HME News Top Stories
Top stories from the medical equipment industry.
In brief: CMS revamps PMD demo, IRS details tax
WASHINGTON - CMS will drop the prepayment review phase from its power mobility demonstration, it announced Feb. 3. CMS also said that PMD providers will be allowed to submit prior authorization requests on behalf of physicians. The demo, originally slated to begin Jan. 1, will start on or after June 1. Other changes include: a public comment period of 60 days on reducing paperwork burdens; and a provision that the demo will start at approximately the same time in all seven states. CMS will hold Open Door Forums prior to the launch. CMS also announced that the Recovery Audit Prepay Review demonstration, which was also delayed from its Jan. 1 start date, would begin on or after June 1. The 11-state demo calls for RACs to review claims before they're paid to ensure providers have complied with Medicare payment rules.
IRS releases proposed rule for medical device tax
WASHINGTON - The IRS last week released a proposed rule for a 2.3% excise tax on medical devices. Industry stakeholders on Friday were still trying to analyze the rule, but at first blush, it appears to contain both good and bad news for HME manufacturers. The IRS has exempted purchased DMEPOS from the tax, but not rented items like power wheelchairs, a distinction that could vary from payer to payer. "It doesn't make sense to impose such a tax on a manufacturer, when we have no idea who's going to be paying for the products," said Cara Bachenheimer, senior vice president of government relations for Invacare. The IRS is allowing 90 days for comments and it's holding a public hearing on May 16. The tax is scheduled to go into effect Jan. 1, 2013.
CMS extends licensure deadline
BALTIMORE - CMS will push the licensure deadline for Round 2 of competitive bidding to May 1, it announced last week. Providers are required to meet any and all applicable licensure requirements for all product categories and in all states in a competitive bidding area in which they plan to bid. Other deadlines remain the same: bids must be submitted in DBidS by 8:59:59 p.m., EST, on March 30; all required hardcopy documents must be received by the Competitive Bidding Implementation Contractor (CBIC) on or before March 30. For more information go here.
Provider gets his day in court
PHILADELPHIA - A court date has been set in the case of Nichole Medical Equipment & Supply vs. TriCenturion: April 20. Nichole Medical, which fought an audit and won, is now suing the CMS contractor that conducted the audit for $10 million in damages. The U.S. Court of Appeals in Philadelphia will hear oral arguments from the two parties on that date. Previously, the U.S. District Court for the Eastern District of Pennsylvania ruled that TriCenturion, as a government agency, has "official immunity," from Nichole Medical's claims, even though, the administrative law judge and then the Medicare Appeals Council ruled in the provider's favor. "We are on the docket and we will have the ear of the high court," stated Dominic Rotella, owner of Nichole Medical, in an email to supporters.
CBO report points to doc fix increase
WASHINGTON - The cost of a permanent doc fix would be $316 billion, a big increase from the $290 billion the Congressional Budget Office estimated in November, according to the CBO Budget and Outlook report, released Tuesday. Without a doc fix, physicians' Medicare payment rates are scheduled to drop 27% in March.
Mixon, Brant honored
ALEXANDRIA, Va. - AAHomecare has named Mal Mixon, chairman of the board at Invacare, and Rob Brant, founder of AMEPA, as the recipients of its new Legislative Advocate Award, it announced on Friday. The award recognizes association members who have worked to advance the industry's legislative goals and motivated others. The award will be presented during AAHomecare's Legislative Conference, Feb. 15 and 16.
Home infusion, HME provider partner up
FAIRFIELD, N.J. - Aperture Health plans to form a joint venture between its subsidiary Triad Therapeutics, a home infusion provider and Reliable Medical, a respiratory and home medical equipment provider, it announced Jan. 27. The deal will allow both companies to increase market presence. Triad serves patients throughout New York, New Jersey and Connecticut.
Posted on 2 February 2012 | 10:00 pm
CMS revamps PMD demo, sets start date
WASHINGTON - CMS will drop the prepayment review phase from its planned power mobility device demonstration, it announced today.
CMS also said that PMD providers will be allowed to submit prior authorization requests on behalf of physicians.The demo, announced in November, was originally slated to start Jan. 1. It will now start on or after June 1 in seven states--California, Texas, Florida, Michigan, Illinois, North Carolina and New York. The demo was delayed in late December after industry stakeholders, consumers and physicians raised concerns with the demonstration.
Among those concerns: that the demonstration could create cash flow issues for providers, and access problems for beneficiaries.
Other changes in the demo: there will be a 60-day public comment period on reducing paperwork burdens; and the demo will start at the approximately the same time in all seven states.
CMS said it will hold Open Door Forums prior to the implementation of the demo.
CMS today also announced that the Recovery Audit Prepay Review demonstration, which was also delayed from its Jan. 1 start date, will begin on or after June 1.
The 11-state demo calls for RACs to review claims before they're paid to ensure providers have complied with Medicare payment rules. Claims included in that demo will include those that historically result in high rates of improper payments.
The Feb. 3 announcement is available here.
Posted on 2 February 2012 | 10:00 pm
Providers make more educated, but still painful, bid decisions
YARMOUTH, Maine - With the bid window now open for Round 2, the big question is: Will the single payment amounts be higher, lower or the same as Round 1 of competitive bidding?
No one will know for sure until this fall, when CMS plans to announce the payment amounts, but HME providers like Doug Crana like to think the increase in education leading up to Round 2, led by The VGM Group, The MED Group and state associations, will result in more rational bidding.
"If we understand the process, and we also understand the lessons from Round 1, we'll bid correctly," said Crana, owner of Consolidated Medical in Newburgh, N.Y. "We'll bid within our limits and not cut ourselves off at the knees. There'll always be wild cards, but hopefully this will be suppressed and limited."
The Round 1 re-bid payment amounts came in at, on average, 32% below the current Medicare fee schedule across nine product categories. The original Round 1 came in at, on average, 27% below the fee schedule.
Even with more rational bidding in Round 2, providers know they still have to prepare themselves for lower payment amounts. HME providers like Bill Armstrong hope non-delivery business models will help them soften that blow to their bottom lines and help them maintain their service levels.
"We believe HomeFill will give us an advantage," said Armstrong, owner of American Oxygen Kompany in Centennial, Colo., a suburb of Denver.
Additionally, providers like Matt Kneeland plan to make up for lower payments with non-Medicare businesses.
"Our plan has been massive diversification," said Kneeland, CEO of Care Medical, which has branches in four bid areas in California. "We have an (e-commerce) site now that, within a year, will completely replace any lost profit that they're going to his us with in Round 2."
The whole process of determining bids, and what they and their patients can do without, has been unpleasant for providers like Irene Magee.
"We're trying to cut out waste and excess cost, but this gets us into having to take a serious look at services we can no longer provide," said Magee, vice president and director at Northeast Home Medical Equipment in Green Island, N.Y., outside of Albany. "There are a lot of services we provide that are on no one's radar. It's a painful strategy, because you want to do what's best for the patient."
Posted on 2 February 2012 | 10:00 pm
MPP: 'It's time to be all in'
WASHINGTON - In a make or break effort to bring home medical equipment providers to the Hill next week to stump for an alternative to competitive bidding, AAHomecare is making its Washington Legislative Conference virtually free.
"It's time to be all in," said Joel Marx, chairman of AAHomecare and president of Cleveland-based Medical Service Co. "If we don't get it done now, we're not going to get it done."
AAHomecare announced last week that it would use reserve funds to waive the $245 registration fee for AAHomecare members, and reduce the $355 fee for non-members to $100. Refunds will be available to those who have already paid.
"The goal is to have a turnout like we've never seen before," said Tyler Wilson, president and CEO of AAHomecare. "We've got to push our message up Capitol Hill and push it in person."
Ideally, stakeholders would like to see the market pricing program or MPP attached to a final bill on the tax cut and "doc fix" due in February.
"That's our opportunity to push MPP over the finish line," said Marx.
The further into Round 2 of competitive bidding the industry gets, the harder it will be to turn around the program, acknowledged Wilson.
"People are invested in it--they spend time and resources to submit bids," he said. "They don't like the program but they realize they've got to do what they've got to do."
Posted on 2 February 2012 | 10:00 pm
CMS weighs in on bid data
BALTIMORE - No sooner had Prof. Peter Cramton released a report that showed 60% to 80% declines in Medicare claims for home medical equipment in Round 1 competitive bidding areas (CBAs), than CMS was dismissing the data.
At a Jan. 25 Jurisdiction C council meeting, Medical Director Dr. Paul Hoover said he hasn't seen any such decline in claims, according to Michael Hamilton, executive director of the Alabama Durable Medical Equipment Association, who attended the meeting. Hoover suggested that perhaps Cramton didn't ask "the right questions" in his Freedom of Information Act (FOIA) request for the data, said Hamilton.
"He said if you don't ask the right questions you get misleading data," he said. "It seems to me it would be a pretty simple process for somebody as experienced at statistics as Cramton must be."
In addition to Hoover, CMS officials have acknowledged "some decline" in claims; they attribute it to reduced Medicare fraud.
When contacted by HME News, CMS officials wouldn't specify a percentage decline in claims or explain why they believe Cramton's report is flawed. It did release a comparison of allowed charges in CBAs versus non-CBAs as proof that the program is necessary to reduce fraud. According to CMS: In Miami, which has 517,370 fee-for-service beneficiaries, there were allowed charges of $221,660,443, or $428.44 per beneficiary; by contrast, in Chicago, which has 1,085,254 beneficiaries, there were allowed charges of $173,922,952 or $160.26 per beneficiary.
Some industry associations are asking the Government Accountability Office (GAO) to investigate the "anomaly" between Cramton's and CMS's conclusions.
"They're using the same data and both sides can't be right," said Wayne Stanfield, president and CEO of NAIMES. "We have no reason to believe that Dr. Cramton would jeopardize his reputation by putting out something that he did not have ultimate confidence in."
Posted on 2 February 2012 | 10:00 pm
Study calls for increased research for complex rehab
MINNEAPOLIS - A lack of research relating to complex rehab could put funding in danger, according to a report from the Agency for Healthcare Research and Quality (AHRQ).
That's no surprise to Mark Schmeler, a University of Pittsburgh professor who has been working to improve research efforts for years.
"We're trying to find better ways to provide wheelchairs and prove (our efficacy) to the government, so they don't keep cutting us," he said. "We've always been trumped by other areas of health care that have higher priority."
Minnesota Evidence-based Practice Center created the Wheeled Mobility (Wheelchair) Service Delivery technical report for the AHRQ at the suggestion of the Medicaid Medical Directors Learning Network.
The network sought a report on the "state of the science" of complex rehab, says Nancy Greer, one of the report's authors.
"Our goal was to describe the wheeled mobility service delivery process, provide an overview of the published evidence on service delivery and identify issues and areas for future research," she said. "Ultimately, we are describing the state of the evidence, and doing so could lead to improved wheeled mobility assessment and delivery."
The report found that, while there is a generally recommended service delivery process for complex rehab, there is a lack of research into its efficacy, which potentially puts funding in danger.
"Without evidence of effectiveness, healthcare systems may not feel obligated to offer specialty clinics and ongoing services, and third-party payers have no rationale for funding the recommended steps," the report states.
Schmeler believes UPitt and NRRT's recent work to collect outcomes data for complex rehab could go a long way to fill some of the gaps in research.
"Doing large, multi-site trials, like we're already doing with the outcome measures, and creating a national registry or national database so we have large sample sizes would let us start looking at different trends or comparing different types of service delivery," he said.
Posted on 2 February 2012 | 10:00 pm
Earnings: FDA negotiations weigh heavily on Invacare
ELYRIA, Ohio - Invacare can't provide guidance for 2012 until it has hammered out an agreement with the U.S. Food and Drug Administration, company officials told investors during a conference call last week to discuss recent earnings.
"The company is currently unable to provide guidance for 2012 and does not expect to be able to do so until it is able to analyze the final terms of the FDA's proposed consent decree of injunction," said Gerald Blouch, president and CEO.
Invacare announced in December that the FDA has proposed it suspend certain operations at its corporate headquarters and wheelchair facility in Elyria, Ohio. Since then, the two parties have been trying to hammer out an agreement.
During the call, Invacare officials told investors there is little else they can say about the negotiations. They're not sure how long the negotiations will last. They're not sure how much revenue could be impacted.
"It's not something that we can control," Blouch said. "If it were, we'd want to get it done. Clarity is good for the market and the management team, as well. We're working with the FDA, and we're both interested in getting this wrapped up quickly."
Additionally, Invacare officials told investors that the company's decision to move manufacturing of its Solara line of manual wheelchairs to Invamex, its facility in Reynosa, Mexico, wasn't related to its negotiations with the FDA. They said it's part of streamlining the company's product lines and simplifying its globalization efforts.
Invacare reported net sales of $449.7 million for the fourth quarter of 2011, compared to $451.5 million for the same period in 2010. It reported a net loss of $35 million for the quarter in 2011 vs. net earnings of $7.2 million for the quarter in 2010.
The company reported net sales of $1.8 billion for 2011, compared to $1.72 billion for 2010. It reported a net loss of $4.1 million for 2011 vs. net earnings of $25 million for 2010.
For North American HME, Invacare reported net sales of $181.8 million for the fourth quarter of 2011 compared to $187.9 million for the same period in 2010, a 3.3% decrease. It reported net earnings (before income taxes) of $16.7 million for the quarter, excluding restructuring charges of $4.4 million and write-offs of $8.5 million, compared to $17.3 million for the quarter in 2010.
Net sales were driven by declines in custom and consumer power wheelchairs, low-active wheelchairs and personal care, partially offset by increases in stationary and portable oxygen concentrators and HomeFill Oxygen Systems.
For North American HME, Invacare reported net sales of $746.8 million for 2011 compared to $738.4 million for 2010. It reported earnings (before taxes) of $55.5 million in 2011, excluding charges and write-offs, compared to $54.7 million in 2010.
Posted on 2 February 2012 | 10:00 pm
Setbacks at The Scooter Store
NEW BRAUNFELS, Texas - Between changing up his management team and taking legal action against some of his former employees, The Scooter Store President Doug Harrison had his hands full in early 2012.
The Scooter Store lost two executives in January: chief financial officer (CFO) Tom Shaw and chief sales officer (CSO) Mike Pfister. But the vacancies shouldn't result in structural or strategic changes within the company, Harrison said.
"Those are both positions that we will keep on my staff," he said. "One has been filled and one's about to be filled."
The Scooter Store hired Shaw as an interim CFO in mid-2011. But his family remained in California, meaning he had to commute to Texas every other week. That's what led him to take a new position there. At press time, a replacement had not yet been named.
Pfister has returned to the oil and gas industry. Steve Tatarian, who was executive vice president of managed care, will step in as interim CSO. Tatarian has been with the company for eight years and has worked in several sales capacities during that time.
Also in January: The Scooter Store sought legal action against ex-employees for violating non-compete agreements. Employees who sign the agreements are barred from competing against The Scooter Store within certain geographic areas, for a certain amount of time. The areas and times vary by state, Harrison said.
"We have lots of people that come to us that are brand new to the industry, so everything they know about it, they learn from us," he said. "We have a very thorough training process for all new employees and lots of ongoing training, as well, which is at no small expense to us."
Typically, employees honor the agreements, and there are few problems, Harrison said.
"Sometimes it is a problem, and then we have to pursue it legally and we will," he said.
Despite these setbacks, The Scooter Store is here to stay, Harrison said.
"The Scooter Store, like other companies in the DME industry, is faced with some serious challenges and also some tremendous opportunities," he said. "The increasing pressure may cause many, if not most, providers to go out of business. However, my faith in the American entrepreneurial spirit says that many companies will find a way to survive."
Posted on 1 February 2012 | 10:00 pm
Bidding has ripple effects beyond provider
Through a combination of luck and persistence, provider Robert Salmon has "grown a nice" diabetes supply business in rural Tallahatchie County, Mississippi.
But it's more than just a nice business for himself and his employees, he's learned. It turns out that his company, The Diabetic Shoppe, has a large impact on the local economy, according to a recent economic impact study by Mississippi State University graduate students. The study found that for every dollar generated by the provider, it adds an additional 27 cents, or $2.1 million to the local economy. It also generates local and state tax revenues of $576,339.
"We were really surprised that a company the size of ours can have such an impact on the local community," said Salmon, president and founder of the Charleston-based company.
The study also highlights the impact the provider has on jobs in the region. The Diabetic Shoppe, the third largest employer in this county of about 15,000, has 60 employees. Another 85 jobs are dependent on the provider by way of those who supply directly to the provider and those who supply to its suppliers.
"If we reduced (our workforce) by 10, then there's another 24, more or less, that would ultimately be laid off," said Salmon. "(For instance) we have a printer. They are almost in business just because we are. We are not their only customer, but without us, they probably wouldn't exist for very long."
In addition to diabetes testing supplies, The Diabetic Shoppe does therapeutic shoes and inserts, and CPAP. Still, if the provider doesn't win a mail-order contract, he stands to lose several million dollars "overnight," he said.
"That's a lot for a small business," said Salmon. "Let's do this auction in a fair minded way so we have an opportunity to say yes or no, but not this all-or-nothing deal where we will most likely be shut out."
With a lot of focus in Congress these days on creating jobs, Salmon finds it hard to fathom why such a job-killing program is being allowed to continue.
"We are talking constantly about jobs and helping small businesses thrive, and they are running a program that will slam the door on thousands of small businesses," he said. "Our politicians need to understand what happens when you put hundreds and even thousands of businesses out of business." HME
Posted on 31 January 2012 | 10:00 pm
Bill will give advocates an edge at CELA
WASHINGTON - Stakeholders planning to attend CELA may have a big boost when they hit the Hill as part of the April event: a bill to create a separate benefit for complex rehab.
Stakeholders scored a victory in October, when Rep. Joseph Crowley, D-N.Y., agreed to sponsor a separate benefit bill. Since then, they have worked to find a Republican co-sponsor.
"There is every indication that we'll have a bill introduced in Congress before (CELA)," said NRRTS Executive Director Simon Margolis. "We're hopeful it will be introduced by the end of February."
Registration for CELA, which takes place April 18-19 at the Hyatt Regency Hotel-Crystal City, opened last week.
Margolis said lobbying for the expected bill will be the main focus of CELA. The event will also include a keynote from United Spinal Association President Paul Tobin, and strategy and information sessions to prepare attendees for a busy day of meetings with lawmakers on the Hill.
Additionally, prior to CELA, on April 16, there will be a national call-in day for stakeholders and consumers to lobby lawmakers to support a separate benefit for complex rehab. Making lawmakers aware that their constituents care about a separate benefit before CELA is key to holding successful meetings during the event, Margolis said.
"It will be very easy if there's a bill," he said. "People won't have to make explanations. They'll call and say 'I'm a constituent of so-and-so and I'm asking them to support the bill.'"
Learn more: http://www.nrrts.org/cela.
Posted on 19 January 2012 | 10:00 pm