In brief: MACs, FLA, Apria and more

CMS names two new MACs WASHINGTON - CMS has awarded new contracts to administer Medicare Part A and Part B claims in seven states to Highmark Medicare Services and Palmetto GBA, the agency announced recently. The value of the five-year contracts--which include a base period and four, one-year options--are more than $400 million each. Camp Hill, Pa.-based Highmark will serve as the Medicare Administrative Contractor (MAC) for Jurisdiction 12, which includes Delaware, Maryland, New Jersey, Pennsylvania and the District of Columbia. Columbia, S.C.-based Palmetto will serve as the MAC for Jurisdiction 1, which includes California, Hawaii, Nevada and the territories of Samoa, Guam and the Northern Mariana Islands. Highmark and Palmetto, the fourth and fifth MACs to be named, will begin processing claims in their respective territories in September 2008 and June 2008, respectively. The contract allows Palmetto to recover some or all of the jobs it lost over the summer. Palmetto laid off about 700 employees after losing a contract to Cigna Government Services. It allows Highmark to hire 300 additional employees. By 2011, CMS will award contracts for 15 MACs. The first three MACs--Noridian Administrative Services, TrailBlazer Health Enterprises and Wisconsin Physicians Health Insurance--are processing claims in 10 western and four midwestern states. CMS expects to award three more contracts by the end of the year. Riverside sells FLA Orthopedics MIRAMAR, Fla. - The Riverside Co., a private equity firm, has sold FLA Orthopedics, a manufacturer and designer of orthopedic bracing, support and related products, to BSN Medical of Germany. No financial terms were disclosed for the deal, which was announced last week. BSN is a multinational healthcare supplier. Riverside acquired FLA in 2003. Under Riverside's ownership, FLA acquired American Professional Bracing and Christina Study in 2005 and 2006, respectively. It also strengthened its management team, expanded its product offerings and became a leader in supplying products to medical retailers, independent pharmacies and DME dealers nationwide. "FLA's net sales have increased 70% since Riverside's partnership with the company began," stated Karen Pajarillo, a Riverside partner. FLA has facilities in Miramar, Fla., and Huntersville, N.C. Apria looks to finance acquisition LAFE FOREST, Calif. - Apria Healthcare has put $265 million worth of senior subordinated debt up for sale, the company announced last week. The provider plans to use the proceeds to bankroll its acquisition of Coram, which it expects to close by early-December. If Apria fails to complete the acquisition, the provider plans to use the proceeds for general corporate purposes, including paying down debt. Brovana gets own code MARLBOROUGH, Mass. - CMS issued a specific HCPCS code for Sepracor's new COPD drug, Brovana, the drug maker announced last week. Effective Jan. 1, 2008, the new code, J7605, replaces miscellaneous code J7699, which currently covers both Brovana and Napa, Calif.-based Dey Laboratories' new drug, Perforomist. Sepracor launched Brovana in April, while Perforomist hit the market in October. Both drugs are long-acting beta agonists taken twice daily. Current reimbursement for the drugs: about $4.85 per dose. OIG agent nabbed for fraud WASHINGTON - An investigative agent for the Office of Inspector General who specialized in Medicare fraud has pleaded guilty to fraud and forgery charges in connection with theft of more than $1 million. Scott Gompert, 43, allegedly used his expertise and connections to identify bank accounts holding criminal proceeds from fraudulent activity. On three occasions in 2005 and 2006, he prepared fraudulent seizure warrants with forged signatures and presented them to financial institutions. Gompert asked the institutions to prepare cashier's checks made out to an alleged official U.S. government seizure account that he established for his personal use. Gompert faces up to 30 years in prison and a $1 million fine on the bank fraud charge, and five years in prison and a $250,000 fine on the forgery charge.