IT and Business Insights for SMB Solution Providers

Leverage a Little-Known Healthcare Law to Jump onto the Revenue Side of Your Clients’ Businesses

MSPs can help medicare providers earn an average of $100K per year using a new law called MIPS (Merit-based Incentive Payment System) … and get the government to subsidize their managed service fees. By Mark Smith

WHEN YOU APPROACH a prospective client, what’s your pitch? A free network evaluation? A HIPAA evaluation? Cost savings?

All of these offers are seen as expenses. Unless a prospect is reeling from IT infrastructure problems and is willing to pay “whatever it costs” to get the problem fixed, he or she is typically starting a discussion with “no” in mind.

It’s much easier for your prospects to say “no” when your service is viewed only as an expense—it’s just the way we’re wired.

When you pitch security, network evaluation, or other types of “audit,” the typical prospect perceives some sort of “danger,” and the body releases cortisol to the brain, also known as the stress chemical. The “no” response is automatically triggered. And it takes a lot to overcome this.

Moreover, pitching your services as “cost savings” is a race to the bottom. It’s hard to highlight value when you’re pitching cost savings. It’s better to be perceived as high value than low cost.

In contrast, a digital marketing agency pitches revenue growth. Yes, it costs money to advertise and the agency charges fees, but ultimately, that agency is pitching revenue growth. Heck, some agencies that are sure of their abilities may even pitch a fee plus revenue sharing, putting themselves on the same side of the table as their clients.

So, what happens to the prospect when he or she starts imagining new revenue growth and all that goes with it? The feeling of anticipation releases dopamine in the prospect’s brain, and for several minutes, that urge to say “no” is suppressed and now that individual is inclined to think, “Yes, I want more revenue.”

Getting on the Revenue Side of Equation

So, how does an MSP get on the revenue side of the discussion?

For the past three years, Mike Holtz of Access1, a Colorado-based MSP, has used “meaningful use” as a catalyst to get new managed service business. Meaningful Use was part of the Obamacare bill that helped subsidize the rollout of new electronic health record systems on the part of Medicare providers.

Holtz was able to get his clients over $2 million in meaningful use subsidies from the U.S. government, resulting in a significant ROI on his service fees. New revenue.

The Meaningful Use provision is done. However, a new law called MIPS, Merit-based Incentive Payment System, now impacts over 250,000 Medicare providers in the U.S. And MIPS is NOT part of Obamacare, so it’s locked in place regardless of what the U.S. legislators decide to do with the healthcare bill.

The average Medicare provider who earns a MIPS score of 100 can earn up to $100,000 year of bonus payments. A low MIPS score can result in a penalty of up to 5% (growing to 9% by 2019). That’s money out of that provider’s pocket.

Plus, the MIPS legislation mandates annual HIPAA compliance. In fact, the typical Medicare provider needs:

  • MIPS compliance consulting
  • Mandatory HIPAA risk analysis
  • Certified electronic health record system (SaaS)
  • Device management (i.e., tablets, laptops, etc.)—all need RMM clients
  • Office 365
  • Business continuity (i.e., local and cloud backup)
  • Help with billing systems
  • Security (PCI compliance, firewalls, etc.)

In most cases, your MSP fees will be covered by the MIPS bonus, because the bigger the provider’s business, the more they bill Medicare, the more bonus they can earn.

Every now and then, a window of opportunity opens up where you can show a positive ROI on your services and jump onto the revenue side of your client’s business. The anticipation of earning the bonus and the avoidance of danger (eliminating the penalty and HIPAA violations) are big incentives for Medicare prospects to say “yes.”

If you would like to find out more about MIPS and how to use this as an effective lead-generation tool for your business, we’ve created a new webinar that explains it all. You can register free here.

MARK SMITH is EVP of the ChannelPro Network.

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