VA contract: 'An additional safeguard'

Saturday, May 31, 2008

FORD CITY, Pa.--Klingensmith HealthCare became a little less dependent on Medicare in March. That’s when the company won a big Department of Veterans Affairs (VA) contract for more than 600 home oxygen patients in southwestern Pennsylvania.

“We went after it hard,” said Andy Stuart, Klingensmith’s compliance director. “We knew that it was an additional safeguard against the purely regulatory payers.”

Thanks to the three-year, multi-million dollar contract, Klingensmith now has a total of more than 3,000 oxygen patients.

Klingensmith is no stranger to the VA. For several years, it has had smaller contracts for oxygen patients at VA hospitals in Pittsburgh and Butler, Stuart said.

“I’m not suggesting that it was easy, but the relationship we already had with the VA from working with them on smaller contracts was an advantage,” he said. “We’ve proven ourselves.”

Klingensmith has opened a location in Washington, Pa., to better serve the VA patients. The location, Klingensmith’s sixth, will consist of a warehouse with multiple vehicle bays and a showroom.

The new location will also allow Klingensmith to better serve beneficiaries in the Pittsburgh competitive bidding area. The provider won and accepted contracts for oxygen, beds, and standard and complex rehab.

The VA contract helps to “substantially more than offset” the competitive bidding contracts Klingensmith didn’t win, Stuart said.

Like Stuart, provider Sandra Hoskin has a new appreciation for her VA contracts in a Medicare world dominated by competitive bidding and a 36-month oxygen cap.

“We’re really enjoying our contracts,” said Hoskin, president of Houston-based American Medical Equipment. “People that rely on Medicare for 90% of their business are going to be in real big trouble.”

Although providers are reluctant to discuss pricing, they say there are more advantages to working with the VA than Medicare, including fewer paperwork requirements.

“They send us prescriptions, and we don’t have to get anything else other than a renewal,” Hoskin said. “We send them invoices every 30 days and about 10 days later, they call us with a credit card number and a list of what they are and are not paying for.”