WASHINGTON – President Obama’s fiscal year 2015 budget includes proposals to limit Medicaid spending on DME and to ramp up Medicare fraud efforts.
On Medicaid spending, the budget explains, “States have experienced challenges in preventing overpayments for DME. Starting in 2015, the budget would limit federal reimbursement for a state’s Medicaid spending on certain DME services to what Medicare would have paid in the same state for the same services.”
This is the third year that Obama has tried to limit Medicaid spending on DME, according to The VGM Group.
The Office of Inspector General (OIG) has released a string of reports saying that state Medicaid programs could see significant savings by aligning their pricing with Medicare’s, particularly its competitive bidding pricing. A report in January, for example, states that Medicaid programs could have saved 23%, or $62 million, if they paid the median competitive bidding rates for incontinence supplies in 2012.
The budget scores this proposal to save $3.135B over 10 years, from 2015-2024.
On fraud, the budget proposes requiring prior authorizations for power mobility devices and advanced imaging—a move that could be expanded to other items and services at high risk of fraud and abuse.
CMS in September 2012 launched a demonstration project in seven states requiring prior authorizations for power mobility devices. The agency reported in December that the demo reduced overall expenditures in those states from $12 million in September 2012 to $4 million in September 2013.
“We have almost a year and a half experience with the program,” AAHomecare stated. “We are working with CMS to make necessary changes and continue to advocate for improvements. However, the budget proposal is very vague, so it’s unclear how it would be implemented.”
Also on fraud, the budget proposes modifying the documentation requirement for face-to-face encounters for DME claims. CMS is expected to start enforcing a face-to-face requirement for DME some time this year. The requirement went into effect July 1, 2013.
“The budget is not law,” VGM stated in a bulletin. “The House and Senate will play a key role in determining which or any of the provisions discussed above will actually be implemented.”
NEW YORK – The United Spinal Association and a group of manufacturers have banded together to ensure people with disabilities have access to needed supplies.
The newly formed Urology Coalition is particularly concerned about the impact of competitive bidding, which it says limits patient access, and the future expansion of the program to include urologicals.
The coalition will also work to ensure access under Medicaid and private insurances.
In general, the Urology Coalition’s mission is to act on health policy matters that:
• Maximize function and independent living for people with disabilities;
• Provide people with disabilities with their choice of, and access to, prescribed and medically appropriate urological medical technology and supplies; and
• Ensure appropriate coding, coverage and payment.
In addition to manufacturers, the coalition will include consumers, disability advocates, clinicians and physician groups.
Members of the Urology Coalition are: ABC Home Medical, Adapta Medical, CR Bard, Coloplast, Convatec, Cure Medical, Hollister, McKesson, Teleflex Medical, UroMed, Wellspect Healthcare, Simon Foundation for Continence and the United Spinal Association.
WATERLOO, Iowa – The VGM Group has received 280 replies so far for its online competitive bidding survey, and it doesn’t want to stop there.
The group created the survey to make it easier for providers to respond to CMS’s recent request for public comment on a proposal to expand the competitive bidding program nationwide in 2016. CMS on Feb. 24 published an advanced notice of proposed rulemaking seeking input on developing a methodology to adjust rates in non-bid areas based on bid rates; and on bundling payments for certain DME, including complex rehab and enteral nutrition.
VGM says its survey clarifies the six questions asked by CMS. It will forward the results to the agency by the March 28 deadline.
MUNDELEIN, Ill. – Medline Industries will open a new, state-of-the-art distribution center in Lincoln County, N.C., in early 2015, the manufacturer/distributor of medical and surgical supplies announced March 3.
Medline expects to begin construction on the $18 million, 400,000-square-foot center this spring. The center will be located in Lincoln County Industrial Park and will create about 40 new jobs.
When the center opens, Medline will have more than 40 distribution centers throughout the United States, along with 19 manufacturing facilities. It has a team of 1,200 sales reps to support its line of 350,000 medical and surgical products.
The center will be constructed using the latest energy efficient technology and undergo LEED (Leadership in Energy and Environmental Design) certification review. Features will include motion sensors to keep lights off in aisles when not in use, 200 skylights, and super-sized fans to reduce dependency on air conditioning and heating.
Medline will use the center to service hospitals, nursing homes, surgery centers, home care agencies and other healthcare providers throughout North Carolina and surrounding states. The company serves as the primary distributor to more than 450 major hospitals and healthcare systems in the U.S.
In 2013, Medline’s sales increased 13% to $5.8 billion.
WASHINGTON – Last week’s proposal to expand competitive bidding nationwide was likely a rude awakening for HME providers who have been sitting on the sidelines thinking that the program wouldn’t directly affect them, say stakeholders.
“Many folks thought it was going to crash and burn,” said John Gallagher, vice president of government relations for The VGM Group. “Folks that haven’t been engaged better get engaged.”
Under the Affordable Care Act, CMS is required to either expand the bid program or apply bid rates to non-bid areas by 2016. In an advance notice of proposed rulemaking published Feb. 24, the agency seeks comments on developing a methodology to adjust rates in non-bid areas based on bid rates; and on bundling payments for certain DME, including complex rehab and enteral nutrition.
Stakeholders are particularly concerned about the prospect of bundled payments.
“Is their whole goal just to reduce payment levels, which is what you always suspect,” said Cara Bachenheimer, senior vice president of government relations for Invacare. “Are they looking for specific directions or just creative ways to change the payment methodology? There’s not a sufficient amount of information.”
The bundled payments would include all related equipment, supplies and service. That would make for difficult business decisions for providers, say stakeholders.
“How do I know how long this person is going to need this equipment or how many supplies they will need,” said Denise Leard, an attorney with Brown & Fortunato.
Nothing in the proposal seems to address the underlying problems with the existing program, including lack of transparency and non-binding bids, say stakeholders.
“We’re analyzing the proposal and the statute itself,” said Jay Witter, vice president of government affairs for AAHomecare. “We’ve got some concerns with the way it’s written. We’ve already talked to members of Congress about it and we need to build as much pressure as possible.”
YARMOUTH, Maine – In the wake of the Feb. 12 forum on audits, the big question is: Where does the HME industry go from here?
From a legal perspective, one of the few options is a constitutional challenge that argues the backlog in processing appeals and the delay in assigning cases to the administrative law judges (ALJs) are obstructing due process, says healthcare attorney Edward Vishnevetsky.
“But that’s an uphill and costly battle,” said Vishnevetsky, an associate with Munsch Hardt. “There are national and state groups that want to make it happen, but they don’t have the financial resources. Individual providers and manufacturers have to come up with a way to do it.”
In light of that, Vishnevetsky believes there are three keys to leveraging the momentum from the forum to forge real change: 1.) HME stakeholders need to align themselves with other Medicare Part B providers to come up with a “concerted effort”; 2.) When lobbying lawmakers, they need to make clear that they seek relief legislatively because the courts have lack of jurisdiction legally; and 3.) they need to take their case to the national media.
“If this story went on CNN, what’s happening to providers would get a lot more traction,” he said.
AAHomecare’s Tom Ryan says the association is working on all of that and more, including legislation.
“We’re trying to come up with legislative language that we can get several groups to sign on to—it’s becoming such an issue for home health, as well,” said Ryan, president and CEO. “We’re getting the final draft reviewed and then we plan to go to the executive committee with it.”
AAHomecare is also trying to arrange a sit-down meeting with stakeholders, Chief ALJ Nancy Griswold and CMS officials, Ryan says.
“While we have to be prepared with legislation, we want the olive branch out and we want to try and work within the agency,” he said.
CHEYENNE, Wyo. – When one of Michelle McMahon’s clients moved from Wyoming to Mexico and began experiencing pain, she could not simply go adjust his seating system. So he asked her if she had Skype.
“He said, ‘Could I have you at least see me in my chair once over the computer?’” said McMahon, president of Frontier Access & Mobility. “Sure enough, I could see him and he could see me.”
On Skype, McMahon talked his Mexican therapist through a mat evaluation to determine how to modify the system. The therapist made adjustments to keep the patient comfortable until new parts arrived from Wyoming. McMahon’s client feels better, she says, thanks to technology.
Telerehab is the future of healthcare and rehab services, says University of Pittsburgh Associate Professor Mark Schmeler, who has studied the field.
“There’s no denying that’s how a good portion of healthcare is going to be delivered,” he said.
The HME industry has been slower to adopt telerehab because it’s not typically funded, but that doesn’t mean providers like McMahon aren’t testing the waters, Schmeler said.
“It’s still sort of the wild west,” he said. “People are doing different things, whatever works. It’s all at the homegrown phase of telerehab for wheelchairs.”
In a rural state like Wyoming, technology can be a savior, not only for McMahon but also for her clients. She mentioned another client whose back-up chair had become too small.
“I said, ‘I don’t have time to drive five hours to help you guys—we’ve got to let technology help us,’” she said.
Again, using Skype, McMahon walked a therapist through a mat evaluation and got the measurements she needed to deliver a new chair.
“This isn’t going to work for everybody, but I think it’s going to work well,” she said. “The funding’s just not there to travel two to three hours for one piece of equipment.”
SEWELL, N.J., and EXETER, Pa. – A strategic alliance announced last week will make it easier for providers to offer Active Controls products on Pride Mobility/Quantum Rehab power wheelchairs.
Per the alliance, providers can order a Pride/Quantum power wheelchair with, say, an Active Controls JoyBar already installed.
“That was the greatest hurdle we had in the U.S. market,” said Jordan Flowers, general manager at Active Controls. “Providers were reluctant to install the products themselves or they didn’t have the technical capabilities. This is something that will help overcome that.”
When providers order Pride/Quantum wheelchairs with Active Controls products, Pride/Quantum will ship the wheelchairs to Active Controls for installation and then to providers fully assembled.
The alliance with Pride/Quantum is a natural fit for Active Controls, Flowers says, because the majority of the company’s products end up on their wheelchairs, particularly the Q6 Edge.
“We’re compatible with pretty much everything, but the bulk of our wheelchairs have been Pride and Quantum,” he said. “They’re one of the biggest players in the industry.”
For Pride/Quantum, the alliance allows them to tap into a growing demand for Active Controls products. The JoyBar, for example, has the allure of allowing users to drive a power wheelchair much like a scooter, using a steering bar and both hands.
“We started to get more and more requests,” said Jay Brislin, vice president of Quantum. “They’re in a stage where they’re starting to get a groundswell.”
Both companies plan to leverage the co-marketing and co-selling opportunities that the alliance creates.
“It advances both sides,” Brislin said. “It’s all about getting clients some good devices and making them more independent.”
Active Controls, which will mark its third year in business in April, hopes the alliance will give it the boost it needs in the U.S. market, where most of its products aren’t paid for by Medicare, but sometimes by other payers like Medicaid and Veterans Affairs.
“Europe accounts for more than 50% of our business right now,” Flowers said. “Over there, the industry isn’t in as much upheaval as it is here.”
ELYRIA, Ohio – Lou Slangen, Invacare’s executive vice president and chief product officer, will retire at the end of February after 27 years with the company, according to a Feb. 27 release. John Remmers, senior vice president of global supply chain and operations since 2010, will take over responsibility for North American commercial operations, according to the release. Since he joined Invacare, Remmers has also overseen global engineering and commercial operations for China and Top End. “He has developed a passion for the home and long-term care markets that we serve, and we believe he is the right person with the right skills and experience to lead Invacare’s North American business,” said Gerald Blouch, president and CEO, in the release. Blouch applauded Slangen’s years at Invacare, saying, “During his years of service, he has been an incredible advocate for the homecare industry and the difference it can make in people’s lives.”
All-States blames audits, cuts for layoffs
FLETCHER, N.C. – All-States Medical Supply has laid off eight employees due to soaring audit rates and recent cuts in Medicare reimbursement, according to a release. When All-States won a contract as part of the national mail-order program for diabetic supplies in 2013, it planned to hire 50 employees to meet an increase in demand. But now, along with the steep cuts associated with the program, the company is also dealing with audits tying up hundreds of thousands of dollars in limbo, said President Jason de Los Santos in the release. “The layoffs were a devastating decision for us, but one we had to make to keep our head above water,” he said. All-States is diversifying into retail stores and therapeutic shoe fittings, as well as adding an on-site pharmacy to take private insurance for diabetic supplies, according to the release.
Fraud program posts record-breaking year
WASHINGTON – The Health Care Fraud and Abuse Control Program recovered $4.3 billion in fiscal year 2013 and $19.2 billion in the last five years. That’s up from $4.2 billion in fiscal year 2012 and $9.4 billion in the previous five years, according to an annual report released Feb. 26. “These impressive recoveries for the American taxpayer are just one aspect of the comprehensive anti-fraud strategy we have implemented since the passage of the Affordable Care Act,” said Department of Health and Human Services (HHS) Secretary Kathleen Sebelius in a release. A highlight from 2013: Strike Force teams coordinated a takedown in eight cities against 89 individuals, including doctors, nurses and other licensed medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $223 million in false billings.In 2013, the Department of Justice (DOJ) also opened 1,013 new criminal and 1,083 new civil healthcare fraud investigations, and helped to convict 718 defendants of healthcare fraud-related crimes.Also as part of fraud prevention efforts, CMS has been revalidating 1.5 million enrolled providers and suppliers under Affordable Care Act screening requirements. As of September 2013, CMS has revoked the ability of 14,663 providers and suppliers to bill Medicare.
Aeroflow signs four new insurance contracts
ASHEVILLE, N.C. – Aeroflow Healthcare has signed new insurance contracts with Cypress Care, Arbor Health, Indiana University and NJ Medicaid, according to a Feb. 28 release. The DME provider is now in-network with 24 state Medicaid plans and hundreds of other insurance providers. As reimbursement cuts, bidding and audits drive providers to close their doors, the contracts allow Aeroflow to step in, said Ryan Bullock, director of sales and marketing. “The additional contracts will position Aeroflow to ensure these patients are still serviced,” he said. The company’s goal is to continue growth nationwide, according to the release.
Insulet grows revenues in Q4
BEDFORD, Mass. – Insulet’s revenues in the fourth quarter of 2013 were $68.5 million, an increase of 19% over the same period in 2012, the company announced Feb. 17. Revenues grew on patient adoption of the OmniPod insulin pump, and despite a reduction in revenues from subsidiary Neighborhood Diabetes, due to competitive bidding. Gross profits for the quarter were $33 million, compared to $25.3 million over the same period in 2012. For the year ended Dec. 31, Insulet’s revenues were $247.1 million, a 17% increase over 2012. Gross profit for the year was $112.4 vs. $92.3 million.
The Compliance Team celebrates 20 years
SPRING HOUSE, Pa. – This year marks the 20th anniversary of The Compliance Team, the only woman-owned Medicare-deeming authority to accredit DMEPOS providers, according to a release. Founder and President Sandy Canally helped to drive a number of improvements to the accreditation process, including the industry’s first plain-language service and product-line specific quality standards, according to the release. “My intent was to make it easier for everyone within an organization to buy into the process by combining a readily-recognizable quality branding message with a third-party validated accreditation tool,” she said. The Compliance Team has accredited thousands of healthcare organization in the U.S., Puerto Rico and the U.S. Virgin Islands.
CMS issues face-to-face reminder
BALTIMORE – CMS has released a “Dear Physician” letter that providers can use to remind doctors they must conduct face-to-face examinations within six months of ordering certain DME items prescribed on or after July 1, 2013. CMS has repeatedly delayed enforcement of the face-to-face rule, but not the written order prior to delivery requirement. In the Feb. 21 letter, CMS said face-to-face examinations are necessary in the following cases: for purchases and initial rentals; when there is a change in the order; when an item is replaced; when the supplier changes; when state law requires it; and on a regular basis only when specified in documentation. It also outlined prescription, and date and timing requirements
Gov’t agrees to re-examine ResMed patents
SAN DIEGO – The U.S. Patent and Trademark Office has agreed to re-examine five ResMed patents in response to challenges filed by Apex Medical, the manufacturer has announced. Apex had filed challenges against ResMed in August 2013 for six patents related to CPAP machines and masks. It’s the latest move in an ongoing patent battle between ResMed and Apex. On Feb. 19, Apex filed challenges to four patents in European and German patent offices. In November, ResMed won preliminary injunctions in Germany against both Apex and BMC Medical, prohibiting them from selling or making certain products without a court order.
Aeroflow expands into South Carolina
ASHEVILLE, N.C. – Aeroflow Healthcare has acquired Easley, S.C.-based Air-Care Home Health, extending its footprint into Greenville, Spartanburg and surrounding areas. As a result of the acquisition, Aeroflow will be the primary provider of oxygen supplies and services to Air-Care patients. Aeroflow will also offer the company’s patients other DME, including vents and negative pressure wound therapy. Aeroflow cites competitive bidding as the driver behind its growth. “This program has presented us with new opportunities,” stated Josh Hill, director of business development, in a press release. “We are actively looking for more strategic locations, acquisitions and expansion opportunities.”
Obama proposes cut to Medicare Advantage
WASHINGTON – The Obama administration has proposed cutting reimbursements rates for Medicare Advantage (MA) plans by 1.9% in 2015, Kaiser Health News reports. Insurers argue, however, that the cut is much bigger when you combine it with new fees on health plans related to healthcare reform, a phase-out of the “star rating” system that helped buffer cuts from previous years and additional cuts due to sequestration, according to the news organization. Last year, CMS proposed a 2.3% rate cut for 2014, but after heavy lobbying, the agency ended up increasing rates by 3.3%. Enrollment in Medicare Advantage plans rose in 2014 by 8.9% to 15.9 million enrollees, according to consulting firm Avalere Health.
CMS to test ICD-10 claims
WASHINGTON – CMS plans to conduct testing of ICD-10 billing submissions across a wide range of fee-for-service providers. In a recent MLN Matters article, the agency said it will offer acknowledgment testing from March 7-10 to allow providers, billers and clearinghouse to determine whether CMS will be able to accept their claims with ICD-10 codes. After analyzing the results, CMS may offer additional weeks of acknowledgement testing. This summer, CMS will offer end-to-end testing to a small sample group of providers. As of Oct. 1, 2014, healthcare claims must contain ICD-10 codes.
Short takes: RESNA, NovaSom
Former Indy 500 driver Sam Schmidt, founder of the Sam Schmidt Paralysis Foundation, will open RESNA’s “Racing Towards Excellence in AT” conference. Held June 13-15 in Indianapolis, the conference will also feature Gregor Wolbring, a University of Calgary scholar of ableism ethics and governance, and Cole Galloway, a University of Delaware pediatric mobility researcher…NovaSom, provider of the AccuSom home sleep test, has joined the American Sleep Apnea Association (ASAA) industry roundtable, according to a release. Corporations on the roundtable support the ASAA mission, activities and programs.
People news: Changing of the guards at ACU-Serve, Jaysec
ACU-Serve Co-founder Jim Knight is now CEO. Co-founders Angie Barone and Tim Barone have left the company to pursue other opportunities. Other changes include Tom Meadows as business partner, Cindy Hoyt as COO, and Samantha Haynam and Yvette Nugent as account managers. Additionally, Stephanie Greene will head up an auditing and consulting division…Gibran Ameer is the new chief operating officer of Jaysec Technologies. He will oversee operations for value and efficiency. Ameer most recently worked with Medical Services of America. “He brings vast knowledge and experience within the home care industry along with a commitment to innovation and client services critical to the success of Jaysec,” said Dan Dillon, CEO.
FLETCHER, N.C. – All-States Medical Supply has laid off eight employees due to soaring audit rates and recent cuts in Medicare reimbursement, according to a release.
When All-States won a contract as part of the national mail-order program for diabetic supplies in 2013, it planned to hire 50 more employees to meet an increased in demand.
But now, as the company is dealing with the steep cuts associated with the program, audits hold hundreds of thousands of dollars in limbo, said President Jason De Los Santos in the release.
“The layoffs were a devastating decision for us, but one we had to make to keep our head above water,” he said.
All-States is diversifying into retail stores and therapeutic shoe fittings, as well as adding an on-site pharmacy to take private insurance for diabetic supplies, according to the release.
WASHINGTON – The Health Care Fraud and Abuse Control Program recovered $4.3 billion in fiscal year 2013 and $19.2 billion in the last five years.
That’s up from $4.2 billion in fiscal year 2012 and $9.4 billion in the previous five years, according to an annual report released Feb. 26.
“These impressive recoveries for the American taxpayer are just one aspect of the comprehensive anti-fraud strategy we have implemented since the passage of the Affordable Care Act,” said Department of Health and Human Services (HHS) Secretary Kathleen Sebelius in a release.
A highlight from 2013: Strike Force teams coordinated a takedown in eight cities against 89 individuals, including doctors, nurses and other licensed medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $223 million in false billings.
In 2013, the Department of Justice (DOJ) also opened 1,013 new criminal and 1,083 new civil healthcare fraud investigations, and helped to convict 718 defendants of healthcare fraud-related crimes.
Also as part of fraud prevention efforts, CMS has been revalidating 1.5 million enrolled providers and suppliers under Affordable Care Act screening requirements. As of September 2013, CMS has revoked the ability of 14,663 providers and suppliers to bill Medicare.
WASHINGTON – CMS announced Feb. 24 that it seeks public comments on how to take its competitive bidding program for DME nationwide on Jan. 1, 2016.
“While the methodology will be proposed in future rulemaking, CMS is first requesting comments on several aspects that it would consider in developing a methodology to adjust DMEPOS fee schedule amounts or other payment amounts in non-competitive areas based on the DMEPOS competitive bidding payment information,” CMS states in a fact sheet.
Specifically, the agency seeks comments on:
- Do the costs of furnishing various DMEPOS items and services vary based on the geographic area in which they are furnished?
- Do the costs of furnishing various DMEPOS items and services vary based on the size of the market served in terms of population and/or distance covered or other logistical or demographic reasons?
- Should an interim or different methodology be used to adjust payment amounts for items that have not yet been included competitive bidding? For example, items such as transcutaneous electrical nerve stimulation (TENS) devices have only been phased into the nine Round 1 areas thus far.
CMS also seeks public comment on whether it should consider simplifying the payment rules under competitive bidding for certain DME and enteral nutrition by making one monthly payment for all related items and services needed each month.
“Medicare allows additional payments for numerous supplies and accessories furnished for use with beneficiary-owned DME and eternal nutrition equipment,” CMS states. “Complicated claims processing systems and edits are needed to count rental months, prevent duplicate payments for thousands of separately coded items, and track utilization of ongoing replacements of supplies and accessories.”
Specifically, the agency seeks comments on:
- Are lump sum purchases and capped rental payment rules for DME and enteral nutrition equipment still needed?
- Are there reasons why beneficiaries need to own expensive DME or enteral nutrition equipment?
- Would there be any negative impacts associated with continuous bundled payments for enteral nutrients, supplies and equipment or for certain DME?
To read CMS’s advance notice of proposed rulemaking on how to expand competitive bidding, go here:
http://www.ofr.gov/OFRUpload/OFRData/2014-04031_PI.pdf. The agency expects the notice to be published in the Federal Register on Feb. 26.