In brief: CMS greenlights CGMs for coverage, Bain Capital makes bolt-on acquisition in pediatric market

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Friday, January 20, 2017

WASHINGTON – CMS classified “therapeutic” continuous glucose monitoring systems as durable medical equipment in a Jan. 12 ruling.

CMS says CGMs are considered therapeutic and meet the definition of DME if:

·      They are approved by the FDA for use in place of a blood glucose monitor for making diabetes treatment decisions (for example, changes in diet and insulin dosage);

·      They are generally not useful to the individual in the absence of an illness or injury;

·      They are appropriate for use in the home; and

·      They include a durable component (a component that CMS determines can withstand repeated use and has an expected lifetime of at least three years) that is capable of displaying the trending of the continuous glucose measurements.

“In all other cases in which a CGM does not replace a blood glucose monitor for making diabetes treatment decisions, a CGM is not considered DME,” the agency states in the ruling.

CMS says it will pay a one-time fee schedule amount of $233 to $277 for CGMs in 2017, plus a bundled monthly payment of $248.38 for the replacement of the sensors, transmitters and all other accessories and supplies. It says the fee schedule amount will be increased in 2018 and subsequent years based on the covered item update factors.

The ruling is effective Jan. 12.

Bain Capital makes bolt-on acquisition in pediatric market

ATLANTA – Bain Capital Private Equity plans to buy PSA Healthcare, combining it with another recent purchase, Epic Health Services.

“The combination of these two companies promises to create a unique and highly differentiated pediatric care platform that offers the highest quality care and the best clinical outcomes for our patients,” stated Rod Windley, chairman of PSA. “Together, we have the opportunity to become the fastest growing and most efficient provider network of home care to medically fragile children in the United States.”

Per the agreement, the current equity holders of PSA Healthcare, including its senior management team and J.H. Whitney Capital Partners, its current majority owner, have agreed to roll over their current ownership interests into the newly formed affiliate.

The combined company will be led by Windley as executive chairman; current PSA CEO Tony Strange as CEO; and several members of Epic Health’s senior management team.

For Dallas-based Epic Health, the deal extends its geographic reach. PSA Healthcare, based here, has more than 75 locations in 16 states, including Florida, Georgia, Pennsylvania, Colorado, Texas and Louisiana.

Financial terms of the deal weren’t disclosed.

Epic Health announced it would be acquired by Bain Capital in December.

Both the PSA Healthcare and Epic Health deals are expected to close in the first quarter of this year.

Gov’t sums up healthcare fraud and abuse control

WASHINGTON – The Department of Health and Human Services and the Department of Justice have released their “Health Care Fraud and Abuse Control Program Annual Report for Fiscal Year 2016.”

The DME-related items in the report include:

·      In March 2016, Respironics paid $34 million to resolve civil False Claims Act allegations for paying kickbacks to DME suppliers to induce those suppliers to buy the company’s masks that treat sleep apnea.

·      In April 2016, Hollister and Byram Healthcare Centers paid $20.8 million to resolve FCA allegations that Hollister paid unlawful kickbacks to Byram with the intent to induce Byram to conduct promotional campaigns designed to refer patients to Hollister’s products.

The report also highlights findings by HHS and the Office of Inspector General that certain DME is available to CMS at a cost well below what is available to state Medicaid agencies. In audits of four state Medicaid agencies, they found that the state could have saved $18.1 million on the purchase of certain DME items if they obtained pricing comparable to pricing under Round 1 of Medicare’s competitive bidding program.

Deadline to sign infusion letter looms

WASHINGTON – The National Home Infusion Association seeks signatures for a letter that urges Congress to align the effective dates of switching to an average sales price reimbursement model for Part B infusion drugs and initiating payments for infusion services.

In the letter, addressed to Senate Majority Leader Mitch McConnell, Senate Minority Leader Charles Schumer, House Speaker Paul Ryan and Democratic Leader Nancy Pelosi, the association requests “quick action” to ensure beneficiaries have access to services, equipment and drugs.

“The disconnect between these two provisions in the 21st Century Cures Act creates a four-year gap that needs to be closed,” states the letter. “Due to the required shift in drug reimbursement…Medicare emergency department, hospital, and infusion costs may increase for this population of beneficiaries.”

The ASP language was built in to the Cures Act to help “pay for” key elements of the Medicare Home Infusion Site of Care Act, which were also included in the bill.

Deadline for signatures is Jan. 24.

CMS details 2017 calculations for oxygen

WASHINGTON – CMS has made available its 2017 calculations for oxygen generating portable equipment, stationary oxygen contents and portable oxygen contents. Each year, the monthly fee schedule payment amounts for stationary oxygen equipment—HCPCS codes E0424, E0439, E1390 and E1391— are adjusted to make the additional payment classes for oxygen and oxygen equipment that were added in 2007 budget neutral. Separate payment classes were added in 2007 for portable concentrators, portable oxygen transfilling systems, stationary oxygen contents and portable oxygen contents. Medicare expenditures each year may not be more or less than they would have been if these separate payment classes had not been established. Therefore, the fee schedule amounts for stationary oxygen equipment are reduced by a certain percentage each year to balance the increase in payments made for the additional separate payment classes. CMS details these calculations in a new download on its website. Industry stakeholders have argued that the calculations apply a “double dip,” using this methodology and the competitive bidding rates to artificially lower payment amounts in rural areas.

HHS finalizes appeals rule

WASHINGTON – The Department of Health and Human Services has published a final rule that addresses the massive appeals backlog. The proposed rule, published in July, established precedential authority to the fourth level of appeals and created attorney adjudicators at the third level of appeals. The final rule did not have major modifications. It will go into effect March 20.

CMS issues guidance for dual-eligibles

WASHINGTON – CMS has published guidance to help states ensure access to DMEPOS is available for dual-eligible beneficiaries. Those strategies are: recommend prior approval; ensure DME claims for dual-eligibles are assessed against Medicaid’s broader coverage criteria; and ensure Medicaid is only looking for Medicare prior authorizations on those items and in those states that Medicare requires it. The guidance also states that states should consider incorporating these requirements and strategies into contracts with Medicaid MCOs.

New data submission period opens for Audit Key

WASHINGTON – The HME Audit Key is now open for submitting data for the fourth quarter of 2016, according to AAHomecare. The association launched the HME Audit Key in 2014 to track audit activity and present findings to lawmakers. AAHomecare recently took steps to increase participation in the Audit Key, including partnering with Brightree to begin beta testing a report that would give providers many of the answers to the toughest questions in the survey.

Pride Mobility hits sales milestone with retail power chairs

EXETER, Pa. – Pride Mobility Products says its provider customers have sold more than 1,000 units of each the Jazzy Air and Go-Chair retail power wheelchairs. “The Jazzy Air has already generated $4 million in sales and $1.6 million in provider profit in just 10 months,” stated Micah Swick, director of sales. “These checkbook-friendly products prove a huge revenue generator for providers and a testimony to the vast potential within the retail market.” Both the Jazzy Air and the Go-Chair were launched in 2016. Pride says it is supporting providers with a “big digital marketing push” for these products in 2017.

PSP Homecare taps into IPAs

RANCHO CUCAMONGA, Calif. – PSP Homecare has obtained contracts with two Independent Practice Associations to provide products to their insured patients. IPAs are businesses organized and owned by a network of independent physicians for the purpose of reducing overhead and pursuing business ventures such as direct healthcare services contracts with employers. IPAs range in size from small three physician networks to larger organizations with hundreds of physicians. PSP Homecare believes it will obtain more contracts with IPAs as it ramps up its marketing strategy and expands into new regions. “We are only just beginning to realize the growth potential of our unique business model,” said Michelle Rico, CEO of Proto Script Pharmaceutical, which owns PSP Homecare. “With more than 600,000 IPAs and more than 4,000 other private insurers in the United States, the opportunity to expand our business on a national scale is truly enormous.”

Ottobock partners with TaiLor Made

AUSTIN, Texas, and ORLANDO, Fla. – Ottobock and TaiLor Made Prosthetics have reached an agreement for Ottobock to be the exclusive distributor of the TaiLor Made prosthetic foot globally, starting in the United States. “The TaiLor Made prosthetic foot is a great complement to Ottobock’s growing portfolio of prosthetic feet,” said Brad Ruhl, president of U.S. HealthCare for Ottobock. The TaiLor Made prosthetic foot is designed with toe and heel elements that move independently along with a shock absorbing mechanical spring pack. It has a unique Control Hub that houses vertical shock springs, allowing for easy in-clinic customization and optimization, according to a press release. TaiLor Made says Ottobock, with its proven track record of introducing “superior microprocessor and endoskeleton components,” is “the perfect company” to introduce the TaiLor Made prosthetic foot to the market.

New sleep apnea device hits U.S. market

BRISBANE, Australia – Oventus on Jan. 16 announced the U.S. launch of O2Vent, what it calls the first and only sleep disorder device cleared by the Food and Drug Administration that provides relief for snoring and obstructive sleep apnea via a unique, separate airway that avoids multiple sites of obstruction, including the nose, soft palate and the tongue. The device, which uses 3D printing technologies and is customized for each patient from medical-grade titanium, works by stabilizing the jaw position, bringing the tongue forward to reduce airway collapse, according to a press release. Oventus is launching the device first in San Francisco, as part of the G’Day Australia events being held there on Jan. 21.