‘It should be the entry fee’

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Thursday, July 31, 2003

CLEARWATER, Fla. - The industry may be split 50/50 over whether accreditation should be mandatory for HMEs who want to do business with Medicare, but not so the nationals. Setting aside rumors that Lincare privately would like to see accreditation remain voluntary, most nationals believe a mandatory requirement has merit.

“It should be the entry fee; you’ve got to pay it to get in,” said Joe Sansone, CEO of Pediatric Services of America (PSA) in Norcross, Va. “I don’t think you can have a statement of your own that says, ‘We’re great guys. Come see us.’ You have to have someone say this is a quality organization that will not impair your health.”

PSA is accreditated by the Community Health Accreditation Program (CHAP), as is Lincare. Rotech Healthcare, Apria and American Home-Patient are accredited by JCAHO.

In the July HME News’ NewsPoll, 51% of 115 respondents favored mandatory accreditation and 49% did not. AAHomecare last month issued a position paper supporting the U.S. Senate’s call for mandatory accreditation, provided it’s flexible and the industry has a role in working out the details.

“I’m not opposed to it being mandatory,” said Gordon Smith, a divisional vice president for American HomePatient. “For us, we already are accredited, so it’s already built into our cost structure and built into the way we do business. Why wouldn’t we want everyone else to meet the same requirements?”

Rotech officials, who typically do not return media phone calls, did not return a call for this story. Apria officials did not return calls either, but in responding to the July HME NewsPoll, which asked if Congress should make HME accreditation mandatory, an Apria executive responded: “Definitely if the industry expects to generate increased credibility.”

Lincare spokesman Joe Grillo called rumors his company doesn’t support national accreditation untrue. Lincare “generally” supports AAHomecare’s position on mandatory accreditation, he said.

“We always support accreditation because it is good for the patient,” Grillo said.

Nevertheless, at least some in Lincare’s braintrust are less than enamored with mandatory accreditation, according to well-placed sources.

There’s a worry at Lincare that if accreditation became mandatory, the accrediting bodies might cook up a whole batch of expensive onerous requirements that companies would have no choice but to follow. If you add that to flat or declining Medicare reimbursement, the impact to a company’s bottomline is obvious, sources say.

Some even feel that mandatory accreditation would produce a barrier to entry for HME entrepreneurs and possibly slow Lincare’s acquisition activity. Lincare needs to acquire smaller providers to maintain its annual growth rate and keep its stock price up. The national may prefer to buy big regional or local providers but doesn’t ignore a company with 100-300 respiratory patients if those patients can be rolled into an existing branch.

“I’m not saying its not workable for Lincare,” said a former employee commenting on mandatory accreditation. “It’s just one more stone they have to carry around and can’t get rid of.”

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