In brief: Roundtable discussion highlights bid problems, S&P downgrades Rotech
OMAHA, Neb. – A roundtable discussion on competitive bidding last week drove home with lawmakers that there are problems with the program, according to those who participated. Rep. Steve King, R-Iowa, and Rep. Lee Terry, R-Neb., attended the event at Kohll's Pharmacy and Homecare, along with HME providers, economics professor Ken Brown from the University of Northern Iowa, and two Medicare beneficiaries. "If more beneficiaries get out there during the recess during, I think we'll be better off," said John Gallagher, vice president of government relations for The VGM Group, who attended the meeting. Also making an impact: a recent study conducted by accounting firm Hogan-Hansen that found callers to 1-800-Medicare faced long waits to get through to a live person and then often received incorrect information.
S&P calls Rotech weak, vulnerable
ORLANDO, Fla. – Fearing that Rotech Healthcare could default on its debt obligations within the next six months, Standard & Poor lowered its rating from "B" to "CCC-" this month. "The ratings reflect Rotech's 'highly leveraged' financial risk profile, dominated by its 'weak' liquidity position, high debt burden and overall sensitivity of credit metrics to the uncertain reimbursement environment," stated S&P. Rotech's "narrow" focus—the provider is 87% respiratory and heavily dependent on government payers—is also a concern, says S&P, due to ongoing Medicare cuts, particularly to nebulizer medications. Any future growth for the company will be tied to Medicare's competitive bidding program, which will add volume but lower rates for contract suppliers. Rotech’s revenue for the second quarter of 2012 declined 3.8% compared to the previous year and its EBITDA was 16%—lower than S&P's full year expectation of 22%. Rotech continues to have negative cash flow and has severely depleted cash reserves, with only $12 million in reserve, according to S&P. "Rotech's vulnerable business risk profile reflects the company's uncertain business strategy as it goes through a change in senior management," stated S&P. In July, President and CEO Philip Carter announced his retirement, effective Dec. 31, 2012.
Annual list features several HME companies
NEW YORK – Things can't be all too bad. Inc. magazine's sixth annual Inc. 500|5000 is out and a quick perusal of the list reveals a handful of HME providers. Charlotte, N.C.-based Carolina's Home Medical Equipment ranked No. 231 for health care and 2,849 overall; Wilmington, N.C.-based 101 Mobility ranked 37 in health and 521 overall; Indianapolis-based Home Health Depot ranked 59 in health and 829 overall; Charlotte, N.C.-based BlueDot Medical ranked 130 in health and 1,664 overall; and Jackson, Mich.-based Great Lakes Home Health & Hospice ranked 141 in health and 1,787 overall. Also on the list were Lawrenceville, Ga.-based software firm Brightree, which ranked 73 in health and 989 overall; and Overland, Kan.-based billing firm Strategic AR, which ranked 17 in health and 250 overall. The annual list ranks the fastest growing small businesses in America.
ATHOMES lauds champion
NASHVILLE – The Association of Tennessee Home Oxygen and Medical Equipment Services (ATHOMES) chose Rep. Marsha Blackburn, R-Tenn., as the 2012 Champion for Homecare at its first convention Aug. 16. The award recognizes a community leader who fights for homecare issues and for patients in Tennessee. Blackburn, a cosponsor of industry bills H.R. 3790 and H.R. 1041, addressed the convention about the importance of home medical equipment in keeping healthcare costs down during a lunch awards ceremony.
HHS finalizes ICD-10 delay
WASHINGTON – Department of Health and Human Services (HHS) Secretary Kathleen Sebelius announced last week a final rule that finalizes a one-year delay to comply with ICD-10. The new compliance date is Oct. 1, 2014. To view the final rule: http://www.ofr.gov/(X(1)S(vp32o25ckyhpvspfpzx3owe4))/OFRUpload/OFRData/2012-21238_PI.pdf
Short takes: Patientco, CareTouch, Telcare
Atlanta-based Patientco, a company that provides a solution for patients to pay their healthcare bills, has received $3.7 million in funding. BlueCross BlueShield Venture Partners and Sandbox Industries led the funding round, and Tom Hawes, Sandbox Industries managing director, will join Patientco's board of directors…Westminster, Colo.-based CareTouch has released a new solution that gives providers the ability to leverage automation technology to manage their oxygen patients. The CareTouch O2 Follow-up Protocol consists of basic safety information for patients and follow-up questions about general usage… Bethesda, Md.-based Telcare, developer of an FDA-cleared wireless glucose monitoring system, has secured $25.5 million in equity funding as the first close of a Series B financing led by Sequoia Capital. Investment proceeds will fund Telcare's marketing and sales efforts, research and development initiatives, and ongoing operations.