Consultancy Project Approach
Dr. Mark Rasmus MD, Medical Director of a Sleep Medicine Practice formed a partnership with three individuals, two (2) dentists (practicing sleep medicine dentistry) and an area physician. The group desired to start a sleep-related durable medical equipment (DME) company, later named Everything CPAP (ECPAP). Their initial monetary Investment was $150,000, including engagement of consulting services in January 2014.
Approach & Methodology:
- Developed Start-up Project Plan after initial complimentary assessment by phone:
- Leadership interviews, selection of manager, orientation of leaders to project planning/responsibilities
- Created proforma based on market conditions and the organizations clinical and financial expectations
- Conducted analysis using a S.W.O.T process (Strengths, Weaknesses, Opportunities, Threats)
- Jointly developed Short-term and Long-term Goals
- Developed a dual approach to project implementation
- Initial On-site consult to begin project implementation
- Development and agreement to remote integration with on-site oversight as needed
- Fee structure for consultation developed using customized daily and hourly rates for on-site and/or remote
- Following initial on-site, work performed remotely, developing policies and procedures and other duties in concert with workflow process, thus ensuring continuity to each partner (consultant and organization).
- Remote consultation performed both independently as well as using multiple scheduled calls with the facility manager and Dr. Rasmus
- Remote consultation was conducted for several weeks, followed by subsequent on-site consultations to confirm and refine the process
- Business Systems & Process Development
- Integration of the budget and proforma into the systems
- Creation of the Clinical & Technical Policies & Procedures
- Developed and Implemented a Performance Management Program
- Accreditation & Compliance
- Designed and Implemented a Comprehensive Compliance/Adherence Program
- Trained management for mandatory accreditation that is required by Medicare and all other payors
- Assisted in selecting an accrediting organization, that provides ECPAP with a focus approach to policy and procedure development
- Remote preparatory work followed by on-site follow-up and process refinement
- Design and Implementation of Service-Related Workflow Processes
- Remote consultation as already described used to link all policies to compliance and workflow processes
- Once Workflow Processes are developed with Best Practice Policies that meet all compliance requirements, an on-site visit followed to both confirm and revise as was necessary, which was then approved by Dr. Rasmus and partners.
- Collaboratively developed the mission and vision with expectations of creating standards of Best Practices ensuring patient adherence to care, compliance with Federal/State Law and Accreditation Standards and meeting or exceeding financial goals.
- Assisted with location and design of physical facility.
Project Description
Client: Everything CPAP; Located in Boise, Idaho
Category: Physician-Owned Sleep DME Start-up Business
Date: January 2014
Consulting Firm: HME Professional, Hustonville, KY
Assigned Consultants:
- Robert Floro, MS, RRT – currently a consultant with Everything Sleep Consulting
- Steve Vinci, BS, RRT – currently a consultant with Everything Sleep Consulting
Services Provided:
- Developed Start-up Project Plan after initial complimentary assessment
- Leadership interviews, selection of manager, orientation of leaders to project planning/responsibilities
- Business Systems & Process Development
- Accreditation & Compliance
- Design and Implementation of Service-Related Workflow Processes
Challenges:
- Original individual hired to manage the start-up abruptly left the organization at time of consultant’s engagement.
- The organization was required to provide products and services to 10 patients to allow accrediting organizations to conduct a valid survey. Without accreditation, future billing would not sustain the organization. (accrediting organizations are required by the Centers for Medicare and Medicaid Services (CMS) to review a minimum of 10 patients during any initial survey.) Unfortunately, the organization was burdened with providing equipment and services to these 10 patients with NO reimbursement, including the inability to recover revenue from those patients.
- The organization was faced with mandatory accreditation (a requirement of CMS and most insurance carriers).before any billing could occur.
- There were no contracted relationships with insurance carriers, in an especially competitive and restrictive insurance environment for DME providers.
- No revenue was collected for approximately 6 months
- All costs were paid from the initial investments
- Starting from scratch (free equipment and services to 10 patients, no referral sources, no physical facility, no insurance relationships, no equipment inventory, no accreditation, etc.)
Results (at the end of 16 months):
- Physical facility is fully operational.
- Hired a manager (also a licensed RPSGT clinician) to start the creation of a Sleep DME company. This individual began working with consultants in January 2014.
- Hired 2nd employee in May 2014.
- Achieved accreditation in April 2014.
- Awarded initial private insurance contracts and initiated billable services in April 2014 (2 months sooner than projected).
- Became profitable in April 2015, 16 months from initial start-up
- There was NO long-term debt, as growth was funded by operational revenue.
- Hired additional clinician
- By the fiscal year end 2015, the annual net profit margin was 21%
- A second location was added in 2024, with both locations achieving annual revenues at year-end of approximately $1.4M.
- 5 FTE’s have been added, in addition to the facility manager. The current total staff includes a 6 clinicians and 3 support staff.
- Projected 2025 revenue for all locations is $2M
- Current DSO = 40 days
NOTE: The consulting engagement resulted in the following positive business opportunities:
- Four individuals (the current DME facility manager – an RPSGT, Mark Rasmus MD, Robert Floro MS RRT and Steve Vinci BS RRT) formed an internet-based continuing education business, providing CEU’s for sleep technologists (RPSGT) and respiratory therapists (used for state licensure) in the United States and Canada. The organization is named Sleep Education Partners (sleepedu.org/respiratoryedu.org).
- Six individuals the current DME facility manager – an RPSGT, Mark Rasmus MD, Robert Floro MS RRT, Steve Vinci BS RRT, Kathryn Hansen BS, CPC, CPMA and Nicole Mueller – social media marketing and web design formed an consulting organization designed specifically to serve the sleep industry, named Everything Sleep Consulting (everythingsleepconsulting.com).