Risk Management: Be proactive with rental equipment

A. It's a common practice for HME providers to rent equipment to their patients. The arrangement works out well, for the most part. The patient doesn't have to pay the full price of their device up front, and the provider gains a steady source of recurring revenue. It's win-win. Unfortunately, this arrangement exposes providers to certain risks that their insurance policy may not always cover.

What happens, for example, if a patient passes away while in possession of your expensive equipment? Their family may not even realize what that oxygen concentrator sitting in the corner of their loved one's living room is, let alone who provided it to them. They may well put it up for sale without realizing that it's a rental, and if you haven't taken inventory for a while, it will be long gone by the time you start to miss it.

A situation like this leaves the provider with limited options, and none of them are great. It won't reflect well on your business if you try to seek compensation from the family months or even years after the fact, and your insurance policy probably won't cover the loss since your equipment wasn't ever damaged or stolen and you have no supporting documentation to attach to your claim.

Protecting yourself from unpleasant and costly situations like this requires regular and proactive inventory management. You can start by clearly identifying the equipment as yours. Put a label on it with the business name and contact information before you ever let it out of your sight. Follow up regularly with your patients or their caregivers after they take possession and take inventory regularly. As a final measure, it's a good practice to keep a credit card on file for each of your patients.

Adam Miller is a senior HME program manager for VGM Insurance. Reach him at adam.miller@vgm.com or on LinkedIn.