In brief: CMS awards new bid contracts, QIC overturns denials

Friday, April 18, 2014

HONOLULU – CMS has awarded new competitive bidding contracts to two local providers in Hawaii: Aloha Medical and American Home Care Systems. To date, just 13 of the 97 providers who accepted contracts as part of Round 2 of competitive bidding were located in Hawaii. The move is in response to concerns raised by the Hawaiian congressional delegation and the Healthcare Association of Hawaii (HAH) about decreased access to equipment and services. “We appreciate that CMS has taken a positive step to help to remove barriers to access to care in Hawaii,” said George Greene, HAH president and CEO, in a recent bulletin from AAHomecare. “However, the logistics and cost of business in the middle of the Pacific Ocean still make the DME competitive bidding program unsustainable in this island state.” With no same-day or overnight express shipping, it takes mainland contract providers at least two to four days to get most equipment and replacement parts and four to eight weeks to get hospital beds and wheelchairs. Complicating matters further: Mainland contract providers are unable to subcontract because prices are below the cost of supplying the equipment once shipping is factored in, according to the bulletin.

QIC overturns denials

WATERLOO, Iowa – Seventy-percent of the denials that U.S. Rehab’s Peggy Walker sent to C2C Solutions for review following a forum hosted by the Office of Medicare Hearings and Appeals (OMHA) have been overturned fully or partially in favor of providers. C2C Solutions is a Qualified Independent Contractor (QIC) that handles the second level of appeals. “C2C Solutions was willing to look over the denials that were made in error,” Walker said. “The errors were technical errors that were reviewed inappropriately.” Walker encourages providers that have had claims denied for technical reasons to submit them to her for review and possible reopening using this form.

DHS strengthens N.J. foothold

HARRISBURG, Pa. – Dynamic Healthcare Services (DHS) has made its third buy of the year: Kenvil, N.J.-based RespaTech, a full-line provider of HME and respiratory equipment. The facility and its operations will be folded into Reliable Medical, which DHS acquired in February. "RespaTech's presence in the New Jersey market combined with Reliable Medical's reach in the area, along with the Northern New Jersey Metro CBA contract that DHS already had in place, gives us an amazing foothold across the state,” said Michael Holloway, president of GMH Ventures, the private equity firm backing DHS. In addition to Reliable Medical, DHS acquired Clarion, Pa.-based Progressive Home Medical Equipment in January. RespaTech owner David Lasko will join DHS and manage the Kenvil office.

OIG analysis doesn’t bode well for F2F requirement

WASHINGTON – Thirty-two percent of home health claims do not meet face-to-face requirements, according to a study released by the Office of Inspector General (OIG). As a result, $2 billion in payments should not have been made. The report also found that physicians inconsistently completed the narrative portion of the face-to-face documentation and that CMS oversight of the program is minimal. The OIG recommended, and CMS concurred, that CMS should require a standardized form to ensure that physicians include all elements required for the face-to-face documentation; develop a specific strategy to communicate directly with physicians about the face-to-face requirement; and develop other oversight mechanisms for the requirement.

Joerns, RecoverCare merge

LOUISVILLE, Ky., and CHARLOTTE, N.C. – Joerns Healthcare and RecoverCare have signed a definitive agreement to combine their companies in a merger-of-equals transaction. The merger will create one of the leading healthcare equipment providers across the continuum of care, according to a press release. Joerns and RecoverCare, which are both owned by private equity firms—Quad-C Management and Aurora Capital, respectively—expect the transaction to close in the second quarter. Joerns is a manufacturer and rental provider of bed systems, therapeutic support surfaces, safe patient-handling equipment and wound management services to the post-acute healthcare market. RecoverCare is a distributor of therapeutic support surfaces and bariatric, wound care and safe patient-handling equipment and solutions across the continuum of care, including acute-care hospitals, skilled nursing facilities, rehabilitation facilities and hospice facilities.

VGM uses OmniSYS to fight audits

WATERLOO, Iowa – A new deal will help VGM members respond to audits using OmniSYS solutions at a discounted rate, the companies announced April 17. “Audits are the most critical problem facing our members today, and responding to them is time consuming and expensive,” said Ron Bendell, president of VGM and Associates, in a release. “VGM is happy to partner with a company that can handle the process from the initial notice up through the administrative law judge level, and do it in an economical way.” OmniSys’s OmniGUARD is a Web-based interactive application that allows providers to upload audit demand letters and pre-pay denials. Audit specialists then collect medical necessity documentation, submit audit packages and monitor responses for providers. The specialists also educate physicians and patients when paperwork fails to conform to guidelines, according to the release. “OmniSYS’s Web-based compliance solutions are designed to take the burden off the supplier and manage the entire audit and documentation collection process, improving payment rates and increasing net cash flow,” said Tricia Fringer, OmniSYS president and CEO.

Gov’t to Orbit Medical: We want our money back

WASHINGTON – The Department of Justice (DOJ) has intervened in a False Claims Act lawsuit against Orbit Medical and Jake Kilgore for allegedly altering and forging physician prescriptions and supporting documentation for power wheelchairs and accessories. On Oct. 23, 2013, a federal grand jury in Utah indicted Kilgore, former vice president and sales manager, on three counts of healthcare fraud, three counts of false statements related to health care and three counts of wire fraud. “The government is intervening in this matter seeking to restore Medicare trust funds taken through the alleged use of falsified records and fraudulent billings, among other things,” said U.S. Attorney for the District of Utah David Barlow in a release. The DOJ’s intervention illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT). The initiative is a partnership between the DOJ and the Department of Health and Human Services. The lawsuit alleges that Orbit Medical sales reps, at Kilgore’s direction and encouragement, knowingly altered physician prescriptions and supporting documentation to get the company’s power wheelchair and accessory claims paid by Medicare. The allegations against Orbit Medical and Kilgore were filed under the False Claims Act by two former employees, Dustin Clyde and Tyler Jackson. Under the act, private parties can sue for false claims on behalf of the government and share in any recovery. The act also permits the government to intervene in the lawsuit, as it’s doing here.

PFQC: Is the GAO saying patients are lying?

WASHINGTON – Consumer advocates question the conclusions of a recent Government Accountability Office (GAO) report that stated Round 1 of the competitive bidding program “did not appear to have adversely affected beneficiary access.” “I speak with Medicare beneficiaries daily who are frustrated and desperate because they are unable to get help,” said Kelly Turner, advocacy director at People for Quality Care (PFQC). “But, basically, this report says they are lying.” More than 3,000 complaints have been filed with PFQC’s Medicare Beneficiary Hotline since June 2013, according to the organization. PFQC says the GAO report was flawed for a number of reasons: it derived conclusions from CMS and its contractors; and its numbers are skewed due to CMS’s definition of a complaint versus an inquiry and the agency’s use of outdated survey data.

Sleep Restfully relocates

HOUSTON – Sleep Restfully will move to a new facility effective April 21 to accommodate growing shipment, storage and manpower demands. “We are pleased about our new location because it offers opportunities for our employees to attract new customers and provide them with even more services and quicker shipment of their orders,” said Charles Goldberg, president and CEO, in a release. The company’s outgoing shipments grew 34% in 2013 compared to 2012. Sleep Restfully distributes sleep therapy and oxygen therapy devices and accessories.

Prism Medical sells UK operations

TORONTO – Prism Medical has sold all shares of its UK division for C$54.9 million, the company recently announced. “As a result of the sale of the UK operations, we expect to considerably reduce our administrative expenses and focus our human and financial capital on the growing North American market for our products and services,” said Andy McIntyre, executive chairman and CEO. Prism’s North American operations generated revenues of more than C$35.3 million in fiscal 2013, he said. The company’s management sees opportunities for organic growth and acquisitions in North America. In conjunction with the sale, Prism renegotiated senior credit facilities, with overall credit lines decreasing as a result of lower assets, according to a release.

Wright & Filippis names new execs

DETROIT – Wright & Filippis has beefed up its management team to reflect its commitment to increased growth, improved efficiency and more effective use of technology. Robert Barrow has been named vice president of operations. Previously, he was CEO of Doctors Hospital of Michigan. Paul Turek has been named director of information technology; Mark Burns has been named vice president of sales; and Steve Filippis, former vice president of facility operations, has been named vice president of mergers and acquisitions. “We see a significant amount of new and emerging opportunities in the marketplace, and believe it is time to strengthen our leadership team,” statedCEO Anthony Filippis in a press release. “While change is going to be the one constant in health care for the foreseeable future, we believe these individuals will put us in a position of advantage.”

Diabetes rates rise

YARMOUTH, Maine – Diabetes is on the rise, but so is control of the condition, according to a new study. Between 1988 and 2010, rates of diagnosed diabetes rose from 6% to 10%, and pre-diabetes rose from 6% to 12%, according to a report published April 14 in the Annals of Internal Medicine. Overall, mean HbA1c levels rose from 5.25% to 5.36%, but those levels stayed the same in adults with normal body weight, blood pressure and lipid levels. Still, nearly 40% of patients aren’t hitting their glycemic targets, especially minority groups, according to the report.

Better Rest celebrates Sleep Apnea Awareness Day

BOSTON – Better Rest Solutions will donate $5 to the American Sleep Apnea Association (ASAA) for every SoClean 2 sold between April 15 to May 15, it announced this week. The fundraising is in recognition of Sleep Apnea Awareness Day, April 18. SoClean 2 allows CPAP users to naturally clean and sanitize their CPAP equipment. "We understand first hand the health issues associated with sleep apnea, as many of us at Better Rest Solutions have dealt with the effects of sleep apnea ourselves either directly or indirectly,” said Mike Schmidt, president of Better Rest Solutions. “We are excited to contribute to the ASAA in recognition of Sleep Apnea Awareness Day.” More than 18 million Americans have been diagnosed with sleep apnea.

ResMed snags two design awards

SAN DIEGO – ResMed has won two Red Dot Product Design Awards for 2014—one for its AirFit P10 nasal pillows mask and one for its soon-to-be-launched Astral 150 life support ventilator. ResMed was also recognized in 2010 for its S9 Series. As part of the competition, manufacturers, designers and architects from 53 counties submitted 4,815 entries. Only 1,120 were recognized. “ResMed has a proud 25-year history of delivering innovative solutions with the patient’s comfort and well-being in mind,” stated Mick Farrell, ResMed CEO, in the release. “We remain focused on three key goals: improving patient quality of life, preventing progression of chronic diseases, and lowering total healthcare costs.”

Weeks provides social media marketing services

MELBOURNE, Fla. – Wallace Weeks is back. The consultant, who left the HME industry four years ago to build a business around photography, has expanded his services to include managing social media marketing for HME providers. Image Centric Media’s “HME Social”* performs social media marketing tasks for HME providers, rather than consulting with them on what they should do. “Many small and mid-size businesses have realized that social media marketing is now essential, yet they lack the time and skill for an effective program,” the company states in a press release. So what’s photography, the company’s bread and butter, have to do with social media? Weeks says photos and video are important sources of content for effective social media marketing.

Short takes

The Braff Group was the No. 1 ranked healthcare M&A advisor in 2013 based on transactions completed, according to Thomson Reuters. The Braff Group completed 23 deals last year. This is the third consecutive year that The Braff Group has earned the No. 1 ranking…ARI Network Services has been named the preferred website vendor for a leading HME wholesale distributor. Per the agreement, ARI will offer the distributor’s network of 8,000 independent providers access to its eCommerce websites…Breathe Technologies has been granted its fifth clearance by the U.S. Food and Drug Administration (FDA) for its Non-Invasive Open Ventilation (NIOV) system. The clearance allows the product to be used with compressed air supply for non-oxygen dependent patients. The previous clearances allowed it to be used for home and institutional use…Sunrise Medical has posted a new corporate video to its website. The video “reveals the recipe for success in achieving its mission” of “improving people’s lives.”

People in the news

Ottobock has promoted John Spillar to market manager for lower extremity prosthetics. He was previously the technical orthopedics territory sales representative for South Texas. He has been with the company since December 2010…HomeCare Connect, a national workers compensation company that manages home health services and home medical equipment and supplies, has named Timothy Bates vice president of operations. In this newly created position, Bates will oversee the company’s HME clinical call center and home modifications operations.


All suppliers would applaud if CMS would finally "develop a specific strategy to communicate directly with physicians about the face-to-face requirement" and all other requirements they impose.  Physicians genereally think that suppliers are making up the rules since they only hear about them from us!