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On the Editor's Desk

by: Liz Beaulieu - Thursday, April 11, 2013

I feel like we’ve heard a lot of HME providers talking about the important role that they play in helping to reduce hospital readmission rates, and I feel like we’ve seen some providers walking the talk, too.

Take Alana HealthCare. In the HME Newswire a couple of weeks ago, Managing Editor Theresa Flaherty wrote about how this provider has reduced readmission rates for stage IV COPD patients with respiratory failure between 40% and 73%. That’s pretty impressive.

We’ve also written about efforts by Landauer Metropolitan, AmeriCare, ContinuCare HealthServices, Klingensmith Healthcare and others.

So I didn’t think it was too much of a leap, when we asked readers this week as part of our most recent NewsPoll: 1.) do you serve patients with chronic conditions; and 2.) if so, do you keep track of 30-day hospital readmission rates?

We knew this wouldn’t be the type of poll that would get hundreds of responses because, even though we’ve heard a lot of talking and seen some walking, we realize this is still an emerging role for most providers.

But I’m still surprised that the results of the poll show that, while 97% of respondents serve patients with chronic conditions like diabetes and COPD, only 25% track readmission rates.

(Granted, only 33 readers have taken the poll so far—re-read fifth paragraph).

Now I realize this question is a little more complicated than it seems. As one provider pointed out to me on twitter in 140 characters or less: “Process/data visibility not there to do it efficiently, UNLESS you partner with integrated system with ACO-like model that will share data.”

He has a point. Some of the providers above, like ContinuCare HealthServices, are owned by hospitals or health systems, which makes these efforts much, much easier.

But providers that aren’t owned by hospitals or health systems are making it happen, too, by forging new partnerships with hospitals and health systems centered around this new role.

Take Klingensmith. In a story about its disease management program, President Dave Knepshield told us: “We went to hospitals and the first five CEOs we showed said, ‘Oh my God. This is incredible.’”

One respondent to the poll said: “We created our own assessment software and database to develop risk scores and define performance improvement goals. We’re able to market the program directly to payers.”

That’s what I’m talking about. This isn’t the kind of role that’s just going to happen to providers. You have to make it happen.

by: Liz Beaulieu - Thursday, April 4, 2013

I was talking to an HME provider on the phone yesterday, which I’m known to do, and he mentioned a guest blog that we posted to our website recently in which a provider makes the case for allowing competitive bidding to move forward and blow up in Congress’ and CMS’s face. Those are my words, not the provider-blogger’s.

The provider-blogger’s words: “Perhaps it is time to let Armageddon occur.” (He also writes: “If I were to offer our industry a bold plan of action going forward, it would be this: Stop pushing MPP and start saying, ‘We can no longer be held responsible. We tried and nobody listened. Now face the music.’”)

The provider I was talking to on the phone said he completely agreed with the provider-blogger. “It’s what we’re all thinking, but no one’s saying,” he said.

So what might Armageddon look like?

Well, I found it freakishly eerie this morning when I saw an article in the Washington Post about how cancer clinics across the nation are turning away thousands of Medicare patients due to cuts that went into effect April 1 as part of the sequester.

My reaction: That should turn some heads.

And we’re talking about a 2% cut, here, versus the 45% cut, on average, that will go into effect under Round 2 of competitive bidding. (Actually, the 2% cut is a bigger deal for the clinics than you’d think at first blush, because most operate on 6% profit margins, according to the article).

Under the cut, one clinic says between 50% and 70% of the chemotherapy drugs it administers have become money-losers.

Another clinic says it will have to turn away one-third of its 16,000 Medicare patients.

These patients turned away from the clinics will likely have to go to the hospital, where their treatments will be much more expensive to administer and for Medicare to pay for.

“One study from actuarial firm Milliman found that chemotherapy delivered in a hospital setting costs the federal government an average of $6,500 more annually than care delivered in a community clinic,” the article states.

Does this type of scenario sound familiar? This is the kind of Armageddon providers are talking real-time.

by: Liz Beaulieu - Tuesday, March 26, 2013

I saw two items online this morning that really bent me out of shape.

The first was an article in The Hill:

America’s Health Insurance Plans (AHIP) has reported that more than 40,000 seniors have called, written or met with their congressional offices to oppose the Obama administration’s proposed 2.2% cut to Medicare Advantage.

Good for the AHIP, but if I’m an HME industry stakeholder I see so many things wrong with this paragraph.

First of all, this cut was proposed, oh I don’t know, in the past few months, and already, 40,000 seniors have spoken out about it? Where have these seniors been in the, I don’t know, 10 years or more that the HME industry has been fighting competitive bidding?

Second of all, these 40,000 seniors are up in arms over a 2.2% cut? I guess this is only the latest in a series of reductions to Medicare Advantage, but a 2.2 cut%? A “crushing blow”? Really? Do they know that on July 1, their friendly HME providers will have to absorb, on average, a 45% cut for certain HME and a 72% cut for diabetes supplies?

So this was the frame of mind I was in when I saw this second item, a letter to the editor from a user of home oxygen therapy in North Carolina:

At night, I am prescribed to use an Invacare Perfecto2 oxygen generator. I can buy a new one over the Internet for $707. I did not buy one though; instead, I rented one from a company in Greenville. The company in Greenville billed Medicare $17,100 for my $707 unit. Medicare said, “You are nuts! You overbilled us! That machine is only worth $6,338. Consequently, Medicare will only pay 80 percent of its worth, or $5,070, and you can get the other 20 percent from the user.” That left me paying the $1,268 balance. So, in summary, the company in Greenville received $5,070 from Medicare and $1,268 from me for a machine whose retail price is $707.

I wonder how many services come with that $707 unit? Set-up? Training? Maintenance? Emergency assistance?

So, not only are seniors not supporting the HME industry’s efforts on a grand scale, but also they’re biting the hands that help them breathe.

Suffice it to say, the lack of awareness among this growing and galvanizing group, when it comes to the HME benefit, hit me really hard today.

by: Liz Beaulieu - Thursday, March 21, 2013

Another 11 HME News TV interviews at Medtrade Spring today. Here are some quick hits:

Jim Hollingshead of ResMed on how the relationship between sleep manufacturers and providers has changed in the past few years due to the emphasis on compliance (due to more stringent policies) and the need for cash sales (due to declining reimbursement)—“It’s about more than boxes and masks.”

Rick Worstell on the increase in the number of providers who are taking audits to the administrative law judge (ALJ) level—Their cash flow may get tied up for six months, but “they’re not settling,” he said. The attitude to have, when it comes to audits: perseverance, he said.

Kevin Gaffney of Nielsen/Medtrade on what was at the top of a provider’s to-do list at the show this year—“They’re here for solutions,” he said. “They’re looking for ways to expand their businesses.”

Mike Sperduti of Emerge Sales on what providers need to focus on to turn their businesses around—He said make sales the No. 1 priority and add new products. He said he’s working with a provider who doubled her revenue in one year just by adding a pain management product that she discovered at Medtrade last year.

Don Clayback of NCART on the next step in efforts to advance a bill to create a separate benefit for complex rehab—He said the Disabilities Caucus in Congress is expected to hold a briefing on the Hill this spring to give industry stakeholders a more public opportunity to educate lawmakers on the bill.

Jay Witter at AAHomecare on efforts to fight competitive bidding—In addition to a bill to replace the program with a market-pricing program, stakeholders are pursuing a bill to delay Round 2 from July 1 to Dec. 31. Because CMS doesn’t have to implement the program on July 1—just some time in 2013—they believe there won’t be a pay-for.

Chris Kinard of QS/1 on why providers should do their homework before jumping into retail—“Retail may be the answer, but it may not be, depending on your demographics and other factors,” he said. If retail is not a good fit, providers still have options, he said, through horizontal (take existing products into new markets) and vertical (add new products to existing markets) growth.

Stay tuned to in the upcoming weeks for full interviews from Medtrade Spring.

‘Til next time!

by: Liz Beaulieu - Wednesday, March 20, 2013

After sitting down with 13 of the industry’s finest consultants, manufacturers and other stakeholders today, I feel more positive than ever that HME providers have a treasure chest of resources ready and waiting to help them through what’s likely to be a bumpy year.

Bruce Brothis of Allegient Billing and Consulting shared his nine Ds to becoming a successful provider—everything from developing retail to data mining to determining a use for the advanced beneficiary notice (ABN) to document imaging. He thinks providers could improve their businesses with broad strokes. “I used to be reimbursement focused, but now it’s about overall operations,” he said. “It can be a dramatic change.”

Consultant Bill Stelzer shared the key to turning a retail business, like home modifications, into a cash-making machine. Providers, he said, need to realize that marketing to customers is a lot different than marketing to referral sources. With customers, he said, you have to attract their business by communicating and responding to them in the marketplace, and you have to treat them like gold once they walk through your doors. “If you take care of customers, the cash follows,” he said.

Gary Long at Brightree shared an interesting analogy for how some providers—mistakenly—think about their software and what it can do. You may have a Motorola flip phone that works just fine, but what could you do if you had an iPhone? “Don’t assume that the technology you have is the best,” he said. He also shared where he sees software going next, including increased data mining (yes, that’s the second reference of the day), and increased interoperability with new technologies (like telehealth) and different healthcare players (like hospitals).

Other quick hits:

Martin Szmal and Dan Fedor of The Mobility Consultants on the PMD demo—Things are running smoothly in Jurisdictions A, C and D, they said, but there are still some hiccups in Jurisdiction B.

Craig Hittle of Somerset CPAs on the impact of the Round 2 payment amounts on valuations and providers that are looking to sell their business—“The timing is not so great,” he said.

Consultant Louis Feuer on the role of drivers in a provider’s success—“They could be the unsung heroes,” he said. “They’re the only person in the home. They should be part sales rep, part PR agent.”

by: Liz Beaulieu - Tuesday, March 19, 2013

No, I won't be at the wave pool at The Mandalay Bay. (Isn't that cool, though?)

I'll be taping some 20-plus HME News TV interviews adjacent to the HME News booth #1104. It's a jam-packed schedule with some familar faces and some new faces—everyone from billing buffs to lobbying giants to legal eagles.

Wednesday, March 20

10:30    Bruce Brothis                     Allegient Billing & Consulting
11:00    Cara Bachenheimer           Invacare
11:30    Bill Stelzer                          Bill Stelzer Consulting
12:00    Sarah Hanna                      ECS Billing & Consulting
12:30    Gary Long                          Brightree
1:00      Martin Szmal/Dan Fedor    The Mobility Consultants, LLC
1:30      Craig Hittle                         Somerset CPAs
2:00      Louis Feuer                        Dynamic Seminars & Consulting/MedComment Center
2:30      Gabe Buckner                    Strategic AR
3:00      Denise Fletcher                  Brown & Fortunato
3:30      Don Clayback                     NCART
4:00      Roxie Murray                      Jaysec
4:30      Clint Geffert                        VGM & Associates

Thursday, March 21

9:30      Jim Holligshead                 ResMed
10:00    Rick Worstell                     Harrington Management Group/The Audit Team
11:00    Kevin Gaffney                    Neilsen/Medtrade
11:30    Seth Johnson                    Pride Mobility Products
12:00    Mike Sperduti                    Emerge Sales
12:30    Jay Witter                          AAHomecare
1:00      Wayne Grau                      The MED Group
1:30      Cy Corgan                         Pride Mobility Products
2:00      Chris Kinard                      QS/1
2:30      Jon Jasperson                  DMETrain

Also, here's a shout-out to some peeps I've already seen today: Kevin Gaffney, The McDevitts (Ryan and Anna), Tyler Wilson, Peggy Walker, Christina Brown, Shelly Prial. Here's to seeing many more of you in the next two days!

by: Liz Beaulieu - Wednesday, March 13, 2013

I always check my email once or twice over the weekend knowing that that, while the trade press like HME News pretty much takes Saturday and Sunday off, the mainstream press does not.

So I wasn’t surprised when I checked my email on Saturday and saw a note from one of our readers with a link to a story published that day by the San Antonio Express about The Scooter Store furloughing most of its employees.

That’s a big deal. The Scooter Store has about 1,800 employees in all, with 1,200 working at its corporate headquarters in New Braunfels, Texas, and the remainder working at distribution centers across the country. The only hint at how many employees still have a job: Local news outlets reported there were about 50 cars in the parking lot at its headquarters this week.

Everyone from HME providers to lawmakers has been following the company’s every move for going on several months. When the industry hit Capitol Hill for a fly-in in February to discuss the negative impact of competitive bidding, The VGM Group’s Jim Walsh said The Scooter Store was the “talk of the town”—and not in a good way— following news that the company had been raided by the FBI and other state and federal agencies, and had laid off another 150 employees. (It laid off 220 last year.)

Now this.

So many people have so many questions: Will The Scooter Store file for bankruptcy? Will it cease to exist? What happens to the 39 contracts it’s serving under Round 1 of competitive bidding and the X number of contracts it was likely offered and accepted under Round 2? What will happen to its complex rehab division, Alliance Seating & Mobility? Will it need to return additional overpayments to CMS? How much money does it owe Sun Capital Partners, its senior secured lender? Does it have any money to pay anyone back?

We’re working on piecing together the answers. We’re calling The Scooter Store, Sun Capital, CMS—you name it.

But beyond the interest surrounding The Scooter Store’s fate lie larger questions that could send shock waves throughout the entire industry.

One of those questions: Depending on its fate, will The Scooter Store be able to pay manufacturers for equipment purchased? Industry watchers tell me that the company is on the hook for multiple millions of dollars to various manufacturers—manufacturers that, like providers, are already struggling due to changes in Medicare policy and reimbursement.

How will they absorb this kind of hit? Will they be able to?

Unfortunately, this is much bigger than The Scooter Store.

by: Liz Beaulieu - Friday, March 8, 2013

I’ve heard, for so many years, about the difficulty providers have obtaining documentation from physicians, that I don’t know why we didn’t think of this before.

On March 28 at noon, Mike Sperduti and I will be hosting the latest in our Referral Source Speaks series of webcasts, this one on documentation.

Mike has surveyed staff in physician offices to find out things like the best time for a provider to call to get documentation filled out and signed, and the best person in the office to help him (it’s not who you think).

Here are a few questions from the survey to give you a feel for the data that Mike will present during the webcast:

For how many patients do you complete documentation for DME in one week?
Do you set aside time to fill out and sign documentation?
If yes, when are you most likely to prepare documentation?
What time of day are you most likely to prepare documentation?
Do you prioritize what documentation gets prepared?
If yes, how do you prioritize what documentation gets prepared?
Do you prefer in-person visits from DME companies to assist with and pick up documentation?
Who is the best person in your office to work with to make sure documentation gets completed?
When is the best time during the week for a DME company to follow up on documentation?
When is the best time during the day for a DME company to follow up on documentation?
Are DME companies consistent, in terms of what they ask you to document for the same product?
Are there DME companies that are better at managing the documentation process than others?
If yes, what do they do?
What’s an example of something an HME company does that bothers you relative to documentation?

We also surveyed staff on how often a DME company asks them to redo their documentation or submit additional documentation, and the most common reasons why, and more.

Want to know the answers to these questions? Tune in to find out.

by: Liz Beaulieu - Friday, March 1, 2013

I would consider this a logical argument:

1.) Our population is aging.

2.) That population would prefer to stay in the home as long as possible.

3.) Because of this, the demand for home medical equipment will increase.

4.) And because of that, home medical equipment will be a healthy business for years to come.

If only things were that simple.

As the industry contemplates a 45% reduction in reimbursement, on average, in 91 cities as part of Round 2 of competitive bidding, it’s more difficult than ever to see how 1+2+3=4. It’s more like 1+2+3=?.

I talked to Lawrence de la Haba this week. He’s the senior vice president of business development at GF Health Products. He says the industry has a public awareness problem, and I think he’s right.

Who knows what home care is, outside of our little industry?

de la Haba says Medicare doesn’t even know what home care is if it thinks it can competitively bid HME like oxygen concentrators like the military does jet aircrafts.

Then much of what lawmakers and the general population know about home care comes from the dizzying stream of stories in the mainstream media about Medicare fraud and abuse, and lately, reality-show-like FBI raids.

“This is what’s high visibility and what gives the industry a bad name,” he said. “But when Mom or Dad are at home on oxygen and resting comfortably—no one writes about that. You don’t see that on the 10 o’clock news. To me, that’s what home care is about.”

It’s true. I know there are huge inroads being made to raise public awareness of home care by national and state industry associations, and by groups like People For Quality Care, but there needs to be more.

Anna McDevitt, president of Laboratory Marketing, wants to join the fray. She wrote to me in an email recently:

“I'm starting to feel strongly that we need to be telling our story outside of our own circles and start focusing on the HME education of America. What is HME? What does it mean to you? How are these services affected by legislation? These are basics that voting Americans should understand and I'm starting to feel like the only way for this industry to survive is to start telling our story a little louder.”

At the end of the day, 1+2+3 has to = something. It’s just that no one knows what that something is right now.

And in some ways, that means the industry can make it whatever it wants it to be.

by: Liz Beaulieu - Wednesday, February 20, 2013

We’re swimming (maybe drowning is more appropriate?) in competitive bidding news over here at HME News.

Here’s a brief list of the competitive bidding-related stories that we’re working on for the April issue (If you’re a competing trade pub, please stop reading here):

1.    We already have a story based on the results of a recent HME NewsPoll that asked providers whether or not they plan to accept contract offers as part of Round 2. Sixty eight percent of the 149 respondents to our poll said they didn’t plan to accept offers. The funny thing: NAIMES is also conducting a survey and 94% of the providers who participated said they accepted the contracts they were offered. What’s gives?

2.    I’m canvassing some of the larger manufacturers in the industry to get an idea of the expected impact of Round 2 on them. I couldn’t help but notice that Invacare’s stock went from $17.10 the day before the announcement of the single payment amounts (Jan. 29) to $16.83 on Jan. 30 and $15.73 on Jan. 31. Right now, it’s $14.81. At ResMed, it went from $47.55 to $46.84 to $43.80. Right now, it’s $43.25. It’s no secret that utilization dropped in Round 1 and it will probably drop as a result of Round 2. What does that mean for sales in 2013?

3.    I also have a call into Inogen, which made waves by submitting bids and accepting contracts as part of Round 1. What about Round 2?

4.    Managing Editor Theresa Flaherty is examining the impact of the new single payment amounts (SPAs) on the M&A market for diabetes providers. Who’s shopping around their list of diabetes patients?

5.    Associate Editor Elizabeth Deprey is checking in with mobility providers, including The Scooter Store and Hoveround, to get reaction from them about the SPAs for standard power and manual wheelchairs. She’s also heard that, thanks to the new SPAs, the days of K0823 being the most popular wheelchair may be over. K0821, a portable version of the same chair, has a higher reimbursement.

If all this pans out, it should be a meaty April issue.

We’ve also received a handful of letters to the editor about competitive bidding that I’ll package together for the issue on the Edit Spread. Providers are upset and frustrated, to put it mildly.

Here’s an excerpt from one of the more interesting letters:

The idea that somehow our industry must "pay for" a solution suggests that we are somehow at fault for the current problem. Well, we are not. You don't see the American Medical Association (AMA) offering up "pay fors" to push off the “doc fix” every year, do you? They simply state the facts and say, “It's on you, Congress.” Congress acknowledges this and every year they push off the “doc fix” until the next year. 

If I were to offer our industry a bold plan of action going forward, it would be this: Stop pushing MPP and start saying, "We can no longer be held responsible. We tried and nobody listened. Now face the music."

We shouldn't look at Round 2 as the end of the world. Conversely, we should look at it as a new beginning. A beginning that clears us of this train wreck and places us back in control of our collective businesses. We offer a lot more than we take from society and now society will find out how valuable this truly is. 

All of this is industry-moving (note I didn’t say shattering, because it won’t be for everyone) stuff.

Stay tuned.