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Senate eyes confirmation hearings for Price

HME News - Thu, 01/05/2017 - 11:36
01/05/2017HME News Staff

WASHINGTON – A key Senate committee will reportedly hold a confirmation hearing for Rep. Tom Price, R-Ga., the nominee for secretary of the Department of Health and Human Services, ahead of President-elect Donald Trump’s inauguration.

An aide to Sen. Lamar Alexander, R-Tenn., chairman of the Senate Health, Education, Labor and Pensions Committee, says the hearing could be held Jan. 18, according to news reports.

The HELP Committee is one of two committees of jurisdiction for the confirmation process. The other, the Senate Finance Committee, has not officially released dates for the hearing. The Finance Committee, chaired by Sen. Orrin Hatch, R-Utah, holds the official vote.

Industry stakeholders have cheered Price’s nomination. A longtime champion of the HME industry, he has introduced bills to replace the competitive bidding program with a market-pricing program.

Lawmakers waste no time on repeal

HME News - Wed, 01/04/2017 - 14:43
01/04/2017HME News Staff

WASHINGTON – Republicans in the House of Representatives have set Feb. 20 as a target date to get a bill repealing Obamacare to President-elect Donald Trump.

Trump himself plans to take executive actions to undo the Affordable Care Act on his first day in office, said Vice President-elect Mike Pence in an article on The Hill.com.

Healthcare experts have warned that repealing the program without an immediate replacement would create chaos. Twenty million people are covered under the act.

HME providers are no fans of the ACA. A recent HME Newspoll showed that 28% of respondents think repealing and replacing the program should be Rep. Tom Price’s top priority as secretary of the Department of Heath and Human Services.

The year in HME News stories

HME News - Fri, 12/30/2016 - 09:01
12/30/2016Liz Beaulieu

YARMOUTH, Maine – 2016 was the year that HME providers fought back.

The most read story on www.hmenews.com in 2016 was “In wake of cuts, HME providers let chips fall.” When CMS implemented the Round 2 re-compete and the first phase of its nationwide rollout of competitive bidding on July 1, providers directed angry referral sources right to lawmakers. Other providers washed their hands of bid products and services—products and services that they had provided for years.

In the No. 2 spot was “Providers start dropping Medicare assignment.” A whopping 89% of the respondents to an HME Newspoll reported they had stopped taking assignment on certain products in the past year. In the No. 7 spot, another story about dropping assignment, “What are opportunities, pitfalls of billing non-assigned?”

The fighting paid off. In the No. 10 spot was “Industry gets assurance that bid relief is forthcoming,” a bellwether of what was to come in December, when Congress passed the 21st Century Cures Act, which contained a provision to retroactively delay the second phase of the nationwide rollout of competitive bidding. The bill also included a provision to delay CMS’s plan to use bid-derived pricing for accessories for complex power wheelchairs for another six months.

Not surprisingly, competitive bidding-related stories dominated much of the top 10, with “Trickle-down effect: Tricare rates nosedive” at No. 5, “Nowhere to hide: Reimbursement cuts multiply” at No. 6 and “CMS resets payment amounts for Round 2” at No.9.

Two stories about M&A activity also made the top 10: “ResMed gets ‘one-two punch’ with Brightree” at No. 3 and “Lincare offloads specialty pharmacy biz” at No. 8. It was big news—and a shock to some—when ResMed bought Brightree for $800 million. Stories in the wake of the announcement centered on the many questions the deal raised, including whether or not ResMed has direct-to-consumer plans, prompting the company to respond.

Last but not least, there was “CMS ready to roll with prior authorizations” in the No. 4 spot. This will also be a top issue in 2017: The agency announced in December that the first two codes up for the PA process will be for complex power wheelchairs and that it will apply the process in two phases in March and in July.

Happy New Year!

Here are the top 10 stories on www.hmenews.com in 2016:

No. 1: In wake of cuts, HME providers let chips fall

YARMOUTH, Maine – It’s only been a month since CMS rolled out draconian reimbursement cuts across the country, but HME providers have begun playing hardball.

http://www.hmenews.com/article/wake-cuts-hme-providers-let-chips-fall

No. 2: Providers start dropping Medicare assignment

YARMOUTH, Maine – HME providers are taking a hard look at what products they can continue to accept Medicare assignment on, from oxygen down the line to canes and crutches.

http://www.hmenews.com/article/providers-start-dropping-medicare-assignment

No. 3: ResMed gets ‘one-two punch’ with Brightree

SAN DIEGO – Some may think the price tag too high and the pairing unexpected, but ResMed officials say the company’s plan to acquire Atlanta-based Brightree makes all the sense in the world.

http://www.hmenews.com/article/resmed-gets-one-two-punch-brightree

No. 4: CMS ready to roll with prior authorizations

BALTIMORE – CMS is moving forward with its plans to implement a prior authorization process for certain DME and stakeholders say it should make life easier for providers.

http://www.hmenews.com/article/cms-ready-roll-prior-authorizations

No. 5: Trickle-down effect: Tricare rates nosedive

YARMOUTH, Maine – HME providers were caught off-guard when Tricare, the healthcare program for uniformed services members and their families, began ratcheting down its reimbursement rates to below Medicare’s new reduced rates.

http://www.hmenews.com/article/trickle-down-effect-tricare-rates-nosedive

No. 6: Nowhere to hide: Reimbursement cuts multiply

YARMOUTH, Maine – Third-party payers have wasted no time applying recently reduced Medicare pricing, respondents to the latest HME Newspoll say.

http://www.hmenews.com/article/nowhere-hide-reimbursement-cuts-multiply

No. 7: What are opportunities, pitfalls of billing non-assigned?

YARMOUTH, Maine – When it comes to billing Medicare non-assigned—something more and more HME providers have been forced to do—there are misconceptions about what can and can’t be done, say industry consultants.

http://www.hmenews.com/article/what-are-opportunities-pitfalls-billing-non-assigned

No. 8: Lincare offloads specialty pharmacy biz

CLEARWATER, Fla., and CHARLOTTE, N.C. – National HME provider Lincare will get $75 million for its specialty pharmacy business.

http://www.hmenews.com/article/lincare-offloads-specialty-pharmacy-biz

No. 9: CMS resets payment amounts for Round 2

BALTIMORE – CMS today announced the new single payment amounts for the Round 2 re-compete of competitive bidding.

http://www.hmenews.com/article/cms-resets-payment-amounts-round-2

No. 10: Industry gets assurance that bid relief is forthcoming

WASHINGTON – HME stakeholders have House Speaker Paul Ryan’s word that Congress will take up legislation that would retroactively delay a recent reimbursement cut in non-competitive bidding areas in a lame-duck session after the elections.

http://www.hmenews.com/article/industry-gets-assurance-bid-relief-forthcoming

Sleep stakeholders look to passage of guidelines in 2017

HME News - Fri, 12/30/2016 - 08:56
‘There’s going to be a large number of drivers who are going to need these services’12/30/2016Theresa Flaherty

WASHINGTON – Mandatory sleep testing and treatment guidelines for commercial drivers are on the verge of becoming a reality, and stakeholders are hopeful that the recent presidential election won’t put the brakes on that.

“We thought it was a fait accompli, and it probably would have been under a Clinton administration,” said Dana Voien, president of SleepSafe Drivers, a Laguna Nigel, Calif.-based sleep management provider, which helped craft the current draft language. “Trump has insisted he’s going to have a moratorium on regulations, so we’ll have to wait and see.”

In October, the Motor Carrier Safety Advisory Committee and Medical Review Board voted to approve guidelines to screen truck drivers with a body mass index of 40 or higher with admitted fatigue or sleeping during wakeful periods.

Screening could also be mandatory for drivers with a BMI of at least 33 and have at least three out of 11 risk factors, such as untreated hypertension, Type 2 diabetes or loud snoring.

“It’s all been submitted to the Office of Management and Budget,” said Steven Garrish, senior vice president of safety and regulatory compliance for SleepSafe. “They need to review the impact of the regulation and then a decision from the FMCSA will be forthcoming, but not until the second or third quarter of 2017 at the earliest.”

The FMCSA has sought to implement recommendations for sleep screening and testing of commercial drivers since at least 2008. The organization has found that while 28% of any truck fleet will test positive for sleep apnea, 80% don’t know it.

After years of pushback, the tide is finally turning, says Garrish, who points growing evidence on the risks of driver fatigue.

“Over the last three years there’s been several in-depth studies that show correlations between sleep dysfunction and crashes,” he said. “Those things have gotten a lot of people interested that weren’t interested before.”

The Federal Railroad Administration has also gotten onboard, stating in November that it would issue a safety advisory to address worker fatigue and stress the importance of sleep apnea screening and treatment. A Sept. 29 commuter train crash in Hoboken, N.J., killed one woman and injured more than 100 others. The driver in that crash has severe sleep apnea, according to news reports.

When the regulation is finally implemented, there’s huge potential for providers to diagnose and treat drivers, says Garrish, who estimates the number of commercial drivers nationwide to be about 6 million.

“When the regulation comes out, there’s going to be a large number of drivers who are going to these need services,” he said.

VGM Fulfillment strikes a nerve

HME News - Fri, 12/30/2016 - 08:54
‘The distribution piece of the business is the most cumbersome’12/30/2016Liz Beaulieu

WATERLOO, Iowa – VGM Fulfillment has been processing and shipping CPAP supplies on behalf of HME providers for nearly six years, but 2016 was a banner year.

By the end of the year, it was shipping supplies for more than 1,000 locations.

“Our volume has grown 35% or more year over year since 2009,” said Jeremy Stolz, vice president of distribution for VGM Fulfillment, which employs more than 100. “But it’s more like 45% in 2016.”

To accommodate that growth, VGM Fulfillment in July 2016 doubled its warehouse space to 80,000 square feet. To put that in perspective: It got its start in a 500-square-foot garage.

Stolz knows it sounds cliché, but he said VGM Fulfillment has taken off because it saves time and money for HME providers that are short on both.

“The distribution piece of the business is the most cumbersome piece for HME providers to manage themselves,” he said. “They become overloaded with products. Products become discontinued. Products get lost.”

With VGM Fulfillment, providers send their orders electronically through their resupply software—be it medSage, ResMed ReSupply or Brightree Connect—and let the company take care of the rest, Stolz says.

“We don’t disrupt their relationships with their patients or their manufacturers,” he said.

Because VGM Fulfillment is shipping more orders than providers would be individually, it gets better rates from carriers like UPS and FedEx, and can charge providers minimal shipping and handling fees, Stolz says.

“Overall, including overhead and all those other expenses in managing inventory, they’re spending 30% to 40% less using VGM Fulfillment,” he said.

Additionally, because VGM Fulfillment is doing more shipping, it has the wherewithal to invest in technology to make the process more efficient and cost effective. In September 2016, it flipped the switch on a new enterprise system from Microsoft.

“The system we had up until this point got us as far as it could,” he said. “This system will take us well into the future.”

Provider Robyn Parrott revisits VGM Fulfillment periodically, but she says the service doesn’t “make sense” for her company right now.

“We have a local shipping provider that dispenses overnight in Michigan,” said Parrott, president of Troy, Mich.-based Sleep Solutions, which ships about 1,000 packages per month. “It costs much less than any other shipping costs that I have seen—less than $4 per package.”

In brief: Arriva Medical appeals revocation, VGM names new CFO

HME News - Fri, 12/30/2016 - 08:53
12/30/2016HME News Staff

WALTHAM, Mass. – The parent company of Arriva Medical, a contract supplier under Medicare’s national mail-order program for diabetes testing supplies, has filed an appeal with the administrative law judge seeking to reinstate its billing status.

Arriva Medical expects the ALJ to hear its appeal within 30 days and issues a decision in three months, it stated in a Dec. 28 update on its website.

“We believe the recent action by CMS to remove Arriva from CMS billing is unlawful, arbitrary and capricious, and harmful to the more than 500,000 patients who depend on Arriva for these critical supplies,” it stated. “We are confident that Arriva is in compliance with CMS guidelines and look forward to an expeditious and favorable outcome.”

CMS revoked Arriva Medical’s billing privileges in November for allegedly submitting 211 claims for deceased patients between April 15, 2011, and April 25, 2016.

Arriva Medical says any errors were the result of “Medicare system flaws.”

Additionally, “the number of purported instances cited by CMS is de minimis relative to the nearly 5.8 million total claims filed by Arriva during that same period,” it stated.

In addition to the appeal, Alere has filed a complaint and related motions in the U.S. District Court for the District of Columbia seeking to compel CMS to stay the process regarding the competitive bidding contract termination while the ALJ appeal is ongoing and to compel CMS to provisionally reinstate Arriva’s billing number while the company pursues the ALJ appeal. It expects a decision on the complaint on or about Jan. 5.

Arriva Medical received a letter from CMS on Oct. 12, informing the company that effective Nov. 4, the agency was revoking its supplier billing number and barring it from re-enrolling in the Medicare program for three years. Then on Nov. 2, CMS upheld its decision based on a four-day, mechanical review.

“CMS reached this conclusion in spite of evidence provided by Arriva demonstrating that any errors were primarily the result of Medicare system flaws,” Arriva Medical stated.

Arriva Medical says it is confident in the merits of the case because:

·      Arriva and the Medicare beneficiaries its serves will suffer irreparable harm if injunctive relief is not granted;

·      The balance of equities and the public interest are decidedly in favor of Arriva;

·      Arriva is likely to succeed on the merits of the case because CMS’s action are depriving Arriva of protected property and liberty interests without due process; and

·      CMS’s refusal to grant Arriva a pre-termination hearing violates due process.

Sleep clinic agrees to pay $2.6M for dual role

SAN JOSE, Calif. – Bay Sleep Clinic and its related businesses have agreed to pay $2.6 million to settle allegations that they were involved in both the diagnosis and treatment of sleep patients, a violation of Medicare rules and regulations.

The government charged Bay Sleep Clinic and its related businesses—Qualium Corp., which operates 20 sleep clinics, and Amerimed Corp., which does business as Amerimed Sleep Diagnostics and Amerimed CPAP Specialist—with fraudulently billing Medicare for medical devices in violation of rules and regulations that prohibit providers of sleep tests from supplying medical devices and from sharing a sleep lab location with a DME supplier.

The government also charged the companies with fraudulently billing Medicare for sleep tests allegedly performed by technicians lacking the required licenses or certifications, and with fraudulently billing Medicare for sleep tests that were allegedly conducted at un-enrolled and unapproved locations.

The allegations against Bay Sleep Clinic were set out in an amended False Claims Act complaint filed by the government on Aug. 8, 2016.

The government intervened in a whistleblower action filed under the qui tam provisions of the False Claims Act. The act allows for private persons, such as Elma Dresser in this case, to file actions to provide the government with information about wrongdoing and then obtain a portion of the government’s recover. Dresser will receive about $545,000.

As part of the agreement, Bay Sleep Clinic has voluntarily terminated its two existing Medicare enrollments and agreed not to re-enroll as providers in the Medicare program for a period of three years.

The claims resolved by the settlement are allegations only and there has been no determination of liability.

AvaCare Medical buys online scrubs company

LAKEWOOD, N.J. – AvaCare Medical, an online medical supply store, has acquired Medical Scrubs Collection, an online medical scrubs store.

AvaCare CEO Steven Zeldes and CFO Mark Bakst say they plan to use their “skills in entrepreneurship” to bring the same growth that they’ve experienced at AvaCare to the Howell, N.J.-based Medical Scrubs Collection.

“We see this as an opportunity to pass on our success at AvaCare Medical to Medical Scrubs Collection,” said Zeldes. “Having worked in the healthcare industry for years, this company fits right into our line of expertise. We also know that many customers at AvaCare Medical are caregivers who can benefit from this acquisition.”

Bakst will also serve as the new CEO at Medical Scrubs Collection.

Medical Scrubs Collection opens the door for AvaCare Medical to expand into the nursing home, hospital and assisted living industries.

“(We plan to offer) them the same easy online shopping experience,” he said.

Medical Scrubs Collection has made a name for itself with its quick checkout, easy returns, personal wish lists and true-to-fit sizing guide. It also offers price match guarantees, as well as large discounts.

AvaCare Medical’s acquisition of Medical Scrubs Collection follows the launch of its new and improved website in June.

VGM names new CFO

WATERLOO, Iowa – The VGM Group has promoted Jeff Rummel, its controller and vice president of accounting, to CFO. Rummel succeeds Mike Mallaro, who became CEO in 2016, following the death of Van Miller, CEO and founder, in 2015. In his new role, Rummel, who joined VGM in 2015, will be responsible for providing strategic and financial leadership. “In Jeff’s time at VGM, he has endeavored to understand our various businesses in the depth needed to contribute meaningful counsel,” Mallaro said in a press release. The promotion is effective immediately. Rummel will also continue to serve as controller until VGM fills that position.

Invacare informs holders of repurchase rights

ELYRIA, Ohio – Holders of Invacare’s 4.125% convertible senior subordinated debentures issued Feb. 12, 2007, and due 2027 have the right to surrender their notes for repurchase by the company, it confirmed Dec. 24. A put option under the indenture governing the debentures entitles each holder to require the company to repurchase for cash all or in part (in principal amounts equal to $1,000 or multiples thereof) of their debentures on Feb. 1, 2017, for a purchase price equal to 100% of the principal amount of the debentures, upon the terms and subject to the conditions set forth in the indenture and the debentures. The purchase price will not include accrued and unpaid interest. The company will pay, on the interest payment date, accrued and unpaid interest on all of the debentures through Jan. 31, 2017, to all holders who were holders of record on Jan. 15, 2017. As of Dec. 23, 2016, there was $13.4 million aggregate principal amount of the debentures outstanding. The offer expires at 5 p.m. EST on Jan. 30, 2017.

Sleep clinic agrees to pay $2.6M for dual role

HME News - Fri, 12/30/2016 - 07:28
12/30/2016HME News Staff

SAN JOSE, Calif. – Bay Sleep Clinic and its related businesses have agreed to pay $2.6 million to settle allegations that they were involved in both the diagnosis and treatment of sleep patients, a violation of Medicare rules and regulations.

The government charged Bay Sleep Clinic and its related businesses—Qualium Corp., which operates 20 sleep clinics, and Amerimed Corp., which does business as Amerimed Sleep Diagnostics and Amerimed CPAP Specialist—with fraudulently billing Medicare for medical devices in violation of rules and regulations that prohibit providers of sleep tests from supplying medical devices and from sharing a sleep lab location with a DME supplier.

The government also charged the companies with fraudulently billing Medicare for sleep tests allegedly performed by technicians lacking the required licenses or certifications, and with fraudulently billing Medicare for sleep tests that were allegedly conducted at un-enrolled and unapproved locations.

The allegations against Bay Sleep Clinic were set out in an amended False Claims Act complaint filed by the government on Aug. 8, 2016.

The government intervened in a whistleblower action filed under the qui tam provisions of the False Claims Act. The act allows for private persons, such as Elma Dresser in this case, to file actions to provide the government with information about wrongdoing and then obtain a portion of the government’s recover. Dresser will receive about $545,000.

As part of the agreement, Bay Sleep Clinic has voluntarily terminated its two existing Medicare enrollments and agreed not to re-enroll as providers in the Medicare program for a period of three years.

The claims resolved by the settlement are allegations only and there has been no determination of liability.

Arriva Medical appeals revocation

HME News - Thu, 12/29/2016 - 10:40
12/29/2016HME News Staff

WALTHAM, Mass. – The parent company of Arriva Medical, a contract supplier under Medicare’s national mail-order program for diabetes testing supplies, has filed an appeal with the administrative law judge seeking to reinstate its billing status.

Arriva Medical expects the ALJ to hear its appeal within 30 days and issue a decision in three months, it stated in a Dec. 28 update on its website.

“We believe the recent action by CMS to remove Arriva from CMS billing is unlawful, arbitrary and capricious, and harmful to the more than 500,000 patients who depend on Arriva for these critical supplies,” it stated. “We are confident that Arriva is in compliance with CMS guidelines and look forward to an expeditious and favorable outcome.”

CMS revoked Arriva Medical’s billing privileges in November for allegedly submitting 211 claims for deceased patients between April 15, 2011, and April 25, 2016.

Arriva Medical says any errors were the result of “Medicare system flaws.”
Additionally, “the number of purported instances cited by CMS is de minimis relative to the nearly 5.8 million total claims filed by Arriva during that same period,” it stated.

In addition to the appeal, Alere has filed a complaint and related motions in the U.S. District Court for the District of Columbia seeking to compel CMS to stay the process regarding the competitive bidding contract termination while the ALJ appeal is ongoing and to compel CMS to provisionally reinstate Arriva’s billing number while the company pursues the ALJ appeal. It expects a decision on the complaint on or about Jan. 5.

Arriva Medical received a letter from CMS on Oct. 12, informing the company that effective Nov. 4, the agency was revoking its supplier billing number and barring it from re-enrolling in the Medicare program for three years. Then on Nov. 2, CMS upheld its decision based on a four-day, mechanical review.

“CMS reached this conclusion in spite of evidence provided by Arriva demonstrating that any errors were primarily the result of Medicare system flaws,” Arriva Medical stated.

Arriva Medical says it is confident in the merits of the case because:

·      Arriva and the Medicare beneficiaries its serves will suffer irreparable harm if injunctive relief is not granted;

·      The balance of equities and the public interest are decidedly in favor of Arriva;

·      Arriva is likely to succeed on the merits of the case because CMS’s action are depriving Arriva of protected property and liberty interests without due process; and

·      CMS’s refusal to grant Arriva a pre-termination hearing violates due process.

AvaCare Medical buys online scrubs company

HME News - Wed, 12/28/2016 - 11:07
12/28/2016HME News Staff

LAKEWOOD, N.J. – AvaCare Medical, an online medical supply store, has acquired Medical Scrubs Collection, an online medical scrubs store.

AvaCare CEO Steven Zeldes and CFO Mark Bakst say they plan to use their “skills in entrepreneurship” to bring the same growth that they’ve experienced at AvaCare to the Howell, N.J.-based Medical Scrubs Collection.

“We see this as an opportunity to pass on our success at AvaCare Medical to Medical Scrubs Collection,” said Zeldes. “Having worked in the healthcare industry for years, this company fits right into our line of expertise. We also know that many customers at AvaCare Medical are caregivers who can benefit from this acquisition.”

Bakst will also serve as the new CEO at Medical Scrubs Collection.

Medical Scrubs Collection opens the door for AvaCare Medical to expand into the nursing home, hospital and assisted living industries.

“(We plan to offer) them the same easy online shopping experience,” he said.

Medical Scrubs Collection has made a name for itself with its quick checkout, easy returns, personal wish lists and true-to-fit sizing guide. It also offers price match guarantees, as well as large discounts.

AvaCare Medical’s acquisition of Medical Scrubs Collection follows the launch of its new and improved website in June.

CMS offers guidance on billing for complex rehab accessories

HME News - Tue, 12/27/2016 - 12:40
Guidance on rural rates still in the works12/27/2016HME News Staff

WASHINGTON – CMS has updated the DME Center page of its website with information on how it plans to implement certain provisions in the recently passed 21st Century Cures Act.

For a provision that delays CMS’s plans to apply bid-derived pricing to accessories for complex power wheelchairs for another six months, until July 1, 2017, the agency states:

“To implement the extension, the 2016 KU fee schedule amounts have been updated by the 2017 0.7% covered item update and will be added to the 2017 DMEPOS fee schedule file. Suppliers should continue to use the KU modifier when billing for wheelchair accessories and seat and back cushions furnished in connection with Group 3 complex rehab power wheelchairs with dates of services Jan. 1, 2017, through June 30, 2017.”

For a provision requiring CMS to retroactively delay reimbursement cuts that went into effect in non-competitive bidding areas from June 30, 2016, to Dec. 31, 2016, the agency states:

“CMS is currently working to implement this section and will be providing contractor instructions for re-processing the applicable claims. There is no action required for the suppliers at this time. Formal instructions will be issued in the near future.”

President Barack Obama signed the Cures Act on Dec. 13.

Rural rates for oxygen dip below bid rates

HME News - Fri, 12/23/2016 - 09:23
12/23/2016Theresa Flaherty

WASHINGTON – Industry stakeholders are trying to figure out why the recently released 2017 DMEPOS fee schedule appears to apply a “double dip” cut to rural rates for oxygen concentrators, lowering them to below competitive bidding rates.

To determine the fee schedule, CMS reduces payments for oxygen concentrators by a certain percentage to maintain budget neutrality in the face of increased utilization for oxygen generating portable equipment.

“This comes as somewhat of a surprise because rural rates are supposed to be derived from the competitive bid program, not this alternative methodology that applies to the fee schedule,” said Cara Bachenheimer, senior vice president of government relations for Invacare. “We’re not quite sure what they did, but we don’t think it’s correct. CMS has yet to publicize the actual calculation.”

CMS has the authority to determine payment rates under the fee schedule and, separately, the authority to determine rural rates. As near as stakeholders can tell, CMS combined both authorities.

The result: The rural rate for oxygen concentrators is $77.16 per month compared to the Round 1 2017 single payment amount of, on average, $79 per month.

“This seems like a bit of a double dip,” said Kim Brummett, vice president of regulatory affairs for AAHomecare. “It makes no sense for rural rates to be lower then the bid rate. Rural rates are supposed to be the highest rates.”

Stakeholders at press time were determining their next moves.

“We are putting together a strategy to figure out how to tackle this and push back on it,” said Brummett.

Their first step: On Dec. 20, AAHomecare sent a letter to the associate general counsel at CMS, outlining what they believe has happened and why it’s a concern.

“We request that CMS recalculate these rates,” the letter states. “Given the approaching Jan. 1, 2017, effective date for the new fee schedules, this issue urgently concerns AAHomecare members.”

SCA makes play for broader, elevated presence

HME News - Fri, 12/23/2016 - 09:21
Acquisition of BSN Medical ‘complements us in an excellent way,’ says president and CEO12/23/2016Liz Beaulieu

STOCKHOLM – SCA plans to buy BSN Medical from private equity group EQT Partners AB for $2.9 billion, giving the company a toehold in the higher growth and higher margin advanced wound care market and setting the stage for the spinoff of its hygiene business.

SCA, best known in the HME industry for its TENA brand of incontinence supplies, expects BSN, which makes Leukoplast and Cutimed advanced wound care products, to broaden and elevate the company’s position in what it calls the “medical solutions” market.

“It’s higher growth and higher margin, but it’s not moving too far away—it’s still disposables,” said Magnus Groth, president and CEO of SCA, during a conference call on Dec. 19 to discuss the deal with investors and analysts. “These are still products that we understand and products that are sold the same way, to the same buyers, in the same channels. It complements us in an excellent way.”

BSN, which reported net sales of 627 million euros for the first nine months of 2016, is also known for its JOBST line of compression therapy products, and its Delta and Actimove lines of orthopedic products. It breaks down its business as 36% wound care, 26% compression therapy and 34% orthopedics.

Among the accolades Groth had for BSN were the company’s go-to-market strategy, powered by a larges sales force of about 1,600 reps; and its strong R&D capabilities and attractive product pipeline, particularly in skin care and absorption.

Groth also highlighted BSN’s strength in selling to hospitals, versus SCA’s strength in selling retail.

“There’s an overlap there that will strengthen both businesses,” he said.

Groth believes the deal perfectly positions SCA to leverage a “significantly under-penetrated” market that is benefiting from an aging population and increasing rates of chronic conditions.

“(These factors) are transforming many parts of the healthcare market,” he said. “(We will see) an increasing move of what used to be healthcare products to retail products.”

When asked whether SCA would make BSN a new division at the company or slide it into its Personal Care Division, officials said they couldn’t answer that question due to the forthcoming separation of the hygiene and forest products businesses, which is pending shareholder approval.

“We will come back during the early part of next year to actually disclose how we intend to do this, and (the spin-off) is part of the equation, so we’ll wait with that answer,” said Fredrik Rystedt, CFO and executive vice president of SCA. “But of course we’re eager to secure a good transparency for you to be able to analyze the company.”

SCA expects to close on the deal, which it says will be accretive to its earnings per share from year one, during the second quarter of 2017.

PE firm TPG buys Mediware

HME News - Fri, 12/23/2016 - 09:19
‘We will see increased investment in the next 24 months,” says CEO12/23/2016Liz Beaulieu

LENEXA, Kan. – Mediware CEO Thomas Mann believes a new investor will help the company transition its HME and home infusion customers to CareTend and help it further build out the business management software.

Mediware announced Dec. 20 that TPG Capital, the private equity fund of alternative asset firm TPG, has entered into a definitive agreement to acquire the company from private equity firm Thoma Bravo.

“The most immediate need for our HME and IV customers is to get on this more sophisticated software and then for us to build out more advanced models for it,” Mann said. “Revenue cycle modeling is what I’m most excited about.”

Under Thoma Bravo, which bought Mediware in 2012 for $195 million, the company ramped up its position in the homecare markets with the acquisitions of Fastrack and Definitive Homecare Solutions in 2013. It released CareTend, a software program that combines the best features of all of its homecare solutions into one platform, in 2015.

While M&A activity among software companies in the HME industry has been hot in the past few years, Mann says the market has settled down, making it less about acquiring businesses and more about gaining customers.

“With our strategy to have software for multiple vertical markets in home care, we feel we have a strong position to gain share from our competitors,” he said. “That’s an important part of our investment strategy, as well.”

Despite nearly tripling in size in the past four years, Mann believes Mediware still has plenty of growing to do, thanks to “macro drivers” that are putting an emphasis on non-acute facilities as the most appropriate settings for healthcare and related services. And so does TPG.

“They share that vision with us,” he said.

San Francisco-based TPG, which has more than $74 billion in assets under management, is no stranger to the larger healthcare IT market, with previous investments in companies like Evolent Health and IMS Health, or to the software market, with previous investments in vertical market leaders like Advent Software and Sabre.

Mann expects TPG “to invest a little more early on,” he said.

“We will see increased investment in the next 24 months in areas where we believe we can grow and bring even more value in five, six, seven years,” he said. “We were not looking for a new buyer, and Thoma Bravo was not anxious. What initiated this was our success and TPG’s belief that they can be part of another successful cycle for the company.”

Moneyline: Mega merger announced, Capital buys Epic Health Services, DME Express raises capital

HME News - Fri, 12/23/2016 - 09:17
12/23/2016HME News Staff

MUNICH and DANBURY, Conn. – Linde and Praxair announced their intention to merge on Dec. 20, creating a company with revenues of about $30 billion and a current market value of more than $65 billion.

The two companies have been courting each other, on and off, for two years.

Linde, which bought Lincare for $4.6 billion in 2012 and American HomePatient in 2015, is currently the industrial gas industry’s No. 2 player, followed by Praxair at No. 3. Air Liquide SA of France leads the industry.

Praxair sold* its U.S. homecare business to Apria Healthcare in 2011.

Shareholders from each company, as well as regulators, still need to approver the merger.

Bain Capital acquires Epic Health Services

DALLAS – Epic Health Services has agreed to be acquired by Bain Capital Private Equity, it announced Dec. 19.

Epic Health Services offers a full continuum of home health services, including private duty nursing, enteral nutrition, medical supplies and behavioral health services for medically fragile children.

“Because of advances in technology and health care delivery, home health care has become a preferred alternative to remaining in a health care facility for children facing difficult health obstacles and their families,” said Chris Roussos, president and CEO of Epic Health Services. “Epic Health Services enables these children to receive high quality care in the comfort of their own homes while supporting their families and helping create an environment of normalcy in the home.”

Epic Health Services has been building a national presence through acquisitions, including the October 2015 buy of Houston-based Medco and the September 2015 buy of Option 1 Healthcare Solutions. The provider, which was founded in 2001, now serves 21 states.

Roussos and the current management team will continue to lead Epic Health Services, which was previously owned by Webster Capital.

Terms of the deal, expected to close in the first quarter of 2017, were not disclosed.

DME Express raises capital for expansion

BATON ROUGE, La. – DME Express, a DME provider to hospice and nursing facilities in the Southeast, has secured an undisclosed amount of growth equity financing from WayPoint Capital Partners, it announced Dec. 19.

Concurrent with the financing, DME Express has also secured a significantly expanded credit facility from its existing lender, Bank of Oklahoma.

Funds will be used to support the company’s rapid growth and its continued expansion.

“This capital raise will enable DME Express to continue to make significant new investments in equipment, technology and expansion into new geographic markets,” said Mark Borneleit, CEO of DME Express, in a press release.

DME Express has more than 100,000 square feet of warehouse space across six states, has more than $20 million invested in inventory, and has more than 120 delivery technicians and vehicles, according to the release.

WayPoint Capital Partners, based in Rye, N.Y., has several billion dollars in assets under management in middle market health care, logistics and business services sectors. A so-called “balance sheet investor,” it does not have predefined holding periods or exit horizons, allowing it to focus on long-term capital appreciation, the release says.

“We look forward to pursuing the numerous organic and inorganic growth opportunities available as a regional leader in a fragmented but consolidating industry,” said Philip Edmunds, vice president at WayPoint Capital Partners, in the release.

Gar Wood Securities served as the exclusive financial adviser to DME Express on the transaction.

In brief: AAH finds big decreases in 2017 fee schedule, Quantum sponsors seat elevation study

HME News - Fri, 12/23/2016 - 09:14
12/23/2016HME News Staff

WASHINGTON – There will be an average decrease in reimbursement of 36.8% in 2017 for the top 25 HCPCS codes for HME, according to a new analysis by AAHomecare of the new reimbursement compared to 2016 and 2015 reimbursement. Low-air loss mattresses (E0277) will see the biggest hit: about a 58% decrease in reimbursement, on average, in 2017 vs. 2016. To perform the analysis of the recently released 2017 fee schedule, AAH segmented eight geographical regions and averaged the reimbursement for all the states within each region. At the high end, the “regional rate” in New England, will decrease 60.2% in 2017 vs. 2016; at the low end, the rate will decrease 53.6% in the Southeast.

Quantum Rehab sponsors seat elevation study

EXETER, Pa. – Quantum Rehab is sponsoring a Georgia Tech study examining how power adjustable seat height can affect the everyday lives of wheelchair users.

“Some users still face funding barriers to this clinically-necessary mobility technology, so this research study will ideally clarify through data as to why funding sources should cover it for those in need,” said Jeannie Sayre, vice president of clinical development for Quantum Rehab. “Based on Quantum’s consumer base widely using power seat elevation, we see our sponsorship of this study as an advocacy role toward those we serve.”

The Rehabilitation Engineering and Applied Research Lab at Georgia Tech has already conducted a pilot study on seat elevation. Ninety percent of those who participated in the study used the technology as a tool for increased safety and independence during activities of daily living. They also used it for transferring, reaching and preparing meals.

The upcoming study seeks to expand the scope of the research by using a larger participant group and data-logging technology. It will also feature real-time feedback to create a real-world portrayal of how seat elevation is used daily and its clinical benefits to users, Quantum says.

The study kicks off in the spring of 2017.

ResMed taps Nunez as new chief medical officer

SAN DIEGO – ResMed has named Dr. Carlos Nunez chief medical officer effective Jan. 3. Nunez most recently served as senior vice president of medical affairs for Becton, Dickinson and Company. He will be based in ResMed’s San Diego headquarters and will report to CEO Mick Farrell and President/COO Rob Douglas. Nunez has more than two decades of leadership experience in the medical field, with a focus on aligning the clinical realities of modern healthcare with the business strategies of global enterprises. At BD, he drove business strategy, innovation and public policy efforts across a business with $12 billion in revenue, while advising on safety, quality and regulatory matters. He has also held senior leadership positions at United HealthCare Group’s Optum division, CareFusion and Picis, a healthcare informatics company. ResMed’s current chief medical officer, Dr. Glenn Richards, will transition to the role of medical director for the company’s product development teams.

Mediware managers named to nat’l claims committee

LENEXA, Kan. – Two DME software product managers at Mediware Information Systems have been appointed to represent AAHomecare on the National Uniform Claims Committee for 2017. Rebecca Bowden and Kimberly Commito will participate in industry discussions related to maintaining the healthcare provider taxonomy code set, managing 1500 claims forms and monitoring legislative and regulatory changes that impact claims. NUCC comprises a diverse group of healthcare industry stakeholders representing providers, payers, designated standards maintenance organizations, public health organizations and vendors. The underlying goal of the committee is to help standardize data to transmit claims and encounter information to and from all third-party payers.

H.D. Smith launches VentureRx to support community pharmacists

SPRINGFIELD, Ill. – H.D. Smith has launched a new program to initiate and fullly support the start up, purchase, sale and related transition strategies of an independent or regional chair pharmacy. VentureRx empowers pharmacy owners to shape the future of their businesses, the pharmaceutical wholesale distributor said in a press release. “Recognizing the amount of pharmacies closing or selling to large chains, H.D. Smith developed VentureRx to support its largest customer base—community pharmacies,” said Chris Smith, president and CEO, in the release. The program is targeted at independents, small chains, long-term care facilities, and specialty or compounding pharmacies. In addition to financial services, VentureRx also offers expertise in store branding, marketing, merchandising, managed care, and full front-of-store designs and programs.

TiLite goes metric

PASCO, Wash. – Starting Jan. 16, TiLite wheelchairs will have metric nuts, bolts and fasteners. The change will affect lead times: 10 days for X Series and Twist, and 20 days for T Series and Z Series. Custom chairs will be scheduled based on complexity. Parts orders will be shipped within 48 hours. Imperial parts will be kept on hand for five years. The change will not affect measurements, tires, casters, armrests, hangers, bearings or upholstery. There will be a revised warranty for metric chairs: complete replacement within the first year, and metric frame kit, including all parts needed to make chair complete, after the first year. TiLite will also offer free metric tool kits with every order until March 1, 2017.

Bill-Ray Mobility wins with Friendly Beds

KIMBERLY, Wis. – The Benjamin Rose Institute on Aging presented its 6th Annual Innovation in Caregiving Award to Bill-Ray Home Mobility at its annual conference in November. Bill-Ray Home Mobility was selected for the award for its Friendly Beds, a device that allows people with disabilities or older adults with limited mobility to get in and out of bed more easily. The award recognizes individuals who, in the course of caring for an older adult or person with disability, solve a challenge that eases the burden on caregivers. Friendly Beds was developed by engineer Joe Vosters based on his experiences as a caregiver for his aging father and a brother in law who suffered a stroke. “I thought there was a need for a heavy duty system where the components work together for unique benefits,” he said. Friendly Beds comprises a 36-inch long trapeze that allows someone with limited mobility to move across a wide bed; a stable balance pole that helps them stand and maintain balance; pivoting assist rails that help them reposition and provide support for getting in and out of bed; and a transfer bar option that allows safe/independent bed transfers for individuals with no leg strength.

Brightree donates to three organizations

ATLANTA – Brightree has given monetary donations to three national nonprofit organizations that support the HME, and home health and hospice communities. The donations to Portlight Strategies, Hospice Foundation of America and Caregiver Action Network will help improve access to medical equipment and supplies, and provide educational materials and resources for patients, people with disabilities, caregivers and other health professionals. “These organizations provide great services to the HME, and home health and hospice, communities, and Brightree is proud to contribute to their efforts and help make a difference with the people they support,” said Matt Mellott, CEO. Each year, Brightree donates to charitable organizations on behalf of its customers, partners and employees in lieu of sending traditional holiday cards.

POWER Symposium partners with Medtrade Spring

LAS VEGAS – Juzo and Amoena are once again hosting their POWER Symposium ahead of Medtrade Spring. The symposium is Feb. 23-25 at Paris Las Vegas Hotel, while Medtrade Spring is Feb. 27-March 1 at the Mandalay Bay Convention Center. The symposium brings together industry leaders, specialty retailers and medical professionals to exchange ideas on ways to re-energize their businesses, gain new perspectives on wellness and better connect with customers. It’s targeted toward specialty retailers catering to women’s wellness needs, including DME companies, women’s and hospital boutiques, O&P providers and medical centers. The symposium and Medtrade Spring have partnered to offer all attendees access to the Medtrade Spring Expo Hall at no cost. The symposium is in its seventh year.

FDA expands approval for CGM system

HME News - Fri, 12/23/2016 - 09:04
12/23/2016HME News Staff

SAN DIEGO – Dexcom has received expanded approval from the U.S. Food and Drug Administration for the G5 mobile continuous glucose monitoring system.

This is the first FDA-approved continuous glucose monitoring system that can be used to make diabetes treatment decisions without confirmation from a traditional fingerstick test. The system was previously approved to complement, not replace, fingerstick testing for diabetes treatment decisions.

“This may allow some patients to manage their disease more comfortably and may encourage them to have routine dialogue with their health care providers about the use of real-time continuous glucose monitoring in diabetes management,” said Alberto Gutierrez, Ph.D., director of the Office of In Vitro Diagnostics and Radiological Health in the FDA’s Center for Devices and Radiological Health, in a statement.

The G5 uses a small sensor wire inserted just below the skin that continuously measures and monitors glucose levels. Real-time results are sent wirelessly every five minutes to a dedicated receiver and a mobile app. Alarms and alerts indicate glucose levels above or below user-set thresholds.

The system must be calibrated at least two times daily using blood obtained from fingerstick tests; however, additional daily fingerstick blood tests are no longer necessary.

The FDA evaluated data from two clinical studies of the G5 system, including 130 adults and children age 2 and older with diabetes. All studies included a seven-day period where system readings were compared to blood glucose meter values, as well as to a laboratory test method that measures glucose values. No serious adverse events were reported during the studies.

Quantum Rehab sponsors seat elevation study

HME News - Thu, 12/22/2016 - 10:53
12/22/2016HME News Staff

EXETER, Pa. – Quantum Rehab is sponsoring a Georgia Tech study examining how power adjustable seat height can affect the everyday lives of wheelchair users.

“Some users still face funding barriers to this clinically-necessary mobility technology, so this research study will ideally clarify through data as to why funding sources should cover it for those in need,” said Jeannie Sayre, vice president of clinical development for Quantum Rehab. “Based on Quantum’s consumer base widely using power seat elevation, we see our sponsorship of this study as an advocacy role toward those we serve.”

The Rehabilitation Engineering and Applied Research Lab at Georgia Tech has already conducted a pilot study on seat elevation. Ninety percent of those who participated in the study used the technology as a tool for increased safety and independence during activities of daily living. They also used it for transferring, reaching and preparing meals.

The upcoming study seeks to expand the scope of the research by using a larger participant group and data-logging technology. It will also feature real-time feedback to create a real-world portrayal of how seat elevation is used daily and its clinical benefits to users, Quantum says.

The study kicks off in the spring of 2017.

Mediware gets new PE owner

HME News - Wed, 12/21/2016 - 11:19
12/21/2016HME News Staff

LENEXA, Kan. – TPG Capital, the private equity fund of alternative asset firm TPG, has entered into a definitive agreement to acquire Mediware Information Systems from private equity firm Thoma Bravo.

San Francisco-based TPG, which has more than $74 billion in assets under management, says it sees “tremendous opportunity” in the healthcare IT sector as patient volumes move outside the four walls of hospitals, requiring investment in software to automate clinical and administrative functions in non-acute settings.

“Mediware is well-positioned to benefit from these trends,” said Nehal Raj, partner at TPG, in a press release. “We look forward to working together with the Mediware team to build the market-leading non-acute care and human services software platform.”

TPG is no stranger to the healthcare IT sector. The firm has previously invested in companies like Evolent Health, IMS Health and Quintiles. It has also invested in software companies, including vertical market leaders like Advent Software, CC Information Services, Eze Software, Intergraph, Mashall & Swift, Sabre, Transporeon and Vertafore.

Mediware believes its new owner will help the company further advance its market position and bolster long-term growth.

“In partnering with TPG, Mediware will have access to substantial expertise and resources that will help us continue to build on the momentum we have experienced over the past four years,” said Thomas Mann, president and CEO of Mediware, in the release.

Thoma Bravo bought Mediware in 2012 for $195 million. Mann calls the Chicago-based private equity firm “a strong partner” that was central to the company’s success over the last four years, providing significant investment, industry experience and guidance.

“Their support has helped us accelerate our growth and complete important strategic acquisitions,” he said.

Mediware acquired Fastrack and Definitive Homecare Solutions in 2013, significantly strengthening its position in the HME, home infusion and home health markets. It also bought CareCentric’s HME, home infusion and home health software businesses in 2011.

In 2015, Mediware released CareTend, a new software solution that combined the features of all of its homecare solutions into one platform.

TPG expects to close on the deal in the first quarter of 2017. Additional terms were not disclosed.

CMS announces first codes up for PA process

HME News - Wed, 12/21/2016 - 10:07
12/21/2016HME News Staff

WASHINGTON – CMS has announced the first two codes that will require prior authorization as a condition of payment.

In a final rule published in the Federal Register on Dec. 21, the agency says it will apply the PA process for two Group 3 power wheelchair codes, K0856 and K0861, in two phases on March 20, 2017, and July 17, 2017.

In phase one, CMS will limit the PA requirement to one state in each of the four DME MAC jurisdictions. The states are Illinois, Missouri, New York and West Virginia.

“Initially limiting the program to one state in each of the DME MAC geographic jurisdictions allows us to test the national claims processing system and the local DME MAC processes,” it states.

In phase two, it will expand the program to the remaining states.

CMS cleared the way to require PA as a condition of payment for certain DME in February 2016. The agency released a “master list” of 135 products for which it may apply the process, including CPAP devices, semi-electric hospitals, manual wheelchairs and oxygen concentrators.

As part of the process, prior to furnishing the item to the beneficiary and prior to submitting the claim for processing, a requester must submit a PA request the includes evidence that the item complies with all applicable Medicare coverage, coding and payment rules. Such evidence must include the order, relevant information from the beneficiary’s medical record and relevant supper-produced documentation.

After receipt of all applicable required Medicare documentation, CMS or one of its review contractors will conduct a medical review and communicate a decision that provisionally affirms or non-affirms the request.

K0856 is a power wheelchair, Group 3 standard, single power option, sling/solid seat/back, patient weight capacity up to and including 300 pounds. K0861 is a power wheelchair, Group 3 standard, multiple power option, sling/solid seat/back, patient weight capacity up to and including 300 pounds.

SCA to buy BSN for 2.74 billion euros

HME News - Tue, 12/20/2016 - 10:56
12/20/2016HME News Staff

STOCKHOLM – SCA has entered into an agreement to acquire BSN Medical from the private equity group EQT Partners AB for 2.74 billion euros ($2.9 billion), it announced Dec. 19.

The deal with BSN, a maker of wound care and compression therapy products and orthopedics, allows SCA to bulk up its hygiene business as part of a planned separation from its forest products business.

“The BSN acquisition is an excellent strategic fit for SCA supporting our vision to improve well-being through leading hygiene and health solutions, two closely interlinked areas,” said Magnus Goth, president and CEO of SCA, in a press release. “BSN has leading market positions in several attractive medical product categories and provides a new growth platform with future industry consolidation opportunities. Our incontinence business, with the global leading TENA brand, shares similar positive market characteristics, customer and sales channels, which provide opportunities for accelerated growth through cross-selling.”

BSN is known for long-established brand leaders in key markets, like JOBST in the compression therapy market.

BSN reported net sales for the first nine months of 2016 of 627 million euros, adjusted EBITDA of 151 million euros, adjusted operating profit of 103 million euros, and an adjusted operating margin of 16.4%.

BSN’s global addressable market size is estimated to be 11.6 billion euros, with an estimated market growth (CAGR 2015-20) of about 4%.

As a result of the deal, SCA expects to increase earnings in year one, and realize annual synergies of at least 30 million euros within three years after closing.

SCA expects to close on the deal during the second quarter of 2017.

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