In brief: Contract supplier pays $12M, CMS revises enrollment application

Friday, September 9, 2016

NEWARK, N.J. – U.S. Healthcare Supply, a national contract supplier for mail-order diabetes supplies, and two of its executives have agreed to pay the government more than $12.2 million to resolve allegations that they violated the False Claims Act.

The settlement resolves allegations that U.S. Healthcare Supply and Oxford Diabetic Supply, both based in Milford, N.J., set up and controlled a fictitious entity to make unsolicited telephone calls to Medicare beneficiaries to sell them DME. The companies then allegedly submitted claims for the equipment to Medicare in violation of the Medicare Anti-Solicitation statute.

“Cold-calling people to sell them expensive medical equipment is prohibited for a reason: unsuspecting patients shouldn’t be coerced into making medical decisions about devices and equipment—which they may not even need—on the basis of a sales pitch,” said Paul Fishman, U.S. Attorney of the District of New Jersey, in a release.

U.S. Healthcare Supply has agreed to pay $5 million plus interest; Jon Letko, its owner and president, has agreed to pay $1 million plus interest. John Letko’s brother, Edward Letko, owner and president of Oxford Diabetic Supply, has agreed to pay $6 million plus interest.

This isn’t the first time CMS has run into trouble with diabetes suppliers. Arriva, the largest of only nine providers to be awarded mail-order diabetes contracts in the latest round of competitive bidding, was rumored to have its provider number revoked by the National Supplier Clearinghouse, underscoring the dangers of having so few providers covering such a large market. On July 21, the company said the matter had been take care of.

CMS revises enrollment app, fee schedule

WASHINGTON – CMS has revised the 855S enrollment application and the July 2016 DMEPOS fee schedule, it announced in a Sept. 8 MLN Connects e-newsletter. The agency plans to publish a revised 855S this fall and providers must begin using it Jan. 1, 2017. Until then, CMS will accept both the current and the revised form. The agency has also revised the fee schedule for 66 codes. For most codes, the revised payment amounts for July 2016 are higher than the original payment amounts, according to AAHomecare.

CDC: Number of COPD-related deaths decreasing

WASHINGTON – From 2000 through 2014, the age-adjusted rate for COPD-related deaths decreased 22.5% for men and 3.8% for women aged 25 and over, according to new data from the Centers for Disease Control and Prevention. The COPD-related death rate decreased for both men and women aged 65-84, and for men aged 85 and over. The rate increased for both men and women aged 45-64, and for women aged 85 and over. The major underlying causes of death for COPD-related deaths were COPD, heart disease, and cancer for both men and women, the CDC says.

BioScrip, Home Solutions tweak deal

DENVER – The price tag for BioScrip’s acquisition of Home Solutions has dropped from $85 million to $75 million, according to news reports. The cash component of the consideration has been dropped from $80 million to $67.5 million. To speed up the deal, the two companies have also agreed to eliminate the need for stockholder approval; instead, they have agreed to a shareholder meeting following the close of the deal to seek such approval and provide Home Solutions with certain contractual protections in the event such approval is not obtained. BioScrip and Home Solutions now expect to close on the deal in the second week of September. Together, the companies are expected to generate more than $1 billion in revenues.

Combined therapy for COPD patients works, study says

LONDON – Adding home non-invasive ventilation to home oxygen therapy decreases the risk of re-hospitalization for COPD patients, according to a study presented last week at the 2016 European Respiratory Society International Congress. Patients in the study who received home non-invasive ventilation in addition to home oxygen therapy had a 51% decreased risk of re-hospitalization or death compared to those who received oxygen therapy alone. Patients who received home non-invasive ventilation went a median 4.3 months without dying or being admitted to the hospital, compared to 1.4 months for those who did not receive non-invasive ventilation, according to the study. Both ResMed and Philips Respironics participated in the multicenter, randomized controlled study, known as “Home Oxygen Therapy – Home Mechanical Ventilation” or HOT-HMV. In press releases, the companies pointed to the potential savings of combining home non-invasive ventilation and home oxygen therapy to care for patients with COPD, which costs the U.S. $36 billion in direct and indirect costs.

Medical Service Co. lands deal with health network

CLEVELAND – Medical Service Co. has hammered out a deal with Kettering Health Network that will pave the way for the provider to streamline the network’s discharge planning process, increase its patient engagement and reduce its hospitalizations. Kettering is a not-for-profit network of eight hospitals, 10 emergency departments, and 120 outpatient facilities serving southwest Ohio. Medical Service Co., with headquarters here, is a regional provider serving Ohio, Pennsylvania, New York and West Virginia. It regularly partners with hospitals, physicians, insurers and other healthcare providers to deliver patient care that controls costs, improves outcomes and reduces patient readmissions.

OIG tells CMS again: Switch to ASP for infusion drugs

WASHINGTON – The Office of Inspector General in a new report reiterates its concerns that, unlike most Part B drugs, Medicare payment amounts for DME infusion drugs are still based on average wholesale prices from 2003. Three years ago, the OIG published a report recommending changes to Medicare payments for DME infusion drugs; however, CMS has continued to reimburse for these drugs at prices that are unrelated to the amounts providers pay to acquire them. The OIG is concerned that paying for the drugs based on flawed AWPs may create access issues or lead to excessive billing. For example, payments that are below costs could make providers less willing to provide a drug, while payments that substantially exceed costs could make them over-utilize a drug. The OIG again recommends that CMS seek a legislative change that would require payments for DME infusion drugs to be based on average sales prices (ASPs), or use its existing authority to include DME infusion drugs in its competitive bidding program.

VGM enlists hospital execs in fight against cuts

WATERLOO, Iowa – The VGM Group has drafted a letter for hospital executives to use to fight back against sweeping Medicare reimbursement cuts. With many HME providers unable to accept Medicare at the new payment rates that were phased in on Jan. 1 and July 1, hospitals will likely have a difficult time discharging patients and experience an increase in readmissions, says VGM. “Since the beginning of the year, many hospital administrators have spoken out regarding Medicare’s actions, but many more are needed,” said John Gallagher, vice president of government relations. “The next few weeks are critical to getting legislative relief before irreversible harm continues.” The letter, as well as other ways to contact elected officials, is located at

Harmar partners with Wheelchairs 4 Kids

SARASOTA, Fla. – Harmar has joined forces with Wheelchairs 4 Kids, a nonprofit organization that provides scooter and wheelchair lifts to children, to increase access. Harmar, along with its dealers, will assist in evaluating needs, arranging installation and providing ongoing support for the children. “Our shared mission is to help reduce the total cost of providing equipment to the children and ensuring a high-quality experience,” said David Baxter, vice president of marketing of Harmar, in a release. Wheelchairs 4 Kids, Harmar and 101 Mobility marked this new partnership by recently donating and installing a wheelchair lift for a 13-year-old boy with muscular dystrophy in Sarasota, Fla. 

Power soccer team prepares to ‘shock’ at Medtrade

ATLANTA – Team USA, the World Cup Power Soccer Champions, will play two exhibition games on Nov. 1 at Medtrade. Players will be introduced at AAHomecare’s Washington Update, and will play one game in the morning and one in the afternoon on the show floor. Local teams played at Medtrade two years ago, but “the level of play and skill from this world-class Power Soccer team will shock the exhibit hall this year,” said Wayne Merdinger, executive vice president and general manager of MK Battery, the primary sponsor and official battery of the U.S. Power Soccer Association and Team USA. Merdinger encourages others to sponsor the sport. For more information on Power Soccer sponsorships:

Short takes: Stealth Products, VGM, state associations

Stealth Productshas redesigned its website to feature helpful resources, product specifications and technical data. It will be updated on a regular basis with videos, announcements and product launches…Jeremy Kauten, CIO and vice president of information technology at the VGM Group, has been selected for the 2016-2017 Leadership Iowa class. Kauten will work with fellow participants to increase engagement and promote “issues awareness” on key topics like economic development, health care, education, government services, environment, recreation and other issues…The Florida Alliance of Home Care Services (FAHCS) and the Georgia Association of Medical Equipment Suppliers (GAMES) will host a combined annual meeting from Sept. 11-13. The theme for the inaugural event, to be held on Amelia Island in Florida, is “Redefining the DME Supplier Role: Claiming DME’s role among healthcare specialty providers.” “Now more than ever DME providers must work together to share ideas, strategies, plans, stories, methods, secrets and solutions,” said Gene Sego, FAHCS president.