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:
PORT WASHINGTON, N.Y. – Drive Medical’s acquisition of Medquip in July is another notch in the company’s belt in the respiratory product category.
When Drive Medical acquired Inovo/Chad Therapeutics in 2011, company officials said they were looking to make more acquisitions in the category. Where Inovo brought to the table oxygen conservers and regulators, Medquip brings nebulizers and disposable respiratory products.
“You have the asthma population that needs nebulizers, but also the COPD population, and as their disease progresses, they may need oxygen,” said Mitch Yoel, executive vice president of Drive Medical. “We have the ability to match products to patients based on their changing needs.”
Drive Medical’s next move in the respiratory product category: to introduce a 5-liter stationary concentrator, called the Pure Concentrator, and a transfilling device, called the Pure Fill. The products, which are currently being beta tested, will be on display at Medtrade in October.
Drive Medical was already a player in the nebulizer market, but Medquip, best know for its Airial line of pediatric nebulizers, “solidifies” the company’s position, Yoel says.
Medquip also brings new products with retail opportunities, such as digital blood pressure monitors, to Drive Medical’s line-up, he says.
Drive Medical has already moved Medquip’s inventory to its Atlanta distribution center, Yoel says.
For Bluffton, S.C.-based Medquip, being part of Drive Medical means having more to offer its customers, says Craig Bright, who owns Medquip and will become senior vice president of business development, respiratory products, for Drive Medical.
“It was going to be challenging in the future to be a niche player,” he said. “We’ve been lucky to have great success, but with the changes in the market, we were concerned we didn’t have the breadth of products. In a market going through a lot of changes, there are always winners and losers, and we feel that Drive is a winner.”
Those changes in the market, namely competitive bidding and audits, will drive continued consolidation among HME manufacturers, Yoel says. Just days after announcing the Medquip acquisition, Drive Medical announced that it acquired Dupont Medical, a manufacturer and distributor of a range of healthcare products in France.
“We’ve had quite a few acquisitions and you’re going to see quite a bit more,” he said.
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.
The bill already has strong bi-partisan support from Reps. Bruce Braley, D-Iowa, John Barrow, D-Ga., John Duncan, R-Tenn., and Mike Thompson, R-Pa., according to the North Carolina Association for Medical Equipment Services (NCAMES). The association’s executive director Beth Bowen and members Joey and Billy Tart of Family Medical worked closely with Ellmers to craft and introduce the bill.
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.
ROCHESTER HILLS, Mich. – Wright & Filippis said goodbye to 35 years of providing home medical equipment and respiratory services on June 30, when it sold that part of its business to Lincare.
“In Medicare’s eyes and the payers’ eyes, those businesses have moved to a commodity business,” said A.J. Filippis, CEO. “We decided we wanted to get back to our roots and focus on prosthetics and orthotics, complex rehab and our accessibility business.”
The family-owned Wright & Filippis, which celebrated 70 years in business in April, has a sizable presence in Michigan, with 32 locations. In 2012, for example, the provider received about $1.4 million from Medicare for oxygen concentrators and $496,234 for CPAP devices, according to the HME Databank.
The terms of the deal were not disclosed, but Filippis confirmed that Wright & Filippis had closed a few locations and laid off employees, although many of them were rehired by Lincare. Lincare will operate out of many of Wright & Filippis’s existing locations, he said.
“For the patients, it’s not going to look much different,” said Filippis. “A lot of these patients we’ve serviced for 15 or 20 years and we wanted to make sure the service levels were going to be consistent.”
Also driving the sale: competitive bidding. In Round 2, Wright & Filippis won only a few contracts, for oxygen, CPAP and negative pressure wound therapy.
The deal didn’t surprise industry analysts.
“Wright & Filippis has been struggling with the DME business since they didn’t win the awards they wanted,” said Don Davis, president of Duckridge Advisors. “And at the end of the day, at least in that part of the world, there’s nobody else to buy them. Lincare has the capital and they are taking advantage of the very low multiples in our industry.”
Although Lincare is gaining a big slice of market share in Michigan, local providers say they are not ready to throw in the towel.
“You are always concerned when competing with somebody that big,” said Kevin Druzinski, president of Motor City Medical in Madison Heights.“They bought the largest independent in Michigan and Wright & Filippis was very strong. Everybody just keeps rolling along and there’s opportunity every time there’s a misfortune like that.”
Wright & Filippis, meanwhile, plans to grow its remaining business, with plans to close on a couple of acquisitions this summer, said Filippis.
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.
ELYRIA, Ohio – Invacare has come back with what it believes is a more effective pricing policy for products marketed and sold over the Internet.
The biggest difference between the old policy, terminated May 22, and the new Minimum Advertised Price (MAP) Policy, introduced July 7: increased accountability, says Judy Kovacs, vice president of customer service and sales operations.
“The new policy has specific actions that we will take if an e-commerce provider doesn’t comply,” she said. “The old policy didn’t have specifics.”
Per the new policy, Invacare has specified minimum advertised prices for products that it has designated “MAP Products.” It’s a violation of the policy for an e-commerce provider to list advertised prices for such products that are lower than the prices specified by the company.
Upon first violation, Invacare reserves the right to place a shipment on hold for two business days and, upon second violation, to place a shipment on hold for 30 business days. Subsequent violations may result in sanctions for longer periods of time, or suspension or termination of accounts.
The policy allows Invacare to strike a balance between protecting its brick-and-mortar providers and encouraging e-commerce providers to market and sell its products, Kovacs says.
“Brick-and-mortar companies are out there doing a great service, but we realize other channels exist,” she said. “E-commerce is a strong purchasing solution for people in this country.”
Kovacs added: “E-commerce providers also want a fair playing field.”
The policy also allows Invacare to “maintain the integrity of our products,” Kovacs says.
“We're not in the game of selling on price," she said. "We have value-add, quality products.”
Invacare will use a service to monitor compliance with its MAP Policy. The company also has staff, internally, that is responsible for managing the policy, Kovacs says.
Ultimately, however, it’s at the discretion of the e-commerce provider to adhere to the policy, she acknowledges.
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.
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 – 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.
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 – 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.
ELYRIA, Ohio – Invacare has introduced a new pricing policy for providers that sell and market its products over the Internet in the United States.
About one month after terminating its existing Lowest Advertising and Marketing Prices (LAMP) Guidelines, the company on July 7 introduced a new Minimum Advertised Price (MAP) Policy.
Per the policy, Invacare will specify a minimum advertised price for certain products that it designates, from time to time, as “MAP Products.” It will be a violation of the policy for an e-commerce provider to list advertised prices for such products that are lower than the prices specified by the company.
(For the current list of MAP products and pricing, go here.)
Invacare says it is within the discretion of the e-commerce provider to adhere to the policy. However, if a provider violates the policy, the company reserves the right to, upon first violation, place a shipment on hold for two business days and, upon second violation, place a shipment on hold for 30 business days. Subsequent violations may result in sanctions for longer periods of time, or suspension or termination of accounts.
Invacare says the new policy encourages e-commerce providers to invest in marketing, pre-sales and post-sales services, and support for the products, and promotes the “premium status” of the company’s products.
“We must continue to recognize those providers who offer superior customer service and product selection of a broad level, and that is the overriding purposed of this policy,” stated Judy Kovacs, vice president of customer service and sales operations, in a press release.
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.
YARMOUTH, Maine – In the year since Round 2 of competitive bidding was implemented in 91 cities, the HME industry has seen a rapidly shrinking provider base.
In a story that’s being retold across the country, provider Rich King says he will wind down operations at ProMed DME on July 31st.
“It’s sad,” said King, CEO of the 30-year-old, family-owned company in Los Alamitos, Calif., a Round 2 competitive bidding area (CBA). “We had a good business for a lot of years and employed a lot of people—we took care of them and their families.”
Although there is no hard and fast data, there are plenty of anecdotes of providers closing shop or merging with other struggling providers in the past year.
ProMed had contracts for wheelchairs and low air loss mattresses, but King said Medicare makes it too difficult to qualify patients for equipment any more. So ProMed has dumped Medicare and will merge with another local provider.
“This company was the same as me—about to shut the doors,” he said. “We figured we’d consolidate expenses and with their sales we’d make a profit in the next two to three months.”
Without contracts, American Medical Equipment, which is located inside a hospital, turns away patients every day.
“They should never have started this bidding program,” said Masooma Tiwana, president of the Memphis, Tenn.-based company. “Patients are having trouble getting equipment, and we hear all the time that companies are shutting down because there’s no business.”
The one-year anniversary of Round 2 also means the time is up—or nearly so—for providers that opted to grandfather existing patients for certain HME.
“Grandfathering is a slow death,” said Doug Coleman, CEO of Longmont, Colo.-based Major Medical Supply. “Even if you’ve grandfathered patients, you don’t get to add new patients. The patients are dying or no longer need equipment so the patient count dwindles month over month.”
Although it’s hard to believe, the possibility of a third round of competitive bidding is just around the corner. That has providers worried that access issues will worsen.
“We can’t afford to lose any more players,” said Steve Ackerman, owner of Spectrum Medical in Silver Spring, Md. “There’s 10,000 people a day turning 65 and we’ve thinned the ranks down to the very minimal level.”
LEWISVILLE, Texas – Provider Tom Polston received his draft notice 30 days after he graduated from college. He spent 10 months in Vietnam’s central highlands in 1969 and, upon discharge, “buried everything” for decades. In May, he traveled to North Carolina to reunite with his fellow soldiers and the Vietnamese translator who helped them communicate with locals during their tour. The former first lieutenant and owner of Specialty Medical Sales spoke with HME News recently about his mission in life.
HME News: What made you look up your Vietnam buddies?
Tom Polston: About two years ago I had a lot of slide format pictures (from Vietnam) converted to digital. I’d never shared them with anybody. I thought, “There’s a story here.” I decided to see if I could find some of my old teammates. After six or seven days, by pure chance, I found my second lieutenant. That started a communication. One thing I tried to find out was, “Where is our Montagnard interpreter, Phian Siu?” Everybody had bits and pieces of information—they thought he got to the states. I made it my mission to find him.
HME: And he had settled in North Carolina?
Polston: He and his wife arrived there in 1988 or ’89. His son couldn’t get out. I rounded up four other guys that knew him in 1968-1970 and we agreed to meet him. He looked thinner and older, of course, but he still had that sparkle in his eyes. He had advanced liver cancer (Siu died in June). He probably contracted hepatitis C after he was taken prisoner in 1973.
HME: How has your military background served you in the HME industry?
Polston: In my 20s, I didn’t understand about building relationships, but clearly we did that in Vietnam. We were five Americans surrounded by everyone else. When I came back I felt like I had to put my nose to the grindstone so I got an MBA. After getting kicked around the corporate world for many years, I wanted to do something myself. I bought this floundering company, Specialty Medical Sales, in 1994, and tried to build a good quality team and do it the morally responsible way. If you do that, people think highly of you and they tell other people.
HME: What is your take on the Veterans Affairs scandal?
Polston: It’s been that way for a long time. It goes back to congressmen and political appointees and cronyism. I had to go to a veterans hospital in 1972. It was a dingy experience, just the smell, the look, the wait.
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.
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 – 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.
ELYRIA, Ohio – Invacare is sponsoring the National Veterans Golden Age Games being 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.”
The games are a multi-event sports and recreational competition for older veterans. Veterans compete in sports such as swimming, cycling, horseshoes, bowling, field events and air rifles.
STRONGSVILLE, Ohio, and NORWELL, Mass. – Roscoe Medical and Carex Health Brands announced today 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.
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 – Medicare’s mail-order program for diabetes supplies has had a dramatic impact on the market, as evidenced by a pair of recent reports from the Office of Inspector General (OIG).
“This is a rough look at what’s available in the marketplace and it doesn’t represent what was available in the marketplace prior to bidding,” said Andrea Bergman, a vice president with McDermott+Consulting, the lobbying subsidiary of a law firm that represents the Diabetes Access to Care Coalition.
The reports looked at Medicare mail-order market shares of test strips in the three months before and after the July 1, 2013, implementation of the national mail-order program. Before the program, two types of strips accounted for 34% of the mail-order market share; after, two types of strips accounted for 45% of the market share.
The top strip in both cases: Prodigy’s AutoCode, which accounted for 23.9% of the market share. By contrast, for the three months ended December 2009, Prodigy’s AutoCode comprised 2.3% of the market, according a similar OIG report in 2010.
Such a spike in market share could be evidence of providers switching beneficiaries to lower-priced products, say stakeholders.
“You would never see a bunch of beneficiaries just one day say, ‘You know what, let’s all shift tenfold to this new available product,’” said Bergman. “You end up with a market where the suppliers are controlling the usage—not the beneficiaries, not the physicians.”
What’s more: the Medicare Improvements for Patients and Providers Act (MIPPA) requires suppliers to demonstrate that their bid covers at least 50%, by volume, of all types of test strips. The dramatic shift in market share could point to continued decreased access to major brands in any future rounds of the program, say stakeholders.
“The goal of the provision is to ensure that patients have access to the products they are currently using,” said healthcare attorney Seth Lundy, a partner with King & Spalding. “The OIG study shows almost no (major) branded products. That would potentially affect how suppliers can have successful bids without any branded products in their bids whatsoever.”
That, in turn, could drive the single payment amounts—currently at $10.41 per box of 50 strips—and the number of suppliers even lower, says Lundy.
“A lot of those contract suppliers are struggling to be able to stay in business at the bid rates and there do not seem to be a lot of suppliers looking to get into the market at the bid rates,” he said. “That’s a real issue in terms of whether there’s going to be a sufficient amount of bidders in Round 3.”