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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.

by: Liz Beaulieu - Tuesday, November 19, 2013

It may not feel like it, but HME providers aren’t the only healthcare providers being audited like crazy by the government.

Hospitals are, too.

I was reminded of this last week when I saw a press release from a group called the American Coalition for Healthcare Claims Integrity (ACHCI).

Never heard of them?

According to the release, the ACHCI, founded in 2009, is a nonprofit “committed to working toward achieving 100% accuracy in payment claims submitted to public and private sector healthcare payors.”

It’s no surprise that among the group’s founding members are “partners in critical accountability initiatives, including the federal Recovery Audit Contractor (RAC), Zone Program Integrity Contractor (ZPIC) and Medicaid Integrity Contractor (MIC) programs.” Its mission: “educate policymakers and other stakeholders regarding the importance of healthcare integrity programs that help identify and correct improper payments.”

In other words, the ACHCI is a lobbying group for the auditors—a true sign that the business of auditing has become a big business.

Anyway, back to that press release. The ACHCI is decrying CMS’s recent—and quiet, according to the release—decision to suspend RAC reviews of short-stay inpatient hospital claims until March 31, 2014.

From the release: “The CMS Recovery Audit Program has successfully recovered more than $7 billion in improper payments since the program began in 2009. This new auditing interruption will amount to an estimated loss of nearly $2 billion for the Medicare Trust Fund, or more if the delay continues.”

ACHCI places the blame squarely on the American Hospital Association (AHA), whose complaints about the reviews, it says, have put increasing pressure on CMS to weaken the program. The group goes on to say that hospitals are responsible for 88% of the overbillings to Medicare.

I know an HME provider or two who would join the ACHCI in decrying the suspended reviews. Why should hospitals get what the group calls a “free pass” while HME providers continue to suffer?

Then again, the HME industry may be better off trying to ride the coattails of the AHA, which is working with Congress to reform the audit system.

by: Liz Beaulieu - Monday, November 11, 2013

Audits are as big an issue—if not bigger, for some providers—as competitive bidding.

So the latest news from the Office of Medicare Hearings and Appeals (OMHA) that it will defer assignments for ALJ hearings possibly up to 28 months has put some providers right over the edge.

And I don’t blame them.

For a story that will appear in our December issue, AAHomecare’s Kim Brummett told Managing Editor Theresa Flaherty: “If CMS wants to continue this ferocious cycle of audits, they need more ALJs.”

It’s unlikely that no one provider has felt the ferocious cycle of those audits more than Gordian Medical d/b/a American Medical Technologies. Michael Watson, vice president of government affairs and corporate compliance officer, wrote in HME News a year ago about how the company’s payments were suspended for 180 days based on a review of five of 14,000 beneficiaries being serviced. As a result, the company had to lay off 10% of its work force and it landed in bankruptcy court.

After reading in HME News about the significant delays in hearings at the ALJ level, Watson emailed me. He told me that the company has 46,000 claims pending at the OMHA, and it adds 5,000 per month to the pile.

“If this 28-month delay in assigning appeals is allowed to stand, it will be disastrous to many, many providers,” he wrote. “Give the timeline of each level of the appeals process (and including this 28-month delay) and the time it takes most ALJs to publish their decisions, it will be more than four years between the date of service and the receipt of the ALJ’s decision.”

That’s worst-case scenario, but still.

And all of this when, as we reported about a year ago, 56% of the time, the ALJ reverses the decisions made by the qualified independent contractor (QIC), the previous level of appeal.

We’ve made the delays at the ALJ the subject of the Newspoll for our December issue. Chime in here. I’m sure many of you will!

by: Liz Beaulieu - Tuesday, November 5, 2013

There’s just so much doom and gloom in the HME industry these days (competitive bidding, audits, face-to-face requirement, etc.) that I get really revved up when I read stories that Theresa and Elizabeth have written that feature providers that are doing smart things. (That, or I could still be on a high from the Boston Red Sox winning the World Series!)

There are at least two of these stories in the forthcoming December issue.

Avid readers of our HME Newswire on Monday got a sneak of one of those stories: Binson’s bets on partnerships with hospital systems. I think partnerships like these are one of the smartest moves in an HME provider’s playbook right now.

At this year’s HME News Business Summit, John Sphon, CEO of MedCare Equipment Company, had everyone’s attention when he gave a presentation on how these partnerships have allowed his company to not only grow (to the tune of net revenues of $70 million), but also meet the increasing demand for coordinated care and population management.

That’s music to my ears.

The other story you’ll read about in the December issue is about Long’s HME. Through the course of this year, the provider has been transforming itself from a traditional HME provider-pharmacy combo to a traditional HME provider standalone with some serious benefits. Here’s a hint: Those benefits have to do with patient management services.

Long’s has also launched a parent company to oversee its HME and new services. The name: LifeH2H (Hospital to Home). That has a nice ring to it, doesn’t it?

OK, I’m done cheerleading…for now.

by: Liz Beaulieu - Tuesday, October 29, 2013

Managing Editor Theresa Flaherty and I couldn’t help but scoff at a quote from CMS Administrator Marilyn Tavenner in a press release this week touting major savings for Medicare beneficiaries.

You see, the standard monthly premium for Medicare Part B will stay the same in 2014 at $104.90.

Which is good news, as Tavenner points out, for not only beneficiaries but also for taxpayers.

But, in explaining why the premium will stay the same in 2014, Tavenner said:

“We continue to work hard to keep Medicare beneficiaries’ costs low by rewarding providers for producing better value for their patients, and fighting fraud and abuse.”

Are Theresa and I paranoid for thinking that when Tavenner says “keep…costs low by rewarding providers for producing better value for their patients” she’s referring to the competitive bidding program and its average reimbursement cuts of 32%, 45% and 37%, respectively, for Round 1, Round 2 and the Round 1 re-compete?

Probably not.

This reminds me of a conversation I had with provider Gene Sego at Medtrade. Sego and a coalition of other providers in Florida have had good success getting lawmakers to sign on to H.R. 1717, a bill that would replace the competitive bidding program with a market-pricing program (MPP). While CMS likes to brag about how beneficiaries are benefitting from reduced co-pays as part of the competitive bidding program, Sego says, in many cases, they end up paying more.

Why? Because beneficiaries get so frustrated with the program (having to start over with a new provider, being forced to use inferior products—it goes on and on and on), they end up throwing up their hands and paying out of pocket.

So instead of a $20 co-pay, beneficiaries end up footing an entire bill for hundreds of dollars.

Theresa, Gene and I aren’t the only ones scoffing.

Consultant Anna McDevitt emailed me recently after watching an interview with Kathleen Sebelius, secretary of the U.S. Department of Health and Human Services (HHS), on CNN. Sebelius made a comment about a serious problem in health care of creating markets where there is none. McDevitt wrote:

“Though HME is just one corner of healthcare, there is certainly a market here and certainly an army of talented people working hard to problem-solve and provide service.”

It’s really sad that Tavenner and Sebelius don’t have kinder words for an area of health care that the government should be building up, not tearing down.