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On the Editor's Desk

by: Liz Beaulieu - Friday, February 21, 2014

If you’re intimidated by the prospect of launching a retail-driven HME business, consider the dozens of experts featured in our upcoming Retail Strategies Special Report as your personal mentors.

In the special report, these experts will guide you on everything from what to prioritize (your customer’s needs, not necessarily the money) to what to carry (how many bath chairs are you really going to sell, asks one expert) to where to get help (your friendly manufacturer, of course).

One of the most intimidating aspects of a retail-driven HME business is competing with big-box retailers like Walmart. A whopping 98% of respondents to a recent HME Newspoll reported that big-box retailers in their area carry HME. What’s more: 71% said these retailers are increasing the amount of HME they carry. 

Have no fear, these experts will tell you. While retailers may have the upper hand when it comes to showcasing a product (though that’s a skill that providers are quickly learning to master), providers have the upper hand when it comes to education. They know their stuff.

Even if you’re a veteran of retail-driven HME business, there’s something in this special report for you. For example, Justin Racine wants to know: Have you considered the impact of your online and mobile presence on your retail strategy? That's taking it up a notch.

We'll be emailing you all the special report on Tuesday, but below you'll find a sneak peek.

So read up, then make some moves. We’ll all be here to cheer you on.

Retail sound bites

Don’t neglect referral sources

“In retail DME, I think focusing on outside referral sources is necessary at least a couple of days a week. I use a part-time salesperson who has learned about our products and how to sell them. Her goal is to be consultative, understand what the referral sources need and develop relationships with key people there.

For many of the outside referral sources, our salesperson offers to bring in lunch or snacks and do an in-service to show some of the new and innovative products we carry.

For senior living facilities, she will promote an in-service with flyers and have a raffle for a small item to attract more attendees. She passes out 10% discount cards and has even arranged an excursion to the store with the activities director.”

—Mike Kuller, RPh, is the author of “The Next Step – Retail Home Medical Equipment.”

Make smart product choices

“Many get into big items like scooters and lift chairs, but what sells over and over are disposables like wound care and incontinence. If you are in a town of 100,000, how many bath chairs are you really going to sell?”

—Cliff Woolard, president of Home Med-Equip Co.

Spread the word

“Advertising can be as simple as an email blast to existing customers. Advertising can also consist of many different mediums, including print, TV, billboard, Web, direct mail, bag stuffers and so on. Often people think TV commercials are costly, but many markets have inexpensive cable and local news stations that allow you to run TV advertising.”

—Andrew Pyrih is the senior vice president, domestic sales, at Pride Mobility Products.

Bling the ride

Home Care medical launched a campaign called “Bling Your Ride” to promote retail accessory products like bags, cane holders, cup holders, and seat and back covers as stylish options for walkers and rollators. “They can design their walkers or rollators the way they want. These items are practical yet edgy and fashionable.”

—Heather Lotz-Klug, manager of retail sales, Home Care Medical

by: Liz Beaulieu - Thursday, February 13, 2014

You may have noticed that The Braff Group Index on our Databank page in the print issue looks a little bit different these days.

In the index, we used to track the stock performance of 38 companies in seven key healthcare service sectors: home medical equipment, home health services, specialty pharmacy, hospitals, long-term care, e-health and healthcare staffing.

But there are so few public companies in the HME industry nowadays—most recently Apria Healthcare announced it would no longer file reports with the Securities and Exchange Commission (SEC)—that the index lost some of its punch.

After brainstorming with Dexter Braff at The Braff Group, we decided to transition the focus on merger and acquisition activity and rebrand the index as the M&A Insider.

In the January, February and the upcoming March issues, we feature graphs on HME transactions per quarter from 2006-13, private equity investment in HME from 2006-13 and HME deal flow from 2001-13, respectively.

Here’s a sneak peak at that last graph, since it won’t get published for another couple of weeks:

And here’s the accompanying commentary from Braff:

Deal flow fell dramatically in 2013. The good news is that the fall-off is not quite as dramatic as the numbers suggest, as deal volume in 2012 was artificially inflated as sellers sought to capture favorable capital gains treatment set to expire at the end of the year. Deals that would have otherwise closed in 2013 were accelerated to 2012, contributing to the slow down.  Moreover, even with the slide, the sector remains extremely active as companies continue to turn to M&A to capture share.

We hope you find this information more useful.


by: Liz Beaulieu - Wednesday, February 5, 2014

Walt Gorski, formerly of AAHomecare, once told me that audits were a bigger issue for HME providers than competitive bidding.

I’m starting to believe him.

With competitive bidding, providers know, for the most part, what they’re dealing with. At some point, they know if they’re going to get a contract or not, and they know that reimbursement will be X% off the current Medicare fee schedule.

With competitive bidding, providers may not like what they know, but at least they have enough information to make appropriate business decisions, such as exiting certain product categories or Medicare all together.

With audits, providers know next to nothing. Since audits can be arbitrary, they don’t know if a claim will be denied, and with the recently announced delays in the appeals process, they don’t even know if they have an avenue for recourse to fight denials.

There have been a number of signs recently that audits have overtaken competitive bidding as public enemy No. 1 in the HME industry:

1.) The respondents to a recent HME Newspoll blamed audits in large part for any poor financial performances in 2013. Fifty-three percent of them said at least 20% of their A/R was more than 60 days old last year.

2.) The People for Quality Care (PFCQ), an advocacy group know for its determined fight against competitive bidding, has turned its attention to fighting audits. On twitter, it recently stated, “2014: Let’s take on audits.”

Another sign: The Office of Medicare Hearings and Appeals will hold a daylong forum on Feb. 12 to discuss delays in the appeals process, and The VGM Group is rallying stakeholders to attend the forum and visit lawmakers on Capitol Hill the next day. It plans to live tweet updates from the forum with the hash tag #VGMAuditMadness.

John Gallagher, VGM’s vice president of government relations, will have a guest commentary in the March issue, where he challenges providers to do their part:

“The time is now to take on audits. We will use the lessons we have learned in the competitive bidding fight to bolster both efforts. To our faithful providers—leaders who have shown so much through the years—it’s time to go to battle again. Our story may not be the celebrity coverage of every day headlines, but darn it, we’re going to make sure it’s heard.”

by: Liz Beaulieu - Tuesday, January 21, 2014

Calls and emails from you, HME providers, aren’t the only calls and emails we field here at HME News world headquarters in Yarmouth, Maine. We also get calls from Medicare beneficiaries pretty frequently.

About a month ago, I got a call from a nice lady in Hartford, Conn., who wanted to know whom to call about getting a new wheelchair. She was a former customer of The Scooter Store and she was accustomed to getting a new wheelchair every five years. I told her she lived in a competitive bidding area and directed her to log on to, to click on “Find suppliers of medical equipment & supplies,” to type in her zip code when prompted, to select standard wheelchairs and to call one of the providers listed.

I didn’t have the heart to tell her that, as a former customer of The Scooter Store, she might have a hard time finding a provider to pick her up. Although, if she is right and she is eligible for a new wheelchair, her chances are probably better.

I also didn’t have the heart to tell her that the 10 providers listed on for her zip code ranged from Lincare at 6.11 miles away to Dusara Corporation/Universalmed Supply at 1,839.19 miles away. In fact, providers six through 10 were 100 miles away or more.

One of these days, I’ll stay on the line with a Medicare beneficiary long enough to ask them a few questions. How did this woman feel about having to find a new provider because her former provider didn’t win a contract, the final sting in a sting of stings that included an FBI investigation and congressional scrutiny? How did she feel about the possibility of having to select a provider located so many miles away?

Managing Editor Theresa Flaherty got an email this week from a self-proclaimed “elderly lady” in San Angelo, Texas, in need of a wheelchair. The woman wrote: “Please contact me. I have no help.”

It does not look like this woman lives in a competitive bidding area and when I plug her zip code into the supplier directory at, I get two results, both of which are a fairly reasonable 18.51 and 19.08 miles away. She lucked out on both accounts.

We’re happy to help when we can, of course, but Theresa and I often wonder: How do these beneficiaries even find us if they can’t find a provider?

by: Liz Beaulieu - Wednesday, January 15, 2014

I knew it was a bit of a stretch when we posted a brief to our website recently about a furniture maker named Perdue Woodworks debuting a line of nightstands designed to conceal CPAP devices. I mean, we’re not in the business of writing news about furniture makers.

But it was just one of those things that I couldn’t resist. It got me to thinking about the day-to-day realities of having obstructive sleep apnea (OSA) and how those realities can, ultimately, impact compliance and the ability of HME providers to continue getting paid.

It turns out I’m not the only one that was interested in this news. The brief got 200 views on our website and a couple of favorites on twitter.

So, naturally, I started digging for more info.

I wasn’t able to reach anyone at Perdue Woodworks, but a Google search on “CPAP nightstands” led me to D.L. Allen Cabinetmaker. I was able to reach the owner of that company, Denny Allen, in Mount Vernon, Ohio.

As you might suspect, Allen, a woodworker and shop teacher by trade, started making nightstands for CPAP devices four years ago when he began using the therapy himself. The nightstand you see on the main page of his website,, is his—a custom-made job in walnut. It features a drawer that pulls out from the side, toward the bed, for easy access; and an opening in the back for the tubing.

Of course, I had to ask Allen whether or not he’s visited local HME providers to let them know about his product.

“When I first started, I had cards printed out and took them to all the providers in central Ohio,” he said. “I don’t know that I’ve gotten one order from that.”

In all, Allen has made and sold only a handful of nightstands for CPAP devices to date.

This surprises me. Yes, Allen’s nightstands are on the expensive side at $300 and up (Perdue is marketing theirs for $150 to $200), but they’re handmade using wood not MDF, and they look like something you’d pass down from generation to generation (Is OSA hereditary?). I can’t help but think these nightstands would make the perfect addition to the room-like displays so many HME providers are setting up in their showrooms. It’s a visual that I think would take some of the stress out of what can be a stressful therapy for patients.

“A lot of the trouble with CPAP is the inconvenience of it,” Allen said. “What I do takes that away. You pull out the drawer and everything’s there, and the drawer stays shut unless you’re getting in and out of it.

“The hard thing is finding a mask that’s not so annoying it keeps you awake,” he said. “But that’s the business of the people who make the masks; I just make the nightstands.”

by: Liz Beaulieu - Thursday, January 9, 2014

In the past few months, a number of people have emailed me suggesting an HME NewsPoll to get a pulse on the financial health of HME providers in 2013. A good way to do that, they said: Ask providers about their DSO, A/R and patient collection rates.

So that’s what we did.

One of the people who emailed me noted that if a provider has 20+% A/R greater than 60 days old, that means trouble.

And wouldn’t you know it, so far, the majority of respondents to the poll say they have 20+% A/R greater than 60 days old. Here’s how the responses to that question break out right now:

What percentage of your A/R was greater than 60 days old in 2013?
0-10%    6
11-20%    14
20+%    26

In another question, a majority says their A/R greater than 60 days old increased at the end of 2013 compared to the end of 2012.

This is based on a small sample (46 respondents), but still.

In reviewing some of the comments to the poll, the bulk of the blame for this falls on audits. One respondent summed it up this way:

“Illinois Public Aid (is) behind nine months to a year; private insurers (are) “developing” every claim—requesting documentation for almost all claims, (they) may as well go back to paper billing and attaching it on the front end; and increased Medicare pre-pay review. DME is a tough industry these days.”

The respondent added: “Less patient pay due to less people employed and less income to pay their bills.”

Another respondent echoed that last statement by saying, “Patients are increasingly struggling to pay balances and choosing to pay other bills instead (heat, power, cable, etc.).”

Paying the heating bill is no joke these days for people in many parts of the country. We’re only two weeks into January, but I think “polar vortex” should be the word of the year for 2014.

The rest of the questions hold a bit of better news: A very slight majority of respondents says their DSO has decreased in 2013 compared to 2012; and a very slight majority says they collected a larger percentage of balances owed by patients in 2013 vs. 2012.

If you haven’t completed the poll, please do so here.

And check out the February issue for the complete results.

by: Liz Beaulieu - Thursday, January 2, 2014

We may have closed the book on 2013, but as The VGM Group’s John Gallagher reminded me this week, we didn’t close the book on replacing the competitive bidding program with a market-pricing program (MPP) program.

In the House of Representatives, H.R. 1717 still has a pulse with 164 co-sponsors in the 113th Congress.

In the Senate, an amendment requiring providers to prove they meet licensure requirements in states where they don’t have a presence before they submit bids, is tucked into a recently passed “doc fix” bill.

What happens from here could be interesting, predicts Gallagher, vice president of government relations. And by interesting, he means good, bad or both.

Here’s why: The “doc fix” bill that was passed is a short-term patch and lawmakers have until March 15 to come up with a more long-term fix to prevent reimbursement cuts to physicians. That, or pass another short-term patch, which is always a possibility, but the administration and others are pushing really hard for a long-term fix, Gallagher says.

On one side, this gives industry stakeholders time to try and bulk up the amendment in the “doc fix” bill to include more substantive changes to competitive bidding, like requiring CMS to award contracts to providers within 50 miles of the competitive bidding area, he says.

“What’s in there is a placeholder more than anything,” Gallagher said.

On the other side, a long-term fix will likely be costly and stakeholders will want to make sure cuts to HME aren’t used as a pay-for.

A lot of how the next few months play out will be affected by the White House’s nomination of Sen. Max Baucus, D-Mont., as the next U.S. ambassador to China. Baucus is chairman of the influential Finance Committee, and neither Baucus nor the staffers of the committee have been friends of the HME industry, Gallagher says.
When Baucus leaves his post, who will replace him (Sen. Ron Wyden, D-Ore., is a likely candidate, Gallagher says) and how much of the committee’s staff will change (some staffers have already jumped ship, but some will surely stay, he says).

“Right now, we’re watching closely to see how this transpires,” Gallagher said.

 Stay tuned.

by: Liz Beaulieu - Friday, December 20, 2013

Happy Holidays from Team HME News!

From left to right: Theresa Flaherty, managing editor; Leah Hoenen, web edtor; Rick Rector, publisher; Heather Kelly, assistant marketing manager; Liz Beaulieu, editor; Jo-Ellen Reed, account manager; Elizabeth Deprey, associate editor; Nicole Copeland, advertising coordinator.

by: Liz Beaulieu - Thursday, December 12, 2013

I just reviewed 10 HME News TV interviews for a new schedule for the first quarter of 2014. Know what that means? I have a preview for you.

From the interview with Invacare’s Cara Bachenheimer, I learned that even though stakeholders don’t have a bill to replace competitive bidding with a market-pricing program (MPP) introduced in the Senate, that doesn’t mean they don’t have support there. She says, “They’re looking at this bill,” meaning the bill in the House of Representatives, H.R. 1717. This has new meaning now that we know a group of senators has offered to include or support including an amendment to fix the bid program in the “doc fix” bill being marked up.

Pride Mobility’s Seth Johnson on repair issues for power mobility devices in the wake of competitive bidding and The Scooter Store closing: CMS “has acknowledged that their phones are literally ringing off the hook.” He says relief needs to cover two areas: documentation and reimbursement.

AAHomecare’s Tom Ryan on competitive bidding: He sees “cracks in the system."

Consultant Lisa Wells on selling cash items online: Behold the power of video. She says consumers are turning to websites to do more than reading. “They’re watching videos,” she says. “They’re more likely to buy if there’s a video that shows how a product works.”

Provider Cliff Woolard is the first to admit that getting into retail isn’t easy or foolproof, but it’s a decision that has paid off for this company. He says finding the right location was the single most important factor in his success. “We’re used to renting a low-cost warehouse in an off-traffic area,” he said. “I drove around for six months to find the right location.”

Consultants Regis Farrell and Mike Sperduti on right-sizing your company: Reducing your headcount is a sensitive subject, but often a necessary move in tough times, they say. One caveat: Don’t rush to make cuts in your sales and marketing departments, they say. “You have to sell your way out” of tough times, Sperduti says. For those employees worth keeping onboard: Reward for results, they say.

Tune in to HME News TV in January for more!

by: Liz Beaulieu - Monday, November 25, 2013

It’s not quite the end of the year, but we’re working on the January issue, so I’m already wondering what the top 10 stories are for 2013.

There’s still a month and some change left in the year, but with two holidays gobbling up at least five days between now and then, how much are things going to change, anyway?

(She says naively. Believe me, I’m not against some huge piece of news breaking in the next month with a headline like, Congress includes market-pricing program language in “doc fix” bill.)

So what are the top 10 stories of 2013 (well through Nov. 25)?

1. CMS announces payment amounts for Round 2

2. CMS names contract suppliers for Round 2

3. CMS announces steeper cuts for Round 1 re-compete

4. Competitive bidding: ‘Everybody’s in panic mode’

5. Bill calls for delay, review of bid program

6. The Scooter Store: Will an indictment be next?

7. The Scooter Store impact spreads

8. Stakeholders react: ‘These are suicide rates’

9. CMS throws safety net to oxygen providers

10. The Scooter Store proposes ‘aggressive’ sale

The next story that just missed the cut: Bills could deliver ‘one-two punch’ to bid program.

The next next story: ISG deal opens old wounds.

I’m grasping at straws, here, because I am shocked that there isn’t a story related to audits in the top 10. Shocked.

I’m not shocked, of course, that competitive bidding and The Scooter Store dominate many of the stories. In fact, now that I review the list again, they dominate ALL of the stories.

Even “CMS throws safety net to oxygen providers” has to do with competitive bidding. This summer, when oxygen patients were having trouble finding a new provider after their current provider closed their doors, CMS agreed to replace oxygen equipment and restart a 36-month rental period. Competitive bidding was one of the reasons for the problem, because it drastically reduced the number of providers that can service patients.

So there you have it—barring any huge news, of course.