In brief: OIG to review bid program, HHS asks court not to intervene in Medicare appeals process

Friday, November 11, 2016

WASHINGTON – The Office of Inspector General has released its work plan for 2017, including post-award audits to assess CMS’s competitive bidding program.

The OIG will review the process CMS used to conduct competitive bidding and to make subsequent pricing determinations for certain medical equipment items and services in selected bid areas under Rounds 1 and 2 of the program. It will also determine the effects of the competitive bidding on Medicare beneficiaries' access to certain types of DMEPOS subject to the program.

Other DME-related items in the OIG’s work plan for 2017:


The OIG is required to report the market share of diabetic testing strips before each subsequent round of the competitive bidding program to help CMS determine how the National Mail Order Re-compete may impact shifts in the market.

The first of three data briefs will determine the market share of diabetic testing strips for the three-month period immediately preceding the implementation of the National Mail Order Re-compete on July 1, 2016 (April through June 2016).

The second report will be for the three-month period immediately after implementation (July through September 2016) and the third report will be for a similar time frame six months after implementation (October through December 2016).

CPAP devices

Prior OIG work found that suppliers automatically shipped PAP device supplies when no physician orders for refills were in effect. The OIG will review claims for frequently replaced PAP device supplies to determine whether documentation requirements for medical necessity, frequency of replacement, and other Medicare requirements are met.


The OIG will determine whether potential savings can be achieved by Medicare if certain PMDs are rented over a 13-month period (the period of consecutive months of rental at which the Medicare payment is capped) rather than acquired through a lump-sum purchase.

Orthotic braces

We will determine the reasonableness of Medicare fee schedule amounts for orthotic braces. We will compare Medicare payments made for orthotic braces to amounts paid by non-Medicare payers, such as private insurance companies, to identify potentially wasteful spending. We will estimate the financial impact on Medicare and on beneficiaries of aligning the fee schedule for orthotic braces with those of non-Medicare payers.

HHS asks court to back off

WASHINGTON – The Department of Health and Human Services has asked the U.S. District Court for the District of Columbia not to intervene in the Medicare appeals process.

In a brief filed Nov. 7, HHS asks for the dismissal of a case brought by the American Hospital Association that seeks a court order requiring HHS to implement procedures that would curtail a massive appeals backlog.

HHS recently reopened a settlement program that offers certain hospitals an opportunity to receive nearly two-thirds of their contested reimbursement in exchange for dropping their appeals. The agency told the court in its brief that this program, when combined with a number of other administrative and legislative actions, could reduce the appeals backlog to zero by 2019.

Previously, on Sept. 19, the court denied HHS’s request to put litigation with AHA on hold until Sept. 30, 2017, telling the agency it must solve the backlog at the Administrative Law Judge level.

CMS announces 2017 premiums

WASHINGTON – For about 70% of Medicare beneficiaries, the average monthly premium for Part B services will be about $109 in 2017, compared to $104.90 for the past four years, CMS announced Nov. 10.

Premiums for this group are protected from sharp increases by a statutory “hold harmless” provision designed to protect seniors, the agency says.

“This year, as in the past, the Secretary has exercised her statutory authority to mitigate projected premium increases for these beneficiaries, while continuing to maintain a prudent level of reserves to protect against unexpected costs,” CMS stated in a press release. “The Department of Health and Human Services (HHS) will work with Congress as it explores budget-neutral solutions to challenges created by the ‘hold harmless’ provision.”

For the remaining 30% of beneficiaries, the average monthly premium for Part B services will be $134 in 2017, a 10% increase from the premium in 2016, CMS says.

Beneficiaries not subject to the “hold harmless” provision include those who do not receive Social Security benefits, those who enroll in Part B for the first time in 2017, those who directly billed for their Part B premium, those who are dually eligible for Medicaid and have their premium paid by state Medicaid agencies, and those who pay an income-related premium, CMS says.

Philips, Masimo settle lawsuits

AMSTERDAM and IRVINE, Calif. – Royal Philips and Masimo have entered into a business partnership agreement that ends all pending lawsuits between the two companies.

As part of the agreement, Philips is released from having to pay a $467 million jury verdict that was awarded to Masimo in October 2014. Instead, it will pay $300 million to Masimo in the fourth quarter, and will make certain marketing and product integration commitments over the coming years.

“I am very satisfied that we have reached an agreement that is beneficial for both companies and that we have ended our legal disputes,” said Frans van Houten, CEO of Royal Philips in a press release. “Going forward, Philips and Masimo will completely focus on jointly delivering meaningful innovations to our customers.”

Philips and Masimo have agreed to jointly market and sell in North America and certain markets in Asia and Europe Masimo’s non-invasive sensor technologies, such as its rainbow and SET platforms, in conjunction with Philips’ patient monitoring and select therapy solutions.

Additionally, Philips will in the future integrate Masimo SedLine brain functioning monitoring, O3 regional oximetry and Nomoline capnography technologies in certain Philips IntelliVue monitors.

“This business partnership agreement marks an important day for us and our customers as two leaders in patient monitoring collaborate to develop solutions designed to enhance clinical outcomes and patient safety,” van Houten said.

Entering into the agreement has minimal impact on Philips’ income from operations in the fourth quarter of 2016, according to the release.

Masimo expects to use some of the after-tax proceeds from the agreement to repay amounts outstanding under its revolving line of credit, the release says.

Happy Veterans Day: Apria participates in ribbon campaign, Geriatric Medical joins forces with Operation Hat Trick

LAKE FOREST, Calif. - Apria Healthcare is encouraging its employees to participate in November’s “Yellow Ribbon Campaign” by placing a yellow ribbon, a symbol of remembrance and awareness, outside their cubicle, homes and facilities to show their support for service members. Apria has a long history of helping veterans transition back into the workforce through company-wide and nationwide initiatives. In 2016, the provider initiated a Facebook “friending” campaign and created Veteran Connect, an internal platform for Apria veterans and employees to network and share experiences with one another. It also joined the Department of Defense Military Spouse Employment Partnership (MSEP), an employment and career program that connects military spouses with employers and was awarded the Patriot Award from the Employer Support of the Guard and Reserve Committee (ESGR), for supporting veterans who have served in the National Guard or Reserve.

Geriatric Medical joins forces with veterans group

WOBURN, Mass. – Geriatric Medical & Surgical Supply has partnered with Operation Hat Trick to raise awareness of the importance of supporting wounded service members and veterans and helping them recover. Geriatric Medical and 47Brand have designed OHT hands to raise money for the organization, which pays for adaptive equipment for amputees, services docs, critical care, emergency rent and other help. “My grandfather originally conceived our company during the waning days of World War II on the decks of a naval destroyer being built at the Boston Naval Shipyard,” said Jeffrey Seigal, Geriatric Medical CEO. “As a third generation family business and an active member of the community, Geriatric Medical is proud to support America’s bravest through its relationship with OHT.”     

Nevada ends tax on DME

CARSON CITY, Nev. – Residents of Nevada has voted to exempt DME from the state sales tax. Question #4 passed overwhelmingly with 72% of the vote. “It’s a major win for the citizens of Nevada,” said Rich Pozesky, president of The Nevada State Association of Medical Product Suppliers, in a release. “This is only step one of the process; however, we are confident that this issue will eventually be law in our state.” Earlier this year, a coalition of HME providers gathered more than 100,000 signatures to put the issue on the November ballot. While the majority of voters voted in favor of the measure, it must pass two election cycles for it to go into effect.

Numotion makes inroads into Texas

FORT WORTH, Texas – Numotion has acquired Home Medical Equipment (HME) of Texas to extend its reach and capacity in the state. HME of Texas has been in business for more than 20 years, serving all of Texas from its location in Fort Worth. “Their knowledge of the Texas market, specifically the eastern and western parts of the state, will improve our coverage and enable us to positively impact many more lives by serving the mobility needs of our customers,” said Mike Swinford, CEO, in a press release. HME of Texas also brings extensive experience with the Applied Income Program of the Texas Department of Aging and Disability Services (DADS). Numotion will apply best practices from HME of Texas to streamline and improve how it interacts with DADS to ensure that choice and mobility needs for customers are optimized. Short term, HME of Texas’ 13 employees will continue to operate from its location in Forth Worth. Next year, that location, along with Numotion’s current branch in Fort Worth, will move into a new facility to align resources and better serve customers.

Quantum hits milestone with iLevel

EXETER, Pa. – Quantum Rehab says its iLevel power-adjustable seat height technology has now been embraced by more than 5,000 users. Launched in July 2015, iLevel elevates the seat of a wheelchair up to 10 inches and, thanks to Extra Stability Technology, allows for full functionality at walking height and speeds up to 3.5 mph. Quantum says the success of iLevel is due to both user demand and an ever-changing understanding by payers toward funding the technology. “Consumers are telling the industry that static wheelchair height in complex rehab is less and less acceptable in their lives,” said John Storie, director of sales for eastern America. “We are witnessing ‘standing height’ mobility become the new norm. As iLevel numbers demonstrate, consumers are shifting toward demanding the most functional, inclusive mobility technologies possible.”

FDA clears 3B Medical’s remote settings

WINTER HAVEN, Fla. – 3B Medical has received 510(k) clearance from the U.S. Food and Drug Administration for the remote device setting capabilities of iCodeConnect, the company announced Nov. 10. “With this software enhancement, therapy and prescription settings can now be adjusted and applied to Luna CPAP and Auto-CPAP devices remotely through 3B’s patient management portal,” the company stated in a press release. “This capability allows clinicians to make prescription changes and update all device settings through iCodeConnect easily and efficiently.” iCodeConnect allows clinicians to manage patient records, develop patient compliance reports, track overall treatment progress of patients, and more.

HealthLinc scores distribution deal for Keeogo

VANCOUVER – HealthLinc Medical Equipment, doing business as HME Mobility & Accessibility, will distribute the Keeogo powered walking assistance device in British Columbia. Keeogo was developed by B-TEMIA, a medical device manufacturer founded in 2010 that specializes in what it calls “human augmentation systems.” The Keeogo has been used by individuals with degenerative medical conditions, such as knee/hip osteoarthritis, multiple sclerosis, Parkinson’s disease, stroke, incomplete spinal cord injury and other conditions that limit mobility. The Keeogo is currently part of a multi-center pivotal clinical trial, part of the process of getting clearance from the U.S. Food and Drug Administration, to enter the U.S. market.

AAHomecare returns to Crystal City

ARLINGTON, Va. – AAHomecare is relocating its offices from Washington, D.C., to Arlington, Va., to save on rent andput membership dues to better use. The change will also allow the association to reach Capitol Hill faster, it says. “This move provides us the opportunity to budget more for lobbying, industry studies, education, member services, and innovative industry techniques that will help our members flourish in these difficult legislative and regulatory times,” AAHomecare stated in a release. The association will be moving to 241 18th Street South, Suite 500, Arlington, Va., 22202. The move will be completed by Nov. 16. AAHomecare's main phone number (202-372-0107) and individual staff phone numbers will remain unchanged.

People news: Walnut Medical Services

Johnstown, Pa.-based Walnut Medical Services has promoted Jodi Clark to director. Clark began her career at the company in 1991 and has held various positions there, most recently assistant director. In her new role, she will manage all operations. Walnut Medical Services is a provider of HME and supplies with four locations in west central Pennsylvania.