In brief: Scooter Store execs dodge charges, CMS revises scope of review

Friday, May 13, 2016

NEW BRAUNFELS, Texas – The Justice Department will not bring criminal charges against former executives of the now defunct The Scooter Store, according to the San Antonio Express-News.

“Based on the results of a five-year investigation, the Justice Department does not believe it has sufficient evidence to prove criminal liability beyond a reasonable doubt as to senior managers at The Scooter Store,” said agency spokesman Peter Carr in an email to the newspaper.

The decision comes more than three years after federal and state agencies raided The Scooter Store as part of an ongoing probe into possible Medicare fraud.

The former chairman and CEO of The Scooter Store, Doug Harrison, denied any wrongdoing in an interview with the newspaper in January 2014.

A number of execs left The Scooter Store prior to the raid, including Mike Pfister, chief sales officer, in January 2012, followed by Harrison in March of that year, and numerous others.

The Scooter Store and its management had also come under scrutiny by Congress. In April 2011, when the company found about $32 million to $64 million in overpayments and agreed to pay back $19.5 million, a pair of U.S. senators wanted to know why CMS accepted such an agreement.

The Scooter store filed for bankruptcy in April 2013 and closed in September of that year.

CMS revises scope of review on redeterminations and reconsiderations

WASHINGTON – CMS has expanded the limits on the scope of review for redeterminations and reconsiderations to include complex prepayment audits, AAHomecare has announced. CMS’s initial instructions to the MACs and QICs applied the limits to post-payment reviews. AAHomecare worked with CMS on revised instructions that read: “For redeterminations and reconsiderations of claims denied following a complex prepayment review, a complex post-payment review, or an automated post-payment review by a contractor, CMS has instructed MACs and QICs to limit their review to the reason(s) the claim or line item at issue was initially denied. Prepayment reviews occur prior to Medicare payment, when a contractor conducts a review of the claim and/or supporting documentation to make an initial determination.” AAHomecare says the change should be helpful to providers as they work through the audit and appeal process.

M&A activity: Securi-T, Sigvaris, National Sleep

LARGO, Fla. – Securi-T USA has announced an acquisition that will allow the company to expand its portfolio of products beyond ostomy care.

Securi-T USA, which has been serving the ostomy community for more than 20 years, has agreed to acquire PECO Medical, a Las Vegas-based designer and developer of continence care products.

“For nearly two decades, providers have relied upon us for high-quality, reimbursement-friendly ostomy products, and they have encouraged us to expand into urological items,” said Greg Bosco, president of Securi-T USA. “We are happy to accomplish this through the planned acquisition of PECO Medical, and we look forward to expanding the existing customer base for PECO products.”

The teams at Securi-T and PECO Medical will be working closely to ensure a smooth transition.

“It will be business as usual for our valued customers,” said Michael Jones, president of PECO Medical.

Sigvaris strengthens market position

PEACHTREE CITY, Ga. – Sigvaris has completed a definitive agreement to purchase BiaCare, a Zeeland, Mich.-based manufacturer of short stretch wraps, compression garments and other products designed to treat patients with veno-lymphatic diseases and disorders. The acquisition strengthens Sigvaris’ market position and allows the company to serve even more patients under a single brand. “This transaction allows us to acquire an established manufacturer with a strong position in the U.S. market,” stated Urs Toedtli, CEO of Sigvaris Group. Sigvaris is part of an international medical device group headquartered in Winterthur, Switzerland, that focuses on the development, production and distribution of medical compression garments, including hosiery and socks. It has distribution in more than 70 countries on six continents.

National Sleep makes buy

CONCORD, N.H. – National Sleep & Respiratory has acquired Eastern Pulmonary Services. Salem, Mass.-based Eastern Pulmonary Services was founded by Phil Raby and Kate Raby in 1980. “We could not be more thrilled to be have Phil and Kate Raby and the entire Eastern Pulmonary Service staff as part of our team,” said Peter Falkson, CEO of National Sleep and Respiratory. “Their experience, dedication to their patients, and character will only make National Sleep & Respiratory better.” Formerly known as National Sleep Therapy, the company started making acquisitions in 2012.

GAO pokes holes in CMS’s MA audit program

WASHINGTON – The Government Accountability Office isn’t pleased with CMS’s progress in recovering substantial amounts of improper payments from Medicare Advantage organizations. The agency currently uses risk adjustment data validation audits to recover improper payments in the MA program. The GAO found that CMS’s methodology does not result in the selection of contracts for audit that have the greatest potential for recovery of improper payments. The GAO also found “substantial delays” in the audits. It says RADV audits of 2007 and 2011 payments have taken multiple years and are still ongoing for several reasons. Additionally, it noted that CMS did not expand the recovery audit program to MA by the end of 2010, as required by the Patient Protection and Affordable Care Act. In 2014, Medicare paid about $160 billion to MA organizations to provide healthcare services to 16 million beneficiaries. CMS estimates that about 9.5% of those payments were improper.

ITC accepts ResMed’s request to investigate

SAN DIEGO – ResMed has announced that the U.S. International Trade Commission has accepted its request to investigate alleged infringement of its patented technology by Chinese manufacturer BMC Medical and its U.S. distributor, 3B Medical. The ITC has agreed to review the alleged infringement of four ResMed patents by BMC’s first and second-generation flow generator products, the RESmart and the Luna. The patents that have been allegedly infringed include a patent relating to a flow generator and humidifier structured to reduce the risk of backflow of water from the humidifier into the flow generator when tipped; and a number of patents relating to a novel design for a flow generator and humidifier to improve performance and ease of use. ResMed is asking the ITC to stop BMC and 3B from importing and selling flow generators in the United States. ResMed has also filed a lawsuit in federal court in San Diego seeking damages.

Alliqua reports growth

YARDLEY, Pa. – Alliqua BioMedical, a provider of advanced wound care products, reported revenues of $4.6 million for the first quarter of 2016, an increase of 120% over the same period a year ago. Organic total growth was approximately 4%. Product revenue was $4.1 million for the quarter, a 177% increase over the same period in 2015. “We remain extremely encouraged by the compelling commercial opportunity for our portfolio of advanced wound care technologies and expect that our continued execution will drive improving growth trends over the course of 2016,” said CEO David Johnson.

Bussani Mobility supports Mobility Awareness Month

BETHPAGE, N.Y. – Bussani Mobility Team, along with the National Mobility Equipment Dealers Association (NMEDA), kicked off the fifth annual National Mobility Awareness Month by offering three wheelchair accessible vans through an online contest. Celebrated in May, the awareness month was created to educate seniors, veterans and caregivers about the many wheelchair accessible vehicles and adaptive mobility equipment options available. To win, participants must submit their written or videotaped stories about how they have overcome their mobility issues. The winners will be announced in June.
Stock movers: Invacare and ResMed

Heartland Advisors has picked up 88,747 additional shares of Invacare stock, the firm disclosed in a report filed with the SEC on May 3. Heartland Advisors now holds about 3.6 million shares valued at about $39.95 million. Invacare now makes up about 2.09% of its portfolio…Peter Farrell, a director at ResMed, sold 20,000 shares of the company’s stock at an average price of $55.90 in a transaction on May 4 valued at about $1.12 million. He now owns 367,978 shares valued at about $20.6 million.

Short takes

Enos Home Medical has acquired the hospice division of Cape Medical Supply. The deal makes the New Bedford, Mass.-based provider the largest hospice supplier in southeastern Massachusetts. The Sandwich, Mass.-based Cape Medical Supply is focusing on its sleep business…Watertown, N.Y.-based Howard Orthotics and Prosthetics plans to open a new location in Canton…Lighthouse Medical Equipment held a grand opening celebration on May 5 at its Bristol, Conn., location…Phillip Durchslag has joined SleepQuest as vice president of sales and marketing. Durchslag has more than 30 years of experience in branding, marketing and sales, most recently with Healthways…Alex Orthopedic celebrates 30 years in business this year. Founded in 1986, the company began as a manufacturer of orthopedic soft goods and soon expanded its product portfolio to include pillows, cushions, DME, diagnostic products, compression hosiery and designer canes.