AMARILLO, Texas – Jeff Baird, chairman of the Health Care Group at Brown & Fortunato, says he has given out more financial advice in the past nine months than he has in the past 25 years. “Many new clients are not coming to us for advice on day-to-day regulation issues, but because they’re selling or buying or merging,” he said. “Our M&A practice has really exploded.” Here’s what Baird had to say about what he calls the “total reconfiguration” of the HME industry.

HME News: What’s behind all the M&A activity in the industry right now? 

Jeff Baird: What we’re seeing is a large number of non-bid winners selling out or closing their doors or filing for bankruptcy. What we’re also seeing is a large number of suppliers, both national and regional, that are being very aggressive as far as buying into those competitive bid areas that aren’t covered by their contracts. We rep a number of large companies that are saying, “Gosh, we weren’t awarded any CBAs in Florida or Texas,” so they’re coming in and cherry-picking winning suppliers through asset or stock purchases.

HME: It’s not surprising that competitive bidding is driving much of the activity.

Baird: We’re also seeing DME companies chase O&P products, because they’re not covered under bidding and they still have higher reimbursement rates. That’s going to come crashing down in the not-too-distant future. CMS and the OIG are going to come in and say, “Nice try; the party is over.”

HME: Is what’s going on in the HME industry a microcosm of what’s going on in health care at large?

Baird: To give this some context, not only are we being squeezed, but also hospitals and doctors are getting squeezed hard. Our pharmacy practice is as large as our DME practice. Pharmacists used to wear the white hats; they did nothing wrong. Now we’re seeing pharmacies go out and do joint ventures and marketing agreements that are suspect at best. Everyone’s trying to chase after the decreasing dollar.

HME: So right now health care, from head to toe, is very much in flux?

Baird: In the past, we have seen shifts, but what I’m seeing now is a total reconfiguration. It’s as if someone has taken a grenade to the industry.

WASHINGTON – Reps. Pat Tiberi, R-Ohio, and John Larson, D-Conn., have introduced a bill that would require providers to obtain bid bonds as part of future rounds of competitive bidding.

H.R. 4920, the Medicare DMEPOS Competitive Bidding Improvement Act of 2014, would also require providers to prove they meet licensure requirements before they submit bids.

“AAHomecare is putting the full weight of the industry behind this practical piece of legislation,” stated Tom Ryan, president and CEO of the association, in a press release. “All providers and manufacturers should immediately ask their elected officials to support H.R. 4920.”

Per the new bill, if a provider receives and accepts a contract from CMS, the bid bond would turn into a performance bond. If a provider receives a contract offer but does not accept it and its bid is at or below the bid price, CMS has the option to collect on the bond.

AAHomecare believes the bill will “incentivize more responsible bids.”

“When bids don’t have to be honored, the whole process becomes hollow,” stated Robert Steedley, president of Barnes Healthcare Services and chairman of the association’s board of directors.

BALTIMORE – CMS’s Fraud Prevention System (FPS) prevented more than $210 million in improper Medicare payments in its second year of operations, more than double the previous year, according to a report sent to Congress today.

The FPS, which uses predictive modeling and other analytics to analyze billing patterns, also resulted in CMS taking action against 938 providers.

“CMS is using the best of private sector technology to move beyond the ‘pay-and-chase’ approach to protect the Medicare Trust Funds,” stated CMS Administrator Marilyn Tavenner in a press release.

In a report also released today, the Office of Inspector General (OIG) concurred with most of CMS’s findings. It said, however, that the agency could increase savings further by 1.) providing contractors with written instructions on how to determine when savings from an administrative action should be attributed to the FPS and 2.) requiring contractors to maintain documentation to support how FPS information contributes to an administrative action.

WASHINGTON – It wasn’t the HME industry’s first time testifying before the U.S. Small Business Administration (SBA) about overreaching regulatory burdens, but last week, something was different, stakeholders say.

“It was awesome,” said Peggy Walker, a billing and reimbursement advisor for U.S. Rehab, one of nine industry stakeholders to testify. “It was the best presentation we’ve ever done. I think we’ve finally gotten some attention.”

Stakeholders also testified before the SBA last year in June. While last year’s hearing focused primarily on competitive bidding, this year’s also focused on audits.

Numerous stakeholders who testified say members of the SBA approached them following the hearing to pledge their support.

“One of the members approached me and said she was really moved,” said Kristi Sanders, a billing manager for Northern Pharmacy based in Baltimore. “They’re not in the DME industry, but they’re all small business owners, and they’d like to know more. She said last year, they felt they were hearing a lot but not doing enough, and this year, they’ve made a commitment to do more.”

In the wake of the hearing, stakeholders are trying to determine how best to work with the SBA to achieve their goals of reforming both the competitive bidding and audit programs.

“We’re working on follow-up meetings,” said Tom Ryan, president and CEO of AAHomecare. “We asked them for their support and they all shook their heads. It’s a great opportunity.”

The SBA was taken aback by the escalation of the issues related to competitive bidding and audits since they last heard from stakeholders. In her testimony, Walker pointed out that, as of Jan. 1, 2014, more than 350,000 appeals are held up at the administrative law judge (ALJ) level.

“One provider is getting 85% of his denials overturned at the ALJ, but because of the backlog, he has $150,000 tied up,” she said. “They got a real sense for the breadth of the problem and how out of control it is.”

Specific examples of the impact of competitive bidding came thanks to Jeff Knight, owner and CEO of Premier Medical based in Louisville. He testified that his locations in bid and non-bid areas are on pace to lose $2.62 million in revenues due to reduced reimbursement from Medicare and other payers that have followed suit.

“We’ve lost 26 people and two execs,” he said. “I told them I knew that number to be exact because I personally had to let each of them go and it was painful.”

WASHINGTON – It’s no secret that audits are out of control, but without data it’s hard to build a case. That’s the problem AAHomecare hopes to help the industry fix with its HME Audit Key.

“We’re trying to make a stand that it’s over the top, but we don’t have any numbers to back that up,” said Kim Brummett, vice president of regulatory affairs for the association. “If we don’t have any numbers that we can share, at the end of the day, it’s all anecdotal stuff.”

With HME Audit Key, providers will use a secure electronic form to answer questions about audits, including how many they have at the redetermination, reconsideration and ALJ levels, and how many appeals they’ve won. The anonymous submissions will be compiled into a data set that AAHomecare can examine to see the impact of audits and share with lawmakers. 

HME Audit Key is part of a multi-pronged effort that AAHomecare has undertaken since restarting its Audit Task Force last fall. The association has also been working closely with Rep. Renee Ellmers, R-N.C., on introducing a bill to reform the audit process.

AAHomecare’s goal is not to eliminate audits, but to reform them.

“We want smart audits,” Brummett said. “We want them to be thorough and good and make sense, and hold people accountable.”

While AAHomecare has been collecting anecdotes about audits via email, HME Audit Key is all about the numbers. And for valid statistics, it needs a large sample size.

“We need to get as many providers to participate as possible,” said Tom Ryan, president and CEO of AAHomecare. “Our goal is to get everyone to understand this is an industry-wide effort, not just an AAHomecare member effort.”

In June, AAHomecare kicked off a campaign to raise $250,00 over two years to develop HME Audit Key, and create and maintain a secure database to support it, Brummett said. 

Brummett said AAHomecare expects HME Audit Key to be ready for a trial run, if not ready for use, by the end of 2014.

BALTIMORE – CMS’s Fraud Prevention System (FPS) prevented more than $210 million in improper Medicare payments in its second year of operations, more than double the previous year, according to a report sent to Congress last week. The FPS, which uses predictive modeling and other analytics to analyze billing patterns, also resulted in CMS taking action against 938 providers. “CMS is using the best of private sector technology to move beyond the ‘pay-and-chase’ approach to protect the Medicare Trust Funds,” stated CMS Administrator Marilyn Tavenner in a press release. In a report also released last week, the Office of Inspector General (OIG) concurred with most of CMS’s findings. It said, however, that the agency could increase savings further by 1.) providing contractors with written instructions on how to determine when savings from an administrative action should be attributed to the FPS and 2.) requiring contractors to maintain documentation to support how FPS information contributes to an administrative action.

Separate benefit bill lands more co-sponsors

WASHINGTON – Twenty-three additional lawmakers have signed on to co-sponsor bills to create a separate benefit for complex rehab in the past month, according to an email bulletin from NCART Executive Director Don Clayback. There are now 141 co-sponsors in the House of Representatives and 16 in the Senate, including Sen. Mike Bennet, D-Colo., a member of the Finance Committee and the HELP Committee. The bills were one of the topics of discussion at the United Spinal Association’s third annual Roll on Capitol Hill last week (see related story), where Clayback; Alex Bennewith, United Spinal vice president-government relations; and Jenn Wolff, director of Users First, hosted a panel discussion on H.R. 942 and S. 948.

Lawmakers extend deadline for letter

WASHINGTON – The deadline has been extended for the “Dear Colleague” letter asking the Office of Inspector General (OIG) to study the impact of competitive bidding before CMS expands the program in 2016. The original June 30 deadline has been extended until after the July 4 congressional recess, according to a bulletin from The VGM Group. The letter, initiated by Reps. Tom Price, R-Ga., Tom Reed, R-N.Y., and Tammy Duckworth, D-Ill., has 25 co-signers, with a goal of more than 100.

Inogen makes play in stationary market

GOLETA, Calif. – Inogen has received clearance from the U.S. Food and Drug Administration (FDA) for a home oxygen concentrator called Inogen At Home. The company, better known for its portable oxygen concentrators (POCs), plans to start selling the devices later this year. “Inogen’s release of the Inogen At Home, combined with its Inogen One family of products, positions the company with a complete product portfolio to be able to fulfill the clinical requirements of most oxygen therapy patients,” it states in a press release. “While the Inogen One product line is clinically validated for 24/7 use, the Inogen At Home gives Inogen a compelling solution for nocturnal-only oxygen therapy patients that do not yet require a portable solution, which are estimated to represent 30% of total oxygen patients in the United States.” Features of the Inogen At Home include five liter per minute continuous flow, a weight of 18 pounds and low power consumption.

MEDIchair goes private equity

TORONTO – Centric Health has entered into a definitive agreement to sell its MEDIchair and Motion Specialties retail home medical operations to Canadian-based Birch Hill Equity Partners for $50 million. MEDIchair and Motion Specialties specialize in the sale of home accessibility equipment, mobility devices and home medical supplies through a network of 47 franchised and 30 corporate stores. “We believe that working together, with not just management, but also the sales reps, store managers, franchisees and other staff, we can position MEDIchair and Motion to thrive in a fast growing industry,” stated Thecla Sweeney, a partner at Birch Hill, in a press release. Centric Health is selling MEDIchair and Motion Specialties as the first step in a strategic repositioning to focus on healthcare services businesses with low working capital requirements and low reliance on government funding, according to the release. The sale doesn’t include Performance Medical Group, which offers custom orthotics, off-the-shelf orthotics, custom bracing, and laser and shockwave therapy at 50 locations across Canada.

Binson’s provides scholarships to children with diabetes

CENTER LINE, Mich. – Binson’s Home Health Care Centers will cover all or part of the cost for 24 children to attend diabetes camp, according to a release. Scholarship applicants wrote short essays explaining why they wanted to attend a week of the American Diabetes Association Camp Midicha in Fenton, Mich. “There is no better way to give back to the community than providing opportunities to children with diabetes,” said Glen Closurdo, Binson’s director of diabetes services. “Camp is a great place for kids to gain self-confidence, while having fun and meeting other kids with diabetes.” Last July, Binson’s was awarded a contract as part of Medicare’s national mail-order program for diabetes supplies.

Use of home monitoring devices to hit 19.1M, report says

YARMOUTH, Maine – Three million patients used connected home medical monitoring devices worldwide at the end of 2013, according to a new report from Berg Insights. Researchers estimate that number will grow to 19.1 million by 2018. Driving growth: Trends in incorporating more connectivity in medical devices, and using personal mobile devices as health hubs. Connectivity is most common for implantable cardiac rhythm management devices, followed by sleep therapy. Glucose monitoring and air-flow monitoring are gaining momentum. Revenues for monitoring devices were 4.3 billion Euro in 2013 and could reach 19.4 billion Euro by 2018, according to the report.

New Charm website allows online orders

PEMBROKE, Mass. – Charm Medical Supply’s new website enables customers to place orders online. “With this new website, we intend to make our comprehensive selection of home healthcare supplies and medical equipment available to a much wider audience,” said Peter Tallas, CEO. Using the new website, customers may also enroll in the company’s DeliverEase recurring delivery program. Charm offers a range of home healthcare products, including incontinence supplies, mobility products, wound care dressings, pediatric supplies and personal care products.

NSM makes buy in Rhode Island

NASHVILLE, Tenn. – National Seating and Mobility has acquired Providence, R.I.-based Major Medical Supply. “Complex rehab products and home access solutions are our greatest areas of expertise,” said Damon Bradley, CRTS, ATP and branch manager for Major Medical Supply, which has been in business since 2005. “Specifically, we provide custom mobility and seating solutions, combined with home access solutions, lifts and ramps.” Major Medical Supply’s six complex rehab professionals are now part of NSM Providence and offer 25 years of combined experience.

Review finds 63% error rate for CPAP devices

FARGO, N.D. – A pre-payment review by Noridian found potential improper payment rates of 63% for CPAP devices from February to May 2014. The Jurisdiction D DME MAC reviewed 2,873 claims with the KH modifier (first month of billing) and 1,663 claims with the KJ modifier (4th-13th month of billing). It found most denials were due to invalid proof of delivery; no documentation in response to the additional documentation request letter; documentation submitted did not demonstrate that face-to-face clinical re-evaluation criterion were met for continued coverage beyond the first three months for KJ claims; and documentation submitted did not support that face-to-face criterion was met. Noridian says it will continue its prepayment service specific review.

Hasco’s Ride-Away to market BraunAbility vans

ADDISON, Texas and BALTIMORE – Hasco Medical subsidiary Ride-Away, a provider of handicap-accessible vans, parts and services, has secured the rights to market BraunAbility wheelchair accessible vans in the Baltimore area. Hasco expects to announce a new dealership in the Baltimore area in the third quarter of 2014. “When our new Baltimore location opens, we expect its more convenient location to attract both existing and new customers from as far as northern Delaware and southern Pennsylvania,” said Hal Compton, CEO of Hasco Medical. BraunAbility offers minivans from Dodge/Chrysler, Honda and Toyota.

Study: Pharmacists can help reduce hospital readmissions

YARMOUTH, Maine – Hospital readmissions could be reduced by 20% if high-risk patients received counseling and medication management from a community pharmacist, according to a new study from the University of Cincinnati’s James L. Winkle College of Pharmacy. The ongoing study seeks to pair 1,000 high-risk patients with community pharmacists. Researchers will focus on patients with heart failure, COPD, pneumonia, myocardial infarction or diabetes.

CareTouch offers billing system integration

WESTMINSTER, Colo. – CareTouch Communications has enhanced its CareTouch360 platform to communicate with most billing systems. The platform now supports one-way billing integration, allowing the HME provider to pull patient order reports and manually enter them; and two-way billing integration, allowing the provider to upload patient orders directly into its billing system. “CareTouch is always looking for ways to make it easier for our customers to keep their patients healthy,” commented Matthew Dolph, CEO of CareTouch. “Adding the integration element takes our solution to the next level, resulting in happy patients and increased revenues.”

WASHINGTON – It’s no secret that audits are out of control, but without data it’s hard to build a case. That’s the problem AAHomecare hopes to help the industry fix with its HME Audit Key.

“We’re trying to make a stand that it’s over the top, but we don’t have any numbers to back that up,” said Kim Brummett, vice president of regulatory affairs for the association. “If we don’t have any numbers that we can share, at the end of the day, it’s all anecdotal stuff.”

With HME Audit Key, providers will use a secure electronic form to answer questions about audits, including how many they have at the redetermination, reconsideration and ALJ levels, and how many appeals they’ve won. The anonymous submissions will be compiled into a data set that AAHomecare can examine to see the impact of audits and share with lawmakers. 

HME Audit Key is part of a multi-pronged effort that AAHomecare has undertaken since restarting its Audit Task Force last fall. The association has also been working closely with Rep. Renee Ellmers, R-N.C., on introducing a bill to reform the audit process.

AAHomecare’s goal is not to eliminate audits, but to reform them.

“We want smart audits,” Brummett said. “We want them to be thorough and good and make sense, and hold people accountable.”

While AAHomecare has been collecting anecdotes about audits via email, HME Audit Key is all about the numbers. And for valid statistics, it needs a large sample size.

“We need to get as many providers to participate as possible,” said Tom Ryan, president and CEO of AAHomecare. “Our goal is to get everyone to understand this is an industry-wide effort, not just an AAHomecare member effort.”

In June, AAHomecare kicked off a campaign to raise $250,00 over two years to develop HME Audit Key, and create and maintain a secure database to support it, Brummett said. 

Brummett said AAHomecare expects HME Audit Key to be ready for a trial run, if not ready for use, by the end of 2014.

WASHINGTON – CMS on July 2 issued a proposed rule outlining how it plans to expand competitive bidding pricing nationwide and bundle payments for certain DME.

CMS proposes expanding competitive bidding pricing by:

·      Adjusting fee schedule amounts for states in different regions of the country based on competitive bidding pricing from competitions in these regions. The regional prices would be limited by a national ceiling (110% of the average of regional prices) and floor (90% of the average of regional prices).

·      Using the national ceiling as an adjusted fee for states that are predominantly rural or sparsely populated.

·      Adjusting fee schedule amounts for non-contiguous areas based on the average of competitive bidding pricing from these areas or the national ceiling, whichever is higher.

Through a limited phase in, CMS also proposes swapping capped rental policies for bundled monthly payments for enteral nutrition, oxygen, standard manual and power wheelchairs, hospital beds, CPAP devices and respiratory assist devices furnished under competitive bidding. The payment would cover equipment, supplies, accessories and any necessary maintenance and repair.

Other provisions in the rule include:

·      Updating the definition of minimal self-adjustment of orthotics to reflect program guidance on what specialized training is needed to provide custom-fitting services if providers are not certified orthotists.

·      Establishing an exception to the prohibition against subdividing a competitive bidding contract that would allow a contract supplier to sell a distinct company that furnishes a specific product category or a specific competitive bidding area (CBA). Under this exception, CMS would sever the product categories and CBAs that the company services, along with the company’s locations, from the original contract; incorporate those product categories and CBAs and locations into a new contract; and transfer the contract to a new owner under specific circumstances.

CMS will accept comments on the rule until Sept. 2, 2014.

The rule is expected to appear in the July 11 Federal Register.

WASHINGTON – CMS’s plan to expand competitive bidding pricing and implement bundled monthly payments for certain HME is a mixed bag of positives and negatives, industry stakeholders say.

Biggest loser: rural areas

In a July 2 proposed rule, the agency outlines plans to apply competitive bidding prices in non-bid areas by using regional prices limited by a national ceiling (110% of the average of regional prices) and the floor (90% of the average of regional prices).

“Until they calculate the ceiling and the floor, it’s tough to say much about this,” said Kim Brummett, senior director of government affairs for AAHomecare. “But it will be a huge hit in rural areas.”

With 45% cuts, on average, as part of Round 2, the regional prices will likely mean big cuts for providers in rural areas even at 110% of the average of regional prices, stakeholders say. To boot: Providers in rural areas are less likely to see volume increases from the program, due to the demographics of the areas they do business in.

In its comments to an advance notice of proposed rulemaking published in February, AAHomecare argued that pricing for HME in rural areas should receive an add-on, much as it does for home health.

“No rural add-on and average bid rates that were wrong—it just doesn’t add up,” Brummett said.

Stakeholders bristle at the idea of using competitive bidding pricing, in general, for anything going forward.

“We believe the methodology is flawed to begin with and the rates are unsustainable,” said Tom Ryan, president and CEO of AAHomecare.

The agency plans to apply expanded competitive bidding pricing Jan. 1, 2016.

Testing the waters with bundling

CMS also outlines plans to phase in bundled monthly payments for enteral nutrition, oxygen, standard manual and power wheelchairs, hospital beds, CPAP devices and respiratory assist devices furnished in no more than 12 metropolitan statistical areas (MSAs).

“At least it’s a demo,” Brummett said. “The big question: What is the rate going to be?”

The MSAs chosen for the demo would have a general population of at least 250,000 and a Medicare Part B enrollment population of at least 20,000 not already included in Round 1 or 2.

Stakeholders worry what bundled payments will do to patient and quality outcomes, for some products more than others.

“When you’re talking about CPAP, compliance is important, and at the end of the day, you have to make sure you have outcomes,” Ryan said.

The agency plans to implement bundled monthly payments, which would cover equipment, supplies, accessories and any necessary maintenance and repairs, Jan. 1, 2015.

CMS will accept comments on the proposed rule until Sept. 2. It expects the rule to appear in the July 11 Federal Register.

WASHINGTON – It took nearly six years, but CardioSom has prevailed in its lawsuit against the government.

A U.S. Court of Federal Claims judge ruled June 30 that the government was in breach of contract when it rescinded contracts in the original Round 1 of competitive bidding.

“It’s been a long time coming,” said attorney Jerry Stouck, a shareholder with Greenberg Traurig, the law firm representing CardioSom. “The (court says) that CardioSom is entitled to damages.”

CardioSom filed its lawsuit in 2008 after Congress delayed the bidding program for 18 months, rescinding its contracts and those of approximately 300 other providers.

Chief Judge Patricia Campbell-Smith’s ruling came just days before the six-year statute of limitations for the lawsuit expired on July 14. Although the ruling could apply to other providers that had their contracts rescinded, they would have to act fast, says Stouck.

“Any other company that wants to take advantage of this has to file a lawsuit prior to the expiration of the statue of limitations,” he said. “I would suspect that there are companies out there that don’t know they have the right to legal recourse. On the other hand, they might be perfectly content and have moved on to other things. Six years is a long time.”

Stouck says the next step is for CardioSom to seek damages. Damages could include expenses like rent and utility costs that CardioSom incurred as a result of ramping up its business to fulfill its contracts, and any profits it would have earned from the three-year contracts.

“The numbers I’ve seen are big numbers,” he said.

In April, Campbell-Smith ruled that the court did indeed have jurisdiction to review the lawsuit.

STRONGSVILLE, Ohio, and NORWELL, Mass. – Roscoe Medical and Carex Health Brands announced last week the new name and brand identity of their parent holding company: Compass Health Brands. The new brand includes a new corporate logo, website (www.compasshealthbrands.com) and message platform. “Compass Health was chosen to reflect the company’s deep industry knowledge, understanding of today’s health care and efforts to navigate its new direction for better patient outcomes and bottom-line growth,” a press release states. Roscoe Medical and Carex Health announced their merger in March. Under Compass Health Brands, Roscoe Medical and Carex Health plan to expand through the acquisition of subsidiaries that complement their portfolios, according to the release. Roscoe also recently acquired Revolution Mobility.

ResMed makes ‘unprecedented’ donation

SAN DIEGO – ResMed has donated more than 10,000 CPAP devices to the American Sleep Apnea Association’s CPAP assistance program (CAP), the association announced June 30. “A donation of this magnitude is unprecedented,” stated Tracy Nasca, executive director of the ASAA in a press release. CAP provides a package containing a CPAP device, tubing, filters and mask to patients who otherwise would not be able to afford them. CAP, which was launched in 2010, relies on the public and commercial sleep industry to help with equipment donations. “Supply has always been our challenge, but thanks to ResMed, we will now be in a position to increase the reach of our program,” Nasca said. ASAA encourages others to provide product or funding for the tubing and masks, etc., needed to complete the packages.

A/R Allegiance integrates with Universal Software Solutions

OVERLAND PARK, Kan. – A/R Allegiance has integrated its payment portal with Universal Software Solutions’ Healthcare Data Management System (HDMS), the company announced June 30. The integration means the cash posting of any credit card payments made through the payment portal will now be automatically entered into HDMS without human interaction.  Another benefit: reoccurring charge generation. “This will significantly reduce the operational expense involved with collecting outstanding patient balances,” stated Christopher Dobiesz, president of Universal Software Solutions, in a press release. “Reducing steps in any process results in cost savings.” A/R Allegiance is also in the process of adding functionality to allow users to log in directly to the payment portal dashboard from the HDMS menu, making it easier to manage open private pay A/R in one location.

Inova combines stationary, portable therapy

AUSTIN, Texas – Inova Labs has received FDA clearance for Activox Duo2, a fully integrated stationary and portable oxygen concentrator (POC) system. Activox Duo2 combines the benefits of a home-use stationary concentrator with the portability of Inova’s LifeChoice Activox POC. Activox Duo2 offers up to 5 LPM continuous flow oxygen for patients at home and up to 3 LPMeg Pulse-Wave oxygen delivery for active patients out of the home using the POC. “Activox Duo2 was designed to provide patients and providers with a non-delivery solution that can positively impact both quality of life and quality of service,” stated CEO John Rush in a release. “This system removes the hassle and burden of tanks and replaces it with true freedom and mobility.”

BOC to update pedorthist exam

OWINGS MILLS, Md. – The Board of Certification/Accreditation (BOC) and its testing vendor recently convened subject matter experts to collaborate on a BOC Pedorthist Job Task Analysis, according to a release. The group will send a survey in July to as many as 5,000 pedorthists and other healthcare professionals to help update the exam’s content outline. “It was a very productive meeting, and I am pleased with the results of our collective efforts,” said Wendy Miller, BOC’s chief credentialing officer. “We sequenced the pedorthist task list from prescription to final fitting and evaluated each task to ensure our pedorthist certification candidates continue to be assessed on appropriate competencies.” Job task analyses are typically conducted every five to seven years, according to the release.

Invacare lives brand promise through games

ELYRIA, Ohio – Invacare sponsored the National Veterans Golden Age Games held June 28 to July 2 in Fayetteville, Ark., the manufacturer announced today. “Invacare is excited to once again be a part of the National Veterans Golden Age Games,” said Brian LaDuke, vice president, marketing and respiratory. “To see these veterans engaging in friendly competition and being active is really living the Invacare brand promise.” Veterans compete in sports such as swimming, cycling, horseshoes, bowling, field events and air rifles. Invacare has also sponsored teams in the Paralympic games and donated power wheelchairs to Youth Challenge’s Paralympic Power Soccer program.

Hasco Medical exits HME

ADDISON, Texas, and OCALA, Fla. – Hasco Medical has sold its Certified Medical business so that it can focus on its mobility vehicle business, it announced last week. "The divestiture represents our complete departure from the durable medical equipment business and makes HASCO the only public company operating in the retail market for handicap-accessible vehicles," said Hal Compton, Hasco CEO, in a release. Hasco offers handicap accessible vans, parts and services through 19 locations.

Review finds 70% error rate for VEDs

INDIANAPOLIS – In a first quarter 2014 widespread payment review of vacuum erection devices (VEDs), National Government Services examined 67 claims and denied 47, for an error rate of 70%, according to a release. The most common reasons for denial were: documentation that did not support diagnosis of impotence or erectile dysfunction; no medical records submitted; no documentation to support diagnosis of impotence or erectile dysfunction to allow coverage for the device; the proof of delivery record did not include the delivery service package identification number, supplier invoice number or alternative method to link supplier and delivery service records; or documentation did not show information justifying medical necessity. The Jurisdiction B DME MAC reminded suppliers that failure to respond to requests for additional documentation violates supplier standards.

Medtrade sessions prep providers

ATLANTA – Medtrade will offer a new “niche market” track at this year’s show. The six educational sessions address home modifications, ventilation services, support surfaces and therapeutic shoes. “Providers who dabble will likely not succeed, but those willing to put in the proper training and capital investment can establish a profitable business,” show organizers state in a press release. Medtrade takes place Oct. 20-23 at the Georgia World Congress Center in Atlanta.

Short takes

The North Carolina Association of Medical Equipment Services (NCAMES) has recognized Rep. Renee Ellmers, R-N.C., with its “Champion of the Industry” award. Ellmers is expected to introduce a bill to reform the audit program. The award was resented during the association’s summer meeting June 25-27…Pediatric Home Service (PHS) was named a Top 100 Minnesota Workplace for the fourth year in a row. The Star Tribune also honored PHS with a Meaningfulness Award based on employee reporting…Brightreehas joined the CommonWell Health Alliance as the first dedicated post-acute vendor. The alliance, a not-for-profit trade association of health IT companies, says Brightree’s participation will open new opportunities for in-home health IT access for patients and their clinicians…RESNA plans to hold its 2015 annual conference at The Sheraton Denver Downtown. The submission deadline is Oct. 19 for workshops and instructional courses; Jan. 13 for scientific and student scientific papers; April 3 for student design competition registration; and April 17 for student design competition submission. 

WASHINGTON – Audits take the spotlight in Washington, D.C., this week as lawmakers seek to address ongoing concerns with Medicare’s audit system.

At a roundtable held today, July 9, by Sen. Bill Nelson, D-Fla., consultant and former AAHomecare exec Walt Gorski will testify on behalf of the Medical Equipment Suppliers Association (MESA) about the audit process and its impact on HME providers. Sen. Nelson is the chairman of the Senate Special Committee on Aging, which, among other tasks, reviews Medicare’s performance on an annual basis.

Then on July 10, the House Oversight and Government Reform Subcommittee on Energy Policy, Health Care and Entitlements, will hold a hearing to discuss concerns with the appeal process and evaluate potential reforms. Chief Administrative Law (ALJ) Judge Nancy Griswold will testify at the hearing, titled “Medicare Mismanagement Part II: Exploring Medicare Appeals Reform.” Griswold first raised the alarm over a massive backlog at the ALJ in December.

Back in February, the Office of Medicare Hearings and Appeals hosted a forum to discuss the backlog at the ALJ.

WASHINGTON – The Office of Medicare Hearings and Appeals (OMHA) has announced a pilot program aimed at helping providers resolve claims appealed to the administrative law judge (ALJ) level.

The OMHA earlier this year held a hearing to address the huge backlog of appeals at the ALJ level.

To qualify for the program, a provider must have a minimum of 20 claims or $10,000 tied up in appeals. The amount of each claim must be less than $100,000. 

Other requirements of eligibility: Claims must have been filed in 2013 and can’t be currently assigned to an ALJ, and providers must appeal all claims for the same service, according to an AAHomecare bulletin.

The program will rely on a settlement conference facilitator to mediate between providers and CMS. The facilitator does not make official determinations, but may help the appellant and CMS see the relative strengths and weaknesses of their positions, according to the U.S. Department of Health and Human Services website.

WASHINGTON – Reps. Renee Ellmers, R-N.C., and John Barrow, D-Ga., introduced a bill on Friday afternoon to reform Medicare’s audit program for HME.

H.R. 5083, the Audit Improvement and Reform Act (AIR Act), would require the MACs, RACs and other contractors performing audits to, among other things, reinstate clinical inference and judgment to reduce error rates. In 2009, when this practice was dropped, the error rate for HME skyrocketed from less than 10% of claims to more than 60% of claims, says Tom Ryan, president and CEO of AAHomecare.

“Common sense has been thrown out the window,” he said. “It has just become a matter of the technical components of the billing process.”

Earlier in the week, Sen. Bill Nelson, D-Fla., chairman of the Senate Special Committee on Aging, hosted a roundtable discussion on audits, and the House Oversight and Government Reform Subcommittee on Energy Policy, Health Care and Entitlements held a hearing to discuss the appeal process and potential reform.

Other components of the bill include reducing the document review period for all audits from five years to three years, excluding providers with low error rates from some or all audits during a two-year period, and establishing education and outreach programs for providers.

“A lot of providers have issues because they don’t know what the rules are—CMS is not clear,” said Jay Witter, senior vice president of public policy for AAHomecare. “This would set in stone what they need to do to follow the rules.”

The industry’s next moves include drumming up co-sponsors for the House bill, introducing a companion bill in the Senate and being at the ready when Congress takes up comprehensive reform on audits.

“There has been a lot of political pressure to take action, and this bill gives us the political power to be at the table,” Witter said.

In conjunction with the bill dropping, AAHomecare has launched a website, www.fixmedicareaudits.org, where visitors can download a copy of the bill and issue briefs, and learn how they can support the industry’s efforts.

“We believe this is doable,” Ryan said.

BALTIMORE – A new pilot program seeks to settle appeals that are stuck at the administrative law judge (ALJ) level, but is CMS ready to negotiate?

“I have clients consistently ask me if they can get into a settlement discussion at the very beginning,” said Stephanie Green, chief consulting officer & general counsel for Acu-Serve. “This is our first opportunity to make CMS come to the table.”

The Office of Medicare Hearings and Appeals (OMHA) launched the pilot to alleviate a massive backlog at the ALJ level. The pilot brings the provider and CMS together with an OMHA employee acting as a facilitator to try and work out a settlement.

The path to settlement won’t be easy, stakeholders say. First of all, the criteria for qualifying for the pilot are strict. Providers must have a minimum of 20 claims or $10,000 stuck at the ALJ level; they must appeal all claims for the same service; and they must have filed the claims, which can’t be already assigned to a judge, in 2013.

“I think from a DME perspective, that’s going to be a challenge,” said Kim Brummett, senior director of regulatory affairs for AAHomecare.

Secondly, the process will likely put the burden of proof on providers, stakeholders say. The OMHA facilitator won’t make official determinations on the merits of the claims, but “may help the appellant and CMS see the relative strengths and weaknesses of their positions,” according to a fact sheet on the program.

“The government has policies that must be followed,” said Wayne van Halem, president of The van Halem Group. “The ALJ, on the other hand, isn’t particularly bound by the policy, so there’s reason in the equation.”

CMS is not required to settle claims and both sides have the discretion to reject offers. If no settlement is reached, the appealed claims will return to the ALJ to await a hearing—which could take years.

“The clients I’ve had who are interested in this don’t want to wait three years,” said Greene.

PORT WASHINGTON, N.Y. – Drive Medical has acquired Dupont Medical, a manufacturer and distributor of healthcare products in France. Based in Frouard, Dupont manufactures and distributes everything from wheelchairs to homecare beds to patient lifts. The company also manufactures diagnostic devices, emergency equipment and medical instruments for doctors and other healthcare professionals. The deal will further expand Drive’s presence in Europe. In May, the company acquired several product lines from U.K.-based Days Healthcare.

The Compliance Team expands patient satisfaction service

SPRING HOUSE, Pa. – The Compliance Team has expanded enrollment in its web-based patient satisfaction reporting and benchmarking service to all DMEPOS providers, whether they’re accredited by The Compliance Team or another Medicare-approved organization. “Given Medicare’s and managed care’s emphasis on pay-for-performance and mandates for providers to prove their quality claims, we believe the time is right to expand our service,” stated Sandra Canally, founder and president, in a press release. The Compliance Team has been requiring the submission of patient satisfaction surveys on a quarterly basis since 1998, making its database the oldest and largest of its kind, the company stated in the release. To date, The Compliance Team has aggregated and benchmarked more than 1.3 million patient satisfaction surveys, garnering 10 million standardized data points from providers in all 50 states, Puerto Rico and the U.S. Virgin Islands. The Compliance Team is charging an introductory fee of $249 per year for the first location for providers that are not accredited by the company.

NovaSom obtains financing

DURAM, N.C. – NovaSom has secured a $7.5 million line of credit from Square 1 Bank to further its foothold in the sleep market. “After being vetted and approved through Square 1's diligence process, management's vision and plans to move into its next phase of development are validated,” said CEO John Spitznagel in a press release. NovaSom manufactures AccuSom, a home sleep test.

FDA warns Philips Respironics over Smart Monitor 2

MURRYSVILLE, Pa. – The U.S. Food and Drug Administration (FDA) has sent a warning letter to Philips Respironics about the batteries used in its Smart Monitor 2. The June 30 letter said batteries in the apnea monitor were not properly examined or tested “causing the units to constantly alarm, not allowing continuous monitoring of respiration, heart rate and oxygen saturation of infant and pediatric patients.” Philips says inspectors found “a limited number” of incorrectly wired battery packs and that the issue was addressed through a device recall, according to the Pittsburgh Post-Gazette. Philips says it has verified its supplier has changed its processes and is doing more inspection, according to the newspaper.

California man gets 121 months in jail for fraud

LOS ANGELES – Vahe Tahmasian has been sentenced to 121 months in prison after being convicted of conspiracy to commit health care fraud, six counts of health care fraud and six counts of aggravated identity theft, according to a press release from the U.S. Department of Justice. Between April 2009 and February 2011, Tahmasian and co-conspirator Erik Mkhitarian, owners of Orthomed Appliance, a DME supply company in West Hollywood, allegedly stole the identity of beneficiaries and doctors from patient files to submit fraudulent claims. Tahmasian, who was found guilty in March, submitted more than $1.5 million in claims to Medicare and received $994,036. He has been ordered to pay restitution, according to the release.

Pain device gets OK in Canada, eh

BILLINGS, Mont. – ExcelHealth has received approval to sell its TENS device, the iRelieve Pain Management System, in Canada. The device offers safe, drug-free pain management, according to a release. “People suffering from physical pain is truly an epidemic,” said CEO and iRelieve developer Mike Williams. “I am passionate about bringing to the marketplace access to OTC pain management products that truly help people.” ExcelHeath received U.S. Food and Drug Administration clearance earlier this year.

Big belly? You’re at increased risk of developing COPD

YARMOUTH, Maine – Obesity, especially excessive belly fat, is a risk factor for chronic obstructive pulmonary diseases (COPD), according to an article in the Canadian Medical Association Journal. A team of researchers in Germany and the United States looked at the relationship of waist and hip circumference, body mass index (BMI) and physical activity levels to new cases of COPD in a large group of men and women in the U.S. They looked at data on 113,279 people between the ages of 50 and 70 who did not have COPD, cancer or heart disease at the beginning of the study. During the 10-year follow-up period, 3,648 people developed COPD. People with large waist circumferences (110 cm or more in women and 118 cm or more in men) had a 72% increased risk of COPD. "Our findings suggest that next to smoking cessation and the prevention of smoking initiation, meeting guidelines for body weight, body shape and physical activity level may represent important individual and public health opportunities to decrease the risk of COPD,” researchers say.

HME revenues, profits to decline, report says

NEW YORK – The HME industry has a lot going for it, including a rapidly aging population, but that may not be enough to offset increased Medicare and Medicaid regulations, according to a new report from IBISWorld. Industry revenue is expected to decline at an annualized rate of 2.5% from 2009 to 2014, bringing down total revenue to $5.6 billion, the research firm says. Profit is expected to fall to 4.2% of revenue in 2014, down from 11.6% of revenue in 2009, it says. The biggest regulation that the HME industry has to contend with: competitive bidding, according to the report. “Moving forward, industry revenue is expected to continue declining due to federally mandated low rental prices, although the industry itself remains mature,” stated analyst Amal Ahmad in a press release.

Moneyline: ResMed, Altius

Altius Healthcare, a provider of home infusion and specialty infusion services, has been acquired by Amerita, a wholly owned subsidiary of PharMerica Corp. “The sale of Altius Healthcare to Amerita is a great opportunity for the company as it will allow us to better compete in the healthcare marketplace,” stated Kevin Nestrick, the founder and CEO of Altius, in a press release. “Amerita has the size and scale needed to win on a national level with a local network that our patients can count on.” Altius has two locations in Prescott and Tucson, Ariz…David Pendarvis, chief administrative officer and global general counsel for San Diego-based ResMed sold 5,000 shares of the company’s stock in a July 3 transaction. The stock was sold at an average price of $50.04 for a total transaction of $250,200. Pendarvis now owns about 69,207 shares of the company’s stock valued at about $3.5 million.

People news

Therapy Support has appointed Cliff Stepp as CEO. Stepp previously served as the company’s executive vice president. His goal as CEO: “lead Therapy Support on a path of brand expansion, growth and employee empowerment,” according to a press release.

WASHINGTON – AAHomecare has launched FixMedicareAudits.org to serve as one-stop shop for audit reform, the association announced this week. The cornerstone of the new site: H.R. 5083, The Audit Improvement and Reform Act (AIR Act), which was introduced by Rep. Renee Ellmers, R-N.C., on July 11. “The new site will serve as a rallying point for the HME community to come together in support of the AIR Act, which will apply common sense fixes to one of the most pressing challenges facing our industry today,” said AAHomecare President/CEO Tom Ryan. The site brings together AAHomecare’s multi-platform fight against audits, including its new *HME Audit Key, educational resources and Share Your Audit Story.

BALTIMORE – CMS late yesterday announced plans to recompete contracts for Round 2 of competitive bidding and the national mail-order program for diabetes supplies.

The agency says it has begun its pre-bidding supplier awareness program, and will announce the bidding schedule and education program this fall. Bidding is set to begin some time in the winter of 2015.

The original contracts for Round 2 are set to expire June 30, 2016.

CMS plans to include the following product categories in the recompete:

• Enteral nutrients, equipment and supplies

• General home equipment and related supplies and accessories (includes hospital beds and related accessories, Group 1 and 2 support surfaces, commode chairs, patient lifts and seat lifts)

• Nebulizers and related supplies

• Negative pressure wound therapy (NPWT) pumps and related supplies and accessories

• Respiratory equipment and related supplies and accessories (includes oxygen, oxygen equipment, and supplies; continuous positive airway pressure (CPAP) devices and respiratory assist devices (RADs) and related supplies and accessories)

• Standard mobility equipment and related accessories (includes walkers, standard power and manual wheelchairs, and scooters)

• Transcutaneous electrical nerve stimulation (TENS) devices and supplies

CMS has shuffled around some products in the recompete, including walkers, now in the standard mobility category, and has added TENS devices, which was included in the Round 1 recompete but not the original Round 2. Not included: infusion pumps and supplies, which were part of the Round 1 recompete.

The agency plans to run the recompete in the same geographic areas, but due to Office of Management and Budget updates there will be 90 metropolitan statistiscal areas (MSAs) instead of 91. Another change: It has redefined the CBAs so that no CBA includes more than one state.

CMS will also recompete the contracts for the national mail-order program for diabetes testing supplies for all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam and American Samoa.

For more info on the recompete: http://www.dmecompetitivebid.com/palmetto/cbic.nsf/DocsCat/CBIC%20-%20Main~DMEPOS%20Competitive%20Bidding%20Round%202%20Recompete%20and%20National%20Mail-Order%20Recompete%20Announced?opendocument

To see a list of specific items in each category:

http://dmecompetitivebid.com/palmetto/cbicrd2recompete.nsf/DocsCat/Product%20Categories

BALTIMORE – Keeping everyone on their toes, CMS has a few surprises up its sleeve for the Round 2 recompete of competitive bidding, say industry stakeholders.

For starters, competitive bidding areas (CBAs) in the Round 2 recompete won’t cross state lines. That means, although the recompete encompasses the same geographic areas as the previous Round 2, there are now 117 CBAs.

“CMS said it’s because of the licensure issues (we saw last time),” said Kim Brummett, senior director of regulatory affairs for AAHomecare. “I think this will save a lot of heartache. What’s challenging, though, is that now there are many more bids for some providers.”

CMS announced plans for the Round 2 recompete of competitive bidding and the national mail-order program July 15. The bidding schedule and education program begin this fall, with the bidding window expected to open in the winter of 2015.

CMS has also shuffled product categories. Providers will be submitting bids in eight product categories, compared to six in the Round 1 recompete. That’s because CMS split nebulizers and supplies (previously part of the respiratory category), and TENS devices and supplies (previously part of general DME) into their own separate categories.

Additionally, walkers have been shifted from general DME into the standard mobility category—a bad move, say stakeholders.

“We really believe walkers should be in the DME category,” said Brummett. “If you do power mobility, you don’t do walkers. If you do walkers, you don’t do power mobility.”

Completely missing from the product list: external infusion pumps and supplies, which were added in the Round 1 recompete. While there haven’t been any reports of widespread access issues, the complex nature of the therapy likely made CMS realize it was a poor candidate for bidding, say stakeholders.

Another surprise: CMS plans to start Round 2 recompete contracts July 1, 2016, and end them Dec. 31, 2018—shorter than the current three-year contracts.

Stakeholders aren’t sure why CMS plans to shorten the contract duration but surmise it may have to do with the agency’s proposal to bundle payments for certain HME starting in 12 metropolitan statistical areas on Jan. 1, 2015.

“It sounds like they may want to accelerate that process of applying bundled pay rates more globally,” said Cara Bachenheimer, senior vice president of government relations for Invacare.

With CMS going full speed ahead on competitive bidding, the industry can’t let up in its efforts to improve the program, say stakeholders. A recently introduced bill that would require bidders to obtain bid bonds currently has 21 co-sponsors; and the U.S. Small Business Administration (SBA) continues to look into the program following a June hearing.

“We’ve already seen Round 2 businesses going out of business,” said John Gallagher, vice president of government relations for The VGM Group. “The SBA is looking at it pretty solidly. They want some numbers from CMS and CMS has yet to respond.”

WASHINGTON – CMS’s proposal to allow contract suppliers to sell specific lines of business could jolt M&A activity in the HME industry, but not necessarily in a good way, industry watchers say.

As part of a proposed rule published in the Federal Register on July 11, CMS proposes “establishing an exception to the prohibition against subdividing a contract that would allow a contract supplier to sell a distinct company that furnishes a specific product category or (serves) a specific competitive bidding area.”

Industry watchers like Don Davis worry the plan would reward contract suppliers that submitted low-ball bids by increasing the value of their contracts.

“It’s like ticket scalping,” said Davis, president of Duckridge Advisors. “It gives providers a ticket for bidding artificially low rates, even though they never intended to play the game, and makes it easier for them to sell it for a profit, because there are fewer legal restrictions. It’s crazy.”

As part of the plan, CMS would: sever the product categories and bid areas that the company serves, along with the company’s location, from the original contract; incorporate those product categories, bid areas and location into a new contract; and transfer the contract to a new owner under specific circumstances.

The plan would apply to all current and future rounds of competitive bidding.

It’s true that where you stand on competitive bidding has a lot to do with whether or not you view the plan positively or negatively, but industry watchers say the plan makes sense for several reasons.

“I’ve had situations, for example, where a company has purchased a company whose contracts included beds and oxygen, but all they wanted was mobility,” said Denise Leard, a healthcare attorney with Brown & Fortunato. “They don’t end up doing a lot with beds and oxygen, but they’re still responsible for them. If they could sever them, that would be wonderful.”

As for CMS’s motive for such a proposal? Leard says the agency may have realized the cumbersomeness of having “one big contract.”

“In Tennessee, where there were instances of providers with contracts that didn’t have licensure or a location, there was some concern they could have their whole contract taken away,” she said. “What they ended up doing is taking away just that part. In a real-world situation, you need more flexibility.”

That flexibility may come in handy especially for providers with multiple locations across the country but one tax ID, and providers with 5% or more common ownership, industry watchers say.

“CMS is not throwing in the towel and saying anything goes, but attorneys like me can work with this kind of expansion to be able to do a lot,” said Neil Caesar, president of the Health Law Center.