In brief: Bidding study, AirSep acquisition, public-private fraud effort

Friday, July 27, 2012

WATERLOO, Iowa – Home medical equipment revenues in Iowa could drop by $99.4 million once competitive bidding prices are implemented in 2016, according to a new study. The number of HME providers will also fall, says Ken Brown, a professor at the University of Northern Iowa, who put together the study for The VGM Group. The study also found that, as HME providers go out of business, the impact of competitive bidding will have a ripple effect. Companies that provide services to HME providers, including VGM and Medline, both of which are located in Iowa, will see their client base reduced, forcing them, in turn, to reduce operations. Losses from those two companies alone could total more than $60 million in lost output and more than 400 jobs, according to the study. “Some members of Congress mistakenly believe there would be no impact in Iowa, but this report refutes that view,” stated Mike Mallaro, CFO of VGM, in a release. The study concludes that, overall, competitive bidding is expected to result in more than $200 million in reduced output and more than 2,500 jobs lost in the state of Iowa. Read the study here:

Chart to buy AirSep for $180M

CLEVELAND – Chart Industries has entered into a definitive agreement to acquire AirSep Corp. for $170 million in cash and up to $10 million in assumed debt, the companies announced last week. The deal allows Chart to supplement its BioMedical Group’s oxygen product offerings and provides a growth platform for on-site air separation gas generation for industrial segments, according to a release. “The acquisition also represents an attractive and stable complement to our large and rapidly growing energy business, including LNG liquefaction and transportation opportunities,” stated Sam Thomas, chairman, CEO and president of Chart. For AirSep: “Our merger into Chart will allow us to grow our business on a broader scale and continue to provider high quality and innovative products,” stated Ravi Bansal, chairman and CEO of AirSep. “We are excited to take our capabilities to current and new customers across the globe, leveraging Chart’s experience and relationships.” The companies plan to close the deal in the third quarter. It is expected to add about $130 million in annual revenues to Chart’s BioMedical Group, according to the release. The deal also includes senior management retention arrangements to ensure business continuity, according to the release. Chart is a manufacturer of highly engineered equipment used in the production, storage and end-use of hydrocarbon and industrial gases. AirSep is a manufacturer of stationary and portable oxygen concentrators for medical use, as well as on-site air separation oxygen generation systems for industrial applications.

Feds launch public-private partnership to prevent fraud

WASHINGTON – The U.S. Department of Health and Human Services and the Attorney General launched last week a partnership among federal and state officials, private health insurance organizations and other groups to prevent healthcare fraud. Per the partnership, the parties will share information and best practices to improve detection and prevent payment of fraudulent healthcare billings. One objective of the partnership is to share info on specific schemes, utilized billing codes and geographical hotspots for fraud so that action can be taken to prevent losses to both the government and private health plans before they occur. Some up the organizations that are among the first to join the partnership: Blue Cross Blue Shield, Tufts Health Plan and UnitedHealth Group.

FTC clears Linde-Lincare deal

MUNICH, Germany, and CLEARWATER, Fla. – The Federal Trade Commission (FTC) has cleared one of the conditions needed for The Linde Group to acquire Lincare Holdings for $4.6 billion, the two companies announced last week. The FTC has granted early termination of the waiting period under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act, according to a press release. “The termination of the HSR Act waiting period satisfies one of the conditions necessary for the consummation of the tender offer,” the release stated. The tender offer is scheduled to expire at midnight EST on Aug. 7. Consummation remains subject to other customary conditions, including the tender of at least a majority of Lincare’s outstanding shares of common stock, according to the release. Under the HSR Act, parties must not complete certain mergers, acquisitions or transfers of securities or assets, including grants of executive compensation, until they have made a detailed filing with the FTC and Department of Justice and waited for those agencies to determine the transaction will not adversely affect U.S. commerce under the antitrust laws. Linde announced plans to acquire Lincare in June.

Acquisition positions providers for growth

HERMITAGE, Pa. – Vantage Home Medical Equipment & Services announced last week that it has acquired Advanced Health Services. The deal will allow Vantage to expand its operations and its footprint, stated Don Davis, president of Duckridge Advisors, which advised Advanced Health Services. It will also give Advanced the "strategic growth capital necessary to better service both its patients and its regional physician referral network," he said. The two companies will continue to operate separately, under their own names. Terms of the deal were not disclosed.

Medline acquires hygiene company

MUNDELEIN, Ill. – Medline has acquired the manufacturing and laboratory assets of Perrigo Company's personal hygiene business, the company announced last week. Medline has also assumed the lease on Perrigo's manufacturing plant in Lake Worth, Fla., and will manufacture personal hygiene products under its Curad brand, as well as on a private label basis.

Fastrack pumps up staff

PLAINVIEW, N.Y. – Fastrack Healthcare Systems has expanded its sales team with Bill Halligan as account manager and Ellen Cappelli as inside sales rep, the software company announced last week. Fastrack has already expanded its quality assurance, tech support, software development and training staff. The company also has openings in outside sales and programming. Halligan comes to Fastrack from CareCentrics, and Cappelli from MediWare, according to a release.

More than 2,000 support H.R. 4378

WASHINGTON – Industry stakeholders are nearly halfway to their goal of 5,000 signatures in support of H.R. 4378, a bill that would create a separate benefit for complex rehab. The petition is a simple and effective way to support the bill, says NRRTS Executive Director Simon Margolis. The petition is located at

Pharmacy group lines up speakers

ALEXANDRIA, Va. – The National Community Pharmacists Association (NCPA) has tapped a couple of healthcare policy "heavyweights" for its 114th Annual Convention and Trade Exposition, it announced last week. Chris Jennings, former assistant to the president for health care under President Bill Clinton, and Thomas Barker, former acting general counsel to the Department of Health and Human Services under President George W. Bush, will discuss what post-election changes are likely in the healthcare market, especially for Medicare and Medicaid. The conference will be held Oct. 13-17 in San Diego. FMI:

CPAP benefits milder cases

YARMOUTH, Maine – CPAP therapy can help patients with mild to moderate obstructive sleep apnea, according to a new study at the University of Illinois at Chicago College of Nursing. In the study, which will be published in the American Thoracic Society's American Journal of Respiratory and Critical Care Medicine, 239 newly diagnosed patients were randomly assigned to active or "sham" CPAP therapy. After eight weeks, the sham patients went on active therapy. Significant improvements were measured on several scores, including the FOSQ and the ESS.

K0823 error rate: 82%

WASHINGTON – The K0823 error rate from April 1 to June 30, 2012, in Jurisdiction B was 87%, according to a prepay review by National Government Services, the DME MAC. The rate is up 5% from the first quarter. The top reason for denial: medical records received did not establish medical necessity (64%). Other reasons include no sufficient evidence that a physician face-to-face mobility examination occurred; seven element order or detailed product description was invalid or incomplete; and no response to the medical review additional documentation request.