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On the Editor's Desk

by: Liz Beaulieu - Wednesday, July 24, 2013

I’ve been working on a couple of stories this week that have required me to make a dozen or so calls to providers. Since I cover mostly the vendors in the industry, that’s usually Theresa and Elizabeth’s domain.

These are a few things that I heard that, while they didn’t quite fit into any of the stories I’m working on, resonated with me for one reason or another.

From Steve Nelson, who’s in a Round 1 bid area in Florida:

We’re forging ahead with cash customers. CMS in their wisdom has forgotten all about the patient. The patient is not getting served. We’re getting phone calls from areas that we used to take care of from patients needing help. It’s a crying shame. CMS is so blind to what they’re doing.
A lot of people are going cash because they’re tired of the game.

I’ve spoken to a lot of physicians and they’re going to get out. They don’t like what’s going on. They don’t like the audits. I said, ‘Welcome to the club.’

From Daryl Bowman, who’s in a Round 2 area in California:

I was offered support surfaces only. I had bid for beds and some other stuff. How can I do support surfaces but not beds? It’s like doing the clutches, but not the cars. I didn’t accept it.
Two years ago, Medicare was 70% of my revenue. I started moving that to retail and Medicare Advantage. Over the past two years, I’ve decreased it to below 50%. Still, I’m going to take a 40% hit on revenue. With me, that’s a lot. Because we’re a small company, we’ve downsized to only two employees. At my height, I had five.

For retail, we have a Costco approach. We have a warehouse set up that you can walk in and the shelving is set up as retail. A person can come in and browse, but we’re still meeting the customer one on one. We sell a lot of wound care and incontinence retail.

by: Liz Beaulieu - Tuesday, July 16, 2013

A few weeks ago, a provider tipped me off that CMS had started recouping payments for Medicare beneficiaries who were in prison at the time of dates of service. This provider was dumbfounded: How could these beneficiaries be in prison when they had received equipment and services in their home and signed delivery tickets, he wanted to know.

“This goes to a new low in my eyes,” the provider said.

I hadn’t heard of this type of recoupment from other providers, so I saved his email to my file of stories to look into.

Fast forward to this week.

CMS has put out a bulletin detailing the recoupments—“A large number of overpayments have been identified,” it states—and advising providers on how to respond to demand letters. The agency notes:

“There may be instances where providers believe that the beneficiary was not incarcerated when the services was provided. However, a beneficiary may be incarcerated even when the individual is not confined within a penal facility. For example, a beneficiary who is on a supervised release, on medical furlough, residing in a halfway house or other similar situation may, nevertheless, be in the custody of authorities under a penal statute. In such cases, Medicare payment may be barred.”

I forwarded the bulletin to the provider. His response?

“Now we need to ask them to pull up their pant leg to see if they are on in-home incarceration? When does it get to a point that we are asking and doing things totally outside of what we are in business for (taking care of ill people in need)? Guess when my driver gets shot for asking about a person being in prison they will not require us to get involved with someone's personal business outside of healthcare?”

CMS doesn’t go that far, but it advises providers that are receiving demand letters for denial of claims because the beneficiary’s Social Security record indicates incarceration on the date of service to contact the beneficiary to gather as much information as possible.

That sounds like a fun conversation, huh?

I wonder how these things even get this far. Shouldn’t the doc or whoever the referral source is know that an incarcerated Medicare beneficiary doesn’t meet the coverage criteria for the equipment and services? If not, shouldn’t CMS focus its efforts on educating them about this and, therefore, nipping the whole thing in the bud, not to mention saving providers from, at the very least, awkward conversations, and, at the very worst, the possibility of physical harm?

But I guess this is typical of the backward way that CMS tends to deal with fraud and abuse.

Unfortunately, the last person holding the hot potato is often the provider.

by: Liz Beaulieu - Wednesday, July 10, 2013

I’m not saying the U.S. Department of Veterans Affairs (VA) is perfect in the way it provides patient care and federal benefits to veterans and their dependents.

Do a Google News Search for Veterans Affairs (or its former name, Veterans Administration) and you’ll find stories about a huge backlog in disability claims and, just today, a story about seven veterans who are accused of dealing drugs to patients being treated at its facilities, some of them for addiction issues.

But it does a lot of things right.

For example, I’ve long admired the VA’s use of health informatics, disease management and telehealth technologies to improve and extend access to care.

Today, in a story in Pharmacy Practice News about how comprehensive discharge plans help to reduce hospital readmissions for COPD patients (a story that also quoted Invacare’s Joe Lewarski, by the way), I learned about this little gem:

One pilot program being tested by his VA system to improve patient health and reduce readmissions is shared medical appointments for veterans with diabetes. Six to eight patients with diabetes and a high risk for cardiovascular complications are brought in for quarterly outpatient appointments with a nurse educator, a health psychologist, a dietitian, a physician and a clinical pharmacist with prescriptive authority. Patients receive joint education but individual medication management by the pharmacist. The VA also plans to pair similar patients as “health buddies” to encourage each other to stay healthy, with the goal of improved health outcomes.

Dr. Sean Jeffery, a clinical pharmacist in geriatrics for the VA Connecticut Healthcare System in West Haven, told Pharmacy Practice News:

“I absolutely think this model could work for HF and COPD patients. We need to catch COPD patients early, make sure they’re on the right medications, they stop smoking and have training on the use of inhalers, diet and exercise.”

There are so many things that are right about this pilot program: the reinforced messaging of having quarterly meetings, the cost savings of having clinicians meet with more than one patient a time, the support and camaraderie of “health buddies.”

I know this program isn’t dissimilar to HME providers doing things like hosting A.W.A.K.E. support group meetings, but it’s more intentional and focused, in terms of improving outcomes.

In this healthcare environment, that’s a necessity.

by: Liz Beaulieu - Wednesday, July 3, 2013

We like to use the phrase “separation of church and state” to describe the relations between the sales and editorial teams here at HME News.

This means that the editorial team goes about writing stories—including stories about advertisers—without being influenced by the sales team. If Jo-Ellen Reed, our sales rep for the West coast, says, “Liz, you can’t write that story about ABC Manufacturer, because it will make them upset and make them possibly pull their advertising,” I don’t have to listen to her. If she says, “Liz, you have to write a story about ABC Manufacturer because they just bought an ad,” I really don’t have to listen to her. (If anyone knows Jo-Ellen, by the way, they know this never happens.)

Conversely, the phrase also means the sales team doesn’t have to consult the editorial team about the content of its ads.

I mention all of this because of an ad that appeared on p. 24 of the July issue. In the ad, 3B Medical argues that there’s a duopoly in the sleep market that allows two manufacturers to keep prices unnecessarily high.

As you can imagine, this has raised an eyebrow or two.

I just want to make clear that this is an ad paid for by 3B Medical, not an article written by the editorial team at HME News. I’ve seen and heard the two terms interchanged freely. The ad even refers to itself as an article, which gives me serious heartburn, but there’s nothing I can do about that. (See third paragraph above.)

I will say, though, that the ad (not article) raises some interesting questions about cost in a post-competitive bidding world:

#1 How much does it cost manufacturers to produce products?

#2 How much should it cost HME providers to buy them?

#3 How much should it cost Medicare to pay for them?

With 45% of Medicare reimbursement now on the cutting room floor, these are all areas that are up for discussion, as far as I’m concerned, and until now, the bulk of the discussions have focused on #2 and #3.

That may be changing.

by: Liz Beaulieu - Friday, June 28, 2013

Since Theresa has so diligently updated everyone on 1.) the industry’s latest efforts to kill competitive bidding (check out the HME Newswire on Monday for the latest, including a denied temporary restraining order) and 2.) the breaking news that CMS has delayed implementation of the face-to-face requirement, I’m going to write about something that has nothing to do with either of these hugely important topics.

But that doesn’t mean that what I’m about to write about is any less important.

Au contraire.

Spurred by Michael Reinemer (Remember him? He’s no longer with AAHomecare, but he is very much keeping tabs on the industry), a handful of stakeholders exchanged emails a few months back about the importance of providers being able to illustrate how HME is cost effective, patient preferred and clinically sound.

While the industry has made huge strides—HUGE—in communicating the problems with competitive bidding and the negative impact of the program on beneficiaries, there’s plenty of room for improvement in this area.

This is becoming a bit of a soapbox for me, but by way of example, only 34 of our readers responded to a recent HME NewsPoll asking whether they track 30-day hospital readmission rates for patients with chronic conditions. Do they also talk with said hospitals about how they can be a cost effective, patient preferred and clinically sound option for these patients—we didn’t even go there.

Providers need to start asking themselves these questions repeatedly: How can I focus on outcomes, and how do I contribute value in the healthcare system? Then they need to communicate their answers to anyone who will listen.

In an effort to the ball rolling, we’re putting together a special report for the October issue (the big one that coincides with Medtrade) on just this topic.

If you’re an industry stakeholder who also feels passionate about this or a provider who’s making strides in this area, shoot me an email:

I’d love to talk.

by: Liz Beaulieu - Wednesday, June 19, 2013

I’ve had a hard time blogging for a few weeks. It’s not because of the lack of news; it’s because of the glut of news. I can’t focus on one topic long enough to churn out a blog. So here are two thoughts that have been buzzing in my head but haven’t found a home here yet.

HOMES: Home Medical Equipment and Services Association of New England. This is the new name for NEMED. It’s an appropriate name for a number of reasons. It emphasizes home and services, and it doesn’t include the word dealer. When I was at the Heartland Conference earlier this month, I asked a few people, wouldn’t it be a good idea if all the state/regional associations picked up this name, replacing the “of New England” with their state or region? This is how many associations operate, right? You have the ALS Association, for example, and you have dozens of chapters: Alabama, Golden West (greater Los Angeles), Evergreen (Washington state) and on and on. I think state/regional associations should remain completely autonomous in their administration, but I think the continuity in names would make them look bigger and more powerful, especially to the public and lawmakers. I mean, what would be a bigger sign of unity? (I have to be honest: It would also help us out here at HME News. Do you know how hard it is to keep straight all the state/regional association names? Do you know how many times Managing Editor Theresa Flaherty has written Pennsylvania Association of Medical Services, instead of Pennsylvania Association of Medical Suppliers?)

Hotlines: I got a call from a gentleman recently who wanted to know who he should contact about his wife’s wheelchair, which she received from The Scooter Store, with all the changes that go into effect July 1. I don’t think there was enough time in the day to fill him in on everything going on with 1.) The Scooter Store and 2.) competitive bidding. The gentleman said he had been trying to contact The Scooter Store, but he couldn’t get anywhere outside of an automated message. He found HME News after a few Google searches. “Medicare pays for the wheelchair each month and she needs it; what am I going to do?” he asked. I confirmed that he was in a bid area, and I told him that he needed to go to to find a contract supplier in his area for more information. I also gave him a hotline number to log complaints about competitive bidding. When Medicare beneficiaries are calling HME News for information, it’s not a good sign.

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.