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Van Miller
CEO and founder, The VGM Group

Editor’s note: The following is a letter to the editor from Van Miller that appeared in the Waterloo Cedar Falls Courier in July. The letter is in response to another reader’s letter decrying fraud and abuse in the Medicare program—a letter that ended with, “Here’s to audits, let there be more.”

It’s absolutely amazing how some people look at statistics and make an overall generalization. Bob Black’s June 25 letter to the editor expressed an opinion without apparently knowing much about the underlying subject matter. I would like to correct the misunderstanding and set the record straight.

Providers of home medical equipment for Medicare/Medicaid patients are under siege through the use of “audits.” Black refers to an FBI estimate on Medicare/Medicaid “fraud,” which is a term they frequently use loosely to also include “improper payments.” This includes situations where a patient and his/her doctor order equipment for use in the home, that equipment is delivered and used by the patient, and then years later (after an “audit”) the government finds there is insufficient documentation in the file to support that ordered equipment under Medicare’s then-current interpretations of what is required. In the case of home medical equipment companies, which, percent-wise, are less than 3% of total Medicare expenditures, here is the real story about the misuse of post-payment audits.

Companies that do the audits are private independent contractors that are paid hundreds of millions of dollars or a contingency. To show the government a return on its investment, they often find minor technical errors or omissions in documentation (most often the doctor’s records) and do not take into account the medical need for the services provided.

These contractors have little oversight as evidenced in this 2011 report by the Office of Inspector General. Because the vast majority of these audit “recoveries” are based on physicians not crossing the Ts or dotting the Is in their records, the preliminary audit findings are eventually overturned through the appeal process. The administrative law judge that finally gets to hear the facts finds the patient did need the equipment, his/her doctor did order the equipment and the provider did deliver the equipment. However, at this time, the appeal process can take up to three years or more. In the meantime, these audit contractors are paid a percentage of claims “found” to be “improper.” It is essentially a “gotcha” game played years later with someone else’s records being found inadequate by someone who is paid to do so.

Meanwhile, many of the providers, especially smaller providers, are being put out of business because they can’t sustain their business. Imagine if you were told years after the fact that your employer was taking back the pay they gave you because they found that someone above you in the company didn’t fill out your paperwork correctly that month. Imagine the hours and hours of work that must go in to defending these post-pay audits years later, while you are otherwise struggling to take care of current patients.

There are lower levels of administrative appeal, but these are almost knee-jerk denials by Medicare staff that have no incentive to spend time on old problems. On the rare occasion they do, 70% of the audit denials are easily overturned. Medicare has recently adopted a policy of not paying the auditing companies until the first two appeal steps are completed. This doesn’t help much because most of the time those first two appeals processes are not substantive (for example, they might stamp a thousand claims “reviewed” in one morning). Again, most will be overturned when actually reviewed by an administrative law judge, thus the auditing companies are being paid a percentage of those denials.

If space permitted, I could also explain how home medical equipment suppliers save Medicare/Medicaid hundreds of millions of dollars a year by allowing patients to be treated outside of hospitals and nursing homes.

So, Mr. Black, I would appreciate it if you’d call me so I can further explain why this audit process is not just “annoying and a pest,” but rather how it’s putting honest and efficient small businesses out of business and helping to drive healthcare costs higher and higher.

Van Miller is CEO and founder of The VGM Group.

Jamie Loper
co-founder, DMEevalumate

As Elmer Fudd would say “Be vewwy, vewwy quiet...I'm hunting wabbits!” The Centers for Medicare and Medicaid Services (CMS) may not be hunting rabbits, but they’re hunting the very elusive greenbacks.

On September 1, 2012, CMS implemented the prior authorization (PA) for power mobility devices (PMDs) demonstration in seven states: Cal., Fla., Ill., Mich., N.C., N.Y. and Texas. CMS claims that spending per month on power mobility devices in the seven demo states has decreased since September 2012, as has spending per month on power mobility devices in the non-demo states. Looking at the statistics provided by CMS, it appears that roughly half (50% to 52%)of requests during the first year of the demonstration were non-affirmed, with the basis for the denials that the beneficiaries do not qualify for the benefit based on the documentation submitted. On April 4, 2014, CMS requested approval to expand the PA Demonstration for PMDs to 12 additional states. Are you ready MD, N.J., Pa., Ind., Ky., Ohio, Ga., Tenn., La., Mo., Wash. and Ariz.?

In a stealthy scouting move during 2012, CMS also signed a five-year contract with Strategic Health Solutions, LLC, a supplemental medical review contractor (SMRC), to perform reviews aimed at lowering improper payment by determining whether Medicare claims were billed in compliance with coverage, coding, payment and billing practices. In a move that should be lauded by the DME industry, Strategic is paid by CMS based on a flat fee arrangement; that is, unlike the Recovery Audit Contractors (RACs), SMRC is not paid a contingency fee for alleged overpayments. SMRC work is also not intended to overlap with that of RACs, but as seen below, their work has inevitably overlapped, causing inefficiencies.

CMS directed one of SMRC’s initial focuses to be post-payment medical review of PMD claims from those states not included in the demonstration project. These post payment reviews were to determine whether the claims submitted were billed in compliance with the PMD policies. The post-payment reviews were not to be limited to K0823; CMS directed SMRC to include all power mobility devices, including complex rehab. The project consisted of a random sampling of 1,200 claims—300 claims per the four DME MAC jurisdictions. SMRC was supposed to conduct their post payment review on claims that had not been audited by another contractor, yet 369 of the 1,200 claims (31%) had previously been reviewed by another Medicare contractor. The 831 remaining claims from this initial sampling with dates of service July 1, 2011—December 31, 2012, revealed an overall total error rate of 60%.

CMS posted an update to its website on February 18, 2014, explaining the wind-down of current outstanding claim reviews to finish out the current recovery auditor’scontracts.The rational for this wind-down was time needed to prepare for the next round of RACs. It is important to note that on March 7, 2014, CMS posted an update reminding providers the Recovery Audit Programs would continue to conduct automated reviews through June 1, 2014. Two RACs have filed “pre-award” protests with the Government Accountability Office (GAO), regarding some of the changes planned by CMS for the next round of five-year RAC contracts. CGI Federal and HMS Holdings (which owns HealthDataInsights) object to CMS’s changes to the next RAC installment. CMS said it would, among other things, revise the number of medical records that RACs can request from providers, reducing them for providers with low claim denial rates, and not pay RAC contingency fees for overpayments until it was clear they would survive the second level of appeal.

If a RAC comes hunting at your company, could you withstand a 60% denial rate? Your company should take advantage of this wind-down time to gear up. CMS is attempting to make its hunting trips as profitable as possible, therefore high-risk providers will be targeted. In other words, failing an audit increases the chances of another audit in the near future. In order to pass audits it is important to ensure that all face-to-face documentation is compliant before delivering the equipment. Encouraging your referral sources to use an algorithmic face-to-face program ensures that medical necessity policies are followed and equipment that is vended will pass muster.

Be prepared for hunting season; don’t get caught out in the open like a sitting duck! Adjust billing practices today and make sure you are in compliance with CMS policies. Look to those who have positive experiences with the PA demo. Perform self-audits on paperwork before the equipment is dispensed. Always have two or even three different people review paperwork. Use checklists. Eliminate the unfavorable odds. If the hunting is good at your company a RAC will return looking for more wabbits.


The DME/HME industry for the past 30 or more years has been cyclic. There have been changes, but most providers have experienced very good years.

But the times are now rapidly changing. CMS and Medicare have been running out of funds. They are looking for every way possible to delay reimbursements. They move forward without any thoughts of how these delays will affect the beneficiaries and providers.

AAHomecare is leading the battle, together with the state DME associations, against these onerous and oppressive changes.

The industry has twice failed to get legislations out of committee that would change this. We cannot allow this to happen once again.  The “market pricing program,” H.R.1717, is still waiting for more congressmen to get on board—or it will fade away! There is so much at stake for every DME/HME dealer.

AAHomecare and the state DME associations will get better results if they obtain much more support. Every DME/HME dealer must become a dues-paying member or face the possibility of having to close their doors. It is that desperate. The cost of membership in both these organizations is so minimal (and written off as a business expense), that I do not comprehend the hesitation.

Dealers must get off their soft chairs and immediately contact both AAHomecare and their state associations. Join now to stay in business. Work with them to protect your company and livelihood. Attend the meetings, go to Medtrade and insure you’re staying solvent. By doing this—joining—you will continue to support your families and those of your employees, and most important, all your customers, your senior citizens and bed ridden.

Take a giant step forward by being a joiner!

If you remember The Roy Rogers Show, you might remember Roy's sidekick, Pat, driving the old Jeep nicknamed Nellie Belle. On occasion, Nellie Belle would get out of control and Pat would yell, “Whoa Nellie Belle." (It was shortened by most people to just plain "Whoa Nellie.") Today, we have a different vehicle out of control: Medicare. Someone needs to holler "Whoa Nellie!” and put a stop to this runaway, out of control renegade before someone gets hurt.

Home medical equipment (HME) providers, hospitals, physicians, and home health and hospice agencies have been assaulted by an unprecedented numbers of audits. The latest numbers show that in the first quarter of fiscal year 2013, the recovery audit contractors (RACs) collected $744.8 million in overpayments. And while providers in all four regions were hit hard, those hit the hardest were in Region C, which had to pay back $244 million in the first quarter of 2013. This is only expected to grow. As reported in Decision Health Daily's recent Red Alert, CMS is paying bounties to a new private corporation. A fifth RAC will have jurisdiction nationwide over just HME and home health and hospice. This expands on the four existing RACs, which have limited jurisdiction by state.

On Feb. 12, the Office of Medicare Hearings and Appeals (OMHA) hosted a very informative and eye opening Medicare Appellant Forum. The purpose was to provide updates to appellants on the status of OMHA operations and relay information on a number of OMHA initiatives designed to mitigate a growing backlog in the processing of Medicare appeals at the administrative law judge (ALJ) level.

These numbers, released by OMHA, will make you yell "Whoa Nellie” over and over! When a request for a hearing is made, requests are mailed to OHMA and processed manually. The average response time to acknowledge that the OMHA request for a hearing was received is 18 to 22 weeks, or almost 6 months. There are 65 judges hearing cases, Chief ALJ Nancy Griswold reported. Judges are hearing, on average, 4.9 cases per day. It would take 65 judges 3,061 days to rule on one week's worth of cases.

Other stats shared at the forum:

  • OHMA receives 15,000 cases per week
  • OMHA has 375,000 cases assigned to be heard
  • There are 480,000 cases waiting to be assigned to a judge.
  • There are 220,000 cases waiting to be added to the OMHA system, manually.
  • It’s 28 months until a case is assigned to a judge
  • 177,283 cases have been assigned through July 15, 2014
  • Once a case is assigned to a judge, the average days to a decision is 329.8 days—and that's after it gets assigned

During the forum, a panel of judges took questions from attendees. Many of the attendees offered the opinion that the tremendous backlog of cases is due to the massive amount of denials at the lower level of appeals and asked what could be done to provide relief.

Griswold expressed several times that OHMA is looking at a "holistic" approach to the challenge that OHMA faces. OHMA is seeking to digitize claims so that they can be processed electronically, said Bruce Golden, director of information management. Golden spoke about OHMA's IT efforts to help process claims. A program called ESCAPE (yeah, right) should be ready to launch by 2016 (Don't hold your breath).

I wish Pat from The Roy Rogers Show was around today to yell, "Whoa Nellie!" so that someone would listen and stop this madness. Those were the good ole days, but the good ole days are gone and Roy is not around to help. It is up to suppliers to yell out, loud and clear!

Jonathan Temple owns OxyMed in Birmingham, Ala.

Don Clayback
executive director of NCART

There’s a great deal of activity regarding healthcare policy changes with the goal of providing quality care and services in the most cost-effective manner. But to be successful, the process must include input from all parties so that changes are made in a fully informed manner and result in the most effective and positive outcomes.

That’s not happening when it comes to Medicare’s coverage of complex rehab technology (CRT).

Medicare policy changes impacting CRT during the past year fall under negative reform. It’s reform that makes it harder for beneficiaries with significant disabilities to get the specialized equipment and services they need. It’s reform that will actually increase healthcare costs. And to compound the problems, Medicaid programs and private insurance plans may follow Medicare’s lead.

CMS has an obligation to administer the Medicare program in a responsible manner, which includes properly evaluating and implementing changes. This obligation necessitates incorporating input from knowledgeable stakeholders who can speak to how a change may increase healthcare costs, decrease quality of care, or have a detrimental impact on clinical and functional outcomes. CMS is consistently ignoring this critical requirement.

The most recent and egregious example is the disregard of public comments on a final rule issued Nov. 22, 2013, that included a reclassification of certain mobility and seating codes from the “routinely purchased” payment category to the “capped rental” payment category.

CMS chose to ignore more than 170 letters and issued its final rule with virtually no changes. Many letters were from well-recognized national consumer and clinical associations. Commenters noted a major problem with a classification relying solely on Medicare claims data from 1986. Common sense indicates the methodology needs to be updated and additional criteria added. Letters also pointed out Congress set a precedent in 2010 that CRT items should be classified as routinely purchased given their specialized and individually configured nature.

These and many other constructive comments and recommendations were completely ignored or discounted by CMS. If the rule is left unchanged, it will have significant negative impacts to Medicare beneficiaries with disabilities. Thankfully, interested congressional offices have agreed to look into this.

Sadly, there are many other recent examples where the disregard of constructive stakeholder comments produced bad policy and will hurt access: the new requirement that beneficiaries must go through the time and expense of a doctor’s examination before they can get their wheelchair brake fixed or their seat belt replaced; the drastic reductions in access to wheelchair repairs due to a competitive bidding program that took bids from companies offering unrealistically low prices without requiring them to actually do repairs at the new rates; and the various changes to how modified and custom manual wheelchairs are coded and reimbursed. 

Genuine collaboration can work if given a chance, as seen in CMS’s prior authorization demonstration project for certain power mobility devices. Upon initial announcement of this three-year demonstration, stakeholders endorsed the concept but pointed out significant problems with certain operational details. To the credit of CMS, it delayed the original start date, and took the time to hear and incorporate comments on how best to roll out a program that would increase safeguards, but not negatively impact beneficiaries. Why can’t this inclusive process, one that protected both the Medicare program and its beneficiaries, be replicated for other Medicare changes?

On a positive note, CRT issues and concerns have gotten the attention of Congress through federal legislation to create a separate benefit category for CRT (H.R. 942 and S. 948). Once this bill is passed, it will provide a foundation for improved safeguards, policies, and recognition on a federal and state level.

There needs to be a change in mind-set and process at CMS. Knowledgeable national consumer, clinician, and industry associations remain committed to working with CMS to promote the provision of quality CRT and support services in the most cost-effective manner. But they need to be genuinely included. That’s what will produce the best decisions for both the Medicare program and its beneficiaries.

Don Clayback is executive director of NCART. Reach him at

Jerry Hall
owner, Hall-Moore Medical Supplies

On Nov. 5, the North Florida Coalition of Home Medical Equipment providers coordinated a meeting between several of the largest hospital systems in North Florida, along with some nursing facilities and the local offices of Sens. Bill Nelson and Marco Rubio, and Rep. Ander Crenshaw. Our coalition has been very active in communicating the competitive bidding issues with our lawmakers; however, we felt it was time that they heard from the case managers and nurses themselves (the horse’s mouth).

The floor was opened to the referrals to talk about the problems they were having with the program. Among their answers:

o      Delayed discharges
o      Readmits because patients were not receiving needed equipment (pointing out that Part A spending increases)
o      Hospital referrals are having to wait seven to 10 days for orders to be filled
o      Skilled nursing facilities (SNFs) are having to wait two to three weeks for their orders to be filled
o      Hospitals and SNFs are being told to do all of their own pre-certifications, including labeling all HCPCs.
o      Referrals have made complaints directly to the CBIC; however, they see no consequences for the winning providers and access has not improved. Winning providers are telling referrals they have to be more patient. Winning providers are telling referrals that equipment is on back order.
o      Referrals are being told that deliveries are limited to the hours of 8 a.m. to 5 p.m.
o      Referrals are being told that deliveries are limited to zip code areas (excluding some zip codes that are clearly part of the contract they won).
o      Referrals are being told that deliveries are limited to weekdays only.
o      Referrals are being told by the winning provider that a part of the order can be filled, but not the entire order.
o      Referrals are having to obtain multiple companies for one patient’s needs.
o      Patients and/or their families are blaming the hospital case managers when equipment hasn’t been delivered after discharge. One winning provider is telling patients that the hospital isn’t sending the orders and that is why there is a delay in getting the equipment.

The meeting went very well and the case managers from the hospitals and rehab facilities were very blunt in talking about access issues under this flawed program. The case managers explained to the lawmakers that before this program started on July 1st, they could get medical equipment for their patients within hours any time of the day or night. Now all of that has changed.

Due to the problems that are occurring in the Jacksonville competitive bidding area (CBA), case managers were not surprised to see studies showing that 80% of the winning winners in the CBA were out-of-area providers who were not servicing the area prior to July 1st, and that approximately 75% of the winning providers for walkers and hospital beds were still not capable of servicing the area three months into the program. One hospital stated that they contacted every winning provider for the Jacksonville CBA and found that most were not capable of servicing the area. The lawmakers found this very disturbing.

I then showed everyone a copy of the response letter I received from the deputy director at CMS concerning my testimony about competitive bidding to the Small Business Administration. In the letter, the deputy director states in paragraph five that CMS conducts an evaluation of expansion plans to verify the supplier’s ability to provide items and services in the CBA on day one of the contract period. The letter also states that one important contract term and beneficiary protection is the requirement that contract suppliers must service the entire CBA. These statements by the deputy director obviously contradict what is actually happening with in the program.

At the end of the meeting, we asked that the Senate offices introduce a companion bill to H.R.1717, which would replace the competitive bidding program with a market-pricing program (MPP). We also asked that a hearing be conducted that includes testimony from case managers, nurses and other healthcare professionals on the program and how it is affecting patient care. The case managers at our meeting today had stacks of email complaints that they will also be forwarding to the offices, which debunks the claim by CMS that there are only 33 complaints nationally.

Jamie Loper
co-founder of

True or false: A pad prescription (order to dispense), blood gas study, ABG or oxygen saturation and a completed CMS 484 form is in compliance with CMS’s Oxygen Coverage Criteria Policy?

True or false: CMS delayed the face-to-face rule until sometime in 2014 so we do not have to worry about it this year?

True or false: You really want to argue with a Qualified Independent Contractor (QIC) in three years about the effective date of the face-to-face rule?

If you answered true to one or more of the above questions, you are following the shortcut to the emerald city of CMS recoupment, not the yellow brick road to favorable audits.

The new face-to-face rule of Section 6407 of the Affordable Care Act (affecting more than 100 items of durable medical equipment) still went into effect July 1, 2013. The only exception is delayed implementation of the enforcement of the face-to-face rule until “sometime in 2014.” An auditor several years from now could reasonably expect full compliance with the face-to-face requirements in your files from July 1, 2013, forward.

The harsh truth for respiratory providers is that they are now experiencing what power mobility providers have seen for the past eight years; physicians are more hesitant to complete a detailed face-to-face evaluation to justify the need for oxygen therapy. Why? Because it requires more of their time; physicians can no longer simply write a script for oxygen.

Oxygen face-to-face documentation must contain 38 key components to justify medical necessity and an auditor will be on the lookout for any that are missing. The supporting documentation cannot be addressed in a question-and-answer format. The physician must make entries in a detailed narrative as to the medical need. The DME MAC website now has a checklist for physicians to refer to when documenting the patient visit.

On the road to a favorable oxygen audit, the face-to-face evaluation must document a respiratory-related condition that benefits from oxygen therapy. Documentation that the patient was seen prior to the initiation of the home oxygen must also be included, as well as a list of alternative treatments tried and proven ineffective. DME provider records must contain a copy of the qualifying blood gas study, ABG or oxygen saturation, as well as all testing methods that were met, according to the policy (LCD) L11457. For initial oxygen claims, the date of the initial test results in section B 1.a, 1.b, 1.c on the CMS 484 form must be before the initial start date of service in Section A. In Section C, the equipment they are providing must be detailed, including HCPCS, manufacturer make and model, and billed and allowed amounts. Finally, the delivery invoice must match the HCPCS for the dates of service submitted for reimbursement.

On the road to a favorable PAP audit, five things must be documented: 1) The patient was seen prior to the ordering of the polysomnogram (sleep study); 2) The sleep study meets the coverage criteria detailed in the national LCD L11528; 3) The face-to-face documents the assessment of obstructive sleep apnea (OSA), current symptoms of OSA and why the patient would benefit from PAP therapy; 4) For continuation of PAP device coverage beyond the first three months (31st to 90th day), the treating physician must conduct a new face-to-face to document the patients tolerance, compliance and benefits from the use of the device, as well as which symptoms of OSA have improved with the use of PAP therapy; and 5) Evidence of training proper patient use of PAP device, along with the delivery ticket.

Based on prepayment audits for the first and second quarters of 2013, results in all four jurisdictions for oxygen remain on average 60% unfavorable. PAP therapy results for initial claims are on average 64% unfavorable and documentation missing in the 31-90 timeframe is at a steady average of 75% unfavorable. The Office of Inspector General (OIG) reported Top 20 Service Types with the Highest Improper Payments for 2011. Oxygen supplies and equipment was No. 1 at more than $1.2 billion. PAP supplies and equipment came in at No. 5 in excess of $414 million. As Denise Fletcher Lard stated in the October issue of HME News, “CMS leaves plenty of clues providers can use to anticipate future audits.” Could we have laid a smoother road for CMS to follow?

There are things you should do right now to merge onto the yellow brick road to favorable audits.  Indeed, CMS has coined this time period as “additional time to establish operational protocols necessary for compliance.” Take this additional time to do things such as educate stakeholders; refine, streamline and integrate your internal processes and checklists; and research and investigate web-based documentation solutions that remove the guesswork out of DME documentation.

The choice is yours: Slip on your ruby slippers and start down the yellow brick road to favorable audits today, or wish you had done so a year from now.

Jamie Loper is the co-founder of

by: Michael Reinemer - Friday, June 21, 2013

The home medical equipment sector needs to be part of the accelerating national conversation about healthcare costs, outcomes and value. While HME has to stay engaged in immense challenges like the Medicare bidding program, the ongoing “auditgeddon” and regulatory hurdles, it ignores the larger value debates at its peril. 

Since the HME sector has the resources, intellectual and otherwise, to walk and chew gum at the same time, I don’t know what’s holding up progress on this big-picture front. HME’s sister sector, the home health agencies, has seen huge problems in terms of Medicare regulations and reimbursement in recent years. That sector mobilized big resources and ideas to address issues such as fraud prevention and also the cost effectiveness of home care in the healthcare continuum.

In the meantime, the long-suffering HME sector remains mired in its crises du jour.

You could see a glimpse of the bigger picture and perhaps the future of health care at the fourth annual Health Datapalooza conference held in Washington, D.C., in June. It was a big, sprawling event attended by health economists, industry leaders, data geeks, journalists, and government officials, including HHS Secretary Kathleen Sebelius.

More and more data is becoming available to analyze. The White House Office of Science and Technology Policy brags that over the past four years, HHS has “liberated over 400 datasets, participated in a countless number of codeathons, and has seen and helped developers build hundreds of apps, services and products using health data.” It’s about time. Imagine a world where HME News didn’t have to use the Freedom of Information Act to wrench reimbursement data out of CMS.

Close scrutiny of outcomes, cost control measures and value will drive much of the real health policy debate among Washington’s wonking class. Consumers, stakeholders and the industry are pressing for more data, more transparency from all sources, plus the analysis that will help draw better insights, practices and policies from the data.

While the HME sector made good connections with many economists in the course of critiquing Medicare’s bidding system and seeking budget estimates (or “scores”) for legislative proposals, it should be doing the same for questions like health and financial outcomes of home care.

Health economists and advocates could help to quantitatively frame issues like the role of HME in preventing ER visits and hospitalizations, and shortening hospital lengths of stay. When the HHS Office of Inspector General opines that Medicare overpays for a specific HME item or category, where is the data and analysis to assess the validity of that indictment? 

The dollars that Medicare spends to reimburse HME providers who deliver and set up canes and walkers for beneficiaries seems like a bargain when you consider that they help prevent devastating falls, which lead to long hospital stays or death. Where is the data analysis to put that item into context? Or similar analysis for oxygen therapy, nebulized drugs, hospital beds, wheelchairs, support surfaces, or diabetic supplies?

The HME sector is losing the value debate. Even though it does not deserve it, HME remains a “target rich” environment that gets a disproportionate amount of negative attention from the Inspector General, the Department of Justice, congressional investigators and too many journalists who cut and paste self-serving government press releases into their news stories.

There are no silver bullets. However, like AAHomecare got out in front of the fraud and abuse debate with specific, aggressive proposals to stop fraud, the HME sector needs an equally aggressive commitment to look at data and put HME into context that will help policy makers and the public better understand the value of home care.

Michael Reinemer is a Washington-based communications consultant. Visit

Georgie Blackburn
Georgie Blackburn is vice president of government relations and legislative affairs for Blackburn’s in Tarentum, Pa.

Editor’s note: The following is an excerpt from Blackburn’s membership address at the PAMS Annual Meeting in May.

The toughest obstacle our industry has encountered over my three-plus decades in this business is CMS’s bid program. In his book, “Good to Great,” Jim Collins wrote that all good organizations have two goals in common: they preserve their core values and they stimulate progress. Competitive bidding impedes both goals!

Our business is based in the Round 1 MSA. This has been a LONG fight! There was never a decision regarding whether we’d bid, but there was also an overriding feeling that while we were attempting to participate, the program had to be fought.

In 2007, when the program was being unveiled, it became very clear that unless our industry and our business voiced its concerns we’d passively be consumed by its detrimental design. That year, my job changed from compliance director to government relations—which gave me a voice for Blackburn’s.

It was the culmination of more than three decades of working with DME, as an ATS, rehab manager and compliance director, that gave me specifics I could discuss. It was time to speak up and speak out!

Blackburn’s has been a member of HIDA, then NAMES, which has become AAHomecare, for years. 

We knew our national association would be working on getting the bid program stopped, but how were they to do this without the help of providers? The Pennsylvania Association of Medical Suppliers (PAMS) had really ignited my fire on issues. During my chairmanship of the board in 2006, PA Medical Assistance tried to initiate a new program called selective contracting, jump starting the bid program that Medicare was about to initiate. The board, our members and then new Executive Director John Shirvinsky successfully met with the secretary in regional meetings, we got our beneficiaries to speak out, and eventually we shut that down. To this date, it has not resurfaced. Poor policy could be stopped in its tracks—it was an epiphany.

I’ve had other epiphanies these last six years fighting the bid program, and they are like snapshots in my mind.

Lesson #1: There really is power in voice!

When the methodology behind competitive bidding was unveiled, complex rehab mobility products were included. Rehab had been my life at Blackburn’s for more than 20 years; I knew the complex rehab patient’s needs and the time involved with specifying the right product for functionality.

I could not conceive of drafting bids that included complex rehab patients when each patient was different, required an inordinate amount of time to arrive at the right product, required analysis of the home environment, required a clinical evaluation team approach, and required fine-tuning even after delivery on an ongoing basis.

At an AAHomecare fundraiser in Washington, D.C., for Republican Sen. Arlen Specter in 2007, I was seated beside him. I had just finished my term as board president at PAMS and was recruited to serve on AAHomecare’s executive board of directors.

AAHomecare felt it advantageous to seat me beside the senator so I could speak about the bid program from a Pennsylvania perspective of a business in Round 1. I was hesitant—this was new to me.

Many colleagues voiced their concerns that morning and as he stood and looked down at me, I finally raised my hand and said:

“Senator, our business is within the Round 1 CBA and I don’t know how in God’s name we can devise a bid for a complex rehab patient—each and every patient is different. Rehab products should not be included in the bid program.”

That statement for some reason resonated with the senator and as he joined the large group assembled for his joint address following the breakfast fundraiser, he shouted out, “Where’s Georgie…Is Georgie here?” I was stuffing a donut in my mouth in the corner because I hadn’t been able to eat seated beside him and choked on it as I raised my arm.

He said, “There she is…Georgie just told me why the bid program is not good for rehab patients and I will do all I can to get to the bottom of this.”

And he did!

AAHomecare scheduled a followup meeting in the senator’s office with then Acting Administrator Kerry Weems and I was asked to speak on behalf of providers regarding rehab patients. By the time Weems left, he identified a rehab patient with Christopher Reeves and even shared a story about his best friend who had ALS and was deteriorating.

I won’t say that meeting directly affected the removal of complex rehab from competitive bidding, but I know it helped. Sen. Specter had assured Weems knew about the rehab patient.

Lesson #2: Legislators do listen to constituent concerns and take them to heart!

Dale Carnegie said, “Speak about those things you know if you want to be heard!” I was psyched! If Sen. Specter felt what I said made sense, maybe others would, too!

I contacted each and every representative in our marketing area and one legislative director, Erik Komandant for Democratic Rep. Jason Altmire, called me to better understand my email regarding the problems I saw with competitive bidding. Rep. Altmire was chairman of the House Small Business Subcommittee. He told me that the congressman was going to hold a hearing and asked if I would write a synopsis as testimony. John Shirvinsky also wrote on behalf of PAMS.
He was selected to speak at the hearing and AAH asked if I would speak on behalf of small providers everywhere.

It was an honor and my personal introduction to Rep. Altmire. It also was the first hearing held on competitive bidding and the effect on providers in Round 1. I invited Rep. Altmire for a site visit, even though our business was directly represented at the time by Rep. John Murtha. He accepted. To drive publicity, I invited the local newspaper and the University of Pittsburgh‘s fundraising director, who was interested in our advocacy work, as well as key managers on our staff.

The congressman spent three hours with us, toured our facility, watched how a Group 3 chair was integrated with custom seating and positioning, and reviewed drive controls.

A good give-and-take roundtable followed where we discussed the level of patients we serviced, the illogical inclusion of complex rehab patients in the mix for Medicare’s new program and our opposition to the program as designed. I asked him how he would start to formulate a bid. He said he couldn’t because every rehab patient was different. From that point forward, we had a champion against the bid program.

Rep. Altmire had a healthcare background, having worked for UPMC prior to winning his seat in the House. He believed that health care should not be auctioned to the lowest bidder, that quality of care would suffer. He also understood the importance of accreditation, compliance, community presence.

He was in his first of three terms about to run for his second. He assured me upon leaving our site visit that he would work to stop the program.

Lesson #3: Commit the time, energy and finances necessary to plant a seed—then watch it grow!

In 2008, our industry successfully delayed Round 1. And it was due to champions like Rep. Altmire, who willingly spoke out to gain support against the program.
In fact, he was one of the speakers supporting the delay on the House floor the day of the vote!

I had received a personal call from Komendant, Rep. Altlmire’s legislative director earlier that day. He had told me not to hold my breath—what I was asking for, to delay the program, was a stretch. Later, he called elated, saying he couldn’t believe what had happened and to congratulate our industry! PAMS awarded Rep. Altmire the “Legislator of the Year Award.”

Our industry was promised improvements with that delay. But, Round 1 was rolled out by President Obama shortly after he took office his first term. We had hoped many important changes would be made, but it remained much the same. We were so disappointed.

Another hearing on the bid program was held in 2009, and I again testified on behalf of AAHomecare and small providers in rural areas. I was surprised when Rep. Altmire came in to personally introduce me. He spoke about his site visit and the services our firm provides 24 hours a day, our commitment to our patients. He shared how we’ve been a part of our community for almost 75 years. 

He really did know us! I realized that a relationship was forming.

He had helped our industry in the past, and I wanted to make sure this savvy champion stayed in Congress and hosted a fundraiser, first in Tarentum, then twice in Pittsburgh over the years. AAHomecare, Pride Mobility Products, Invacare and many other industry leaders co-hosted the events and traveled in to be there in person. Many of my PAMS colleagues were on hand to support him and he was elated at the turnout.

It reinforced his commitment to our industry and to our cause.

The House changed to a Republican majority and another friend and loyal supporter, Rep. G.T. Thompson, emerged. Rep. Thompson had a clinical healthcare background and also responded very positively to my concerns about the program in our initial meeting during his first term. He and his legislative director, Matt Brennen, were go-getters—they wanted the bid program stopped.

Jay Witter, Seth Johnson, Cara Bachenheimer and our own John Shirvinsky became my mentors. I continued to ask legislators for help, but my mentors taught me how to put that in the context of what could be done. In a bi-partisan move, Rep. Thompson and Rep. Altmire introduced a bill to stop competitive bidding.  We got a significant number of names on the bill, but at the end of the congressional year, we all knew it wouldn’t go anywhere unless we had a substitute plan and that didn’t surface until last year with the development of the market-pricing program (MPP).

Importantly, Reps. Thompson and Altmire’s bill served as a placeholder for MPP, keeping the negative and illogical aspects of competitive bidding alive until a replacement program would be adopted. Rep. Thompson was given the PAMS 2011 “Legislator of the Year Award!”

Lesson #4: In politics, redistricting can hugely affect relationships

In the last election, Rep. Altmire lost his seat. He was a centrist voter, had never missed a vote in all the years he was in office, and voted against the Affordable Care Act—he voted according to what his constituents wanted. I believe it came back to haunt him within his own party. A victim of redistricting, he and Rep. Mark Critz battled in the primary. Rep. Altmire lost. Poor turnout in his region was blamed. The unions also had backed the Affordable Care Act and he didn’t. He thought it was too costly and inefficient. Regardless of the reason, we lost one of the best champions we have ever had.

Then Rep. Critz lost to Rep. Keith Rothfus—a Republican. I have begun the educational process—again. We’re currently in the midst of scheduling a site visit, but we already have his support as a co-sponsor on H.R. 1717.

Lesson #5: Backing good people in Congress is a good business decision. Building new relationships—a necessity!

The challenge to develop relationships and educate on issues is ongoing. People may change, but our issues remain. Fundraising is a key way to do build relationships. Mal Mixon, chairman of the board of Invacare, told me last year that he was having a fundraiser at his home for House Speaker John Boehner and I said I’d love to meet the speaker. Mal’s response was, “Do you have $50,000?” His fundraisers and mine are very different! But both serve a purpose!

Chuck and I, and Ron and Jo Jean have supported and hosted many fundraisers for legislators in our service area and for industry champions since 2007. It enhances the bridge building.

Since 2007, our legislators have challenged us to come up with a replacement methodology for competitive bidding. I wanted and our industry wanted competitive bidding to just go away—it was hard to swallow the fact that a pay-for was required. Our champions knew they couldn’t stop the program without an eventual replacement.

Do you recall how the industry became incensed at the 9.5% cut to achieve the delay in 2008? Now we are facing 45% cuts in DME in Round 2 and we’ve been living with an average 36% average DME cut in Round 1 in Pittsburgh since 2011! Our situation is serious.

LESSON #6 – The answer eventually surfaces. Stay positive!

In April, H.R. 1717, “The Market Pricing Program Act of 2013,” was introduced by Republican Rep. Tom Price of Georgia, a physician, and Rep. John Larson of Connecticut. They are colleagues of our own Rep. Mike Kelly, the PAMS 2013 Homecare Champion. All sit on the powerful House Ways and Means Committee. MPP levels the playing field; it allows us to stay in the game!

With Round 1 already out of the gate since 2011; with CMS propaganda stating there aren’t any significant issues or complaints; and with Round 2 ready to begin July 1, battle lines are drawn.

Here’s the challenge: We must garner legislative support for MPP! We must do that with data. We must do it quickly! The lack of transparency in this program must be challenged; the outrageous low-balled discounting must be dissected. CMS must be made accountable for ignoring the recommendations of 244 auction experts as we struggle to keep our firms thriving and continue to service patients.

We need hearings to question CMS’s assertions about the success of the program. We need to challenge CMS’s award procedure—who got in, who didn’t and why? What are the financial qualifications—they’ve never been shared! Why were awards given to non-licensed companies in various states? How were capacity estimations determined? What is the formula for establishing financial credibility of award winners?

As of July 1, 91 more CBAs will be involved. Chances are Round 2 will involve your business like it has involved Blackburn’s the past three years in Round 1.
I know how hard our national association and key manufacturers and their lobbyists have worked to get the bid program stopped. I know how hard state associations have worked and are working under the tutelage of John Shirvinsky to amass data to share with legislators.

This is NOT the time to claim fatigue! This is NOT the time to feel dejected! This is NOT the time to criticize! This is NOT the time to let someone else do your talking! This is NOT the time to back down and succumb to CMS propaganda about 45% savings and a promise of improved quality care! This is the time to come together and speak with one voice.

I know perseverance wins. Let me share a very personal story.

Early in 2010, I got a call from Rep. Altmire’s chief of staff, Sharon Werner, inviting me to attend the First Ladies Luncheon with Mrs. Altmire. She explained this was an annual event for congressional spouses; the congressman’s wife took one constituent a year. The staff had a vote, and I was the constituent! I was so honored!

The night before, there was a reception in the Library of Congress. Rep. Altmire personally took me through the books of Thomas Jefferson, which reside there. We viewed letters of first ladies ranging from Mrs. Adams to Mrs. Bush—history could be traced in their handwriting.

The next day was magical, seeing and hearing the first lady speak, witnessing in person the Navy band, the gorgeous luncheon, the tenor from Le Miserable crooning “Bring Him Home.”

During the drive home, I received a tearful call from my son that his wife, our 29-year-old daughter in law, Alison, had a biopsy done that day. The doctor quickly called them back into his office to explain they were facing Stage IV breast cancer, with metastasis to the lymphatic system. The doctor was very, very sorry. Their boys were 2 years and 9 months old. A troublesome lump thought to be a gland for three lingering months finally had been biopsied at their insistence and the news was bad—the very worst. Alison’s prognosis was not good.

That day is engrained in my memory—from surreal highs to incomparable lows.

My point is this: That evening, April 28, 2010, Alison told me she would survive despite the odds. The numbers given by her doctor meant nothing to her!

Two years later, Alison was honored as the cancer Survivor of the Year for West Virginia University Health System, speaking to 350 clinicians from around the country on the power of a positive outlook and carefully individualized patient care! Today, her six-month PET scans still remain clear, the next is this month. The boys are now 5 and 3, and thriving! They have a family life!

To us, it’s a miracle, but not to her. She believed she could beat cancer and did whatever it took from three bouts of chemo to multiple surgeries to radiation to more surgery to make that reality!

She never gave up. She never gave in! Her confidence was contagious!

LESSON #7: I learned from Alison to achieve any goal, we must believe we can!

I believe success is found at the intersection of challenge and opportunity! Friends, we are at that intersection! Some say our odds are not good at getting MPP passed! I say there are no odds—only data! We will never know what we can accomplish unless we try! Now is the time to contact our legislators, be relentless, be tenacious, and be passionate. The illogical data from Round 2 is powerful proof.

Let’s WIN with facts. Let’s educate together! Let’s beat CMS at their propaganda game.

AAHomecare’s Washington Legislative Conference is May 22-23 in Washington, D.C. Be there. It’s our time to shine!

Georgie Blackburn is vice president of government relations and legislative affairs for Blackburn’s in Tarentum, Pa.

Patrick Naeger
Executive vice president at Healthcare Equipment & Supply Co.

Editor’s note: This is an email that provider Patrick Naeger sent to the office of Sen. Claire McCaskill, D-Mo, following the congressional hearing to review provider business practices and Medicare audits. McCaskill leads the Subcommittee on Financial & Contracting Oversight, which held the hearing.

After watching the hearing yesterday I am a bit frustrated. Clearly, the one thing missing was the DME provider. While the hearing did not shed a good light on the industry, as a whole, it did bring attention to the bad providers who are illegally soliciting Medicare beneficiaries. In that regard, I can assure you, that the overwhelming majority of providers are on the senator’s side and we want to help fight the fraud and we have solution. All of us want the bad ones gone!

Clearly there was some frustration on the part of the senators. It seemed no one from CMS did a very good job providing quantifiable answers so that any of the senators could wrap their heads around the issues of fraud, improper payments and the alphabet soup of contracted auditors. I know how they feel—this is my world and I understand this frustration because these are the folks we deal with daily! Clearly by their own testimony, they provided profound evidence that the system is broken and I am glad the senators saw this first hand. In fact, after hearing Dr. Peter Budetti's exchange with Sen. Johnson, I expect to see the good doctor on Dancing With The Stars next season. While the answers, or lack thereof, were comical, this was no laughing matter.

Furthermore, the statement Mr. Laurence Wilson made to Sen. Tammy Baldwin's concerns about the effect of competitive bidding on rural providers was blatantly misleading at best. Mr. Wilson stated, "The program doesn’t affect areas other than metropolitan areas and surrounding suburban area at this point, so true rural areas are not affected by competitive bidding" In fact, I have a letter that was sent to Marilyn Tavenner, acting CMS Administrator at the time, from Sen. McCaskill asking that they look at the St. Louis CBA and give consideration to rural counties like Washington and Crawford. Mr. Jonathan Blum, deputy administrator, made a visit to Washington County at the request of Rep. Emerson to see and hear firsthand how rural Washington County really is. Washington County only has one hospital. In fact, this hospital enjoys the designation of a rural hospital because it serves a rural community. Washington County, Mo. has 33 people per square mile. This is not urban or suburban by any definition. In fact nine out of the 15 counties in the St. Louis CBA have less than 100 people per square mile. In St. Louis, there could be more oxygen patients per square mile than people per square mile in Crawford County.

Furthermore to show how bad competitive bidding really is and to Sen. Baldwin's point, the only two locally owned independent full line DME providers in Washington County who have invested in brick-and-mortar operations did not get bids. And one of them is ME! Mr. Wilson may paint this picture that all is OK but he is wrong again. The only thing left after bidding out the 10 most costly product categories are crumbs! While I applaud Sen. McCaskill for going after those who are illegally soliciting seniors, we must be mindful not to throw the baby out with the bath water.

Home care is the cure, in my opinion, for keeping Medicare costs down. Home care is the most affordable, most economically feasible solution. Ten thousand baby boomers are retiring every day and the demand for products and services has never been greater, and will continue that way for the next two decades. Now is not the time to eliminate those who are most capable of providing this affordable care to our seniors. Competitive bidding in its current form will destroy the DME industry. The industry has a plan we just need to be heard.

I think this committee could do great work to ensure seniors have the services they will need available to them. In fact, I would ask this committee to have a hearing on how the competitive bid rates were determined. It seems no one can get an answer from CMS and I believe Sen. McCaskill, through her committee, could get this done. While this should be a very easy endeavor it has become impossible. The bids were made, they were open, they were validated and awarded. All notices are out and the bid amounts were announced, but somehow no one—and I mean not even members of Congress—can see how the bids were determined, yet Mr. Wilson is touting how well this is working and will continue to work. While we are told these numbers come from actual suppliers, CMS will not let the sun shine in, unlike in every other government bid opportunity. The providers who will see their businesses destroyed deserve to see why. Furthermore as I understand it, the competitive bidding law was written to expressly exclude any opportunity for administrative or judicial review—surely that can't settle well with any lawmaker and especially with Sen. McCaskill. Obviously, there is more to come and I plan on bringing it to you next month during my visit to Washington.

In the meantime, my offer is still on the table as it has been for several years now. I would love to show the senator firsthand the day-to-day operations of a three-generation DME company. She or any staff is welcome to come and spend as much time as they like. In addition, for any additional hearings she might have looking into the DME realm, I am more than happy to offer my services and give my perspective based on 25 years of experience. Please share this letter with the senator. I hope to hear from you soon about how the senator feels regarding my point of view. Like the good doctor from Chesterfield, Mo., who inspired this past hearing I hope my concerns and experience shared, here, inspire her, as well.

Patrick Naeger is executive vice president at Healthcare Equipment & Supply Co.