WorkCompWire
Full article on: workcompwire.com
Every year, workers’ compensation plan administrators and payers find themselves doing more with less. Thanks to ever-increasing costs and ever-tightening budgets, everyone is tracking spending more closely than ever—and looking for value opportunities. While areas like pharmaceutical and surgical spend are typically at the top of the cost control list, more and more, no stone is being left unturned in the quest for savings.
One often-overlooked category is durable medical equipment (DME) and medical supplies. While these are necessary and frequent expenses, they can easily add up to substantial spending overages. In terms of vendor relationships, stakeholders in the workers’ compensation space should be able to trust their DME supplier as an active partner in cost control, not just a passive order filler.
The hidden hero of recovery—and a hidden cost driver
DME and medical supplies are a broad segment that includes any orthopedic devices or equipment designed to help with mobility, function, and comfort while recovering from an injury or surgical procedure. For injured workers, timely access to necessary equipment can significantly improve quality of life and make the difference between a smooth recovery and a delayed return to work. From wheelchairs and walkers to beds, and even simple items like cushions and back braces, medical equipment does much of the heavy lifting in getting injured workers back to productive everyday activity.
However, it has also grown to become a significant source of costs. According to NCCI data, durable medical equipment, prosthetics, orthotics, and supplies represent a cost share between 4% and 13% of medical costs, depending on the state. Although broader economic factors such as inflation and supply chain disruptions have contributed to rising expenditures, there are controllable aspects of spend that can create a ripple effect of ballooning expenses. Understanding device appropriateness, device selection, and the importance of proactive service can contribute significantly to cost control efforts.
Right device, right price, right service
DME and medical supply providers are in a unique position to help identify savings opportunities. A DME and medical supply partner that is committed to value and quality should be actively working to ensure device appropriateness, provide lower cost options, and deliver comprehensive support.
Specifically, this means conducting careful and thorough assessments of each injured worker’s unique needs and environment to provide the right device, at the right price, and with the right level of service:
- Right device: Ensuring each device is necessary and appropriate and will fully support recovery.
- Right price: Systematic procedures to maximize savings through cost-effective options and lower-priced alternatives.
- Right service: Proactive support and management that meets injured workers where they are, offering convenience and solving potential problems early through quality assurance.
Working with a DME and medical supply provider that isn’t doing all three can quickly add up to runaway costs.
Dedicated formulary identification, big savings
Getting the right device at the right price relies on partners with an established network of trusted suppliers that deliver value without sacrificing quality. One particularly important component of device selection is the availability of lower-priced alternatives and generic equivalents. Similar to drug formularies in the pharmaceutical space, there are often preferred options for devices and supplies that can result in significant cost savings.
Just one example of the potential cost savings: Instead of dispensing a brand-name cold compression unit, which averages a daily rental fee of $122.00, an appropriate alternative is a standard cold compression rental at a cost of approximately $78.57 per day—a 36% savings when using a preferred vendor.
With the high volume of DME and medical supply purchases, an effective formulary identification plan can result in thousands of dollars in savings per case. Due to often limited bandwidth for claims professionals, the sheer volume of caseload can make oversight difficult. With adjusters often juggling hundreds of files, relying on a trusted partner with an established, proactive brand-to-formulary substitution program can help relieve both workload and spending overruns.
Passive vendor, or active partner?
When it comes to service, there’s a big difference between reactive autoship-based fulfillment and proactive cost containment. Going beyond device selection, the ability to provide human-focused service can offer value, while improving injured worker experience. Through real-time communication, human oversight, and quality assurance measures, vendors can ensure items are delivered correctly and on time. What’s more, proactive service can help payers explore the potential value of rent-to-purchase options where appropriate.
An active DME partner can also provide savings opportunities by being part of a larger organization delivering a breadth of services with access to unique levels of expertise, ranging from home health to prosthetic support to post-acute care. Working with one point of contact who can seamlessly coordinate between dedicated, specialized teams of care focus can lead to meaningful gains in efficiency and cost containment. For example, integrating experienced, workers’ comp-focused DME and medical supplies, home care, and home modifications can create tremendous savings potential and an improved experience.
What to look for in a strategic DME provider
For the greatest efficiencies, you may wish to seek a vendor that:
- Uses established procedures to recommend clinically equivalent generics
- Has an experienced staff of focused experts
- Works with a trusted network of suppliers
- Avoids auto-shipping and personally confirms all orders
- Explores the value of rent-to-purchase options
- Monitors rentals and initiates timely returns
- Offers real-time communication and support that meets injured workers where they are
- Tracks usage, authorizations, and upgrades
- Supports delivery, exchanges, and pickups across a wide network
- Delivers a wide range of home care services
Overlooked DME and medical supply expenses can result in significant cost overruns. With budgets becoming more and more challenging, stakeholders need an engaged partner that can help rein in spending while improving outcomes. When examining your current DME supplier, ask yourself if they are providing the proactive programs, personalized support, and technology-enhanced communication your organization needs—or if they’re silently increasing your costs.
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