In brief: Liberty Medical vs. Medco, another fraud hearing

Friday, April 25, 2014

PORT ST. LUCIE, Fla. – Liberty Medical has filed a complaint with the U.S. Bankruptcy Court for the District of Delaware against Medco Health Solutions alleging that Medco engaged in “inequitable conduct” during Liberty management’s buyout of Medco’s then-subsidiary Polymedica, a transaction that included the Liberty business. Liberty’s management alleges, among other things, that it was only after filling for bankruptcy that they learned that more than $42 million listed in accounts receivables were uncollectable, and that the value of Liberty’s property and equipment was overstated by $9 million. Additionally, they allege that Medco refused to pay pre-closing taxes for Polymedica, leaving Liberty on the hook for millions of dollars in taxes. “It is our view that Medco was aware that Liberty would be unable to survive as a stand-alone company should Medco fail to perform as promised in connection with the management buyout,” the company states in a press release. Among other remedies, Liberty seeks damages relating to a series of transactions and over $1 billion in equity redemptions that left Liberty and its subsidiaries insolvent at a time when the businesses were being prepared for sale.

Liberty’s management acquired Polymedica for $30 million in December 2012. Three months later, Liberty filed for Chapter 11 bankruptcy protection.

Ways and Means hearing to examine Medicare waste

WASHINGTON – The House Ways and Means Health Subcommittee will hold a hearing on policies that address Medicare waste, fraud and abuse on April 30 at 2 p.m., according to a bulletin from The VGM Group. The subcommittee is expected to hear from the Office of the Inspector General (OIG), the Government Accountability Office (GAO) and CMS’s Center for Program Integrity about different ways to curb abuses. “It is very clear that problems with Medicare waste, fraud, and abuse persist,” said Chairman Kevin Brady, R-Texas, in a press release from the committee. “The Medicare trust fund is already headed toward insolvency and every dollar of fraud is a dollar not dedicated to providing quality care for our nation’s seniors.” The hearing will take place in room 1100 of the Longworth House Office Building.

Providers enter national stage with merger

WESTMINSTER, Md. – Mobility Rehab Products has joined forces with Cal City Medical Supplies, doing business as Smart Remedies, to develop a national footprint for the delivery of DME. As a result of the merger, the companies will cover 208 competitive bid contracts for general HME and supplies, negative pressure, enteral nutrition, beds, chairs, walkers and support surfaces in 81 areas. “Mobility Rehab Products, with this new merger, will now be able to expand our number of product offerings, services and geographic footprint to offer top quality service to our patients,” stated Randall Watson, CEO of Mobility Rehab Products. Mobility Rehab services a multi-state area encompassing Maryland, Delaware, Florida, Pennsylvania, New Jersey and South Carolina. Its range of products and services includes diabetes testing supplies and footwear; wheelchairs and seating and positioning; orthotics and prosthetics; bathroom safety; respiratory; patient and ambulatory aids; and hot and cold therapy. Smart Remedies focuses on diabetes testing supplies. It does not have a contract to provide supplies as part of the national mail-order program, but it does have contracts for enteral nutrition (1), beds (79), wheelchairs (74), walkers (50) and support surfaces (4) as part of competitive bidding, according to its website. 

Trial closes for 3B Medical, ResMed

LAKE WALES, Fla. – The trial between 3B Medical/BMC Medical and ResMed concluded on April 17, but a final decision is not expected until December, according to a press release. The trial before the International Trade Commission (ITC) was the result of a complaint filed by ResMed in July 2013 alleging infringements on several patients. “It was a long fought and very expensive battle for all companies involved,” stated Alex Lucio, vice president, in the release. “Now that the trial is behind us, we can refocus our efforts to bringing new products and innovative solutions to the sleep disordered breathing market. We are very confident that the ITC will find in our favor.” BMC is also in the process of preparing IPR (Inter Partes Review) applications seeking to invalidate several ResMed patients in the U.S. Patent and Trademark Office to prevent the company from inhibiting future innovations. “We didn’t ask for this fight, but we have no intention of backing down,” stated James Xu, president.

BMC gets ResMed patent revoked in China

LAKE WALES, Fla. – BMC Medical has succeeded in having one of ResMed’s patents revoked in China, according to a press release. BMC initiated invalidity proceedings against five ResMed patents before the Chinese Patent Re-examination Boards (PRB) in October 2013. Oral proceedings for four cases have taken place. On April 22, the PRB revoked one of the patents, for a “cushion for patient interface.” Other cases are still pending. In Germany, BMC has decided not to pursue a patent infringement case brought by ResMed for one of three products, because the patent expires for that product in November. BMC will pursue the case for the remaining products. Hearings are scheduled for the fall.

COPD Foundation challenges GAO report

WASHINGTON – The COPD Foundation “takes great umbrage” with a recent Government Accountability Office (GAO) report, which said that the advocacy groups it interviewed for the report expressed no widespread concern over beneficiary access under the competitive bidding program. “The COPD Foundation has contended for some time that CMS should exempt oxygen from the DME competitive bidding program,” the foundation said in a recent release. “Had the GAO interviewed the COPD Foundation, we would have had the opportunity to express our displeasure and growing concern with this flawed program.” The foundation has been in contact with the CMS Ombudsman regarding access issues, and says the bid program has been a hardship on beneficiaries. 

CMS to issue comparative billing report for diabetes supplies

WASHINGTON – CMS will issue a comparative billing report (CBR) on diabetes testing supplies in April, it announced in the April 24 MLN Connects newsletter. The CBR, produced by contractor eGlobalTech, will contain data-driven tables and graphs comparing billing and payment patterns on a state and nationwide basis. The goal: to offer a tool that helps providers better understand applicable Medicare billing rules. The report is available only to those who receive them.

Commuter rail eyes sleep apnea screening for engineers

NEW YORK – A new directive would require Metro-North’s 350 engineers to be tested for sleep apnea, according to news reports. The engineer involved in a 2013 derailment that killed four and injured dozens was found to suffer from severe sleep apnea. “Recognizing that an undiagnosed sleep disorder likely was a major contributing factor to the tragic accident, our organization is working with Metro-North to establish a program to help identify engineers who may suffer from the same medical condition,” said Mike Doyle, general chairman of the Officials with the Association of Commuter Rail Employees Union. 

Roche turns around diabetes sales

NEW YORK – Roche Diagnostics saw North American diabetes sales of $112 million for the first quarter of 2014, a 13% increase over the same period a year ago, according to news reports. The company’s sales of glucose monitors decreased 16% in 2013, mainly due to Medicare’s national mail-order program for diabetes supplies, which resulted in a reimbursement cut of, on average, 72%. The program kicked of July 1, 2013. Roche tried unsuccessfully to sell its diabetes division last year.

BOC unites departments, changes leadership

OWINGS MILLS, Md. – The Board of Certification/Accreditation (BOC) has consolidated its organization certification and accreditation departments, strengthening its product delivery and cross-promotion efficiencies, according to a press release. To facilitate the new direction, BOC has promoted Wendy Miller to chief credentialing officer. Previously, she was director of facility accreditation. She will lead the direction, strategy, policies and day-to-day operations of the credentialing programs. BOC has also promoted Jeff Price to COO. Previously, he was director of operations. He will direct, maintain and support strategic and operational initiatives in the areas of IT, human resources, financial management and marketing.

Short takes

Med-Care Diabetic & Medical Supplies has donated more than 150 refurbished CPAP machines to the American Sleep Apnea Association’s (ASAA) CPAP Assistance Program. Med-Care is a contract supplier for Medicare’s national mail-order program for diabetes supplies…DeVilbiss Healthcare has been named one of five finalists for the 2014 Pennsylvania Governor’s Impact Awards in the Export Impact Category for the Southern Alleghenies Region. This is the second consecutive year that the company has been named a finalist…Team Invacare athlete Ernst van Dyk won the men’s push rim wheelchair division of the Boston Marathon on April 21. The 41-year-old from South Africa broke the tape in an unofficial time of 1 hour, 20 minutes, 36 seconds. Van Dyk has now won the Boston Marathon a record 10 times. His last win was in 2010… ExcelHealth’s new dual-channel electrotherapy TENS device for muscle and joint pain relief is now available without a prescription. The suggested retail price for the iReliev Pain Management System is $69.95. ExcelHealth seeks distribution partners for the device, which is smaller than many cell phones and comes with batteries. The device is already available on eBay, Amazon and…Integrated Medical Services is now offering Medela’s Invia Liberty negative pressure wound therapy units, and has launched a new online store.