In brief: Study highlights bid program’s flaws, Amazon eyes medical supplies pilot

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Friday, July 20, 2018

SAN FRANCISCO – Add the Pacific Research Institute to the long list of economists and researchers who believe CMS’s current competitive bidding program for HME is inefficient at best and dangerous at worst.

PRI’s study, “Reforming CMS’ Competitive Bidding Process to Improve Quality and Sustainability,” borrows on the work of Peter Cramton, an economist and outspoken critic of the program, and research firms like Dobson DaVanzo & Associates.

“Medicare patients are receiving lower quality durable medical equipment, which is taking a toll on their health outcomes,” writes Wayne Winegarden. “Further, there is mounting evidence that the reimbursement policies are destabilizing the supplier market, portending sustainability problems in the future.”

Winegarden says there are two “devastating flaws” with the current program: First, CMS uses the median of the winning bids as the price; and second, the agency doesn’t require a winning provider to fulfill its commitment.

The result is what he calls “unproductive gamesmanship,” including, among other things, providers intentionally underbidding to reduce the profitability of their competitors, and provides biasing winning bids toward lower cost/lower quality equipment.

Winegarden says CMS should set reimbursement price equal to the bid that is just high enough to ensure enough suppliers will produce the right quantity and quality of HME—a marketing-clearing price.

Other reforms that should be made, according to Winegarden:

  • Bidding areas should be appropriately drawn so that the costs that suppliers bear are similar across the entire area
  • All bidders should meet minimum quality and financial standards
  • The bidding process should be transparent so that even if providers are not selected, stakeholders can see the bid arrays and understand how the rates were actually determined
  • All bidders should be required to submit binding bids and/or provide bid surety bonds to ensure that they are committed to fulfilling their bids at the winning price

“These types of bidding systems have historically performed well when judged against the efficiency criteria for a competitive bidding process—it creates both allocation efficiency and quality efficiency,” he writes.

PRI Is a nonprofit, nonpartisan organization supported by private contributions that seeks to advance free-market policy solutions.

NSM expands service in Northeast

NASHVILLE, Tenn. – National Seating & Mobility has acquired Maximum Mobility in Sayre, Pa., strengthening its presence in the Northeast. The deal positions NSM to expand its service reach across northern Pennsylvania and parts of Upstate New York. Jeff Klossner, an ATP and OT who has owned Maximum Mobility since 2003, will make the transition to NSM as a branch manager, overseeing the location as NSM’s newest branch. AccessNSM, a division of NSM, will use the retail showroom at the branch to offer a range of home accessibility products, as well. NSM already operates branches in Philadelphia, Harrisburg, Allentown, Reading and Pittsburgh, and a satellite branch in Erie.

AAHomecare: Please Stand Up

WASHINGTON – Registration is now open for AAHomecare’s Stand Up for Homecare Reception at Medtrade in Atlanta. The association raised more than $30,000 at Medtrade Spring, helping to fund PR, legal and research initiatives in support of the industry’s public policy goals. The reception will take place on Tuesday, Oct. 16, from 5:30-7:30 p.m. at the SkyLounge at the Glenn Hotel. “Last year’s even was standing room only, so purchase your tickets today,” AAHomecare says.

People news: CHME, Invacare

Foster City, Calif.-based CHME has added Susan Wong as vice president of finance. Wong, who has 20 years of “progressive” experience leading the financial and accounting efforts of small- and mid-sized companies, starts working at the company on Aug. 6. She specializes in technology and health care, and companies that are evolving. At CHME, Wong will be responsible for assisting with the execution of CHME’s business plan for market growth…Elyria, Ohio-based Invacare has appointed Diana Ferguson to its board of directors. Ferguson currently serves as the CFO for Cleveland Avenue, a privately held venture capital firm that invests in restaurant, food and beverage concepts, and emerging brands. She also serves as principal of Scarlett Investments, a firm that invests in and advises middle-market businesses. Ferguson was unanimously appointed by the board after a search conducted by an executive search firm. Invacare now has nine directors, eight of whom are considered independent.

Rick’s Medical Supply makes acquisition

ROSEBURG, Ore. – Rick’s Medical Supply will acquire Douglas Medical Equipment Supply effective Aug. 1, according to local news reports. The DMES location here will continue to operate, and will also serve as the new home for the Scrubs and More Store, a division of Rick’s that specializes in surgical scrubs and related supplies. Rick’s also plans to open a new retail store in North Bend in September. Rick’s Medical Supply got its start in 1974 and offers a full line of DME, including oxygen, CPAP, beds and wheelchairs, and medical supplies

AAH survey seeks input on sole-source contracts

WASHINGTON – AAHomecare’s Medical Supplies Council is conducting a survey to evaluate the impact of sole-source contracts and narrow network arrangements on beneficiary access. Specifically, beneficiaries and case managers in Illinois, Indiana, Ohio, Nebraska, New Hampshire, New Jersey, Tennessee and Texas are asked to share their experiences. AAHomecare is asking providers to share the link to the survey on social media and with referral sources, and to engage with consumer advocacy groups. Information from the survey will be used in outreach with payers.

WOY selection committee announced

WATERLOO, Iowa – Barbara Smith, the 2017 HME Woman of the Year, will serve on the this year’s HME Woman of the Year Honorary Selection Committee. Rounding out the committee are Douglas Coleman, CEO of Rocky Mountain Medical Equipment, DBA Major Medical; Liz Beaulieu, editor of HME News; Rita Stanley, vice president of government relations at Sunrise Medical; and Andrew Morse, assistant to the president for Board and Governmental Relations at the University of Northern Iowa. VGM will review the committee’s recommendations and select four finalists to attend the awards ceremony at Medtrade. There were 38 nominations last year. “Although we can only select one winner, it is always rewarding to read through the amazing work that women continue to do to strengthen the industry we all serve so passionately,” said Clint Geffert, president of VGM & Associates. Nominations are open until Aug. 13 and can be submitted here.  

Amazon eyes medical supplies pilot

SEATTLE – Amazon is reportedly looking to create a pilot program with Xealth and at least two hospital networks that would allow doctors to recommend bundles of medical supplies and have them delivered to patients’ home upon discharge, according to an article on cnbc.com. The pilot is still under review, but it is expected to start in a matter of months. It would provide patients easy access to supplies they need via Amazon Prime, although those without Prime membership will have access via other e-commerce providers, according to the article. Xealth, a start-up company, recently partnered with ResMed on a pilot that allows primary care physicians at Providence St. Joseph Health to access data from CPAP devices right from their electronic medical record software.

Numotion forms foundation

BRENTWOOD, Tenn. – Numotion has launched the Numotion Foundation to support people and causes that enhance the lives of people living with disabilities. For each new wheelchair sold, Numotion will make a contribution to the foundation. The foundation will also engage employees and supporters to donate funds and provide a centralized structure to distribute funds on behalf of Numotion to relevant organizations and programs. “It is our hope that through the foundation’s efforts we can help to further enhance the great work that so many of our long-standing partners are doing to improve the lives of those with disabilities,” said Mike Swinford, CEO of Numotion.

HIDA brings HISCI under its umbrella

ALEXANDRIA, Va. – The Health Industry Distributors Association will merge with the Healthcare Industry Supply Chain Institute, effective Sept. 1. HISCI members will become affiliate members of HIDA and HISCI leadership will continue to guide its activities. “The addition of HISCI’s members into the HIDA network is a ‘win’ for both organizations and their members,” said Matt Rowan, HIDA president and CEO. “This combination will add new dimensions to HIDA’s networking and educational value, and enhance the development of industry best practices.” The HISCI Annual Meeting will take place Sept. 27, 2018, at HIDA’s Streamlining Healthcare Expo & Business Exchange in Chicago.

Allegiance Group gets certified

OVERLAND PARK, Kan. – The Allegiance Group, a provider of patient-pay collections, has announced that its COLLECTPlus application has earned certified status for information security by HITRUST. The status demonstrates that COLLECTPlus has met key regulations and industry defined requirements, and is appropriately managing risk, according to a press release. “The HITRUST CSF is the gold-standard that needs to be met, and Allegiance Group is pleased to be able to demonstrate its commitment by achieving HITRUST CSF Certification,” said Anne Orrick, COO. “Organizations like ours are under great pressure to meet complex compliance requirements that include technical and process elements, such as HIPAA< NIST, ISO and COBIT.” COLLECTPlus, the Allegiance Group’s signature product, allows the company to integrate with a provider’s billing system and automate their entire private-pay billing and collections cycle.

Innovest Global secures contract with Byram Healthcare

CLEVELAND – Innovest Global has announced that it has secured a call center contract with Byram Healthcare. “Byram Healthcare is well-positioned for continued growth and ran a competitive bid process to find a call center partner that would assist and support its growth,” Innovest Global stated in a press release. “The new contract builds on an existing relationship and Byram Healthcare believes that the Innovest Call Center will generate additional sales for Byram.” Innovest Global has completed the training a 12-person team that will be deployed for Byram Healthcare. The contract is the largest to date for Innovest Global’s Commercial & Industrial Division. Byram, a provider of disposable medical supplies, was acquired by Owens & Minor, a Fortune 500 global healthcare solutions company, last year. It specializes in supplies for diabetes, ostomy, wound care, urology and incontinence, as well as enteral nutrition products.

CPAP therapy reduces risk of heart failure for all, study finds

YARMOUTH, Maine – Sleep apnea not treated with CPAP therapy was associated with an increased risk of heart failure in patients of all ages, according to a nationwide cohort study recently published in the Journal of the American Heart Association. Using nationwide databases, the study followed the entire Danish population from 2000 until 2012. Patients with sleep apnea receiving and not receiving CPAP therapy were identified and compared with the background population. The primary end point was first-time hospital contact for heart failure and adjusted incidence rate ratios of heart failure were calculated using Poisson regression models. Among 4.9 million individuals included, 40,485 developed sleep apnea during the study period (median age: 53.4 years, 78.5% men), of whom 45.2% received CPAP therapy. Crude rates of heart failure were increased in all patients with sleep apnea, relative to the background population. In the adjusted model, the incidence rate ratios of heart failure were increased in the untreated sleep apnea patients of all ages, compared with the background population. Comparing the CPAP-treated patients with sleep apnea with the untreated patients with sleep apnea showed significantly lower incidence rate ratios of heart failure among older patients.