Business Operations and Management
Revenue cycle and payer mix
A DME company runs on a revenue cycle: intake, verification, authorization, delivery, billing, and collections. Understand payer mix-Medicare, Medicaid, commercial, and private pay-and how each affects cash flow. Medicare pays on a fee schedule with assigned rates; commercial payers may negotiate contracts. A common trap is assuming a signed ABN guarantees payment; an ABN only shifts liability when the item is genuinely non-covered and the notice is properly delivered.
Inventory and asset management
Serialized equipment (concentrators, wheelchairs) must be tracked from receipt to delivery to pickup. Rental equipment returns to inventory and must be refurbished and documented. Questions test whether a supplier can bill for equipment that was never delivered or was delivered to the wrong address. Maintain a delivery log and reconcile it monthly.
Staffing and compliance operations
Know the roles: intake specialist, billing specialist, respiratory therapist, delivery technician, and compliance officer. Segregation of duties matters-the person who authorizes should not be the person who bills. Understand the compliance program elements: written policies, a compliance officer, training, auditing, and a reporting mechanism.
Financial metrics
Track days in accounts receivable, denial rate, and collection rate. A denial rate above a threshold signals a documentation or eligibility problem, not just a billing problem.
Worked example
If a payer denies 20% of claims for missing authorization, the fix is upstream: add an authorization checkpoint at intake. Auditing the billing team alone will not solve it. Rule of thumb: fix denials at the earliest process step where the error originated.