need to start thinking, planning and acting like fully fledged retail businesses in 2018.

That starts with taking a by-the-numbers approach to their cash sales. If they haven’t already, providers need to start programs to track key performance indicators for their retail sales. These include: gross profit, cash flow, sales per square foot, customers per day, customer conversion rates, average sales per customer, items per customer, repeat customers, inventory turn times, unit sales, sales by department, sales by sales person, and sales by category.

In terms of how providers should track these items, many of the industry’s HME business management software offerings offer retail features that include reporting tools to help providers track their retail performance. Also, most HME software systems also provide tools for generating custom reports that can help you drill down on the metrics that mean the most to your business.

Regardless of how providers monitor retail data, the key is that they do it constantly. They must know how they are performing in terms of these key metrics right now, as well as be able to trend their performance.

Also, for daily monitoring any of the HME software packages offer dashboard features that can provide instant daily feedback across a variety of metrics. Just like the instrument panel in a car, dashboards assemble key metrics into one or two simple screens, presenting them via basic graphic and numerical feedback. Like many reporting tools, most dashboards are customizable.

The key is to use the data strategically. Start by using the data points as benchmarks so that you can get an idea of how your business currently performs. Then set company and department objectives for improving output, fine-tuning efficiency, and increasing overall performance. Set goals, track performance on a weekly, monthly, quarterly and annually basis, and adjust accordingly.


While it might sound daunting to some providers, e-commerce is becoming a business imperative in the HME industry, and it should be part of your strategic planning for 2018. Simply put, it’s where the customers are. According to a June Forbes article (bit.ly/2zqbEv4), online sales grew faster in 2016 than they had over the past three years and account for 11.7 percent of overall retail sales. There seems to be no stopping this sea change of how customers shop and get much of their product information.

So how to providers approach e-commerce? It starts by picking a business model. Christina Throndson, director of business development for VGM Forbin. Throndson oversees all business development by VGM Forbin for websites, social media and online advertising. She outlines three basic models for HME e-commerce:

  • Model 1, Awareness—an online presence meant to drive traffic to the physical location.
  • Model 2, Convenience—a limited e-commerce presence designed to help patients purchase resupply items and other HME offerings online, but still in support of a physical location.
  • Model, 3 Dedicated e-commerce—a business that is dedicated to e-commerce and is focused on engaging with and transacting with online customers on a regional, national or international level.

Where do most providers stand? Throndson says that based on her experience with VGM Forbin customers, a loose estimate would breakdown with approximately 60 percent of HME providers with an e-commerce presence falling into model 1, about 35 percent falling into model 2, and only approximately 5 percent qualifying as model 3.

Also, providers must have a solid mobile game. Wherever they are on the e-commerce spectrum, your site needs to provide information that a mobile customer can find easily. A consumer’s first step is no longer picking up the phone to ask you a question about a product — they expect to find this information on your site with just a few taps or swipes on their smart phone. And if patients can’t find what they need from your site in just a few moments, they will move onto the next site. Mobile must be a key component of your 2018 e-commerce strategy.

Distributed Provider Operations

For a few years now, providers have been hearing that they must start outsourcing major cost centers from their business, and 2018 will likely see the continued expansion of what we like to call “the distributed provider.”

Distributed providers outsource various components of their business such as warehousing, fulfilment, ordering, online capabilities such as e-commerce, and other aspects of their businesses so that they can focus on patient care, working on reaching new referral partners and other payer sources, and expanding their businesses. 

Drop-shipping and fulfillment services represent a major component of this, and is growing in popularity particularly when it comes to re-supply items. There are no upfront costs to use the service and providers pay for orders as they are shipped and maintain their pricing arrangements privately with the manufacturers. Many of these services integrate with providers billing systems so that they entire process can be as smooth and turnkey as possible. Moreover, all the packaging and printed communication – and often live support — can be done under the provider’s brand. 

Another popular outsourced service has been billing and collections services. There are various accounts receivable services in the industry that work to help collect patient co-pays and other fees that are due to providers. In many cases, the cost associated with having to chase these A/R items down in-house is cost-prohibitive, but through outsourcing providers can collect on at least part of the money they’d otherwise leave on the table.

But those are just two aspects of distributed provider operations. During 2018 we can expect providers to examine even more ways to outsource. 

Revenue Diversification

A trend that providers cannot ignore during 2018 is revenue and business diversification. Providers must work overtime to expand their revenue sources. As much as competitive bidding might be chipping away at reimbursement, the demand is there. So, in addition to driving cash sales to build new revenue, providers must research opportunities such as third-party payer, health plans and facilities-based care, such as skilled nursing facilities.

In fact, this is becoming such a priority that even major industry organizations such as the American Association for Homecare are putting a premium on this. For starters, the association has focused like a laser on relations with payers other than Medicare. That approach started with hiring payer relations expert Laura Williard, who is the association’s vice president of payer relations. Since then the association has pursued what it labels a “multi-pronged approach” that has also involved efforts from state associations when it comes to fighting reimbursement cuts from non-Medicare payers.

Also, AAHomecare’s HME/RT Council and the America Association for Respiratory Care have been working to develop new respiratory care models that could possibly drive new business models, as well.

So, if the national associations have placed a such a strategic emphasis on non-Medicare funding, that should be a strong indication to providers that they should following suit during the months to come.

Mobility Market Growth

The mobility market has seen some interesting changes in recent years, and when Medicare converted standard power to a rental model, many in the industry started penning eulogies for the segment, but instead retail power mobility took off. Customers and caregivers are demanding choices — even for big ticket items — and they aren’t hesitating to pay for those items when Medicare refuses to fund power mobility items that elevate their quality of life.

Now, there are mobility providers that are 100 percent retail. True, those providers represent a minority of the segment, but they are showing that a dedicated retail model is viable. And it could be that they took that leap of faith at exactly the right time.

Why? The market is taking off. According to market research firm Lucintel, the global market for power and manual wheelchairs will hit $6.1 billion by 2022, expanding at a compound annual growth rate (CAGR) of 5.9 percent from 2017 to 2022, according to a report from.

Lucintel noted that power chairs will see the most significant growth during the forecast period, but manual wheelchairs still comprise the lion’s share of the overall market. Most notably, North America will remain the largest geographic segment of the wheelchair market due to increasing obesity, availability of more sophisticated wheelchairs, and higher disposable income.  

Mobility providers need to be asking themselves how well are they poised to generate retail revenues during 2018, and if they aren’t, they need to start coming up with plans to approach this market while the window of opportunity to gain market share is still open.

Medicare Red Tape Relief Project

Back in July, House Ways and Means Health Subcommittee Chairman Pat Tiberi (R-OH) announced the “Medicare Red Tape Relief Project,” a far-reaching effort to reduce unnecessary and burdensome regulation on various healthcare providers and suppliers by cutting Medicare regulations.

This was big news for the HME industry, obviously, and the second that the subcommittee asked for input from all corners of healthcare, the American Association for Homecare and the National Coalition for Assistive and Rehab Technology stated the industry’s case when it comes to Medicare’s regulatory burdens. At that time the industry made a lengthy list of recommendations to both a Ways and Means request for feedback on Medicare red tape, as well as a CMS request for information (RFI). The list included everything from audit reforms to competitive bidding changes and protections for complex rehab. Moreover, recommendations poured in from all corners of Medicare. 

What are the next steps? Having collected that feedback, the subcommittee will then collate the response and begin hosing roundtable discussions with various Medicare stakeholders nationwide. The goal will be to isolate problems and identify solutions. The final stage will be to start outlining and implementing the solutions to those programs.

We can expect during 2018 that at least the roundtable discussion to occur. It will be critical for industry advocate to monitor those events and participate in that process to ensure the industry is hear. 

This article originally appeared in the January 2018 issue of HME Business.

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