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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.

by: Liz Beaulieu - Wednesday, February 6, 2013

HME providers weighed heavily on the mind of Andrea Stark in the wake of the announcement that CMS would reduce payment amounts, on average, 45% as part of Round 2 of competitive bidding.

There were so many things going through her mind, including how providers might not have understood the weighting system that made their bids for items like disposable filters more important than their bids for CPAP devices.

“If you didn’t get the disposable filters right, it didn’t really matter when you got down to the CPAP machines themselves,” said Stark, a reimbursement consultant for MiraVista.

Regardless of how the industry got here, Stark believes providers must now focus all of their attention on making decisions—decisions based on sound business and not based on the fear of not being able to do business with Medicare anymore.

“People need to start looking at what this is going to look like," she said. “They need to make a hard and fast decision and the risk is that they’re going to make poor business decisions.”

For example, it may sound like a no-brainer for providers who weren’t offered contracts to grandfather their existing patients, Stark says.

“But let’s think this through,” she said. “You’re locked into these rates and you still have to meet all the service requirements like 24-hour care, but you don’t have any new business coming in. It’s not doom and gloom, but you have to accept where your businesses will be under this program.”

Another wild card that Stark says providers should factor into their decision: audits.

“A contract doesn’t exempt you from audits,” she said. “You’re still going to have that throwing down your revenue. You’re still going to have to chase down new patients and re-qualify patients. There are definitely operational concerns to be had, as well.”

For more food for thought, read Andrea’s blog, “To Accept or Deny? To Grandfather or Not? To Survive or Thrive?”

by: Liz Beaulieu - Friday, February 1, 2013

Let me be honest.

The first thought that ran through my head when I learned that the payment amounts for Round 2 were, on average, 45% below the current fee schedule, was, “Providers really shot themselves in the foot this time.”

I mean, this 45% isn’t an arbitrary number, right? It’s based on the bids that were submitted by real life, breathing HME providers, right?

Well, it turns out it may not be that black and white.

The VGM Group’s Mark Higley wrote in a blog this week that he believes the bidding program, as it’s currently structured, gives CMS more control over picking the payment amounts than it may be letting on.

Higley explains how the large ocean of bids from which CMS determines the median is actually a small pool of bids. The agency starts with the capacity of the lowest bidder and moves up through the bidders until it meets expected demand. It’s from this pool that CMS determines the median, not the ocean.

Think of it this way: Say 10 bids come in at $1 through $10. If CMS based the payment amount on those numbers, it would be $5.5. But CMS starts with $1 until it meets demand, say at $4, and then it bases the payment on $1 through $4, making it $2.5.

Economist Peter Cramton at the University of Maryland echoed these concerns in a post to his website shortly after the payment amounts were released:

“It was not the bidder who set the prices, but CMS through its arbitrary manipulation of the quantities associated with each bidder. CMS was able to pick any price between the lowest bid made by any bidder and the highest bid made by any bidder through its selection of quantities. The CMS-set quantities are never revealed and never used for anything but setting the price. This is why the CMS process is not an auction at all, but an arbitrary pricing process.”

What I want to know: Who designed this program, anyway? If Cramton and more than 200 economists agree that it’s faulty and unlike most of the auctions they’ve seen, who designed it?

Managing Editor Theresa pointed out that a recent FOIA submitted by the Center for Regulatory Effectiveness mentions a National Technical Expert Panel that was convened by HCFA, now CMS, to gather feedback regarding the design of the program. Did they design it? Who are they?

Who?

by: Liz Beaulieu - Thursday, January 24, 2013

I had the pleasure of doing a Q&A with Norm McCombs this week.

If you missed the announcement earlier this month, McCombs, the senior vice president of research and development at AirSep, will be awarded a National Medal of Technology and Innovation at the White House in February for his work on pressure swing adsorption (PSA), a method of separating gases that made oxygen concentrators possible.

Imagine that you and your co-recipients were called “inspiring American innovators” by POTUS?

It was a heady conversation full of terminology I don’t hear every day: the aforementioned PSA, synthetic zeolites, process engineering.

But it was heady, most of all, because McCombs said something that I feel is really representative of the majority of the people who work in the HME industry. When I asked McCombs, who is 75, why he isn’t retired, he said:

“I’m going to be 76 soon, but I’m still invigorated by my work. It’s my vocation and avocation. If being retired is doing what you want to do, I’ve been retired all my life.”

(I’m going to honest, I had to look up avocation, too: something a person does in addition to a principal occupation, especially for pleasure; hobby.)

How else do you explain why Shelly Prial, who is retired, is still attending Medtrade events, writing a blog about industry issues and tirelessly championing association membership?

How else do you explain why Larry Wegner, president of Family Care Home Medical Equipment, repaired Michael Shockley’s wheelchair for free?

How else do you explain why Ed Dressen, owner of Dressen Medical Supply, repaired Will Privette’s wheelchair, again, for free?

I could go on.

They do these things because they’re committed, yes, but they also do them because they love what they do. They find pleasure in it.

When you strip away reimbursement and all the hassles that come with it, that’s what this industry is all about.

by: Liz Beaulieu - Thursday, January 17, 2013

Let me start out by saying (writing?): The competitive bidding program, as it stands now, is a mess. No one in the industry disputes that (if there is, I haven’t heard from them).

But I was talking with a billing consultant today who told me that competitive bidding has actually improved the documentation process for providers.

Say what?

Well, pre-competitive bidding, referral sources had the luxury of dangling their business like a carrot.

“They had a carte blanche,” she said. “They had a lot of choice of providers, and they could seek out the provider who asked for the least documentation. There was always a provider who was willing to set up the patient, then go through the paper chase.”

Post-competitive bidding, however, referral sources have fewer choice of providers and, due to rampant audits, the providers they have to choose from are more apt to request documentation upfront, before providing equipment or supplies.

“It has helped to retrain those docs,” she said. “In that way, I think it’s had a positive impact.”

Of course, that the documentation process is improving is probably due to a perfect storm of things, competitive bidding being only one of them. There are the aforementioned audits, which may have more to do with it than anything else.

There’s also the increasingly complex web of rules and regulations that providers must follow, which I think is making not only the barriers to entry in the HME industry more difficult but also the barriers to success. Those providers that are willing to paper chase after-the-fact? I think they’re a dying breed.

I got to talking about documentation with this consultant because HME News and Emerge Sales are working on a new webcast in our “Referral Source Speaks” series on documentation. It’s going to be a good one. Stay tuned for details.

by: Liz Beaulieu - Friday, January 11, 2013

There seemed to be quite a bit of healthcare-related buzz coming out of this year’s Consumer Electronics Show in Las Vegas. This gigantic and glitzy show was more about technological advancements in TVs, computers and smart phones, of course, but it also included a Digital Health Summit on Jan. 9 and 10.

This year’s Digital Health Summit featured an impressive slate of sessions on everything from analyzing and using the skyrocketing amount of healthcare data that’s out there, to leveraging mobile applications to help consumers manage their chronic conditions.

The lineup of speakers included big names like CNN’s Dr. Sanjay Gupta, United Healthcare Group’s Dr. Reed Tuckson and The Dr. Oz Show’s Dr. Mehmet Oz. It also included BodyMedia CEO Christine Robins, who I interviewed in the fall.

One announcement coming out of the Digital Health Summit that caught my eye: ADT, a provider of electronic security and monitoring services for residences and small businesses, has partnered with Ideal Life to offer remote health management services.

ADT will integrate Ideal Life’s health monitoring and information technology into its interactive home management system, ADT Pulse. ADT Pulse allows customer to do everything from remotely arm and disarm their security systems, to control their thermostats, small appliances and lights.

When I saw this news (courtesy of Rich Miller, a fellow editor at our sister publication Security Systems News), it got me to thinking: Where are these types of partnerships in the HME industry? While it makes sense for ADT to expand its services in this way (it’s already in the home providing monitoring services), doesn’t it also make sense for HME providers?

And yet…

HME providers may not be as technologically advanced as an ADT, but, to me, the synergies are just as strong from a business perspective. Providers are most definitely in the home, to deliver equipment and provide services on a regular basis, and now that I think about it, they have an even more vested interest in the health and safety of their customers.

What’s the stumbling block? There isn’t a payer out there who reimburses for these services yet? Who cares—what about the customer? What about the customer’s caregivers?

While I’m at it—and I may be under the influence of the Consumer Electronics Show and the borderline crazy technology its known for (think a vibrating fork that measures your chews per minute)—why aren’t more HME manufacturers incorporating monitoring technologies into their products? CPAP manufacturers have started to do this in response to more stringent requirements around compliance, but shouldn’t these capabilities be more widespread? I mean, it’s technologies like these that allow providers to run their businesses more efficiently and cost-effectively, but maintain a high level of care.

It seems to me that a lot of what’s in store for health care has do with who owns the home, so to speak. I’d like to bet my money on an HME provider over an ADT, but right now, that’s a losing bet.

by: Liz Beaulieu - Friday, January 4, 2013

Boy, did the HME News team get a rude awakening this week.

We all officially came back to the office on Wednesday, after two weeks shortened by holidays (and Theresa’s and my birthdays, I might add), snow storms (almost two feet, all told) and illnesses (there’s a nasty bug making the rounds of our office).

And it’s been non-stop ever since.

Just the news coming out of the complex rehab market, alone, this week is crazy. First, there was a new private equity owner for National Seating and Mobility (NSM). Then there was a merger between ATG Rehab and United Seating & Mobility (USM).

I totally didn’t see that last one coming, at least not so soon. I pictured NSM, USM and ATG each continuing to acquire smaller companies in 2013, with some merger between two of these nationals coming years down the road. This adds a new wrinkle to a series of stories that Associate Editor Elizabeth Deprey wrote about consolidation in this market for the January issue. Foreshadowing, anyone?

There was acquisition news elsewhere in the industry, too: Advanced Home Care bought Extrakare and Brightree bought CareAnyware.

There was also the realization that the recently passed “fiscal cliff” deal didn’t include language on the industry’s market-pricing program (MPP) but did include a provision to apply competitive bidding pricing to retail diabetes supplies. Check out the HME Newswire on Monday for complete coverage on that.

I mean, what a week.

And the Round 2 payment amounts haven’t even come out yet (or not as of the writing of this blog).

Now that I think of it, it was non-stop during the holidays, too, between Invacare’s agreement with the Food and Drug Administration (FDA), AssuraMed’s acquisition of Invacare Supply Group (ISG) and Philips Respironics’ pilot project with Kroger.

Hang on. It looks like 2013 is going to be a wild ride.

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by: Liz Beaulieu - Thursday, December 27, 2012

Below is a letter to the editor that I received from West Coast provider Dennis Kline. While there are more than a few providers exiting the HME industry these days, they usually go quietly, by closing their doors without fanfare or by selling to a larger provider. But not Kline.

After more than 20 years in the DME business I have decided that enough is enough and I’m exiting the business altogether. I've owned two companies during this time, most notably Source One Medical, once one of the largest suppliers of power wheelchairs and oxygen in the country. It is with mixed feelings that I am making this decision, but the fact is this business simply isn't satisfying or economically feasible anymore.

Instead of providing the highest level of product and service to insurance beneficiaries, mainly Medicare, and being able to make sure they are constantly being taken care of, we have been forced to provide the cheapest products available, many of them used, while having to considerably scale back on any additional service and care. The beneficiaries are paying the price, and concern for their care is taking a back seat in the eyes of Medicare, at the expense of overreaching and capricious audits and the suffocating oversight of our industry. The amount of fraud and abuse in the DME business is nowhere near as prevalent as it is with physicians, hospitals and clinics, but we are the easier targets.

Regardless of the product, we have been constantly under attack by various contractors, their mix of acronyms having become mind-boggling. Never a day went by that we weren't notified of an audit, additional paperwork necessary, a denial for unjust reasons, an audit decision not in our favor, or an Administrative Law Judge hearing 6 to 9 months out. At least 60% of our claims were being audited in some form. From the time we were first notified of an audit to the time we finally got to present our case in front of an ALJ, almost two years went by.

The cash flow problems this causes, when extrapolated, are enormous. The various reasons for denial prior to the ALJ level have been capricious and grossly unfair, with little or no bearing on the beneficiary’s actual need. We were once denied because the reviewer didn't think the patient could sign so neatly given their condition, in effect accusing us of forging the paperwork! The creativity the contractors have used in finding new ways to deny a claim were truly astounding. They should be ashamed of their harmful denial of care and the taking away of rightful entitlement. But I'm sure they can care less if it results in a misguided savings to the Medicare program.

I have constantly asked if anyone in the audit process has ever talked directly to the patient or physician, and the answer was always, "No, we don't have the time." The overall cost to taxpayers for this process to continue for almost two years, when one call could answer everything, is incomprehensible. Not to mention the cost to the beneficiary for being denied the benefit only because his physician didn't word his chart notes specifically the way the medical reviewers want to see them. But this could result in more rightful claims paid, and they certainly don't want that.

Add to this the sham of competitive bidding and the damage this is doing, and will continue to do, to the industry, to entrepreneurial business enterprises, and, most importantly, to beneficiary care. How our senators and congressmen can allow this program to move forward is an absolute travesty. Jobs are being lost, patient care is being severely compromised, and even those companies getting contracts are barely making it. Nevertheless, when it comes to competitive bidding the people at CMS have both blinders and earplugs in place, moving forward with their path of destruction. And Capital Hill is barely taking notice. Hopefully, the industry can get the market-pricing program passed, a small victory in a sea of defeats.

How did we ever get to this place? From my perspective everything started to go downhill with Harris County back in the 90s. It’s the fault of CMS for not properly applying logical and simple oversights to the billings by newer providers. As a result, honest providers that are doing their best to provide and comply—the majority—have been forced to pay the price because CMS was not properly policing the industry. Even in the years since Harris County, CMS has done little or nothing to sort out the honest and lasting providers who have constantly proven their compliance from the newer providers intent on committing fraud.
In the end, Source One was left with compounding debt as a result of the interrupted cash flow, along with an AR level that we had a 50/50 chance of ever seeing in the one to two years we would have to wait. As I said before, it simply was no longer a satisfying or economically feasible business. There's much more I can vent about that has damaged our industry, but just these issues are exhausting and frustrating to discuss.

I leave this business with some fond memories, but I will never return in an ownership capacity. I doubt I'll ever return at all; the scars will certainly take time to heal. I wish everyone in this great business the very best, and certainly do not look forward to ever needing any benefits under the Medicare program.

—Dennis Kline, president and CEO, Source One Medical, Irvine, Calif.

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