Where's the opportunity in transfilling technology?

Editor's note: This is the first in a series of stories about transfilling technology. Next week: HME providers offer their ground-level view.

ELYRIA, Ohio - Invacare's recent disclosure that it lost a significant order for HomeFill oxygen systems by a national account in 2014 is likely a one-off, with manufacturers of transfilling technology reporting demand has been healthy.

Invacare saw a spike in sales for HomeFill in 2013, when a national account converted to the transfilling technology, but it was a “one-time, big order,” says Lara Mahoney, director of investor relations and corporate communications for Invacare.

“So when we compare 2014 to 2013, we had to make note of that in our earnings,” she said.

While Invacare wouldn't disclose the identity of the national account, Apria Healthcare was the top provider of K0738 in 2013, collecting $2.7 million in reimbursement from Medicare, according to the HME Databank.

Invacare officials say HomeFill is a “growth target” for the company.

“We're seeing a lot of mid- to large-sized accounts convert to HomeFill,” said Niraj Patel, business unit director for respiratory for Invacare. “The past few months have been extremely heavy for us.”

Officials expect that trend to continue, if not intensify, in the ramp up to the national rollout of competitive bidding on Jan. 1. The prospect of having bid pricing in effect everywhere is pushing providers, especially those serving more rural areas, toward non-delivery business models that help them reduce operational costs.

“It's a tremendous opportunity to get more conversions,” Patel said. “Providers want to be able to stay in business.”

DeVilbiss Healthcare, the manufacturer behind the iFill personal oxygen station, agrees that after a rough patch from 2010-11, when competitive bidding was initially rolled out and when providers put much of their buying on hold, the demand for transfilling technology has rebounded.

“Even as low as rates are, they've stabilized, and providers know what their cash flow is going to be going forward,” said Jim Clement, director of product management, respiratory solutions. “We've had a healthy increase in demand in the last year and a half.”

While manufacturers stand behind transfilling technology as an HME provider's best bet at a non-delivery business model, they acknowledge that POCs will be a stronger contender down the road, once certain issues can be worked out, like improved battery life and the capability for continuous flow.

“There is a future for the POC, but the industry isn't there yet,” Patel said. “We're investing in that area, as well.”

Indeed, manufacturers like Invacare and DeVilbiss have complete offerings, with stationary oxygen concentrators, POCs and transfilling devices.

“Having as many options for the patient as possible is the way to go,” Clement said.