Episode #33: Managing DME Operations: Insights from Keith Steichen of Royal Apex Solutions

In this episode of the Claim to Fame, Alex and Wayne welcome Keith Steichen, founder of Royal Apex Solutions, a DME consulting firm.

What’s Covered?

Keith talks about his 25 years of experience in the DME industry, focusing on revenue cycle management (RCM), compliance, and payer relationships. He highlights the importance of adaptability in the ever-evolving DME landscape and the need for companies to improve billing and collection practices. Keith also shares insights on the roles of private equity in DME businesses, the complexities of commercial insurance, and the importance of patient education in the effective use of DME products. The discussion touches on the future impact of AI and automation on DME operations, and the critical need for alignment between sales reps and reimbursement teams. The episode concludes with a rapid-fire session where Keith shares personal insights and leadership philosophies.

Podcast Transcription

• Podcast Episode: Managing DME Operations
• Guest: Keith Steichen, founder of Royal Apex Solutions
• Hosts: Alex & Wayne (NikoHealth)

Introduction

[00:01:14]

Royal Apex Solutions is a DME consulting firm. Many founders, CEOs, and presidents understand sales and marketing well but struggle with the reimbursement process. The work involves analyzing existing processes, affirming what is working, identifying improvements, and ultimately driving more money to the bottom line.

[00:02:22]

What has kept you passionate about this industry for 25 years, through every major payer change and compliance challenge?

The industry is constantly evolving — it is never stagnant. You have to be adaptable, put your thinking hat on every day, and work with people in a genuinely positive way. The variables are endless. And ultimately, the patient’s quality of life improves because of the work being done. Being part of that process is very fulfilling.

Revenue Cycle Management — Misconceptions & Gaps

[00:03:18]

What is one of the biggest misconceptions people have about RCM in the DME space?

Most companies have not paid enough attention to it. When they started the business, they established certain protocols, put one or two people in charge, and never evolved from there. There have been so many changes and variables that they simply have not kept up with the times. Their only warning signal is typically declining reimbursements — and by then, it is usually too late.

[00:04:07]

Many DME companies keep billing in-house while others outsource. What do you recommend?

It is a case-by-case decision. A small startup strapped for funds may need to farm out billing initially. However, as a company grows, there is a strong case for building internal billing operations. The margins are better, the return on investment from skilled billing staff is real, and — importantly — owning a billing operation is a tangible asset when planning an exit. Most DME companies do not manufacture their own product and rely on 1099 distributors who might move to a competitor for one percent more. An internal billing operation provides a genuine competitive moat and supports larger valuation multiples at exit.

Two of the largest private equity firms have both said independently: every company has finance, HR, and engineering — but what makes a DME business particularly attractive is its reimbursement and billing operations, because it creates a moat and drives larger exit multiples.

Billing Performance — Accountability, Metrics & Scaling

[00:06:46]

What are the most common issues holding DME companies back from maximizing billing and collections?

A general lack of accountability. When asking leadership about their billing operations, they will often point to one standout person — someone who may have been excellent five or ten years ago but has not kept pace with the industry’s changes. Typically, that person holds the best territories and hands off the difficult ones to newer staff, maintaining an artificially high performance plateau. When you dig in, they are often not contributing as much value as assumed. The fix is an honest evaluation combined with clear metrics and performance standards.

[00:08:12]

Which KPIs matter most?

Invoicing is easy — anyone can hit the invoice button. What matters is collections. And what drives collections is clean paperwork on the front end — working closely with the sales organization to ensure quality documentation before billing. The key metric to pursue is first pass yield: the share of claims paid on the first submission. Pursuing second and third attempts costs time, money, and energy, so maximizing first pass yield is where the real value lies.

[00:09:13]

How do you scale process without losing personal accountability?

It starts with getting to know the organization and the people — their true strengths, weaknesses, and any systemic handicaps they are working around. Is there a systems issue? A processing bottleneck? People in reimbursement roles often lack a real advocate, and their immediate manager may not have access to the executive team. Understanding their pain points and finding out what they need to collect more effectively is the essential first step.

Private Equity in DME

[00:10:25]

What is different about consulting for PE-backed groups versus founder-led or startup DMEs?

PE groups operate on strict timelines — typically three to five years from acquisition to return — and will do almost anything to hit that goal, including bringing in high-level outside consultants. That is a very different environment from a founder who built the company organically from the ground up. When PE culture meets a home-grown business culture, the two do not always mesh. It can work, but it requires significant dialogue and deliberate cultural alignment.

[00:11:41]

What is your overall read on the PE and DME landscape today?

PE typically works very well for upper executives — it creates a cash-out event for owners and senior leadership. But what often gets lost in translation is the people who worked extremely hard to build the company. They are not always forgotten, but sometimes they are.

Compliance & Payer Relationships

[00:12:17]

You have handled everything from workers’ comp to VA to Medicare. Which payer type is the most complex right now?

Commercial insurance. Workers’ comp is relatively straightforward, and Medicare is a single payer — you can get the hang of it. But commercial insurance comes with countless plans and constant changes. Smaller companies in particular can get completely lost in the weeds trying to keep up.

[00:13:03]

If a DME owner is worried about audits, what is your number one piece of advice?

Know what your staff is actually doing — not what is written in the SOPs, but what is truly happening day to day. If there is any inkling that things are not being done in a fully forthright manner, clean it up immediately.

[00:13:50]

How do you approach compliance when balancing speed and growth?

Compliance is king and queen. It can cripple a company. At mid-size to larger companies, there is usually a compliance officer — and the reimbursement team needs a strong, ongoing relationship with that person. When situations arise, they need to work through them together. That partnership is not optional; it is essential.

[00:16:10]

How does a relationship-first mindset translate into better payer relationships?

People do business with people they enjoy working with. Being abrasive or difficult limits success in contract negotiations. But the real benefit goes beyond the initial contract — a strong relationship means the key person at the insurance company will often give you advance notice of upcoming changes. The goal is to cultivate those relationships continuously, not just call when you need something.

Leadership & High-Performance RCM Teams

[00:14:47]

You have led teams of over 100 people. What is your leadership philosophy for building high-performance RCM teams?

The one thing you cannot change is a person’s character. Trying to turn someone with a poor attitude into a high performer through good management rarely works. Give a good-to-great attitude paired with above-average intelligence, and a team can accomplish a great deal — because technical skills can always be trained. Give someone brilliant with a poor attitude, and no amount of training will compensate. Attitude plus smarts is the foundation everything else is built on.

Industry Shifts, AI & Automation

[00:17:20]

What is the biggest shift DME leaders should be preparing for right now?

In the back of most owners’ minds is the question: how long can this continue? Declining reimbursements are beginning to appear on the horizon for many product lines. That creates a real need for diversity — in product mix and portfolio — to sustain long-term growth.

[00:18:18]

How do you see AI and automation shaping RCM and compliance over the next five to ten years?

It is necessary, and it is already here. Anyone still uncertain whether AI is a trend or a fad is already behind. The right approach is to identify where AI saves time and then reallocate those employees to more profitable work. In certain situations, you can realistically achieve 30 to 60 percent improvement relatively quickly. And if competitors have already adopted it, you are further behind than you realize.

The Biggest Systemic Issue in DME Operations

[00:20:17]

If you could wave a magic wand and fix one systemic issue in DME operations, what would it be?

The disconnect between the doctor prescribing a device and the patient actually receiving it and using it correctly. Patients often receive equipment right after a surgery or traumatic event, take it home, and have no idea how to use it or how it will benefit their recovery. That training gap leads to poorer outcomes and negative feedback back to the referring physician — which is a significant problem when that doctor is also a primary referral source.

Organizations that do really well have trained fitters and invest heavily in patient education. Those that drop-ship with little to no patient interaction underperform significantly. AI can actually play a role here through online training resources and automated follow-up, but many companies are not yet taking advantage of it.

[00:23:11]

Is patient education a staffing problem, or is the breakdown happening somewhere else?

The breakdown happens in the gap between when the doctor writes the prescription and when the product reaches the patient. That black hole is where care coordination falls apart. Companies that excel close that gap with active touchpoints at every stage.

There is also a fourth point on the classic triangle — patient, doctor, payer — that often gets overlooked: the sales rep. When reimbursement and sales are not aligned, chaos follows. Sales reps blame billing for costing them money; billing blames sales for incomplete paperwork. No one wins. The real framework needs all four: patient, doctor, sales rep, and payer — all aligned.

Rapid Fire

Metrics dashboards or gut instinct? Metrics dashboards — ideally a combination, but if forced to choose: dashboards.

Payers or patients — who is harder to please? Payers.

Audits or acquisitions — which is more stressful? Audits. Acquisitions are usually fun.

If you were not in DME, what industry would you be in? Still service-focused. Currently co-founding a medical staffing agency helping nurse practitioners, physician assistants, and executives find their next roles. Outside of work: counseling men individually, and alongside his wife, counseling married couples.

Leadership style — Moneyball or Remember the Titans? Remember the Titans.

One word to describe the DME industry? Dynamic.