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by: Liz Beaulieu - Tuesday, June 11, 2013

The tide may be turning on CMS and its competitive bidding program, industry stakeholders told attendees at The VGM Group’s Heartland Conference on Tuesday.

A majority of the members of the House of Representatives have signed on to a “Dear Colleague” letter written by Reps. Glenn Thompson, R-Pa., and Bruce Braley, D-Iowa, that calls for CMS to delay Round 2 of the program.

“This will send shockwaves to CMS,” said John Gallagher, vice president of government relations for VGM.

CMS plans to kick off Round 2 on July 1, using payment amounts that are, on average, 45% below the current fee schedule.

Even if CMS doesn’t respond to the request, Thompson and Braley now have built-in support to introduce legislation, stakeholders say.

“This is a huge, huge step forward,” said Jay Witter, vice president of government affairs for AAHomecare.

Stakeholders have been hammering lawmakers with data that competitive bidding is built to fail. In addition to hundreds of contract suppliers that don’t currently meet licensure requirements in states like Tennessee and Maryland, research conducted by Invacare shows 46% have “serious financial issues,” says Cara Bachenheimer.

“In Round 1, I think it was 27%,” said Bachenheimer, senior vice president of government relations for Invacare.

Even Sen. Max Baucus, D-Mont., who led efforts to expand Round 2 as part of the healthcare reform law, is having second thoughts, stakeholders say.

“He talked to (CMS Administrator Marilyn Tavenner) about (the licensure issues) and he was not pleased with her response,” Witter said. “That shows you how far we’ve come.”

React to change

Regardless of what happens with competitive bidding, attendees realize changes are afoot, however, and speakers like Chad Knaus, the NASCAR crew chief for the No. 48 Spring Cup Series car driven by Jimmie Johnson, told attendees: “You can’t be afraid when challenges change.”

Facing mounting pressure and increasing regulations, Knaus told attendees of how it was only after he delegated more responsibility to his team that he was able to end a four-year dry spell and win a championship again in 2006.

“A magical thing happened,” he said. “It’s amazing what happens when people have to react.”

Inspire ‘real negotiators’

Like Knaus, HME business owners need to react to succeed. Speaker Miriam Lieber told attendees to adapt their leadership skills to reflect the current environment.

“Would you hire the same staff today?” asked Lieber, president of Lieber Consulting. “They need to be real negotiators, not order takers.”

by: Liz Beaulieu - Friday, June 7, 2013

This is going to be a quick blog*, but I wanted to share with you the first piece of data to come in for our 2013 State of the Industry Report (which contains 2012 data).

Each year, we track the number of DMEPOS providers that bill Medicare in five categories:

Less than $300,000
$300,000 to $1 million
$1 million to $3 million
$3 million to $10 million
More than $10 million

Before I share the 2012 data, let me refresh your memory on the 2011 data:

Less than $300,000          90,119
$300,000 to $1 million        5,131
$1 million to $3 million        1,188
$3 million to $10 million         209
More than $10 million              69

Here’s the 2012 data:

Less than $300,000            88,365 (-1.9%)
$300,000 to $1 million          5,021 (-2.1%)
$1 million to $3 million          1,169 (-1.6%)
$3 million to $10 million           229 (+9.6%)
More than $10 million                73 (+5.8%)

The biggest movement this year compared to last year is in the number of providers that billed Medicare from $3 million to $10 million, and more than $10 million. The number of providers in these groups is inching upward, no doubt, due to consolidation in the industry.

And we’ve seen so much consolidation already this year, that it’s probably a movement that will continue, if not intensify, when we report the 2013 data next year.

I’ll share more as it comes in.

*I’m heading to Waterloo, Iowa, via Chicago and Des Moines for The VGM Group’s Heartland Conference. Check back in for updates.

by: Liz Beaulieu - Wednesday, May 22, 2013

Each year around this time, I find myself in the position of appealing to HME providers for help on two initiatives that are very important to the future of the HME industry.

The first is the HME Excellence Awards.

Going back to 2002, a panel of three judges has helped us select the best provider in three categories: HME, home respiratory and rehab technology. It’s a fun tradition around here—seeing who applies, being bowled over by how many great providers there are out there, and calling the winners.

For the providers who submit applications, it’s a great way to take stock—of their financials, community involvement, policies and procedures, and more.

For the winners, it’s a great testament to all of their hard work and a great marketing tool.

Not to mention—amidst all of the doom-and-gloom right now, wouldn’t it be nice to pause and celebrate what’s right in the HME industry? That providers are helping to keep patients in the home, where they prefer to be and where Medicare will spend less money on them. That they’re helping patients to live independent lives despite a chronic condition or a disability.

An added bonus: Winners will be given free registration to the HME News Business Summit and invited to participate in a panel discussion led by judge Miriam Leiber.    

The initial application for the awards only takes a few minutes to fill out. Do yourselves a favor and submit one today. The deadline is June 7.

The second is the HME News/SRA Financial Benchmark Survey.

HME News, along with Steven Richards & Associates, has been conducting the Financial Benchmark Survey for seven years now. Benchmarking data is something I frequently get calls about and, as far as I know, this is the only game in town. Data points include everything from revenues per employee to DSO to commission per setups to employee expenses.

This probably takes more than a few minutes to fill out, but it’s the only way to get the results for free.

I’d be eternally grateful if providers participated in these two initiatives. I realize everyone’s busy—and has little attention for anything non-competitive bidding related—but I think they’re well worth your time.

by: Liz Beaulieu - Monday, May 20, 2013

Industry stakeholders like to talk about how home medical equipment consumes such a small piece of the Medicare budget. I think the going rate these days is less than 2%.

It’s crumbs, really.

I see why stakeholders stress this. Even though it’s a small spend, it feels like HME has borne the brunt of the government’s harried cost-saving initiatives, whether it’s national competitive bidding or audit activities.

It’s unprecedented.

But instead of focusing on the way in which HME is small, what if providers focused on how HME can be big?

Big is a word that kept coming to me as I was putting together the educational program for this year’s HME News Business Summit, Sept. 8-10 in St. Louis.

Big picture.

Big data.

Big presence.

Big partnerships.

Many of the sessions at this year’s Summit are about providers broadening their view and taking a hard look at how they can be part of these big movements around them. That could mean driving business decisions with analytics, merging with other providers to create scale and efficiency, or partnering with health systems to fuel growth and improve coordinated care.

Shouldn’t we want HME to be a bigger piece of the Medicare budget? If this were the case, wouldn’t it mean that all of the industry’s hard work to convince CMS and lawmakers that HME is more cost effective and patient preferred was paying off?

Let’s go big or go home.

Meet me in St. Louis.

by: Liz Beaulieu - Friday, May 10, 2013

I get a kick out of the power some of our readers think I wield.

Just the other day, an HME provider called me and our conversation went something like this:

Provider: I’m looking at the May issue and there’s an article that says Round 2 may get delayed. When are we going to find out about that?

Me: Well, there’s a bill that has since dropped to replace competitive bidding with MPP, and the industry is now focusing all of its efforts on that.

Provider: What about the delay?

Me: A bill for the delay hasn’t been introduced. Before the bill for MPP was introduced, the industry was exploring that as another option to buy some time to get the bill for MPP introduced.

Provider: When will the bill for MPP get voted on?

Me: Well, I know the goal is to get it passed somehow—maybe as part of a larger piece of legislation—before July 1, when Round 2 is supposed to start.

Provider: Do you think that’s going to happen?

You get the idea. I really wish I had a crystal ball at times like these. Instead, I have a broken lucky eight ball that, when I shake it, always says, “As I see it, yes.”

Perhaps that should have been my answer to the provider’s last question? Here’s to hoping it’s true.

Recently, I had two providers call me on separate occasions and one called me “the big cheese” and the other called me “the boss.” My conversation with the first provider went something like this:

Me: Hello, this is Liz.

Provider: Theeeeeee Liz, the big cheese?

Me: That's me.

While we’re talking about cheese, if I had to name my favorite cheese, which is a hard thing for me to do, because I haven’t met a cheese I don’t like, it’d be goat cheese. Though, close behind goat cheese would be cheese curds. You can get these in most grocery stores these days, but they’re nothing like the kind you can get in Quebec.

Speaking of Quebec, that’s where my parents are from, and if you know that, you’ll have a good idea of how to pronounce my last name the next time you call. It’s French: Beau (nice) lieu (place). But in these neck of the woods, in Maine, they pronounce it Bowlier. Go figure.

Anyway, FYI, I wield very little power around here, especially over competitive bidding. If you want some real answers, ask Managing Editor Theresa Flaherty. She doesn’t eat cheese and her last name is easier to pronounce.

by: Liz Beaulieu - Thursday, May 2, 2013

For those of you uninitiated in the to-do list of an HME News editor, the first week in May is when she has to submit half a dozen or so Freedom of Information Act (FOIA) requests with the Pricing, Data Analysis and Coding (PDAC) contractor to update the HME Databank.

The Databank features a listing of the top Medicare providers by total reimbursement for 231 codes (Provider Share can be filtered by state, city or zip) and a listing of fee-for-service reimbursement for 426 codes included in competitive bidding (Product Share can be filtered by state and county).

We’ll update the Databank in September with 2012 data.

Each year for Provider Share, I keep a running list of code requests. We consider the 231 codes in there some of the most popular codes—you know, E1390, E0260, E0601, A4253 and K0823. So it was interesting to see that many of the codes that users have requested fall under urologicals, wound care, orthotics, ostomy and enteral.

Were the users requesting these codes already doing business in these markets and looking for data? Or were they requesting these codes looking to enter these markets and looking for data? I wish I had taken note.

We’ll add dozens of codes in these areas to the Databank as part of this year’s update.

Speaking of this year’s update, it should be pretty interesting. Last year, with the 2011 data, we got our first glimpse of the HME industry post-competitive bidding. Round 1 of the program went into effect Jan. 1, 2011. This year, with the 2012 data, we’ll have a better look at the continuous impact of competitive bidding on Medicare spend.

For Riverside County in California, one of the areas included in Round 1, Medicare spend for E1390 decreased from about $4.8 million in 2010 to about $3.3 million in 2011.

In Mecklenburg County in North Carolina, which includes Charlotte, Medicare spend for E1390 decreased from about $2.6 million in 2010 to about $1.7 million in 2011.

What happened in 2012?

Stay tuned.

by: Liz Beaulieu - Tuesday, April 23, 2013

A few folks that I talked to today were all abuzz about an announcement made by Sen. Max Baucus, D-Mont., that he will retire in 2014.

This is big news, obviously, with Baucus the chairman of the influential Senate Finance Committee, which, among other things, oversees Medicare and Medicaid. He’s also the sixth Democrat to announce his retirement, giving momentum to Republicans trying to retake control of the Senate.

But in our small universe called the HME industry, what does this mean? Is Baucus a friend or foe?

Sifting through our archives, Baucus popped up in a number of stories:

Baucus in 2010 had this to say about the, on average, 32% cut in Medicare reimbursement as part of Round 1 of competitive bidding: “Today we are seeing that transparency and competitiveness in Medicare results in a 32 percent reduction in costs, just from the first stage of this program alone. I’m very pleased with these strong results from making Medicare a more competitive and transparent purchaser and America’s seniors and taxpayers should be as well.”


Speaking of competitive bidding, Baucus in 2009 was the driver behind including a provision in the healthcare reform bill to expand the number of areas in Round 2 to 91.

Yikes squared.

And speaking of healthcare reform, he was also one of the drivers behind provisions to include a 2.3% tax on medical device manufacturers (most HME was left out) and to eliminate the first-month purchase option for power wheelchairs (that stayed in, and continues to be painful for providers).

But it hasn't been all bad.

Baucus (along with Sen. Charles Grassley, R-Iowa) went to bat for pharmacies in 2010, asking the Department of Health and Human Services to cut them some slack in meeting the accreditation requirement (they got it).

Baucus also went to bat for home infusion providers in 2009, admitting that Congress needs to do something about the lack of Medicare coverage for the therapy (bill after bill has been dropped, to no avail).

Still, with Baucus staying put for several more months and with his track record on competitive bidding, the industry’s biggest battle with him may be yet to come. The industry is redoubling its efforts to replace competitive bidding with a market-pricing program (MPP) before CMS implements Round 2 on July 1. What will he do, if anything?

The next question becomes: Who will replace Baucus as chairman? If the Democrats maintain control of the Senate, the next in line is Sen. Ron Wyden, D-Ore. He’s been tight lipped about his potential promotion, but here’s what he told The New York Times:

“My bottom line is, the country is expecting the Finance Committee over the next two years to focus on the country’s priorities and that’s improving the fiscal picture, fixing this broken, dysfunctional mess of a tax code and dealing with what is a demographic tsunami with huge implications for Medicare. I’m just going to leave it at that.”

A demographic tsunami indeed. If competitive bidding moves forward, it may be a deadly one.

by: Liz Beaulieu - Friday, April 19, 2013

Mal Mixon recently completed a new book chronicling his life’s experiences, but in no way is he ready to close the chapter on his company Invacare or the HME industry.

The author of “An American Journey” realizes that Invacare’s run-in with the Food and Drug Administration (FDA) and the industry’s battle with competitive bidding are still very much unfolding and he stands resolute in his support.

On Invacare, he said: “We’ll get through it. We’re taking the criticism that comes with it from Wall Street, but I believe we’ll come out stronger for it.”

On competitive bidding, he said: “I’ll keep fighting for the industry. I won’t give up and, hopefully, we’ll beat this thing.”

Drawing from his experiences, including his stint with the Marines; his college years at Harvard University; his job at Technicare, a division of Johnson & Johnson; and his decision to lead the purchase of Invacare, Mixon had these words of advice for HME providers:

Look outward

“I think this industry has been sort of inward. Providers have always been more concerned about their businesses and how it affects them. A few leaders have emerged to carry the ball for the industry, but when you look at the hospital and physician lobby, we’re almost no voice at all. A professor at Harvard told me, ‘If you don’t blow your own horn, someone else will use it as a spittoon.’”

Stay positive

“I always see the glass as half full. I know that home care is going to be huge eventually. People are living longer and the cost is lower at home. I can’t see all of America living in institutions. I think the ACO concept is in favor of home care. If I were a hospital president or CEO, I’d have a homecare component that took care of my patients.”

Keep learning

“I meet a lot of different people. A lot of times, you can do something for them or teach them something, and they can do the same for you. I say, 'I still haven’t decided what I want to be when I grow up.' I’m learning all the time. I try to apply what I know, and the more I learn, the better I become.”

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.