by Robert Moretta Jr., MBA (cand.)

The United States is in the early stages of a demographic shift as the percentage of elderly citizens steadily increases, according to the U.S. Census Bureau. Home health care agencies should anticipate this shift by taking the initiative to better prepare themselves for the expected influx of new patients.  One way agencies can achieve this is to ensure their software systems are efficient and up-to-date. The author discusses many benefits that can accrue to home health agencies large and small through implementation of enterprises software systems.

Regardless of size, your organization will acquire a variety of benefits through implementation of an enterprise software system. For instance, enterprise-type software can give your agency a competitive advantage by standardizing business processes; sequential steps are replaced by tasks that can be performed simultaneously, which eliminates delays in decision making. This is important because it provides personnel with one specific set of guidelines on how to execute various processes; as a result there is an increase in data entry accuracy.

Home care agencies rely heavily on data gathered within their software systems. Healthcare contracts, insurance companies, Medicare and other payers establish specific services that each of their covered patients is authorized to receive but it can be difficult to keep up with changes to a patient’s authorization form. Any minor error on a submitted claim may cause an automatic rejection from the payer, which is why accuracy plays an important role in the billing process. Rejected claims have a high probability of evolving into an uncollectible receivable because of their time-sensitive nature, resulting in an undesirable effect on agency cash flow.

Similar to any other business, poor cash flow can negatively impact decision-making; but information technology can improve management of this aspect of the business. Depending on which software product you choose, upgrading to software can ease your billing department’s transition from paper claims to electronic claims. Submitting claims electronically is far superior than mailing paper claims as it decreases turnaround time for payment collection. Agencies are often instantly notified of rejected claims, which allows personnel to correct and resubmit the claim for payment without delay, resulting in improved cash flow and greater A/R collection success.

Your billing department can benefit from software, but benefits are not exclusive to that department. Enterprise-type software can also streamline exchange clinical and financial information between the branch locations and the corporate office. Patient data entry at branch locations can be analyzed by both the marketing and accounting departments.

Marketing can monitor the number of cases and hours each branch is handling in order to determine which locations may be struggling. Using collected information, personnel can focus on assisting those struggling areas. Accounting can generate financial reports based on scheduling data entered by branch personnel. These reports can monitor aging receivables, staying on top of delinquent accounts to be collected. Streamlining this information into one enterprise system reduces the need for multiple smaller applications.

Another benefit of newer software systems is support for HIPAA compliance, which older systems may not do as well. HIPAA regulations require controlling access to information, as well as tracking who accesses information. Newer CRM systems supply an audit log, showing who made each change or addition. The nature of information in any patient record software system requires more effective security and management tools, less commonly found in older systems.

The other major HIPAA concern is electronic transactions that may include identifiable patient information, such as claims and referral authorizations. These too may not be supported by older systems. Agencies should carefully consider how they can maintain their systems, procedures, and operations to comply with these industry standards.

As the population ages, the home health care industry has a promising future on the horizon, but needs to be prepared to capitalize on the opportunity to capture future market share. One way to handle the boom of prospective patients is to implement an enterprise system that will make operations more efficient. Standardization of business processes will have a positive impact on the flow of information as various agency departments grow more efficient.

As the industry begins to experience this demographic shift, agencies should also expect regulations to become stricter; but there is no need to worry about that because an updated software system will be on top of these changes before you are.

Works Cited

Laudon, K. C., & Laudon, J. P. (2010). Management information systems: Managing the digital    firm. (11th ed.). Upper Saddle River, NJ: Prentice Hall.

Quinn, L. S. (2009, July 28). In search of HIPAA-compliant software: Tips for selecting software that will help your organization comply with new HIPAA rules.

Sterling Solutions. (2006). HIPAA compliance.

Thornton, P. B. (2010). Management: Implementing change. BusinessWest, 26(21), 54-58.

USCB. (2011). The older population in the United States: 2011. Washington: U.S. Department of Commerce.

Robert Moretta Jr. is an MBA candidate at St. Joseph’s College in Patchogue, New York. This article is based, in part, on his experiences while employed by a home health care agency.

©2012 by Rowan Consulting Associates, Inc., Colorado Springs, CO. All rights reserved.
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