In brief: Drive gets new CEO, AdaptHealth buys PCS from McKesson

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Friday, November 22, 2019

PORT WASHINGTON, N.Y. – Drive DeVilbiss Healthcare CEO Bob Gilligan has stepped down, the company announced Nov. 19.

Drive’s board of directors has appointed former Dentsply Sirona executive Robert Size as its new CEO. He will assume day-to-day leadership of the company and will also join the board.

“We thank Bob Gilligan for his leadership and valuable contributions to Drive,” said John Compton, chairman of the board. “We are confident that Bob Size will lead Drive into a phase of further growth and customer satisfaction.”

Size comes to Drive after serving in various executive leadership roles at Dentsply Sirona, a supplier of dental materials and equipment, over the past 15 years. At Dentsply, he had enterprise-wide executive and operating responsibilities, as well as manufacturing operations and sales responsibilities in the United States and Europe.

Prior to Dentsply, Size served as CEO and president of Superior MicroPowders and held various cross-functional and international leadership positions at Cookson Group PLC.

“I am incredibly excited to assume this role and for the future of the company,” he said.
Drive recently received $35 million in new capital, along with a reduction in cash debt service obligations from its current lenders of about $100 million over the next two and a half years.

Prior to the transaction, the Wall Street Journal had reported that Medical Depot, which operates Drive, had begun restructuring talks with its senior lenders on $600 million in debt.

Drive has been owned by Clayton, Dubilier & Rice, a New York-based private equity firm, for the past three years.

AdaptHealth expands supplies portfolio

PLYMOUTH MEETING, Pa. – AdaptHealth has entered into a definitive agreement to buy McKesson’s Patient Care Solutions (PCS) business, adding urological and ostomy supplies to its growing product portfolio.

PCS will also increase AdaptHealth’s presence in the markets for wound care, incontinence and diabetes supplies, as well as breast pumps.

“The acquisition of PSC will represent an important step in our continuing growth as an industry consolidator,” said Luke McGee, CEO of AdaptHealth. “We believe the addition of these products will double our overall addressable market.”

PCS, which maintains national relationships with physicians, medical facilities and customers, generated net revenues of about $134 million for the trailing 12 months ended Oct. 31, 2019.

Also part of the deal: AdaptHealth will enter into a supply and distribution agreement with McKesson for PCS’s HME service lines.

“We are very pleased to expand our existing distribution relationship with McKesson,” said Josh Parnes, president and COO of AdaptHealth. “The acquisition of PCS complements our existing PAP resupply offering and will allow us to provide an expanded set of supplies to both the current customers of PCS and AdaptHealth.”

AdaptHealth’s total investment in PCS, including restructuring costs until the business is fully integrated in the second half of 2020, is expected to be $30 million.

Adapt Health, the result of a merger with DFB Acquisitions, recently went public and is listed on the NASDAQ under AHCO.

Improper payment rates for DME have dropped $1.29B

WASHINGTON – CMS announced Nov. 18 that program integrity measures lowered the estimated amount of Medicare fee-for-service improper payments by $7 billion from FY 2017-19 to $28.9 billion, the lowest level since FY 2010.

Specifically, the agency says DMEPOS improper payments decreased an estimated $1.29 billion from FY 2016-19 due to various corrective actions.

“Our progress on improper payments is historic, but there’s more work to be done,” said CMS Administrator Seema Verma. “CMS has taken a multi-faceted approach that includes provider enrollment and screening standards, enforcement against bad actors, education on rules and requirements, and advanced data analytics,” she said. “These initiatives strike an important balance between preventing improper payments and reducing the administrative burden on legitimate suppliers.”

The improper payment rate decreased to 7.25% in FY 2019, down from 8.12% in FY 2018, the third consecutive year it has been below the 10% threshold for compliance per the Improper Payments Elimination and Recovery Act of 2010.

In addition to DMEPOS, this year’s decrease was driven by progress in:

Home health claims saw a $5.23 billion reduction in improper payments from FY 2016-19 due to corrective actions, including policy clarification and Targeted Probe and Educate for home health agencies.

Other Medicare Part B services, i.e. physician office visits, ambulance services, lab tests, saw a $1.82 billion reduction in improper payments in the last year due to clarification and simplification of documentation requirements for billing Medicare under CMS’s Patients Over Paperwork Initiative.

CMS has developed a five-pillar program integrity strategy: Stop bad actors, prevent fraud, mitigate emerging programmatic risks, reduce provider burden and leverage new technology.

Judge freezes assets in test strip rebate case

INDIANAPOLIS – A judge has granted a motion to freeze certain assets of Priority Healthcare Corp., the latest development in a lawsuit over “unwarranted rebates.”

In a lawsuit filed in September 2018, Roche, a manufacturer of diabetes testing supplies, says it paid $37.5 million of “unwarranted” rebates to insurance companies and their pharmacy benefit managers for claims submitted by PHC between Jan. 1, 2013, and the end of the first quarter of 2018.

This latest motion, issued by the U.S. District Court for the Northern District of Alabama on Nov. 7: prohibits PHC from “transferring, liquidating, pledging, loaning…or otherwise disposing of any funds, shares of stock, or other assets,” held in certain accounts at various financial institutions; orders the company to return of any funds or assets disbursed or transferred from those accounts after Dec. 31, 2018; and orders it to verify the return of those assets within 48 hours by emailing Geoffrey Potter of Patterson Belknap, the attorney for Roche.

The motion also orders the financial institutions, SunTrust Banks, TD Ameritrade and E*Trade Securities, to liquidate all assets in the accounts and deposit the refunds into the Registry Fund of the Treasury where they will be held in trust.

PHC is a network of pharmacies in Alabama, Mississippi and Arkansas.

VGM to providers: Tell your story in RFI

WASHINGTON – A task force of the Ways and Means Committee in the House of Representatives has published a request for information on “priority topics that affect health status and outcomes,” VGM reports.

The committee’s Rural and Underserved Task Force seeks topics for consideration for future sessions.

“DME suppliers, state associations and hospital discharge planners and case managers need to respond,” VGM stated in a bulletin to members. “Take advantage of this opportunity to submit your comments regarding poor reimbursement and the effect this is having on access issues for Medicare beneficiaries.”

Comments on the RFI, which seeks answers to 10 questions, are due close of business Nov. 29.

The task force is charged with discussing the delivery and financing of health care and related social determinants in urban and rural underserved areas and identify strategies to address the challenges that contribute to health inequities.

“Tell your story,” VGM stated.

Marina Home Health joins forces with Fisher-Titus

SANDUSKY, Ohio – Marina Home Health, a DME provider serving north central Ohio, will operate the Norwalk, Ohio, branch of Fisher-Tutus under the name Fisher-Titus Durable Medical Equipment under a new joint venture, according to the Norwalk Reflector. “Pairing our DME history with the current Fisher-Titus home medical equipment offering is an incredible opportunity for us,” Mike Will, president of Marina Home Health, told the newspaper. “As a locally owned and operated company, we appreciate the needs of this area and look forward to serving the Norwalk community.” The joint venture will begin on Jan. 1. Marina Home Health was formed in 2008 in Sandusky and has grown to also serve patients in the Tiffin, Galion, Bucyrus and Mansfield areas. The company is jointly owed by Allison Will, The Foundation of Firelands and Avita Health System.

OIG recommends CMS review Part B drug prices

WASHINGTON – The average sales price for 11 drug codes for the second quarter of 2019 exceeded the average manufacture price by 5% or more for two consecutive quarters, according to a new report from the Office of Inspector General. Another 11 codes exceeded the 5% threshold in the second quarter, but did not meet other price-substitution criteria. When the ASP exceeds the AMP by 5%, the Department of Health and Human Services substitutes the ASP-based amount with a lower calculated rate, either 103% of the AMP or the widely available market price, whichever is less. The OIG has provided the 11 drug codes to CMS for review to determine whether the agency should pursue price substitutions that would limit excessive payments for Part B drugs.

NSM eases ordering process with new tool

NASHVILLE, Tenn. – National Seating & Mobility has launched a new Funding Portal to automate the order approval process for equipment. The custom software also triages orders, prioritizing critical needs, and is integrated with mynsmorder.com, an online order-tracking dashboard launched earlier this year that updates clients at each step of the process. “This custom-developed software, teamed with our total care approach aligning each client with one funding specialist throughout the order process, translates to a seamless, more expedient delivery of complex rehab equipment to those who need it,” said Charles Sargeant, senior vice president of field support operations.

Northshore Care upgrades shopping experience

CHICAGO – Northshore Care Supply has a newly revamped website, northshore.com, to offer a personalized shopping experience for users of incontinence supplies. The new website features an intuitive navigation bar, a dedicated sample request page, product filters, a full product catalog, customer product ratings, built-in subscription for auto-ship customers and personalized content. “Our new NorthShore.com website is a major leap forward in technology, speed and accessibility,” says President Adam Greenberg. “The site is much faster, especially on mobile devices that account for over 50% of our online traffic. We've also added a lot of new features that will help customers better locate the products that they need, including an enhanced free sample request form that automatically suggests and mails out items so people can try before they buy.”

VGM Market Data launches new visualization tool

WATERLOO, Iowa – VGM Market Data has launched VGM Market Data 2.0, a new visualization tool that combines data analysis and sales enablement into a single map that’s accessible from a desktop, mobile phone or tablet. The data featured allows users to identify and rank high-value referral sources for DME products, find out who is referring patients to their competitors, and focus their sales team to make the biggest gains. VGM Market Data pulls from 2.5 billion medical claims annually from Medicare, Medicaid and more than 900 different commercial payers. It currently has data from April 2018 through July 2019. “We have two choices: To do what we’ve always done and reclaim the same results; or harness data that gives laser-like market intelligence and utilize it in a way that maximizes opportunities for growth,” said Ryan Ball, director of VGM Market Data.

Soleo extends Midwest presence

MCKINNEY, Texas – Soleo Health has acquired the pharmacy business of Dayton, Ohio-based Paragon Infusion Therapy, which has a presence in southeast Ohio and throughout Indiana and Kentucky.

The deal complements Soleo Health’s Columbus, Ohio, location and expands its Midwest presence. Nationally, the provider has 20 pharmacies and is licensed in 50 states.

“We welcome Paragon to the Soleo Health family,” said CEO Drew Walk. “We deemed Paragon a perfect fit for Soleo Health as we share a similar philosophy in terms of the high levels of clinical services we deliver, our dedication to patient care and the local attention we provide.”

Paragon Principals Aaron Braden and Brad Manning, along with the entire Paragon team, will transition to Soleo Health. “Aligning with Soleo Health allows us to provide additional capabilities and resources, while maintaining our local presence and pulse on the delivery of quality care to which our stakeholders have grown accustomed,” said Braden.

Also focusing on organic growth, Soleo opened two locations in 2018, in Alabama and West Virginia.

Inks deal with Highmark

Soleo also announced this week that it has been chosen by Highmark Inc. as one of three providers to care for its hemophilia patients. Under the agreement, Soleo will manage and support Highmark members through its dedicated bleeding disorders therapeutic care management centers; and through its proprietary outcomes program, SoleMetrics, which collects and delivers data to demonstrate clinical and economic value.

Option Care tapped by Highmark

BANNOCKBURN, Ill. – Option Care Health has been chosen by Highmark health plan as a preferred provider of factor drug products for the treatment and management of plan members with hemophilia, beginning in January 2020. Option Care Health has access to all hemophilia factor treatments, including those that are limited in distribution, as well as a Bleeding Disorders program with a care team that has Hemophilia Treatment Center training. “Highmark chose to partner with Option Care Health because of the extraordinary care we provide to patients, as well as our rigorous performance standards and ability to control drug waste and costs, while still delivering excellent outcomes,” said Rich Denness, chief strategy officer for Option Care Health. “The health plan recognizes that we will provide their members who have been diagnosed with hemophilia the highest-quality personalized care to help manage this complex and challenging condition.”

WellSky extends REACH with collaboration

OVERLAND PARK, Kan. – WellSky has partnered with three leading post-acute providers, USA Healthcare, Concierge Home Care and Healthy Living Network, to offer WellSky REACH. The initiative seeks to help post-acute and personal care providers collaborate with payers and risk-bearing health systems using predictive analytics. WellSky REACH (Risk-Enabled, Analytical, and Coordinated Healthcare) is a comprehensive suite of EHR-agnostic capabilities that leverages WellSky’s payer expertise and advanced predictive analytics. “Today, one out of every three post-acute patients is a member of a Medicare Advantage plan,” said Bill Miller, CEO of WellSky. “That number is expected to increase to one in two, which will cause a dramatic shift in how providers work with payers. To succeed in this new paradigm, post-acute providers will need advanced capabilities that traditional technology vendors have not provided.”

Withings, Airflow Sleep join forces to offer better sleep

BOSTON – Airflow Sleep now offers its customers a full sleep solution to track, assess and improve their sleep using Withings MED PRO and the Airflow Sleep Z02 Sleep System, a side or back pillow. In addition to the pillow, patients receive Withings Sleep, a clinically tested sensor that measures heart and respiratory rate, body movements and snoring; and an activity tracker that offers a 24-hour look at activity and sleep habits. Data from these devices is synced with the Airflow Sleep app so users can visualize and monitor their trends. Those insights are also shared with the company’s sleep advocates, who offer support and advice. “A lack of quality sleep has serious effects on overall health and well-being,” said Andy Fligor, CEO at Airflow Sleep. “We are dedicated to ending this problem by putting the right tools and technology into consumers hands to help them achieve better quality sleep, take back control of their health and live happier lives.”

Universal Software updates certification

DAVISON, Mich. – Universal Software Solutions has announced that Healthcare Data Management System is now certified by Surescripts for E-Prescribing and Directories, allowing users to receive compound drug prescriptions and allergy information, and submit prescription change requests. HDMS completed testing in October to achieve certification prior to the Jan. 1, 2020, deadline for the new National Council for Prescription Drug Programs’ SCRIPT standard v2017071. “The advantage that integrations to the Surescripts network gives HDMS, as compared to software running in other specialty and retail pharmacies, is that the prescription drops into our client’s primary software tool,” said Danielle Crane, HDMS trainer. “Pharmacy techs or customer reps do not have to view prescriptions from a separate eScript portal then manually import or key it into the software where they are pursuing adjudication and filling orders. Not only does it save time, it closes the gap for human error in a big way.” Universal has been a technology partner with Surescripts since 2018.

One Drop uses AI to predict blood glucose levels

NEW YORK – One Drop has developed a model to predict blood glucose levels for people using continuous glucose monitors. Using more than 10 million hours of CGM data from One Drop users, the model accurately predicted blood glucose levels within 30 mg/dL of the CGM-measured values up to 120 minutes in advance. At 30 minutes, predictions were within 30 mg/dL more than 97% of the time; at 60 minutes, they were within 30 mg/dL more than 75% of the time; and at 120 minutes, within 30 mg/dL more than 55% of the time. The same model accurately predicted blood glucose levels 30 minutes in advance that were within 50 mg/dL of the CGM-measured values more than 99% of the time; at 60 minutes, within 50 mg/dL more than 90% of the time; at 120 minutes, within 50 mg/dL more than 80% of the time. The model is the company’s latest effort to use AI to improve self-care for people with diabetes, building on its eight-hour blood glucose forecasts for users with Type 2 diabetes, launched in the One Drop mobile app this summer.

Footit Medical rewards Sinigur for driving growth

WEST SPRINGFIELD, Mass. – Footit Medical Supply has promoted Natalia Sinigur to vice president. Sinigur has also exercised her stock option rights, making her a 35% owner of the company. Footit Medical President Richard Spafford says Sinigur was key in the “explosive growth” in the provider’s CPAP and respiratory divisions since they launched in 2014. “She will play a key role for us in future acquisitions and continued growth,” he said. Footit Medical has a new 4,000-square-foot location on Memorial Avenue in West Springfield, Mass., that showcases its expanded product lines and features interactive floor displays.

Short takes: The Compliance Team, Quantum Rehab, CAIRE

SPRING HOUSE, Pa. – Sandra Canally, RN, founder and CEO of The Compliance Team, is one of 144 women to be named to Drug Store News’ Top Women in Health, Wellness and Beauty awards program. Canally, who is the only woman to own a certified healthcare accreditation organization, received an award for Business Excellence. “I am honored to receive this award; however, these awards represent much more than individual achievements,” she said. “They represent the considerable power of women in business, the concept of seeing opportunity around every corner, the determination to say yes despite apparent hurdles. I am proud to be included in such a victorious group of women”…iLevel seat elevation technology by Quantum Rehab is now being used by more than 30,000 customers. The technology, which provides 12 inches of elevation while driving up to 4.5 mph, will next be incorporated into the company’s Edge 3 Stretto. The Stretto, which is scheduled to launch in January, is designed to allow for all power positioning functions in a much narrower footprint than most Group 3 offerings…CAIRE’s FreeStyle Comfort portable oxygen concentrator is now available in Europe. The POC made its European debut at the MEDICA show, Nov. 18-21 in Dusseldorf, Ga. CAIRE launched the FreeStyle, which features autoSTAT technology, in 2018.