In brief: OIG targets Hoveround, CMS to revise fee schedule

Friday, December 4, 2015

WASHINGTON – The Office of Inspector General (OIG) wants Hoveround to pay back the federal government $27 million for power mobility devices that it says do not meet Medicare reimbursement requirements.

The OIG audited claims for 200 randomly selected beneficiaries who received PMDs from the direct-to-consumer manufacturer in 2010 and found 154 did not meet Medicare requirements. Of those, 144 did not meet medical necessity requirements and 10 had incomplete documentation, according to the agency’s report.

On the basis of its sample, the OIG estimates that Medicare paid Hoveround more than $27 million for PMDs that did not meet requirements in 2010. In all, Hoveround received nearly $50 million for PMDs that year, the second-largest reimbursement for these claims.

In addition to the refund, the OIG recommends that Hoveround implement internal controls to ensure that beneficiaries meet requirements before providing equipment.

In a written response to the report, Hoveround disagreed with the findings, saying the OIG applied incorrect standards, and the agency influenced the medical review and biased the results. Furthermore, Hoveround claims the OIG never revealed it was conducting a medical necessity review and therefore the company was unable to submit supporting evidence.

The OIG denies Hoveround’s allegations and stands by the review’s findings.

CMS to revise revised fee schedule

BALTIMORE – CMS will revise its recently released 2016 DMEPOS fee schedule after finding errors, the agency has announced.

The agency released the revised fee schedule Nov. 23. It includes adjusted payment amounts for 11 product categories as part of its national roll out of competitive bid pricing on Jan. 1.

“CMS identified errors in the fee schedule amounts for some items and will therefore be releasing revised fee schedule files within the next week,” the agency stated on Dec. 1. “A list of the items affected by the revisions will be included in a separate public use file along with the revised 2016 fee schedule public use files.”

The fee schedule for non-bid areas was developed in two ways: the average pricing in the competitive bidding areas in the region for regional areas; and the national weighted average plus 10% for rural areas.

Sens. John Thune, R-S.D., and Heidi Heitkamp, D-N.D., have introduced a bill that seeks to soften the blow of the rollout of the adjusted payment amounts. S. 2312 would increase rural single payment amounts by 30%, and increase regional SPAs by 20% in all other non-bid areas.

Inogen faces fears head-on

GOLETA, Calif. – Inogen last week provided additional full-year guidance for next year, perhaps in a move to quell fears surrounding the national rollout of competitive bidding pricing on Jan. 1, 2016.

The company, which manufactures and provides portable oxygen concentrators, expects adjusted EBITDA for 2016 to be in the range of $35 million to $37 million, representing 14.8% to 21.3% growth compared to its mid-point guidance of $30.5 million for 2015. It expects net income for 2016 to be between $11 million to $13 million, representing 18.9% to 40.5% growth.

“INGN shares have fallen in recent weeks and we think that the primary factor driving the decline was concern about the impact of the expansion of Medicare’s competitive bidding program during 2016,” wrote Mike Matson, an analyst for Needham & Co., in a report following the announcement. “While we expect the additional reimbursement cuts to create a modest headwind for revenue growth and margins, we still expect INGN to see strong revenue and earnings growth next year.”

Inogen shares dropped from $43.86 per share on Nov. 16 to $38.76 per share on Nov. 19, an 11.6% decrease. Currently, they’re trading at $38.27 per share.

Inogen also confirmed revenue guidance for 2016 of $177 million to $183 million, representing 16.8% growth compared to mid-point guidance of $151.5 million for 2015.

“We remain confident in our ability to continue to grow the top line, while at the same time leveraging operating efficiencies for continued strong profitability despite the reimbursement headwinds from the national rollout of competitive bidding pricing we anticipate in 2016,” stated Ray Huggenberger, president and CEO of Inogen.

CMS recently released revised fee schedule amounts for oxygen equipment and 10 other products categories in non-bid areas as part of the national rollout.

In its most recent earnings report, Inogen detailed its plans to offset the expected hit to rental sales with strong growth in direct-to-consumer sales.

CMS: ACA spurs growth in health spending

WASHINGTON – Overall national health expenditures grew by 5.3% in 2014, as millions of uninsured Americans gained health coverage through the Affordable Care Act, the CMS Office of the Actuary reported Dec. 2.

The report also credits rapidly rising prescription drug costs for the growth.

“Still, the rate of growth remains below the level in most years prior to the coverage expansion, while out-of-pocket costs grew at the fifth lowest level on record,” said CMS Acting Administrator Andy Slavitt in a release.

Overall, health care spending grew 1.2% faster than the overall economy in 2014, resulting in an increase in the health spending share of gross domestic product from 17.3% in 2013 to 17.5% in 2014, the report states. In the decade before the ACA, healthcare spending grew 6.9% annually, 2.8% faster than the overall economy. 

Medicare spending grew 5.5% in 2014 compared to 3% in 2013. Total Medicare spending per enrollee grew by 2.4% in 2014, the report states.

Total Medicaid spending grew 11% in 2014, compared to 5.9% in 2013, due to the coverage expansion under the ACA, the report states.

“Today’s report reminds us that we must remain vigilant in focusing on delivering better health care outcomes, which leads to smarter spending, particularly as costs increase in key care areas, like prescription drugs costs,” said Slavitt.

Industry revs up lobbying engine

WASHINGTON – Industry stakeholders have logged on to the VGM Action Center and sent more than 1,100 messages in one week to drum up support for a new bill to soften the blow of the national rollout of competitive bidding pricing, according to The VGM Group. S. 2312, introduced Nov. 19, would, among other things, increase reimbursement by 30% in rural areas and 20% in regional areas, and phase in the new pricing over two years instead of six months. AAHomecare has also been encouraging stakeholders to reach out to their senators to support the bill. The association expects a similar bill to be introduced in the House of Representatives this week. The end goal: attach the bills to an omnibus bill that Congress must pass by Dec. 10 to prevent a government shutdown.

Virtual sleep center keeps patients at home

MOUNT PLEASANT, S.C. – A new online service is allowing sleep apnea patients and individuals with sleep disorders to get diagnosed and receive treatment from the comfort of their own living rooms. Singular Sleep offers online consultations with a board certified sleep physician, home sleep testing in 13 states and sleep health products.“We established Singular Sleep to help empower people to take control of their health by getting better sleep,” said founder Dr. Joseph Krainin in a release.

LifeMap Solutions launches COPD apps

SAN JOSE, Calif. – LifeMap Solutions’ COPD Navigator app, which helps patients better manage their condition, is now available for free download from the App Store. The company, a digital-health subsidiary of BioTime, a biotechnology company, has also announced that an enhanced version of the app called SuperCare iBreathe will be used by SuperCare Health, a respiratory disease management company. This app is customized with data collection points that allow SuperCare Health’s clinical care team to track data in real time and respond immediately to patients enrolled in its Healthcare at Home program. Both versions of the app will provide real-time local weather and air quality alerts, medication reminders, and tools to help patients track their symptoms.

Scott’s Home Health expands footprint

WASHINGTON, Mo. – Scott’s Home Health Medical Supply has doubled in size, according to a local newspaper. The new 2,000-square-foot facility offers liftchairs, oxygen supplies, nebulizers, bath safety and mobility products, as well as home modification products. “We’ve always wanted to expand the retail store so we can offer more of a variety of product,” co-owner Cary Goldsmith told the newspaper. After the business next door moved, Goldsmith purchased the space and knocked down the wall. Founded more than 30 years ago, Scott’s Home Health has locations in Washington and Troy, Mo.

OIG spotlights home infusion payments in report to Congress

WASHINGTON – Medicare could have reduced payments for home infusion drugs by $251 million over an18-month period if it used an average sales price methodology, the Office of Inspector General said in its Semiannual Report to Congress. The OIG, which has recommended that Medicare switch from an average wholesale price to an ASP model, found that “at least 42% of DME infusion drugs had Medicare payment amounts that were more than twice their estimated acquisition costs.” The OIG reported the same findings in April but noted it had not factored in the cost of services for providing home infusion therapy.

Aeroflow employees host canned food drive

ASHEVILLE, N.C. – Aeroflow Healthcare donated more than 1,000 pounds of food to the Manna FoodBank, the provider announced recently. The provider’s employees held a canned food drive to collect the food, according to a press release. “Patient care is always our number one priority at Aeroflow,” said CEO Casey Hite. “It doesn’t matter if they are current patients of ours, or members of the community who may be in need; we want to do whatever we can to help improve their lives.” The food bank serves Western North Carolina. Aeroflow employees are also collecting Toys for Tots and donating their time at a local senior center. In September, the provider raised money to support a local children’s hospital.

Invacare inventor has passed away

ELYRIA, Ohio – Joseph B. Richey, who founded Invacare with Mal Mixon, died of cancer on Nov. 23, according to the Chronicle-Telegram. He was 79. Richey was president of Invacare’s Technologies Division and senior vice president of electronic and design engineering when he retired from the company about a year ago. Richey, an inventor and innovator, was instrumental in the development of the HomeFill Oxygen System. He also helped develop gearless-brushless motors and digital controls for power wheelchairs. He held numerous patents.

Lincare gets bigger in N.C.

WILMINGTON, N.C. – Lincare plans to double its footprint here, according to the Greater Wilmington Business Journal. The Clearwater, Fla.-based national provider plans to move into a 4,300-square-feet location in January, twice the size of its current location. “We continue to grow internally and externally across the area,” Wes Todd, local center manager, told the newspaper. “There’s very strong demand for our level of service and clinical expertise.”

Nunn’s HME acquires Rothschild’s Home Health

ROME, N.Y. – Nunn’s Home Medical Equipment has acquired Rothschild’s Home Health Care of Syracuse, N.Y., allowing the company to open its first additional location. Nunn’s has been operating out of Rome, serving 15 counties, for 73 years. Nunn’s will continue to offer the same products and services in the 6,000-square-foot location in Syracuse, but it will add new products and a respiratory therapist. “Acquiring Rothschild’s was a natural next step for Nunn’s as we expand and grow in our region,” said Shawn Weiman, vice president.

Short takes: United States Medical, Oaklawn HME & more

Yvonne Blackstone, shipping director at United States Medical Supply, has been inducted into the National Association of Professional Women’s VIP Woman of the Year Circle for 2015-16. She has been recognized for leadership in health care…Marshall, Mich.-based Oaklawn Home Medical Equipment has relocated from a downtown storefront to the first floor of Oaklawn Hospital. “The driving force behind the move was convenience for the patients,” Bill DeSmet, the company’s executive director of support services, told a local newspaper…Lebanon, Tenn.-based Permobil has donated a custom wheelchair to former Wilson County Sheriff’s Deputy Court Officer Earl Dyer, who is paralyzed after a stroke. Dyer, 49, now lives on a disability income of $1,200 each month and he must pay $1,600 for insurance, leaving nothing for expenses. “I cannot tell you how thankful I am,” he told a local newspaper…OxyGo now offers a five-year warranty plan on its portable oxygen concentrators. One-, two- and three-year limited warranties are the industry standard, despite a five-year rental cycle, the manufacturer points out.