WASHINGTON – It appears HME providers will now be able to repair equipment, such as power wheelchairs, without having to find the original medical necessity documentation from the original provider, AAHomecare reports.
If Medicare paid for the base equipment initially, medical necessity for the equipment has been established, according to the association’s initial reading of new guidance from CMS on the matter.
“When reviewing DMEPOS claims for repairs, contractors shall only review for continued medical necessity of the item and necessity of the repair,” CMS states. “Contractors shall not expend resources to determine if the requirements for the initial provision of the DMEPOS item as/when it was originally ordered were met.”
The guidance applies to all DME equipment owned by Medicare beneficiaries as of Nov. 4, 2014.
CMS offered the following example in its guidance: “Even though a face-to-face encounter is required for the initial provision of certain wheelchairs, it is not needed for the repair of a wheelchair already covered and paid for by Medicare. However, documentation from the physician or treating practitioner that indicates the wheelchair being repaired continues to be medical necessary is required. For this purpose, documentation is considered timely when it is on record in the preceding 12 months, unless otherwise specified in relevant Medicare policy.”
AAHomecare heralded the guidance as a “step in the right direction toward fixing the convoluted and confusing documentation requirements.”
“From patient complaints to members of Congress, it has taken many voices to help CMS understand that the current state of medical equipment repair is unacceptable,” stated President and CEO Tom Ryan in a release.
Issues with repairs, especially for power wheelchairs and especially in the wake of competitive bidding, have been well documented by AAHomecare, People for Quality Care and even the mainstream press.
SAN DIEGO and LAKE WALES, Fla. – An administrative law judge at the International Trade Commission (ITC) on Aug. 22 made an initial ruling on ResMed’s claims that Chinese manufacturer BMC Medical and its U.S. distributor 3B Medical have infringed on a number of its patents.
ResMed reports that Judge Thomas Pender found that BMC/3B’s InH2 humidifier and four of its masks (iVolve nasal mask, iVolve N2 nasal mask, Willow nasal pillows mask, and iVolve full face mask) infringe ResMed patents.
BMC/3B points out, however, that the judge agreed to invalidate three out of four of ResMed’s claims on the humidifier. Because this is an initial ruling, BMC/3B says it plans to petition the ITC to invalidate the remaining claim to completely clear its CPAP devices.
The ITC isn’t scheduled to make a final decision on the case until December.
While Pender has recommended that the ITC ban BMC/3B from importing or selling any of the infringing products in the U.S., BMC/3B says the ruling will have no impact on its ability to manufacture and distribute product going forward.
“Our product design teams have redesigns ready and molds prepared to move new designs into production as needed,” said Alex Lucio, vice president of 3B, in a statement to HME News. “The most significant take away is that 3B/BMC’s line of CPAP, Auto-CPAP and Bi-Level devices are already moving to redesigned components which are not implicated by this decision.”
Pender has also recommended a cease and desist order that would enjoin BMC/3B from selling, advertising, marketing, storing or testing the infringing products in the U.S.
ResMed is calling the ruling a victory.
“The judge’s decision is not just a victory for ResMed and the product innovation that is core to our brand, but it’s also a win for patients who deserve high quality, comfortable care,” stated David Pendarvis, chief administrative officer and global general counsel, in a release.
ResMed and BMC/3B concluded a trial before the ITC in April.
WASHINGTON – There are now 10 lawsuits representing 17 HME providers suing the federal government for breach of contract as part of the original Round 1 of competitive bidding, says Jerry Stouck, a shareholder with Greenberg Traurig, the law firm representing Cardiosom.
Cardiosom paved the way for the lawsuits when a U.S. Court of Federal Claims judge ruled in its favor in late June, saying the provider is entitled to damages for being awarded contracts and then having them rescinded as part of an 18-month delay to the program in 2008.
“We’ve been in touch with all the attorneys involved,” Stouck said. “There are going to be some individual issues—the damages in terms of lost profits are going to depend on the company—but I think it makes a lot of sense for there to be coordination among the cases.”
Because of a six-year statute of limitations, providers had until July 14 to file lawsuits against the government.
In addition to filing a lawsuit on behalf of eight providers, Munsch Hardt has also filed a class action complaint on behalf of all the providers that were awarded contracts, says Ross Parker, a shareholder in the law firm’s litigation section.
“Each of these 325 providers that had their contracts unilaterally terminated have a right to be heard and seek redress,” he said. “They relied upon governmental contracts that were awarded to them and then were taken from them with the stroke of a pen. If ever a private corporate citizen had the right to sue the government, this is such a case.”
The eight providers are: Advacare Home Services, Life Healthcare Services, Health Systems Services, Pulmocair Respiratory, Coastal Care Medical Supply, All Star Oxygen & Home Medical Equipment, DSI Midwest Associates and Care Touch Medical Equipment.
While the firms work with the judge in the case, Patricia Campbell-Smith, to coordinate the lawsuits, Cardiosom is also taking its next step: seeking damages. To put together a package, the provider will first need some records from CMS, Stouck says.
“During that three-year period covered by the contracts, (once they were implemented), those CPAP machines were sold by someone—how much was sold, what were the prices,” he said.
Ultimately, the lawsuits are subject to appeal, a course of action the government will likely take, the attorneys involved believe.
“Even though it’s not a case of first impression, the government could possibly appeal this as high as the Supreme Court,” said Edward Vishnevetsky, an associate with Munsch Hardt. “If the government loses, the damages could be in the hundreds of millions of dollars. They certainly don’t want to lose that.”
ELYRIA, Ohio – With a consent decree with the U.S. Food and Drug Administration (FDA) taking longer than it expected to resolve, Invacare has accelerated efforts to reduce its cost structure by reducing its workforce by 190 employees.
It’s a move that will save the company $14 million to $15 million annually on a pre-tax basis when fully instituted in 2015.
“We need to find opportunities, as the consent decree continues, to restore profitability,” said Lara Mahoney, director of investor relations and corporate compliance. “It was a difficult decision to make, but we need to put ourselves in the right financial position for our remaining associates and for our customers.”
The cuts will affect 150 salaried employees and 40 temporary employees across three divisions: North America/Home Medical Equipment, Institutional Products Group and Asia/Pacific. About 60 of the salaried employees work at the company’s Elyria North Ridgeville campus.
Mahoney characterized the restructuring as “one piece of our turnaround plan.”
“We will have to look at other initiatives to drive costs out of our complex business model and improve sales,” she said.
During a July 24 conference call to discuss Invacare’s financial results for the second quarter and first half of the year, interim President and CEO Rob Gudbranson hinted that the company had “tough decisions” to make, but that it was “committed to turning around the business in this challenging time.”
To lift the decree, Invacare must pass a third and final audit by a third-party auditor and, after that, a re-inspection by the FDA. During the call, Gudbranson said Invacare still needed to better demonstrate that its quality system is sustainably compliant and that each subsystem is properly integrated.
“(Lifting the consent decree) is taking longer than we thought,” Mahoney said. “It’s a very complex and fully integrated process.”
Invacare has struggled under the weight of the consent decree, which has limited manufacturing at its Taylor Street facility. For example, the number of domestic power wheelchairs that it has shipped from the facility in the second quarters of 2014 and 2013 represented only 8.8% and 14.5%, respectively, of the pre-consent decree units shipped during the same period in 2012.
Invacare has already reduced its workforce at the Taylor Street facility. There have been three layoffs there since the decree went into effect in late 2012: 25 workers in July 2013, 68 workers in April 2013 and 143 workers in late 2012. A “small number” of workers have since returned to the plant.
Invacare isn’t the only manufacturer in the industry reducing its workforce: ResMed announced in July that it had reorganized its commercial and research and development teams in the Americas. The move affected 1% to 2% of its global workforce of about 4,000 and resulted in a $6.3 million expense related to employee termination benefits in the fourth quarter.
YARMOUTH, Maine – HME providers need to be more diligent about making sure oxygen contents, which are now subject to the face-to-face requirement, are included on original orders, say industry stakeholders.
If they’re not, a new exam and a new order are needed if providers want to bill for contents after the equipment caps, between months 37 and 60, says AAHomcare’s Kim Brummett.
“Providers have been giving the content to the patient all along and now suddenly the equipment caps and they have to bill for the contents, and we typically don’t have contents on the order,” said Brummett, senior director of regulatory affairs for AAHomecare.
This is why AAHomecare last week recommended to CMS that it carve out the content codes from the face-to-face requirement. CMS implemented the requirement in 2013, but it hasn’t started enforcing it yet.
Providers that have orders with the content codes on them, even before they were able to bill for them, are in the clear, says MiraVista’s Andrea Stark.
“It varies from provider to provider—some providers are proactive at getting an order for anything the patient will need; others only for what they are specifically billing for at that time,” said Stark, a reimbursement consultant.
One bright spot: If the patient has had an office visit within the previous six months, that would satisfy the requirement, Stark says.
Provider Ron Evans says, historically, Medicare hasn’t been great at paying for contents in general.
“We’ve never had much success,” said Evans, owner of Phoenix-based Valley Respiratory Services.“You bill it correctly and Medicare still doesn’t want to pay it.”
FRANKLIN, Tenn., and ROCKY HILL, Conn. – The race is on: Complex rehab giants National Seating & Mobility (NSM) and Numotion have each tapped outside talent to take the reins as both companies look to continue growth.
Mike Swinford has joined Rocky Hill, Conn.-based Numotion as CEO, while Bill Mixon has joined Franklin, Tenn.-based NSM as president, a newly created position.
“We’re getting to be a pretty large company, as companies go in this industry, and we’re continuing to grow,” said Mike Ballard, founder and CEO of NSM. “We needed more bandwidth at the top, quite simply.”
NSM’s Mixon: ‘I’m comfortable with complex’
Mixon, most recently president of Universal Hospital Services, has 24 years of experience in the healthcare and professional service industries. Previously, he managed the North American service and installation businesses for Philips Medical Services, and held leadership roles at Baxter and American Hospital Supply Co.
“I’m comfortable in relatively complex service environments, where it’s important you have high levels of quality, high levels of cycle time and the right approach to customers on a daily basis,” said Mixon. “I’ve run service businesses in other large healthcare companies and I’m excited about bringing some of those skills to NSM.”
That experience with larger organizations, more than a direct knowledge of complex rehab, is what matters, said Ballard.
“We were very careful in our search to find somebody who has the intellectual capacity to understand there are many generic sides to our business where you can use conventional business techniques,” he said. “To be successful, he really needs to only appreciate what our RTSs go through and do on a daily basis.”
So far, Mixon’s new role has taken him across the country to various company branches.
“I’ve been very impressed by the culture of this business,” he said. “This is a business that cares about the patients and delivers services in a professional way every day.”
Numotion’s Swinford: ‘We have a unique opportunity to change this industry for the better’
Swinford spent 22 years with GE, most recently as president and CEO of GE Healthcare Global Services. He sees an opportunity to help Numotion grow further by providing local, personalized service, while leveraging national scale, infrastructure and size, resulting in faster, more flexible and more responsive service.
“This has been a fragmented market with a lot of small players, and Numotion has really been a market leader in a relatively immature market,” he said.
Swinford says his experience working with a number of payment methodologies and systems worldwide will benefit him in his new role.
“Right now, everyone needs to do more with less and get better outcomes,” he said. “As we work with payers and providers, getting creative with models and solving problems, we have a unique opportunity to change this industry for the better.”
Another high priority for Swinford: continuing Numotion’s outreach efforts.
“A big part of my responsibility as the leader of Numotion is really to advocate on behalf of our customers,” he said.
WASHINGTON – CMS began requiring fingerprint-based background checks for certain providers on Aug. 6, according to an MLN Matters article. The checks will first impact individuals with a 5% or greater ownership interest in a provider that falls into the high-risk category and is currently enrolled in Medicare or has submitted an initial enrollment application. The checks will be implemented in phases—not all providers in the high-risk category will be part of the first phase. Providers will receive notification that they must meet the requirement from their MAC. Those that do receive a notification have 30 days from the date of the letter to be fingerprinted. Previously, CMS had stated that it would start requiring the checks some time this year.
NCART’s Don Clayback answers Ice Bucket Challenge
BUFFALO, N.Y. – NCART Executive Director Don Clayback answered the ALS Association’s Ice Bucket Challenge last week. Clayback tied the challenge with National CRT Awareness Week, Aug. 18-24. “Things that go naturally together: salt and pepper, Abbott and Costello, peanut butter and jelly, ALS Association Ice Bucket Challenge and National CRT Awareness Week,” he wrote to members in an email with a link to a video of him performing the challenge. Before he poured a bucket of ice water over his head, Clayback said, “I just want to say to my friends, Jimmy Fallon, Justin Timberlake and Bill Gates, stop with the emails, stop with the phone calls. I’m here. I’m going to do it.” In turn, Clayback challenged Gary Gilberti of Numotion, Doug Westerdahl of Monroe Wheelchair and Greg Packer of U.S. Rehab, all members of the NCART board of directors. “The ball, or I should say, the bucket, is in your court,” he said in the video.
Jurisdiction B releases review results for support surfaces, CPAP devices
YARMOUTH, Maine – Group 2 pressure reducing support surfaces had a claims error rate of 73.7% from April 1, 2014, to June 30, 2014, the Jurisdiction B DME MAC has reported. Top denial reasons included insufficient documentation of larger or multiple stage III or stage IV pressure ulcers on trunk or pelvis that have not improved over the last month, and insufficient documentation due to a missing signature. CPAP devices had a claims error rate of 67% for the same timeframe, the MAC reported. Top denial reasons included no documentation that the beneficiary continues to use and benefit from the device for replacement following a five-year reasonable useful lifetime, and no documentation of a face-to-face evaluation by the treating physician for replacement.
NST patients use app to ‘master’ sleep therapy
BOSTON – National Sleep Therapy (NST) has developed a proprietary iPad app to train new sleep therapy patients on how to use their CPAP devices, the provider announced this month. “Educators have shown that people retain new information better when: (1) they’re able to proceed at their own pace; (2) they learn and retain better with visuals; (3) they feel they’re in control; (4) they’re engaged and feel special; and (5) they can hold the teaching device in their own hands,” stated Eric Cohen, co-founder and president of NST, in a release. Cohen, a trained engineer, developed the app. Respiratory therapists (RTs) will oversee patient use of the app. “Our RTs methodically guide patients through the training,” Cohen said. “As the patient becomes comfortable with each section, they check off the boxes. Items left unchecked are revisited, so the clinician can explain, answer questions, and visually demonstrate. The RT asks the patient to show they’ve mastered their CPAP.” The app will be instrumental in ensuring patients are trained consistently, thoroughly and correctly in the use, care and maintenance of their CPAP machines, Cohen says. “Doctors are often on a tight schedule so they can’t always spend 60-90 minutes with a patient,” he said. “We have carefully orchestrated every minute of the setup process to maximize engagement and retention.” NST believes this approach is applicable to other types of chronic conditions, such as diabetes.
HME companies make annual list
NEW YORK – A quick scroll through Inc. Magazine’s annual 500|5000 list, published yesterday, contains several names familiar in the HME industry. In the overall list, HME providers include Charlotte, N.C.-based Carolina’s Home Medical Equipment (4,561); Charlotte, N.C.-based BlueDot Medical (4051); and Sandwich, Mass.-based Cape Medical Supply (4039). All three providers have made the list previously. Also on the list were two Atlanta-based billing systems and services companies: Brightree (2237) and Patientco (405).
Liberator declares dividend
STUART, Fla. – Liberator Medical on Aug. 18 declared a cash dividend of $.0325 per common share to its shareholders, an 8.3% increase from the last dividend paid on July 10. The new dividend will be paid Oct. 10. Last week, Liberator reported $11.75 million in gross profits for the third quarter of 2014, a 7.6% increase over the same period in 2013.
ActiveForever acquired by investment firm
SCOTTSDALE, Ariz. – ActiveForever has been acquired by an East Coast investment firm specializing in direct marketing of health products, according to a press release. Larry Fugleberg and Erika Feinberg purchased Independent Living Products in 2003, and rebranded it ActiveForever. It provides medical, fitness and assistive technology equipment and devices. The firm is keeping the current management team in place, with Feinberg as CEO and chief outcomes officer, and Fugleberg as director of programming and IT infrastructure.
CMS clarifies payments for wheelchair accessories
WASHINGTON – CMS has published a change request (8864) that instructs contractors to update systems allowing payment for wheelchair accessories when provided for use with non-competitively bid wheelchair base units after the end date of the certificate of medical necessity and when the modifier “KY” is present. The change applies to payments for wheelchair accessories furnished for use with Group 2 and Group 3 power wheelchairs by contractors in a competitive bid area (CBA); for competitively bid wheelchair accessories furnished for use with wheelchair base units not bid in Round 1 or Round 2 by contract and non-contract suppliers for beneficiaries living in a CBA; for competitively-bid wheelchair accessories not bid in Round 1 but furnished for use with any wheelchair base to beneficiaries living outside a CBA; and for competitively bid wheelchair accessories not bid in Round 1 and that were furnished for use with wheelchair base units not competitively bid in Round 2 to beneficiaries living in a CBA. The changes take effect for claims processed starting Jan. 5, 2015.
‘Local Hero’ drives off in new accessible van
PHOENIX – Vantage Mobility International (VMI), Toyota and the National Mobility Equipment Dealers Association (NMEDA) this week handed the keys to a 2014 Sienna with VMI Northstar conversion to Courtney Boyll. The Alabama teacher, coach, wife and mother of three was paralyzed in a car accident 20 years ago. She won the national Local Hero Contest that was part of National Mobility Awareness Month, an annual campaign to educate people with disabilities and caregivers about adaptive mobility solutions. “I think anything is possible when you put your mind to it,” said Boyll. “I take it one day at a time and make it the best I can. And, I am thankful for the van that VMI, Toyota and NMEDA are providing to make my life easier.”
Bay Pharmacy sticks with HME
STURGEON BAY, Wis. – Bay Pharmacy has sold its pharmacy business to CVS, but CEO Tom Voegele will continue to run the company’s HME business, according to local news reports. “We will be coming up with a new name,” he said. The HME business will remain in the company’s current location in the Cherry Point Mall. Thirty employees will be affected by the move; 14 will continue to work in the HME business. The pharmacy business will move to a new location that CVS is building a few blocks away.
Big Sky adds Wyoming
ANACONDA, Mont. – The Big Sky Association of Medical Equipment Suppliers (Big Sky AMES) has added Wyoming to the fold, according to a bulletin from The VGM Group. The state association, which made the announcement at its annual convention here last week, covers Montana and Idaho. “The addition of Wyoming seemed like a natural fit,” said Dedra Haworth of Harrington Surgical in Montana. Big Sky AMES has unveiled a new logo that includes a picture of that state of Wyoming, along with Montana and Idaho.
Qualcomm Life collaborates with ResMed
SAN DIEGO – Qualcomm Life, a subsidiary of Qualcomm, has announced a collaboration with ResMed to develop connected health solutions. ResMed is using Qualcomm Life’s technology to streamline transitions of care from the hospital into the home. It is integrating Qualcomm Life’s 2net Hub and Platform with its Astral vents to capture and transfer near real-time biometric data to the HealthyCircles Care coordination platform. It’s also using HealthyCircles with its CPAP devices to enable hospitals and care providers to closely monitor patients to prevent hospital readmissions. “Working with Qualcomm Life extends our data solutions in the next-generation of remote patient monitoring solutions,” stated Jeremy Malecha, senior director, product management for ResMed Americas, in a release. “The 2net and HealthyCircles Platforms infrastructure streamlines data collection and transmission, enabling continuous, quality respiratory care for patients beyond the hospital.”
Home Care Medical ramps up online services
NEW BERLIN, Wis. – Home Care Medical has launched a Shop Online Store that allows customers to easily shop for HME and other products online. The new site, www.homecaremedicalshoponline.com, offers detailed product descriptions with informational videos and brochures; new, featured and sale products; and free shipping on most orders over $50. The site also allows customers to pay their bills online—full or partial payments or set up recurring payments. “Our company is always looking for new and innovative ways to meet the needs of our clients,” said Kandy Raether, vice president of sales and marketing for Home Care Medical, in a release. “With our website’s new features, we are pleased to offer the most advanced technologies and products available—24/7.”
ELYRIA, Ohio – Invacare will reduce its workforce by almost 200 employees as part of a restructuring plan, it announced yesterday.
The company will cut 150 employees and 40 temporary employees from its North America/Home Medical Equipment, Institutional Products Group and Asia/Pacific divisions, according to a press release.
About 60 of those employees work at the Elyria corporate headquarters and the Taylor Street manufacturing plant, according to Crain’s Cleveland Business.
The cuts will save $14 million to $15 million annually, according to the release.
“While the decision to downsize our workforce is extremely difficult, it is a necessary step in light of our financial results for the first six months of 2014 and the slow sales start to the third quarter,'' said Robert Gudbranson, interim president and CEO.
Invacare recently reported a loss in net earnings of $31.6 million for the first half of the year compared to net earnings of $22.7 million for the same period last year. It reported net sales of $640.4 million vs. $676.2 million.
For North America/HME, the company reported a loss in net revenues of $28.4 million, excluding restricting charges, for the first six months of the year compared to $19.8 million for the same period last year. It reported net sales of $267.8 million vs. $311.2 million.
Invacare has struggled under the weight of a consent decree with the Food and Drug Administration (FDA) that has limited manufacturing at the Taylor Street plant. The company is trying to complete a third and final audit to comply with FDA regulations.
BOSTON – National Sleep Therapy (NST) has developed a proprietary iPad app to train new sleep therapy patients on how to use their CPAP devices, the provider announced this month.
“Educators have shown that people retain new information better when: (1) they’re able to proceed at their own pace; (2) they learn and retain better with visuals; (3) they feel they’re in control; (4) they’re engaged and feel special; and (5) they can hold the teaching device in their own hands,” stated Eric Cohen, co-founder and president of NST, in a release.
Cohen, a trained engineer, developed the app.
Respiratory therapists (RTs) will oversee patient use of the app.
“Our RTs methodically guide patients through the training,” Cohen said. “As the patient becomes comfortable with each section, they check off the boxes. Items left unchecked are revisited, so the clinician can explain, answer questions, and visually demonstrate. The RT asks the patient to show they’ve mastered their CPAP.”
The app will be instrumental in ensuring patients are trained consistently, thoroughly and correctly in the use, care and maintenance of their CPAP machines, Cohen says.
“Doctors are often on a tight schedule so they can’t always spend 60-90 minutes with a patient,” he said. “We have carefully orchestrated every minute of the setup process to maximize engagement and retention.”
NST believes this approach is applicable to other types of chronic conditions, such as diabetes.
WASHINGTON – It’s game time for the industry’s efforts to reform the audit and competitive bidding programs, industry stakeholders say.
“We need to do everything we can to build support for our bills to put ourselves in the best possible position to be attached to a moving vehicle prior to the end of the year,” said Seth Johnson, vice president of government relations for Pride Mobility. “There’s plenty of opportunity to address all our issues.”
To that end, during the August legislative recess, stakeholders are talking up H.R. 5083, a bill to reform the audit program, and H.R. 4920, a bill to require binding bids as part of the competitive bidding program to lawmakers in their districts. The bills, introduced earlier this summer, have 14 and 29 co-sponsors, respectively.
Case in point: Karyn Estrella is spending August crisscrossing New England. She has meetings scheduled with 19 of the 21 congressional offices in those six states. The executive director of the Home Medical Equipment and Services Association of New England (HOMES) says there’s much more interest in the industry’s issues this year.
“They really seem to understand the burden that’s been put on the industry,” she said. “When we start talking about audits and they hear that people have to wait two years or more, they just can’t believe it.”
Stakeholders report successful meetings in several states, including Montana, where providers visited with Republican Rep. Steve Daines last week.
“He was focused on what our ‘ask’ was going be and that is to stop the roll out of bidding nationwide,” said John Gallagher, vice president of government relations for The VGM Group, who attended the meeting. “He’s also getting engaged on audits. His folks are talking (about) signing onto H.R. 5083 when he gets back.”
Following the August recess, the House Ways and Means Committee is planning a hearing on audits. A report released last week by the Government Accountability Office (GAO) says CMS needs to provide audit contractors with additional guidance and oversight.
“That adds more fuel to the fire of why we need guidance and regulation in terms of the audit legislation,” said Kim Brummett, senior director of regulatory affairs for AAHomecare. “I think momentum will increase with the report out.”
Lawmakers are due back in Washington, D.C., on Sept. 8, but with the looming elections, they will be in and out—mostly out, stakeholders predict. That’s not necessarily a bad thing, stakeholders say.
“I always find, as we get closer to an election, where all of the House and one-third of the Senate will be standing for election, they tend to be a little more attuned to their constituency and what they can do to help to ensure that they will vote to re-elect them,” Johnson said.
WASHINGTON – CMS officials assured providers during a Special Open Door Forum last week that there won’t be any surprises when the PMD demo rolls into 12 new states Oct. 1.
Coverage and documentation requirements will be the same as in the seven original states, they said.
“The question is, ‘What’s new in this expansion?’ and the answer is, ‘Just the additional states,’” said Dr. Dan Schwartz, chief medical officer of the Survey and Certification Group at CMS.
The expansion will require prior authorization requests for PMDs in Arizona, Maryland, Georgia, Indiana, New Jersey, Kentucky, Louisiana, Missouri, Ohio, Pennsylvania, Tennessee and Washington. The original states are not affected by the expansion.
Providers also wanted to know more about the timing of the demo’s start.
“We can’t submit the paperwork until Oct. 1 and can’t deliver until after Oct. 1,” said Stacy Lewis of CG Medical Family Health. “Do we make the beneficiaries wait, or submit prior to that and deliver later?”
A CMS official’s response: The demo applies to all seven-element orders signed by doctors on or after Oct. 1.
CMS officials also reviewed the logistics of the demo. The DME MACs have 10 business days to postmark their written decisions to prior authorization requests, and 20 days to consider and make determinations on resubmissions of denied requests.
A provider asked if the demo would provide protection from post-payment audits. Generally, the prior authorization process would exclude a provider from post-payment audits, Schwartz said.
GOLETA, Calif. – Inogen’s focus on direct-to-consumer sales is paying off, CEO Ray Huggenberger says.
The company has enjoyed double-digit increases in total revenues for two quarters in a row now: 50.8% for the second quarter ended June 30, 2014, and 50.1% for the first quarter ended March 31, 2014.
“We made a shift in focus starting at the beginning of this year to focus more on cash sales,” Huggenberger said during a conference call last week to discuss Inogen’s financial results for the second quarter. “We weren’t quite sure how that would turn out. The first quarter was very encouraging; the second quarter is confirming those numbers and that trend. I don’t want to call one quarter a trend. I’m going to be cautious calling two quarters a trend.”
Inogen reported total revenues of $30.4 million for the second quarter. Net income was $2.3 million compared to $2 million for the same period last year. Sales revenues were $20.5 million vs. $12.8 million, and rental revenues were $9.9 million vs. $7.4 million.
Inogen now plans to double down on the direct-to-consumer market by expanding its sales force, Huggenberger says.
“We were able to drive some substantial growth without purely relying on increased headcount to drive growth,” he said. “Now…I think it is time to invest in more capacity to do more of it.”
Business-to-business sales continue to be Inogen’s fastest growing segment (it saw an 88.8% increase in the second quarter), but Huggenberger believes it’s enjoying some “pull through” from the company’s direct-to-consumer advertising.
“I think the bigger driver of the business to business success in the second quarter is that we’re educating patients about this technology,” he said. “Not every call goes to us. Many call their current provider and say, ‘Yes, this is what I want and if you don’t give it to me, I’ll go somewhere else.’”
With two solid quarters under its belt, Inogen has revised its outlook for the rest of the year: It projects total revenues for 2014 to be in the range of $102 million to $106 million, instead of $92 million to $96 million; and net income to be in the range of $4.5 million to $5.5 million, instead of $4 million to $5 million.
Filling out this year, Inogen expects to begin shipping its new stationary concentrator, the Inogen At Home, in the fourth quarter. But it doesn’t expect the launch to have a material impact on revenues, Huggenberger says.
“We plan to test various marketing and sales strategies for the Inogen At Home before it is rolled out on a broad scale,” he said.
As for CMS’s proposals to expand competitive bidding pricing nationwide in 2016 and to use bundled monthly payments for certain DME—Inogen remains bullish. It expects the former to have a potential impact on revenues of 4% to 5%, and the latter to actually have a positive impact.
“It has the potential to add more patients and reduce complexity in the sales, setup and billing processes,” Huggenberger said.
MATTHEWS, N.C. – Snug Seat could soon resume distributing in the United States more than a dozen products manufactured in Denmark by R82.
The U.S. Food and Drug Administration (FDA) has scheduled a re-inspection of R82 in November to review changes the manufacturer has made since the agency inspected its facilities in 2010 and 2013, and found numerous violations.
“R82 is confident everything is in order and anticipates the FDA will release the detention within 45 to 50 days after the visit,” said Kirk MacKenzie, president of Snug Seat, which distributes seating, standing and walking aids for disabled children.
During previous inspections, the FDA found R82 violated six “good manufacturing requirements” of its quality system regulation, including failure to establish and maintain procedures for verifying or validating corrective and preventive action; failure to review and evaluate all complaints to determine whether an investigation is necessary; and failure to maintain device master records (DMRs).
Mackenzie characterized the violations this way: “There were no product problems or quality issues per see, but a lack of documentation needed for the products.”
The FDA has been refusing to allow 15 products—everything from the Cougar wheelchair to the Swan bath chair to the Rabbit mobile standing frame—to be imported.
The situation has taken its toll on Snug Seat—which has lost market share, especially for products like bath chairs—and its customers, Mackenzie acknowledges.
“We had a mother call us who, if she couldn’t get this device within 90 days, her child was going to need an operation,” he said. “It’s a specialized stander that no one else has. We managed to find a demo unit for the family to borrow.”
While R82 isn’t the only manufacturer to come under scrutiny by the FDA—it joins Invacare, for one—it’s unique in that the products in question are manufactured in Europe. Other companies that manufacture there should take heed, Mackenzie says.
“The requirements in Europe haven’t been that stringent, but they’re getting tighter,” he said. “It behooves those who manufacture in Europe to make sure their products have all the proper documentation.”
WASHINGTON – The Government Accountability Office (GAO) is calling on CMS to improve the efficiency and effectiveness of its post-payment review efforts by providing contractors with additional guidance and oversight.
The GAO reviewed MACs, ZPICs, RAs and CERT contractors because “questions have been raised about their effectiveness and efficiency, and the burden on providers.”
While CMS has taken steps to prevent contractors from conducting duplicative post-payment claims reviews, the GAO found, “CMS neither has reliable data nor provides sufficient oversight and guidance to measure and fully prevent duplication.”
Specifically, the GAO called on CMS to:
· monitor the Recovery Audit Data Warehouse to ensure contractors are submitting required data and that the data in the database are accurate and complete;
· develop complete guidance defining contractors’ responsibilities regarding duplicative claims reviews, including specifying whether and when MACs and ZPICs can duplicate other contractors’ reviews;
· regularly assess whether contractors are complying with CMS requirements for the content of correspondence sent to providers; and
· clarify current requirements for content of additional documentation requests and results letters, and standardize the requirements as much as possible for greater consistency.
The Department of Health and Human Services agreed with the GAO’s recommendations and noted plans to improve CMS guidance and oversight.
Investments pay off at Liberator Medical
STUART, Fla. – Liberator Medical has reported $11.75 million in gross profits for the third quarter of 2014 compared to $10.89 million for the same period last year, a 7.6% increase. Net sales increased 6.2% to $18.58 million as a result of a direct response advertising campaign to new customers and an emphasis on customer service to maximize reorders. “During our fiscal third quarter, we made key investments in our organizational infrastructure to improve the efficiency and performance of our customer-facing staff,” said Mark Libratore, president and CEO, in a press release. “We are investing in acquiring and serving our customers, which is central to our mission as a healthcare products provider and to achieving the maximum return on our advertising expenditures.” Net income, however, dropped 1.5% to $1.98 million. For the nine months ended June 30, 2014, Liberator reported gross profits of $34.42 million, a 5.9% increase over the same period last year; net sales of $54.83 million, a 5.9% increase; and net income of $5.72 million, a 19.4% increase.
ResMed launches comprehensive platform for sleep therapy
SAN DIEGO – ResMed announced last week the launch of Air Solutions, a connected care platform for treating sleep disordered breathing from diagnosis to treatment to compliance management to patient engagement. Two components of the solution: The AirSense 10 series of flow generators and the AirFit family of masks. The AirSense 10 CPAP and APAP devices will be available in the U.S. on Aug. 18. The AirFit masks were launched earlier this year. Other components include ApneaLink Air, a home sleep testing device, and AirView, a monitoring and compliance management system that provides data on demand.
MED schedules fly-in
LUBBOCK, Texas – The MED Group, in conjunction with AAHomecare, will host a legislative fly-in at the W Hotel in Washington, D.C., on Sept. 10. The focus of the fly-in in will be to promote H.R. 4920 and H.R. 5083, bills to reform the competitive bidding and audit programs, respectively. The fly-in will kick off with a pre-meeting on Sept. 9 from 7 p.m. to 9 p.m. for attendees to pick up lists of appointments and leave-behind information. “This legislative fly-in is open to all DME providers so that industry stakeholders can show solidarity on these issues,” stated Jeff Woodham, senior vice president and general manager of The MED Group, in a press release. To register, call MED at 800-825-5633 and ask to speak to a customer support representative.
PHS offers homecare education to students
ST. PAUL, Minn. – Pediatric Home Service (PHS) has launched partnerships with area colleges and universities to educate students about homecare services. The provider believes educating students about home care is just as important as hospital care. “Through these opportunities, students can see the benefits and complexity of home care firsthand,” stated Judy Giel, senior vice president of clinical service, in a press release. “We’re dedicated to expanding students’ knowledge base and their understanding of how these services are provided at home.” Fields of study include respiratory therapy, infusion nursing, homecare nursing, nutrition service and social work.
The road to Medtrade: Audit sessions and call for presentations
LAS VEGAS – Medtrade has no fewer than 10 audit-related sessions planned for the Oct. 20-23 event in Atlanta. “Our surveys revealed that attendees wanted more educational sessions dealing with audits,” stated Group Show Director Kevin Gaffney in a press release. “We responded in a big way.” See a complete schedule of these and other sessions at www.medtrade.com… Show organizers are already gearing up for Medtrade Spring: They’ve put out a call for presentations for the March 31-April 1 event in Las Vegas. Interested speakers must submit their ideas by Aug. 22; show organizers will notify selected speakers by Dec. 1. Go here to submit: http://n2b.goexposoftware.com/events/cfp/goExpo/public/form.php?fi=1006.
Dr. Comfort steps out for diabetes
MILWAUKEE – Dr. Comfort, a manufacturer of therapeutic footwear, has committed to raising $100,000 in 2014 as a National Team for the American Diabetes Association’s Step Out: Walk to Stop Diabetes. Dr. Comfort’s employees, friends, family members, customers and vendors are invited to join the company’s corporate team in participating in any of the 110 Step Out events nationwide. Every mile walked and dollar raised supports the ADA’s research and advocacy efforts to improve the lives of those affected by diabetes. In addition to participating in the walks, Dr. Comfort is donating to the ADA $10 from the sale of every pair of shoes from its athletic shoe line.
Diabetes risk increases sharply
NEW YORK — The risk of diabetes has doubled, with 40% of Americans born between 2001 and 2011 at risk of developing the disease, according to a new study published in The Lancet Diabetes & Endocrinology. For minorities, the risk is higher: More than half of all Hispanics and non-Hispanic black women will develop diabetes. For black men, the risk is 5%. “That’s a very real statistic not only for the public but also for the people treating and trying to prevent diabetes,” said Edward Gregg, the lead study author and an epidemiologist at the U.S. Centers for Disease Control and Prevention. “I hope this will be a stimulus really to find ways to prevent diabetes in the first place and reduce incidence.”
IntelliWheels receives grant
CHAMPAIGN, Ill. — IntelliWheels has secured a $1.5 million grant to further its development of ultra-lightweight, multi-geared wheels for manual wheelchairs. “By using simple gearing we can create a more dynamic method of mobility, providing wheelchair users greater ability to interact in their environment,” said Marissa Siero, co-founder of IntelliWheels, in the release. The grant was awarded by the National Institutes of Health, National Center for Medical Rehabilitation Research at the Eunice Kennedy Shriver National Institute of Child Health & Human Development.
Good works: Invacare, CareTouch
Invacareserved as a national host sponsor for the 34th National Veterans Wheelchair Games, Aug. 12-17 in Philadelphia. Invacare has been a supporter of the Games since 1981 and has also supported similar events. In addition to financial support, the manufacturer provided assistance with transporting veterans and their luggage from the airport and performing maintenance throughout the games…CareTouch has raised $1,000 to support the Butterfly Program of Porter Hospice Hike for Hospice event and is now aiming to double that by the Sept. 14 event. A team of CareTouch employees will participate in the hike.
Short take: Invacare
The board of directors of Elyria, Ohio-based Invacare has declared a cash dividend of $.0125 per share on its common shares and $.011364 per share on its Class B common shares payable Oct. 10, 2014, to shareholders on record on Oct. 2, 2014. Invacare recently reported a net loss in earnings of $13.6 million for the second quarter compared to a loss of $12.5 million for the same period last year. It also announced recently that Rob Gudbranson would become its interim president and CEO.
People in the news
AAHomecare has added Mina Uehara as a regulatory affairs associate. Uehara recently received a Master of Public Policy from American University. Her graduate work there focused on Medicaid. Uehara will work closely with Kim Brummett, vice president of regulatory affairs, on the association’s regulatory initiatives.
WASHINGTON – The Government Accountability Office (GAO) is calling on CMS to improve the efficiency and effectiveness of its post-payment review efforts by providing contractors with additional guidance and more oversight.
The GAO reviewed MACs, ZPICs, RAs and CERT contractors because “questions have been raised about their effectiveness and efficiency, and the burden on providers.”
While CMS has taken steps to prevent contractors from conducting duplicative post-payment claims reviews, the GAO found, “CMS neither has reliable data nor provides sufficient oversight and guidance to measure and fully prevent duplication.”
Specifically, the GAO report called on CMS to:
• monitor the Recovery Audit Data Warehouse to ensure contractors are submitting required data and that the data in the database are accurate and complete;
• develop complete guidance defining contractors’ responsibilities regarding duplicative claims reviews, including specifying whether and when MACs and ZPICs can duplicate other contractors’ reviews;
• regularly assess whether contractors are complying with CMS requirements for the content of correspondence sent to providers; and
• clarify current requirements for content of additional documentation requests and results letters, and standardize the requirements as much as possible for greater consistency.
The Department of Health and Human Services agreed with the GAO’s recommendations and noted plans to improve CMS guidance and oversight.
Inogen repeats double-digit increase
GOLETA, Calif. – Inogen increased total revenues 50.8% in the second quarter of 2014, the company reported this week.
For the three months ended June 30, revenues were $30.4 million compared to $20.2 million for the same period in 2013.
Sales revenues were $20.5 million, a 60.5% increase compared to the $12.8 million for the same period last year. Total units sold were 9,200, an increase of 67.3%.
Rental revenues also increased, although that growth was offset by reimbursement cuts related to Medicare’s competitive bidding program. Rental revenues were $9.9 million for the second quarter, up from $7.4 million in 2013.
"We are very encouraged with the level of productivity and traction we've seen throughout the first half of this year,” said President and CEO Raymond Huggenberger in a release. "We intend to continue to execute on our strategy to both raise awareness of our oxygen-therapy products and leverage the investments made in sales and marketing to drive demand. We also plan to increase our go-to-market resources to drive future growth and prepare for additional activities, such as the commercial launch of our Inogen At Home product later this year."
Inogen received FDA 501(k) clearance for the Inogen at Home in June.
The manufacturer increased total revenues 50.1% in the first quarter of this year.
WASHINGTON – CMS announced last week that the recovery audit contractors (RACs) will restart some of their reviews, but industry stakeholders don’t expect any curveballs.
Due to delays in awarding new contracts, the agency is giving the RACs the green light to get back to work on automated reviews and, on a limited basis, complex reviews.
“It doesn’t sound like they’re authorizing new audits, just reactivating the audits that they previously allowed,” said Andrea Stark, a reimbursement consultant with MiraVista. “It’s new claims, but not new concepts.”
The RACs have been on hiatus from sending post-payment additional documentation requests (ADRs) since February, as part of CMS’s transition to new RACs.
While stakeholders agree that the bulk of the reviews affecting DME will likely be automated reviews (for example, a patient was in a skilled-nursing facility on the date of service), they’re not ruling out complex reviews.
“CMS has done so many things with the RACs to make it clear that DME is a focus, my guess is, if they’re going to pick one area to reinstate complex reviews, DME is an easy target,” said Wayne van Halem, president of The van Halem Group, a division of The VGM Group.
In the past, the RACs have performed complex reviews on respiratory assist devices (RADs) and power mobility devices (PMDs), stakeholders say.
“With so much focus on the prior approval process for PMDs, hopefully, they’ll shy away from those,” said Kim Brummett, senior director of regulatory affairs for AAHomecare.
In the wake of the news, stakeholders were keeping an eye on the RAC websites, where they’re obligated to detail their activities.
“The decision to restart the reviews isn’t illogical,” Brummett said. “The RACs aren’t making money if they’re not auditing claims.”
As always, documentation is the best defense against audits, stakeholders remind providers.
“The RACs go where the money is,” van Halem said.
CMS says it still expects to award new contracts some time this year.
YARMOUTH, Maine – Mobility providers aren’t lining up to support a CMS proposal to describe, and pay for, standard manual and standard power wheelchairs each under a single code.
Ninety-five percent of the 98 respondents to a recent HME NewsPoll say they don’t like the plan. There are too many differences between wheelchairs—combining them under a single code would encourage the use of cheap products with few options, they say.
“There are too many variations based on the individual patient,” said E. Patrick Smith, president of Community Medical Supply. “You have to have a way to identify those variables.”
CMS proposed the single code system on July 11 as part of another proposal to implement bundled monthly payments for wheelchairs and other DME.
Shalon James, a coding and billing specialist for South Tyler, Texas-based Access2Mobility, is one of the 5% of respondents backing the plan, at least for standard manual wheelchairs.
“Medicare should take a page out of Texas Medicaid’s book on the manual wheelchair coding,” James wrote. “There are a lot of different codes available on the standard wheelchairs, but it cuts down on the number of line items on your claim.”
Respondents were split evenly over whether the coding system should be changed at all—49% said yes for manual wheelchairs and 47% said yes for power wheelchairs.
CMS’s last significant change to the coding system: About 10 years ago, it broke up four power wheelchair codes into 61 codes.
“(A single code) is not the answer, but 50 codes is not the answer, either,” wrote Dan Lipka, a former NRRTS president. “Changes are needed, but the July 11 proposal is like jumping out of the proverbial frying pan and into the fire.”
Other stakeholders agree it’s time for changes. One respondent says there are too many power wheelchair codes, but not enough manual wheelchair codes.
“The manual wheelchair codes are too few, are archaic and do not reflect the breadth of available technology,” the respondent said. “The power codes are too numerous.”
YARMOUTH, Maine – Hospice agencies are under the microscope as CMS pays closer attention to how patients are admitted. That translates into fewer hospice patients for HME providers, they say.
“Medicare has gone out and done a lot of surveys and audits and found that a lot of hospice agencies have been keeping their patients on too long,” said Tony Myrell, president of Colton, Calif.-based Premier Medical. “They’ve gone back to those agencies and said, ‘You should pay us back for those patients, it was inappropriate hospice.’”
In June, the Huffington Post published an investigation into the hospice industry, which, according to the article, has quadrupled since 2000.
An increase in the allowed diagnoses has led to a boom of patients entering hospice care, say HME providers.
“Years ago, a relatively stable COPD patient who was on home oxygen wouldn’t have a need for hospice service, but at some point, the inclusion of COPD as an admitting diagnosis for hospice really opened up their ability to garner new patient admissions based on that,” said Woody O’Neal, vice president of Pelham, Ala.-based O2 Neal Medical, whose company stopped taking new hospice patients because of declining reimbursement rates over the past five years.
CMS is also focusing on the services that hospice agencies are providing, or rather, aren’t providing, said William Deary, CEO of Jackson, Miss.-based Great Lakes Caring.
“While reimbursement may not necessarily be declining, the bottom line is changing,” he said. “CMS is getting much more attuned to ensuring that hospices are providing all the services and support items, such as HME or pharmacologicals, they are required to provide.”
For example, some hospice agencies may have had patients pay for medications through their Part D plans, Deary explained.
The increased attention gets to the heart of responsible hospice, Deary said.
“Are you protecting the Medicare trust fund, which is one of your responsibilities as a Medicare provider, and are you admitting patients appropriately?” he said. “I think, basically, what’s going on in the hospice industry is hospice is getting more scrutiny under CMS than it’s received in the past and I’m going to say appropriately so.”
WESTMINSTER, Md. – HME provider Randy Weston wants to break the mold of the traditional accountable care organization (ACO) model.
Although most models are physician or hospital based, he is developing an ACO based on ancillary services, such as HME, pharmacy, nursing and lab testing. The ACO, called Valley ACO, was recently approved by Medicare.
“We think by flipping it upside down we will be successful and more flexible,” said Weston, CEO of Mobility Rehabilitation Products and The Weston Group.
The Affordable Care Act of 2010 called for a reduction in hospital readmissions for Medicare beneficiaries. That includes the formation of ACOs, in which healthcare providers work together to provide high quality, coordinated care.
Valley ACO’s next step: attracting a network of participants, including physician and hospital groups. So far, feedback has been positive, says Weston.
“The physicians get to participate in the ACO and share in some of the possible revenue savings, which is nice, and they still own their practice,” he said. “They also get access to other potential referral sources.”
Forming an ACO isn’t all that much of a stretch for Weston, whose portfolio of healthcare businesses covers assisted living, skilled nursing, nursing, hospice, pharmacy and lab, in addition to DME. Looking to the long term, Weston envisions a very streamlined healthcare model.
“We’d like to design an electronic medical records system that will include all the ancillary participants and offer everybody (access to) that system,” said Weston. “If a therapist gets a referral from a physician, I don’t have to fax him six times or do a lot of the stuff we have to do now in the DME world.”
Although Weston’s model is the exception rather than the rule, it’s an avenue worth pursuing, says consultant Greg Shockey. Post-acute care providers offer valuable experience with the target patient populations, he says.
“Most of these big ACOs are focusing on the 5% of patients that are responsible for 50% of hospital charges,” said Shockey, managing member of Accountable Care Expos. “For post-acute care providers, that’s nearly all of their patients. The bottom line is, you have to do something different.”