In brief: Court approves Rotech’s plan, Shoprider launches rehab biz

Friday, August 30, 2013

ORLANDO, Fla. – A bankruptcy court in Delaware has approved Rotech Healthcare’s reorganization plan, paving the way for the company to emerge from Chapter 11 in September, it announced Aug. 29. “We said at the outset this would be a swift passage through the reorganization plan, and it has been,” said Steven Alsene, president and CEO of Rotech, which filed for bankruptcy in April. “We have successfully completed an important milestone in the financial restructuring that positions Rotech to operate successfully in today’s very competitive environment.” The bankruptcy court has approved $358 million in exit-financing commitments from Wells Fargo and from certain existing holders of 10.5% senior second lien secured notes, according to a press release. Under the reorganization plan, Rotech’s existing common stock will be cancelled and most of the new common stock of the reorganized company will be distributed to holders of the senior second lien secured notes. The company’s Statutory Committee of Unsecured Creditors supports the plan, which also received the approval of voting creditors during a hearing. Rotech says the plan reduces its debt by more than $300 million.

Shoprider launches complex rehab division

CARSON, Calif. – Shoprider Mobility Products expects to hit the market in 2014 with a line of complex rehab products and accessories, the company announced Aug. 27. Shoprider will provide the products through a new division called ROVI Mobility Products, which will be led by industry veteran Cody Verrett. “ROVI is all about a fresh move forward,” he stated in a press release. “We understand what is available in the market today and we are striving to offer clients, clinicians and ATPs an alternative.” Since 1988, Shoprider Mobility has done the bulk of its business in standard power wheelchairs and scooters. “We are excited to enter the complex rehab business segment and we are committed to utilizing our 25 years of experience in manufacturing high-quality power mobility products to aid this division in every way possible,” stated David Lin, president of Shoprider, in the release.

Beneficiary on bid program: ‘This is a terrible situation’

PHILADELPHIA – Competitive bidding is driving local suppliers out of the market, leaving beneficiaries who use DME with few close-to-home options for services such as wheelchair fitting and training, industry stakeholders and Medicare beneficiaries said during a press conference Aug. 23. “Eighty-two percent of Philadelphia-area providers (within 50 miles of the Philadelphia-Camden-Wilmington bidding area) have been eliminated in favor of providers from as far away as Texas and California,” said John Shirvinsky, executive director of the Pennsylvania Association of Medical Suppliers (PAMS). Before the bidding program began, there were 185 wheelchair providers in a 50-mile radius of Philadelphia; now there are seven, stakeholders said. The decline in options could force people into more expensive care options, they said. “This is a terrible situation for seniors and the disabled,” disability-rights activist and wheelchair user Alan Holdsworth said. “Buying and repairing durable medical equipment like wheelchairs is a local activity. People, especially people with disabilities and the elderly, look to local providers to take care of their equipment needs.”

Sleep Nation makes 38th buy this year

NASHVILLE, Tenn. – Sleep Nation, Inc., is taking advantage of a changing market by continuing to make acquisitions. The CPAP provider announced Aug. 29 that it has made its 38th purchase this year and the 43rd since its inception in May of 2012. “We have invested significant resources into our platform’s systems and now are starting to reap benefits as we spread our fixed costs over more and more orders,” stated CEO Richardson Roberts in a press release. The Franklin, Tenn.-based company specializes in products for sleep apnea, shipping supplies to CPAP patients throughout the U.S.

Sanomedics receives financing for deals

MIAMI – The medical-technology holding company Sanomedics International Holdings Inc. announced Aug. 26 that it has received $5 million in funding to put toward working capital and the completion of a pair of targeted acquisitions. The financing breaks down to a $3 million revolving line of credit and a $2 million term loan. “This financing is a major step in our success and a further endorsement of the plans we have for the future,” said Keith Houlihan, Sanomedics co-founder and president, in press release. “The proceeds will permit us to move forward in our plans to close our two targeted acquisitions of Prime Time Medical, Inc. and Duke Medical.” Subject to the lender’s due diligence and another commitment agreement, the financing is expected to close by the end of September. HME News earlier reported on these purchases: Prime Time Medical* provides home medical equipment from Largo, Fla., and Duke Medical** provides products and supplies to people with sleep apnea in the Houston and Galveston, Texas, areas.

AAHomecare joins in coding reform effort

WASHINGTON – Due to lack of oversight and industry input, AAHomecare believes the current CMS coding system does not accurately describe items and services covered and reimbursed. That’s why the association has signed on to a letter from the Alliance for HCPCS II Coding Reform asking for increased transparency and due process. At CMS’s request, the alliance has developed a list of recommendations for improving the process, including separating coding decisions and coverage policies; establishing an appeals process to independently review coding decisions; and improving the Pricing, Data Analysis and Coding (PDAC) verification and revision processes. The alliance includes associations, manufacturers and medical groups that have come together to work with CMS to make improvements to coding.

CMS outlines expedited process for NCDs

WASHINGTON – CMS has announced an updated process for new or reconsidered national coverage decisions (NCDs). According to a notice published in Federal Register, CMS will periodically publish on its website the NCDs it proposes to remove and the reasons why. After taking public comment for 30 calendar days, the agency will remove, retain or formally reconsider the NCDs in question. CMS says the revised policy does not alter or amend regulations that establish rules related to the administrative review of NCDs. The notice was effective Aug. 7.

Inappropriate, questionable billing for test strips, OIG says

WASHINGTON – Medicare inappropriately allowed $6 million in claims for diabetes test strips in 2011, according to a report from the Office of Inspector General (OIG). The claims were for beneficiaries without a documented diagnosis code for diabetes, or for beneficiaries who were in hospitals or skilled nursing facilities. The OIG also found that $425 million in Medicare-allowed claims had characteristics of questionable billing, and that suppliers in 10 geographic areas nationwide were responsible for 77% of that questionable billing. CMS partially concurred with the OIG’s recommendations to enforce existing edits to prevent inappropriate claims, and to increase the monitoring of suppliers. It concurred with recommendations to provide mode education to suppliers and beneficiaries about appropriate billing practices, and to take appropriate action regarding inappropriate claims and suppliers with questionable billing. In all, Medicare allowed about $1.1 billion in claims to 51,695 suppliers for test strips to 4.6 million beneficiaries in 2011.

Fisher & Paykel improves forecast

IRVINE, Calif. – With new products boosting sales and widening margins, Fisher & Paykel Healthcare has raised its earnings, according to news reports. The company will likely have a profit of $90 million to $95 million for the year ending March 31. Earlier this year, it forecasted a profit of $85 million to $90 million. Fisher & Paykel reported a profit of $77.1 million for 2013. The company is also benefitting from lower costs from its plant in Mexico. “Our margins are increasing as a result of new products and applications driving a favorable product mix, and efficiencies through lean manufacturing, logistics and supply chain improvement,” stated Mike Daniell, chief executive. Fisher & Paykel expects operating revenue of $625 million to $645 million for the year ending March 31. Previously, the company forecasted $610 million to $630 million. It reported operating revenue of $556.3 million for 2013.

Study: Up-front spending on O&P saves money long term

WASHINGTON - Providing patients with orthotic and prosthetic devices saves taxpayers money in the long term, according to the findings of a new study released Aug. 27. The study, conducted by health economist Dr. Allen Dobson and commissioned by the Amputee Coalition, found that Medicare spent the same or a comparable amount on patients who received devices as it did on those who needed the devices but did not receive them. The reason: The study suggests that the devices help patients not only rehabilitate, but also reduce hospitalizations and the use of costly live-in care facilities. Patients who received the devices had more physical therapy and rehabilitation, which kept them at home and out of facility-based care. Additionally, those who are more independent may have fewer emergency-room visits and hospitalizations. According to the study, which examined 42,000 paired sets of claims between 2007 and 2010, Medicare could experience 10% savings ($2,920 less) for those receiving lower extremity orthoses, and comparable amounts for patients receiving spinal orthoses and lower extremity prostheses.

Short takes

The early bird rate for Medtrade—$100 savings—ends Sept. 6. Register at…Shield HealthCare has announced its 13th annual caregiver story contest. The contest, which the company holds to honor the work of family caregivers and healthcare professionals, runs from Sept. 3 through Nov. 30…Drive Medical is partnering with the American Cancer Society (ACS) to raise money to fight breast cancer. Drive will donate part of the proceeds from the purchase of its new Adjustable Height Rollator to the ACS Making Strides Against Breast Cancer campaign…Denver-based CareTouch Communications, which is celebrating the one-year anniversary of CareTouch Collect, a program that contacts patients and connects them with their providers to secure payment or devise a payment plan, has launched a new account transfer service. CareTouch FAST allows users to switch from their previous vendor to the CareTouch…Elmsford, N.Y.-based BioScrip has completed its acquisition of CarePoint Partners, a national provider of home and alternative-site infusion therapy. CarePoint services 20,500 patients annually and has 28 sites of service in nine states in the East Coast and Gulf Coast regions.

People news

Golden Technologies has hired Michael Scarsella as its Northeast regional sales manager. Scarsella has an MBA in marketing and strategic planning and has more than 14 years of experience in the retail furniture industry…Jens Mielke is the new CFO of Hasco Medical Inc. Mielke, who holds a Master of Business Administration degree, was previously an audit partner with a Dallas firm, where he served Fortune 500 and smaller, private companies; and a senior financial reporting analyst for PepsiCo, Inc.