In brief: AAH fights device tax, Rotech reports earnings

Friday, May 18, 2012

WASHINGTON – AAHomecare President Tyler Wilson made the case for exempting all HME and supplies from a 2.3% medical device tax during a public hearing by the Internal Revenue Service (IRS) last week. In a proposed rule earlier this year, the IRS used a retail exemption to carve out some but not all HME from the tax. In its final rule, AAHomecare recommends the agency expand the exemption to include a “bright-line test” that explicitly lists all such items and supplies within the safe harbor, including all HME. If the IRS will not do that, AAHomecare recommends the agency clarify that a two-pronged test to determine whether a device falls under the exemption is “not exhaustive or conclusive or to be rigidly applied.” “In other words, devices or supplies that fail to meet one of the factors should not, without further analysis, trigger the application of the tax if other criteria are satisfied,” according to Wilson’s testimony. The tax is scheduled to go into effect January 2013.

Bad debt, billing error dog Rotech’s earnings

ORLANDO, Fla. – Rotech Healthcare posted contractual and bad debt adjustments totaling $9.6 million for the first quarter of 2012, according to an earnings report the provider released last week. Rotech attributed the "higher than normal" adjustments to its implementation of a new electronic order intake system in the second half of 2011, which delayed paperwork. Also delivering a blow: A correction of Medicare overpayments of $2.2 million or less in each of the fiscal years 2009, 2010 and 2011, the result of a programming logic problem within the company's billing system. Other highlights from Rotech’s earnings report: For the three months ended March 31, 2012, the provider reported net revenues of $117 million; its core product lines of oxygen and CPAP grew 5% over the same period a year ago; and adjusted EBITDA1 decreased to $21.3 million for the quarter, down from $27.8 million for the same quarter one year ago.

Demo: Start date pushed back, AAH releases issue paper

WASHINGTON – CMS announced last week that it will not begin its seven-state power mobility device demonstration project on June 1. It will begin later this summer, with 30 days notice to providers. In other news, AAHomecare last week released an issue paper stating that for the program to be successful CMS must clearly define the prior authorization process; educate providers and suppliers on the details of the new program; and allow physicians to use a clinical medical necessity template for the face-to-face evaluation. The paper is available here (

VGM beefs up Heartland agenda

WATERLOO, Iowa – The VGM Group has added two new events to the schedule for The Heartland Conference in June. The first, on June 5, will be a discussion of the Round 1 recompete of national competitive bidding by Mark Higley, vice president-development. Attendees will leave the event with a CD with preparation tools and checklists. The second, on June 7, will be a presentation by two DME MAC medical directors: Dr. Stacey Brennan of Jurisdiction B and Dr. Dick Whitten of Jurisdiction D. They will discuss the CERT program and how providers can reduce billing errors. FMI:

Drive packages online marketing tools

PORT WASHINGTON, N.Y. – Drive Medical has launched a “Ecommerce Retailer Program” to help HME providers with marketing their online businesses. The program comprises tools like buying and shipping options, promotions, outbound web links, customized packing slips and the “Ecommerce Exchange.” The exchange, launched three years ago, contains, among other things, web-optimized product images and videos, daily inventory updates, and sales statistics.

NCART hosts H.R. 4378 webinar

BUFFALO, N.Y. – NCART will kick off advocacy efforts for H.R. 4378, the bill to create a separate benefit for complex rehab, with webinars on May 24. Stakeholders must pre-register here ( for the 11:30 a.m. ET session and here ( for the 4:30 p.m. ET session. Attendees will get an overview of the bill, discuss advocacy steps and tools, and have a chance to ask questions. 

Providers pledge to fight on

WATERLOO, Iowa – More than 300 HME providers have signed the "I'm Still Fighting Pledge," sponsored by People for Quality Care (PFQC). Providers commit to tasks ranging from handing out education material about competitive bidding to reaching out to the media, stated PFQC in a release last week. For more information or to sign the pledge: