Subscribe to On the Editor's Desk RSS Feed

On the Editor's Desk

by: Liz Beaulieu - Tuesday, April 15, 2014

Here's a sneak peak at The Braff Group Insider for the May issue. This graph breaks down M&A activity by the nationals and non-nationals over a 10-year period.

Commentary from The Braf Group:

Based upon proprietary data collected and analyzed by The Braff Group, it is clear that during the peak years of 2004-2005, the nationals accounted for more than half of the HME deal flow. And then the Deficit Reduction Act, which included the oxygen cap, was passed in 2005. Almost immediately, the nationals abruptly and dramatically exited the market. Since then, local and regional providers, as well as rehab, supply, and sleep consolidators, have completely remade the market to the multi-faceted, multi-focused, multi-player environment that exists today.

Here's a specific breakdown of the number of deals by each group:


Nationals: 64

Non-nationals: 35


Nationals: 55

Non-nationals: 44


Nationals: 13

Non-nationals: 49


Nationals: 1

Non-nationals: 50


Nationals: 2

Non-nationals: 37


Nationals: 3

Non-nationals: 50


Nationals: 2

Non-nationals: 56


Nationals: 9

Non-nationals: 62


Nationals: 5

Non-nationals: 101


Nationals: 4

Non-nationals: 54

by: Liz Beaulieu - Friday, April 4, 2014

For years, HME providers have been trying to teach physicians what they need to include in their chart notes, often to no avail, says Sarah Hanna, president of ECS Billing & Consulting North.

But the transition to ICD-10 may be the thing that finally gets through to them, she says.

“How a physician gets paid corresponds to a diagnosis procedure code,” she said. “Well guess what, to prove medical necessity for an ICD-10 code, which is more specific, you have to chart in a way that proves all these different characteristics of that ICD-10 code. Hello, we’ve been trying to do this for years.”

Where providers have often felt like the only ones out there educating physicians about proper documentation, now revenue cycle management companies and other groups tied into physician payments also have a vested interest, Hanna says.

“This should help us in the long run,” she said.

Discharge drama

Speaking of rude awakenings, discharge planners in hospitals are finding out real fast that they can no longer discharge patients with HME without a detailed written order signed by a physician, says Sylvia Toscano, owner of Professional Medical Administrators.

“They ask, ‘What’s changed,’” she said. “A lot of times we talk, talk, talk, but it only becomes an impact when they can’t dispense.”

Once discharge planners know the real impact of the change, which went into effect Jan. 1, there are still challenges to overcome.

“We’re hearing a lot of, ‘The physician has already done the rounds and isn’t due to come back around for awhile,” she said. “The patient can’t get the DME; it’s creating some access issues.”

Bigger ticket, bigger pain

No one’s happy about the suspension of the assignment of new appeals to the administrative law judges (ALJs), but perhaps least happy of all are complex rehab providers, says Kelly Wolfe, CEO of Regency Billing and Consulting.

“The people looking at these claims at the earlier levels don’t always know what they’re looking for, because they don’t see many custom chairs, so most providers will try to turn it around at the ALJ,” she said.

But with the suspension, that’s no longer an option, Wolfe says.

“These are big-ticket items—we have one provider who has $127,000 wrapped up,” she said. “Now there are businesses that are being forced to close their doors.”

by: Liz Beaulieu - Friday, March 28, 2014

It’s a little too early to go into too much detail, but a big focus at this year’s HME News Business Summit, Sept. 7-9 in Minneapolis, will be post-acute care.

Not HME, but post-acute care.

There will be a number of sessions that will have something to do with this growing movement of post-acute providers banding together and with acute care providers for survival (if you think HME is the only healthcare segment that’s hurting, you’re wrong) and success (not only financially, but also from an outcomes perspective).

We began covering this movement at the past two Summits. Two years ago, we had a panel of HME providers who were in the early stages of making plays in a number of areas: negotiating preferred provider agreements, offering chronic diseases management programs through telehealth or proposing high-touch transitional program. Last year, we had a provider who is partnering with area health systems by giving them part ownership in the company.

I feel like this movement has come a long way in the past two years, to the point where you have vendors like Brightree and Mediware positioning themselves and their software solutions for, not just HME and home infusion and home health, but post-acute care and all it entails (see stories in the May issue).

This year, we’ll have another panel of providers, but this group is more established in its partnerships and agreements. We’ll also have a presentation by a person inside a growing health system whose job it is to build a post-acute care presence in its existing and new markets.

One of the providers on the panel put the importance of this movement this way:

“I have long seen that as an industry we needed to transition into relationship marketing rather than just service marketing. In this line of thinking, it means being in a position to offer a solution to a community, network, organization at the moment that a problem is trying to be solved. This may mean decreasing re-admissions, increasing compliance, etc.”

It’s forward-thinking stuff.

We plan to announce the educational program for the Summit in May. Keep an eye out.

by: Liz Beaulieu - Monday, March 17, 2014

Here's a sneak peek at The Braff Group M&A Insider for the April issue:

Commentary from The Braff Group:

This month, we examine how M&A transaction volume in HME compares with other healthcare service sectors. Even with a 45% fall off in HME deal volume in 2013 vs. 2012, the sector still accounted for a sizeable 19% of the 300 deals completed this past year. Leading the way in 2013 was home health, which, despite an increasingly challenging reimbursement climate and a marked increase in its risk profile, nevertheless accounted for nearly one-third of all healthcare service deals.  But the sector to watch out for is behavioral health. 

by: Liz Beaulieu - Friday, February 28, 2014

I was as surprised as the next person to see this week’s advance notice of proposed rule making from CMS detailing its plans to not only spread bid pricing to non-bid areas (I guess we knew that one was coming), but also possibly change the game entirely by bundling payments for certain HME like CPAP devices.

That’s “bigger than competitive bidding itself,” one provider told me.

CMS says about the move: “We believe it may be appropriate to modify the Medicare payment structure for certain DME under the competitive bidding program by requesting a single bid for furnishing all related items and services needed on a monthly basis (that is, rented equipment, replacement of supplies and accessories, repair or rented equipment, etc.).”

Sticking with CPAP, that means the CPAP device rental, masks, tubing, humidifier, maintenance and servicing.

Bundling payments, CMS argues, could make the bid program more streamlined—for providers, for beneficiaries and for the agency. By way of example, CMS had this to say about capped-rental items:

Suppliers: “The suppliers would no longer have to worry about counting rental months to determine when they might be losing title to certain items in their inventory.”

Beneficiaries: “These changes could also benefit patients who would no longer have to arrange for repair of patient-owned equipment or worry about servicing patient-owned equipment for which a manufacturer no longer makes replacement parts available.”

CMS: “From a program standpoint, the payment rules for capped rental items are complicated and onerous to administer. The program must keep track of separate payment, coverage, medical necessity, and other rules for hundreds of related codes for replacement supplies and accessories used with the base equipment as well as labor and parts associated with repairing patient-owned equipment. In addition, claims processing systems must count rental months and contractors must identify when legitimate breaks in continuous use occur and can result in the start of new capped rental periods. This leads to costly and complicated claims processing systems and edits for processing millions of claims for these items and services.”

Bundling, as you know, has become a bit of a trend in health care. First, there are the managed care companies to whom an increasing number of state Medicaid programs pay a lump sum per patient for managing care, regardless of the services provided.

Then there’s CMS’s Bundled Payments for Care Improvement (BPCI) Initiative. Under the initiative, healthcare organizations enter into payment arrangements that include financial and performance accountability for episodes of care. The goal: higher quality, more coordinated care at a lower cost to Medicare. Episodes currently being tested under this initiative include COPD, diabetes, and various respiratory conditions.

Industry stakeholders are skeptical.

“Is their whole goal just to reduce payment levels, which is what you always suspect,” Invacare’s Cara Bachenheimer told Managing Editor Theresa Flaherty for a story that will appear in the HME Newswire on Monday.

Stakeholders also worry about the logistics, from a business perspective, of such a different payment model.

“How do I know how long this person is going to need this equipment or how many supplies they will need,” Brown & Fortunato’s Denise Leard told Theresa.

CMS seeks comments on all of this—and I’m sure it will get its fair share.

by: Liz Beaulieu - Friday, February 21, 2014

If you’re intimidated by the prospect of launching a retail-driven HME business, consider the dozens of experts featured in our upcoming Retail Strategies Special Report as your personal mentors.

In the special report, these experts will guide you on everything from what to prioritize (your customer’s needs, not necessarily the money) to what to carry (how many bath chairs are you really going to sell, asks one expert) to where to get help (your friendly manufacturer, of course).

One of the most intimidating aspects of a retail-driven HME business is competing with big-box retailers like Walmart. A whopping 98% of respondents to a recent HME Newspoll reported that big-box retailers in their area carry HME. What’s more: 71% said these retailers are increasing the amount of HME they carry. 

Have no fear, these experts will tell you. While retailers may have the upper hand when it comes to showcasing a product (though that’s a skill that providers are quickly learning to master), providers have the upper hand when it comes to education. They know their stuff.

Even if you’re a veteran of retail-driven HME business, there’s something in this special report for you. For example, Justin Racine wants to know: Have you considered the impact of your online and mobile presence on your retail strategy? That's taking it up a notch.

We'll be emailing you all the special report on Tuesday, but below you'll find a sneak peek.

So read up, then make some moves. We’ll all be here to cheer you on.

Retail sound bites

Don’t neglect referral sources

“In retail DME, I think focusing on outside referral sources is necessary at least a couple of days a week. I use a part-time salesperson who has learned about our products and how to sell them. Her goal is to be consultative, understand what the referral sources need and develop relationships with key people there.

For many of the outside referral sources, our salesperson offers to bring in lunch or snacks and do an in-service to show some of the new and innovative products we carry.

For senior living facilities, she will promote an in-service with flyers and have a raffle for a small item to attract more attendees. She passes out 10% discount cards and has even arranged an excursion to the store with the activities director.”

—Mike Kuller, RPh, is the author of “The Next Step – Retail Home Medical Equipment.”

Make smart product choices

“Many get into big items like scooters and lift chairs, but what sells over and over are disposables like wound care and incontinence. If you are in a town of 100,000, how many bath chairs are you really going to sell?”

—Cliff Woolard, president of Home Med-Equip Co.

Spread the word

“Advertising can be as simple as an email blast to existing customers. Advertising can also consist of many different mediums, including print, TV, billboard, Web, direct mail, bag stuffers and so on. Often people think TV commercials are costly, but many markets have inexpensive cable and local news stations that allow you to run TV advertising.”

—Andrew Pyrih is the senior vice president, domestic sales, at Pride Mobility Products.

Bling the ride

Home Care medical launched a campaign called “Bling Your Ride” to promote retail accessory products like bags, cane holders, cup holders, and seat and back covers as stylish options for walkers and rollators. “They can design their walkers or rollators the way they want. These items are practical yet edgy and fashionable.”

—Heather Lotz-Klug, manager of retail sales, Home Care Medical

by: Liz Beaulieu - Thursday, February 13, 2014

You may have noticed that The Braff Group Index on our Databank page in the print issue looks a little bit different these days.

In the index, we used to track the stock performance of 38 companies in seven key healthcare service sectors: home medical equipment, home health services, specialty pharmacy, hospitals, long-term care, e-health and healthcare staffing.

But there are so few public companies in the HME industry nowadays—most recently Apria Healthcare announced it would no longer file reports with the Securities and Exchange Commission (SEC)—that the index lost some of its punch.

After brainstorming with Dexter Braff at The Braff Group, we decided to transition the focus on merger and acquisition activity and rebrand the index as the M&A Insider.

In the January, February and the upcoming March issues, we feature graphs on HME transactions per quarter from 2006-13, private equity investment in HME from 2006-13 and HME deal flow from 2001-13, respectively.

Here’s a sneak peak at that last graph, since it won’t get published for another couple of weeks:

And here’s the accompanying commentary from Braff:

Deal flow fell dramatically in 2013. The good news is that the fall-off is not quite as dramatic as the numbers suggest, as deal volume in 2012 was artificially inflated as sellers sought to capture favorable capital gains treatment set to expire at the end of the year. Deals that would have otherwise closed in 2013 were accelerated to 2012, contributing to the slow down.  Moreover, even with the slide, the sector remains extremely active as companies continue to turn to M&A to capture share.

We hope you find this information more useful.


by: Liz Beaulieu - Wednesday, February 5, 2014

Walt Gorski, formerly of AAHomecare, once told me that audits were a bigger issue for HME providers than competitive bidding.

I’m starting to believe him.

With competitive bidding, providers know, for the most part, what they’re dealing with. At some point, they know if they’re going to get a contract or not, and they know that reimbursement will be X% off the current Medicare fee schedule.

With competitive bidding, providers may not like what they know, but at least they have enough information to make appropriate business decisions, such as exiting certain product categories or Medicare all together.

With audits, providers know next to nothing. Since audits can be arbitrary, they don’t know if a claim will be denied, and with the recently announced delays in the appeals process, they don’t even know if they have an avenue for recourse to fight denials.

There have been a number of signs recently that audits have overtaken competitive bidding as public enemy No. 1 in the HME industry:

1.) The respondents to a recent HME Newspoll blamed audits in large part for any poor financial performances in 2013. Fifty-three percent of them said at least 20% of their A/R was more than 60 days old last year.

2.) The People for Quality Care (PFCQ), an advocacy group know for its determined fight against competitive bidding, has turned its attention to fighting audits. On twitter, it recently stated, “2014: Let’s take on audits.”

Another sign: The Office of Medicare Hearings and Appeals will hold a daylong forum on Feb. 12 to discuss delays in the appeals process, and The VGM Group is rallying stakeholders to attend the forum and visit lawmakers on Capitol Hill the next day. It plans to live tweet updates from the forum with the hash tag #VGMAuditMadness.

John Gallagher, VGM’s vice president of government relations, will have a guest commentary in the March issue, where he challenges providers to do their part:

“The time is now to take on audits. We will use the lessons we have learned in the competitive bidding fight to bolster both efforts. To our faithful providers—leaders who have shown so much through the years—it’s time to go to battle again. Our story may not be the celebrity coverage of every day headlines, but darn it, we’re going to make sure it’s heard.”

by: Liz Beaulieu - Tuesday, January 21, 2014

Calls and emails from you, HME providers, aren’t the only calls and emails we field here at HME News world headquarters in Yarmouth, Maine. We also get calls from Medicare beneficiaries pretty frequently.

About a month ago, I got a call from a nice lady in Hartford, Conn., who wanted to know whom to call about getting a new wheelchair. She was a former customer of The Scooter Store and she was accustomed to getting a new wheelchair every five years. I told her she lived in a competitive bidding area and directed her to log on to, to click on “Find suppliers of medical equipment & supplies,” to type in her zip code when prompted, to select standard wheelchairs and to call one of the providers listed.

I didn’t have the heart to tell her that, as a former customer of The Scooter Store, she might have a hard time finding a provider to pick her up. Although, if she is right and she is eligible for a new wheelchair, her chances are probably better.

I also didn’t have the heart to tell her that the 10 providers listed on for her zip code ranged from Lincare at 6.11 miles away to Dusara Corporation/Universalmed Supply at 1,839.19 miles away. In fact, providers six through 10 were 100 miles away or more.

One of these days, I’ll stay on the line with a Medicare beneficiary long enough to ask them a few questions. How did this woman feel about having to find a new provider because her former provider didn’t win a contract, the final sting in a sting of stings that included an FBI investigation and congressional scrutiny? How did she feel about the possibility of having to select a provider located so many miles away?

Managing Editor Theresa Flaherty got an email this week from a self-proclaimed “elderly lady” in San Angelo, Texas, in need of a wheelchair. The woman wrote: “Please contact me. I have no help.”

It does not look like this woman lives in a competitive bidding area and when I plug her zip code into the supplier directory at, I get two results, both of which are a fairly reasonable 18.51 and 19.08 miles away. She lucked out on both accounts.

We’re happy to help when we can, of course, but Theresa and I often wonder: How do these beneficiaries even find us if they can’t find a provider?

by: Liz Beaulieu - Wednesday, January 15, 2014

I knew it was a bit of a stretch when we posted a brief to our website recently about a furniture maker named Perdue Woodworks debuting a line of nightstands designed to conceal CPAP devices. I mean, we’re not in the business of writing news about furniture makers.

But it was just one of those things that I couldn’t resist. It got me to thinking about the day-to-day realities of having obstructive sleep apnea (OSA) and how those realities can, ultimately, impact compliance and the ability of HME providers to continue getting paid.

It turns out I’m not the only one that was interested in this news. The brief got 200 views on our website and a couple of favorites on twitter.

So, naturally, I started digging for more info.

I wasn’t able to reach anyone at Perdue Woodworks, but a Google search on “CPAP nightstands” led me to D.L. Allen Cabinetmaker. I was able to reach the owner of that company, Denny Allen, in Mount Vernon, Ohio.

As you might suspect, Allen, a woodworker and shop teacher by trade, started making nightstands for CPAP devices four years ago when he began using the therapy himself. The nightstand you see on the main page of his website,, is his—a custom-made job in walnut. It features a drawer that pulls out from the side, toward the bed, for easy access; and an opening in the back for the tubing.

Of course, I had to ask Allen whether or not he’s visited local HME providers to let them know about his product.

“When I first started, I had cards printed out and took them to all the providers in central Ohio,” he said. “I don’t know that I’ve gotten one order from that.”

In all, Allen has made and sold only a handful of nightstands for CPAP devices to date.

This surprises me. Yes, Allen’s nightstands are on the expensive side at $300 and up (Perdue is marketing theirs for $150 to $200), but they’re handmade using wood not MDF, and they look like something you’d pass down from generation to generation (Is OSA hereditary?). I can’t help but think these nightstands would make the perfect addition to the room-like displays so many HME providers are setting up in their showrooms. It’s a visual that I think would take some of the stress out of what can be a stressful therapy for patients.

“A lot of the trouble with CPAP is the inconvenience of it,” Allen said. “What I do takes that away. You pull out the drawer and everything’s there, and the drawer stays shut unless you’re getting in and out of it.

“The hard thing is finding a mask that’s not so annoying it keeps you awake,” he said. “But that’s the business of the people who make the masks; I just make the nightstands.”