Subscribe to On the Editor's Desk RSS Feed

On the Editor's Desk

by: Liz Beaulieu - Wednesday, January 14, 2015

HME News taped a bunch of HME News TV interviews at Medtrade in October. I always enjoy previewing these interviews—there are so many hidden gems in them that can get you motivated about the industry, your company, your employees, you name it. That's a big ROI for a three- to seven-minute video.

This batch of interviews covers everything from executive leadership challenges like coaching to industry trends like consolidation to bigger picture themes like bringing the care continuum downstream.

These interviews will be posted to our website every other Wednedsay. Print out the schedule. Make a point to check them out.

Feb. 4

Kevin Gaffney, Emerald Expositions/Medtrade

Trends at Medtrade: New exhibitors, new products, new attendees

Feb. 18

Seth Johnson, Pride Mobility Products

Wheelchair repairs: Documentation pressure eases, but do the economics make sense?

March 4

Andrea Stark, MiraVista

Take an early adoption approach to the face-to-face requirement

March 18

Chris Kinard, LifeHME

It’s not all bad: Consolidation creates a stronger, better HME industry

April 1

Kelly Barry, Hollister

What’s the key to cash sales for supplies? Variety, discretion and on-time shipping

April 15

Mike Strange, Emerge Sales

Create the next generation of talent with coaching

April 29

Elizabeth Jepson, Brown & Fortunato

How to lock up a referral stream—legally

May 6

Mitch Yoel, Drive Medical

Tell the story of how technology can affect outcomes

May 20

Michelle Templin, The MED Group

HME providers can help bring care continuum downstream

June 3

Michael Blakely, DMEevalumate

View the face-to-face requirement as an opportunity

June 17

Wendy Miller, BOC

Want to increase your professionalism? Take the extra step of certification

July 1

Chris Watson, Brightree

Embrace systems that can easily talk to referral sources

July 15

Dennis Olsen, ARI Network Services

Consider robo shoppers when developing your website

July 29

Miriam Lieber, Lieber Consulting

Bad operational flow? Reexamine your leadership skills

Aug. 12

Kay Koch, occupational therapist

Aging in place: The products aren’t new, but the patients are new to the products

Aug. 26

Ryan McDevitt, Brightree

The million-dollar question: How should you prioritize your revenues?

Sept. 9

Justin Racine, Geriatric Medical

Mix up traditional and digital marketing efforts

Sept. 23

Mark Wells, Independence Medical

Supplies patients: Look at the ‘market basket’

Oct. 7

Peggy Walker & Ronda Buhrmester

Documentation: Make it personal, make it clean

Oct. 21

Jane Wilkinson Bunch, Jane’s Healthcare Consulting

The tables have turned: Why hospitals need us more than we need them

by: Liz Beaulieu - Friday, January 9, 2015

I blogged last week about how the industry saw some good progress, but no resolutions, on its top issues of competitive bidding and audits in 2014.

Well, it’s off to a good start in 2015.

In what’s turning out to be a good news week, AAHomecare has announced that lawmakers in not only the House of Representatives but also the Senate will re-introduce bills next week to reform the competitive bidding program.

The association has also announced that the Office of Inspector General (OIG) will add a fifth bid study to its docket—this one on the impact of the program on beneficiary access to DME.

And it’s only Jan. 9!

Of course, when it comes to competitive bidding, the industry doesn’t have all year to play with. Because the bid window for the Round 2 re-compete closes in late March, stakeholders would like to see some movement on the bills before then.

That’s a tall order, but again, it’s progress.

If good things come in threes, we should have an audit bill or some other progress on that front very soon.

At the end of the day, however, regardless of what happens with competitive bidding or audits, you have to be thinking about how YOU can drive your business forward, as Mike Sperduti explains in a guest commentary that will appear in our February issue.

“Your thinking and psychology will play the biggest part in determining your success or failure this year. If you think external factors like competitive bidding, healthcare legislation or other people are responsible for what happens in your life, then you are handing over that power to them. If they are responsible, then you can’t make it right, only the situation/other person can. The first step to having the best year of your life is to take absolute responsibility for everything—what you have, what is going on and who can fix it.”

by: Liz Beaulieu - Tuesday, December 30, 2014

You’d think, after taking a three-month maternity leave, that I’d I feel a little bit more Rip Van Winkle about the HME industry.

But as I peruse the issues that Managing Editor Theresa Flaherty so skillfully got out the door while I was out, I can’t say that I feel like I’ve missed very much.

Competitive bidding.





The good news: I’m still pretty up to date on what’s going on in the HME industry.

The bad news: There hasn’t been much in the way of resolutions to the industry’s issues.

But what’s a new year good for if not optimism, I say.

Take competitive bidding. While the program has been part of the industry’s lexicon for decades, I feel like 2014 was a year of, if not resolutions, definitely progress. For the first time, the industry succeeded in getting two senators to introduce a bill that would modify the program. The industry has had a number of such bills in the House, but never in the Senate.

It was also a first for a bill that would reform the audit program.

These bills will all need to be reintroduced in 2015, yes, but because of the progress made in 2014, the industry won’t necessarily be starting over.

Of course, I can’t guarantee 2015 will be any different than any other year, but I can guarantee that Theresa, Associate Editor Tracy Orzel and I will be following the industry’s progress every step of the way.

Here’s to a successful and prosperous 2015.

by: Liz Beaulieu - Monday, September 22, 2014

We announced the HME Excellence Awards winners at the HME News Business Summit Sept. 7-9 in Minneapolis, but I also wanted to give them a well-deserved shout-out here:

First place: Reliable Medical Supply, Brooklyn Park, Minn.

Second place: PediStat, Miami

Third place: Active Healthcare, Raleigh, N.C.

We’ve updated the HME Excellence Awards web site with the news, but you’ll have to wait until the Show Dailies at Medtrade in October to read profiles of these three great companies. (If you’re not at Medtrade, the profiles will also appear in the November issue.)

I have to tell you, it never gets old seeing how excited these companies get about winning an HME Excellence Award. Just look at these faces from Reliable Medical Supply, including Jeff Hall, president and CEO (center).

When we present the awards, the winners don’t typically ask to say something. This year, two of the winners did—Hall, in person at the Summit; and Lisa Feierstein of Active Healthcare, who couldn’t attend the event, through a statement—and we happily obliged.

I think this speaks to how much of a watershed year it has been for so many HME providers. I think the award means a lot to every company that wins every year, but to these companies this year even more so.

by: Liz Beaulieu - Friday, September 12, 2014

In this sneak peek of the M&A Insider that will appear in the October issue, The Braff Group looks at HME deal trends from 2006 to date.

As the firm notes in its analysis below, the last three quarters of activity have been relatively steady, with 15-18 deals per quarter.

What might that mean? Take in the graph and read analysis below for the full picture.

Based on proprietary data collected and analyzed by The Braff Group, after four quarters of deal flow bouncing up and down between Q4 2012 and Q3 2013, the home medical equipment sector has recorded three rather steady—and reasonably strong—quarters of M&A activity (15-18 deals per quarter). This may reflect a “settling in” of the market after the jarring announcements of competitive bid pricing for Round 2 and the Round 1 re-bid. As far as emerging trends, we note a somewhat anecdotal, but perhaps no less revealing, development. After repeated—and misguided—predictions of wide-spread Armageddon following each major reimbursement jolt over the past 20 plus years (rent-purchase, oxygen modality neutrality, the six point plan, OBRA ‘90, BBA ‘97, O2 caps), the doomsdayers may finally have gotten it right—sort of. For the first time since we’ve been covering the sector, we are beginning to hear more than just a few recordings of “this phone number is no longer in-service” as competitive bidding, somewhat predictably, is making the industry a bit less competitive. Where the sky-is-falling crowd continues to get it wrong, however, is the breadth of the retreat. Certainly some players that failed to earn bids have rolled in their wheelchairs.  But far more are tenaciously working the edges of the markets—from focusing on non-competitive bid products, to targeting non-Medicare beneficiaries—to keep their doors wide open.

If you want specific deal numbers per quarter, here they are:


Q1: 16

Q2: 18

Q3: 14

Q4: 12


Q1: 9

Q2: 15

Q3: 15

Q4: 6


Q1: 6

Q2: 12

Q3: 7

Q4: 10


Q1: 6

Q2: 16

Q3: 17

Q4: 10


Q1: 9

Q2: 8

Q3: 9

Q4: 11


Q1: 22

Q2: 18

Q3: 11

Q4: 17


Q1: 26

Q2: 16

Q3: 24

Q4: 27


Q1: 11

Q2: 20

Q3: 9

Q4: 17


Q1: 15

Q2: 18

by: Liz Beaulieu - Tuesday, September 2, 2014

We’re used to CMS breaking news late on the Friday before a long holiday weekend. And Friday, Aug. 29, was no exception.

(It turns out Invacare took a page from CMS’s playbook and also announced late on Friday that it was selling Altimate Medical to strengthen its balance sheet and reduce debt.)

At about 3:20 p.m. EST, CMS sent out an “MLN Connects Provider eNews – Special Edition” offering a settlement to acute care hospitals and critical care hospitals to resolve appeals of patient status denials.

There has already been at least one concession made when it comes to audits and the almost guaranteed appeals that come with them: A pilot project by the Office of Medicare Hearings and Appeals (OMHA) that brings provider and CMS together with a facilitator to work out a settlement. The idea: alleviate a massive backlog of appeals—think nearly half a million of them!—at the administrative law judge (ALJ) level.

In this white flag of sorts, “CMS is offering an administrative agreement to any acute care hospital or critical access hospital willing to resolve their pending appeals (or waive their right to request an appeal) in exchange for timely partial payment (68% of the net payable amount).”

“CMS encourages hospitals with patient status claim denials currently in the appeals process to make use of this administrative agreement to alleviate the burden of current appeals on both the hospital and Medicare system,” the agency states in the bulletin.

I particularly enjoyed this headline from Modern Healthcare, whose dedicated staff reported on the news the next day, a Saturday: “CMS offers holiday sale on audit appeals.”

I have since received a few emails from HME providers, wondering why CMS isn’t extending the same offer to them. One wrote to me: “Hospitals are given preferential treatment and the rest of us are treated like second class citizens.”

Would you drop an appeal for partial payment? This provider said he would.

Of course, the bigger question, here, is why CMS is willing to acknowledge a “burden of appeals” but isn’t willing to reform the very program that got everyone into this mess in the first place? It seems to be so unwilling to do this that not only the HME industry but also the hospital industry has had to introduce legislation to try and force the agency’s hands.

by: Liz Beaulieu - Wednesday, August 27, 2014

There are three excellent panel discussions at the HME News Business Summit this year (It’s Sept. 7-9 at The Marquette Hotel, so there’s still time to register!).

I touched on these panels in a previous blog.

But I wanted to give you a better idea of where we’re headed with the panels on partnerships and strategic planning.

Where does HME fit in?

For the panel on partnerships, we’ll have four HME providers talking about how they’ve been able to further embed themselves in the continuum of care. They’re prepared to answer questions like:

*What are your outlooks and perceptions (either real or perceived) on the role of HME plays in the healthcare landscape in terms of providing solutions vs. simply providing products?

*How have these partnerships changed how other healthcare providers view your company and what you do?

*Why have you made partnerships part of your business plan?

*Who are the healthcare providers out there to build relationships with? What healthcare providers have you had the most success with?

*How have you been able to build partnerships with other healthcare providers? How do you open doors at a hospital system or a nursing agency? Do you get outside help?

*Who are the key contact points at the hospitals/facilities/providers with whom you work with?

*What’s the business case for these partnerships: What are you looking to get out of it? What are they looking to get out of it? Who shares in the risk?

*Is there a way to monetize these partnerships? What are some non-traditional sources of funding, such as grants?

*What kind of investments are involved in building these partnerships? What capital and labor investments are involved?

*What are the advantages and disadvantages of these partnerships?

*What has been the impact of competitive bidding on whether you’ve sought out partnerships and how you’ve built these partnerships?

*What has been the impact to your referrals sources and overall business as a result of an increased physician/hospital/system integration and/or alignment?

*How do partnerships open the door to other payers, such as managed care companies?

What’s your strategy? 

For the panel on strategic planning, we’ll have three HME providers talking about how they take a systematic approach to overcoming the challenges and leveraging the opportunities in the industry today. They’re prepared to answer questions like:

*Give us an example of an issue or challenge that you have tackled with strategic planning.

*Why did you use a strategic plan?

*How far into the future did you plan? One year or multiple years?

*How did you communicate your strategic plans to employees? How well was it received?

*Did you use a particular planning mode? How well did it work?

*What metrics/methods did you use to measure performance?

*What results did you expect to achieve? Did you achieve them? Explain.

*What’s the best way to stimulate strategic thinking?

·      What was the worst thing that happened in the past year? What must happen to fix it?

·      What was the best thing that happened in the past year? What do you need to do to make it a repeatable experience?

*How do you get input from as many employees as possible on current issues in your company as part of assessing your current situation? Does this help with staff buy-in?

*What have you learned from your experience of formalized planning?

*What do you think are the potential consequences for an HME company deciding to do nothing?

Who wouldn’t want to know the answers to these questions? It’s information you can take to the bank.

by: Liz Beaulieu - Thursday, August 21, 2014

The Open Door Forum yesterday was pretty much all hospice, all the time (Oasis, payment rates, cost report, cap survey), so you won’t be seeing a story about it in HME News.

But there was an interesting question asked during the Q&A portion of the forum that’s worth mentioning here.

Someone from a hospital called in to ask CMS officials why physicians are getting such detailed requests for documentation from DME providers.

He said: “We’re getting requests from DME providers for some level of documentation from the physician that there has been a face to face by the nurse practitioner. We’re wondering, in a situation where (patients have been hospitalized), wouldn’t the medical record itself serve that purpose? Can you clarify what’s really needed at this point? There have been situations where discharges are delayed. Physicians, especially in the surgical world, are tied up. We’re not sure what’s required and they’re asking for some detailed information.”

Where do I begin…That the hospital sees the DME provider as a nuisance for trying to follow the rules? That CMS policies can sometimes defy common logic? That patients are getting delayed in their discharges due to that lack of common logic? That hospitals still don’t know what’s going on with the face to face?

CMS didn’t have anyone present at the forum to answer his question. Randy Throndset, director of the Division of Home Health, Hospice and HCPCS, advised him to send an email to the Open Door Forum email address.

Welcome to our world, hospitals.

by: Liz Beaulieu - Tuesday, August 19, 2014

Getting the Power Point presentations for the HME News Business Summit always makes me feel like a little kid at Christmas.

The presentations started rolling in last week, and let me tell you, they didn’t disappoint.

In fact, I think this may be the best Summit yet. I say this every year and every year it’s true.

This year’s speakers have helped me raise the bar once again.

Below are a few tidbits from two presentations to give you a taste of what you’ll hear and see next month:

How important is the role of an HME provider in helping hospitals reduce readmissions or achieve other positive outcomes?

Anyone who has checked out the educational program for the Summit knows that a big theme this year is the drive to better integrate acute and post-acute care.

So do hospitals believe HME providers play an important role in helping them reduce readmissions or achieve other positive outcomes?

After conducting exclusive research, speaker Mike Sperduti found that the majority of hospitals interviewed (60%) said HME providers do play an important role. Only 2% of hospitals said HME providers play no role at all.

Be prepared for Mike to ask you: How many of you have approached discharge planners and case managers to discuss the HME provider’s role?

As Mike says, “This is about opportunity.”

Is there such a thing as a “top performer” in a post-competitive bidding landscape?

It turns out there is, as you’ll find out from speaker Rick Glass.

In this year’s presentation on the Financial Benchmarking Survey, Rick includes a profile of an eight-year-old business faced with large reimbursement cuts as part of Round 1 and Round 2 of competitive bidding. Sound familiar?

The company responded to the losses with a “relentless focus” on improving efficiency and accelerating growth. The key: It made substantial investments in achieving those goals.

The company’s revenues were flat at $7 million in 2013 vs. 2012, but it finally saw a payoff in 2014, when revenues increased to $12.5 million and 30% EBITDA.

There’s more, of course, but that’s all you're going to get from me.

Register for the Summit to get the full picture.

by: Liz Beaulieu - Wednesday, August 13, 2014

You bet, says Dexter Braff.

In this latest sneak peek of The Braff Group M&A Insider, which will appear in the September issue of HME News, we take a look at deal trends by the nationals from 2001 to 2013.

Here’s a specific breakdown of the activity of Rotech, Lincare and Apria Healthcare during that 13-year span, based on data collected by The Braff Group:


Rotech: 0

Lincare: 18

Apria: 8


Rotech: 0

Lincare: 26

Apria: 18


Rotech: 1

Lincare: 13

Apria: 27


Rotech: 0

Lincare: 27

Apria: 27


Rotech: 10

Lincare: 15

Apria: 24


Rotech: 1

Lincare: 9

Apria: 3


Rotech: 0

Lincare: 1

Apria: 0


Rotech: 0

Lincare: 2

Apria: 0


Rotech: 3

Lincare: 0

Apria: 0


Rotech: 1

Lincare: 1

Apria: 0


Rotech: 4

Lincare: 4

Apria: 1


Rotech: 4

Lincare: 0

Apria: 0


Rotech: 4

Lincare: 0

Apria: 0

It’s interesting to consider these numbers in the context of a few big milestones in the HME industry. As Braff points out in his commentary below, activity started to skid in 2005-06 with the Deficit Reduction Act, which introduced a 36-month cap on reimbursement for oxygen equipment and services.

There was a little spike in activity in 2011, especially by Rotech and Lincare (4 deals apiece), when competitive bidding went live in nine cities across the country. As you’ll recall, the nationals didn’t pick up as many contracts as they thought they would, leaving them to acquire other companies with contracts in key areas and product categories.

It’s interesting to note that Rotech continued its spike in activity in 2012 and 2013. Actually, Rotech was relatively quiet leading up to 2005-06, when Lincare and Apria were going gangbusters. With the exception of 2005, the bulk of its activity has been in 2009-13.

It’s also interesting to note that Apria has logged only one deal since 2008, when it was bought out by an affiliate of The Blackstone Group. It looks like the same thing has happened to Lincare since 2012, when it was bought out by The Linde Group (Though Managing Editor Theresa Flaherty points out that Lincare made at least one deal during that timeframe: RxStat).

Here’s the commentary from The Braff Group:

This month, we quantify what industry observers have known anecdotally for several years: that is, the marked change in acquisition activity driven by “The Nationals.”  Rarely do we see such a dramatic and immediate free-fall in deal flow. But such was the impact of the Deficit Reduction Act of 2005 (signed in early 2006), which introduced the 36-month cap on oxygen reimbursement and essentially knocked the nationals out of the arms race for more locations. In many areas, this opened the door to regional and local providers to pick up the slack. It also provided the impetus for buyers, including a wave of private equity sponsored investors, to pursue non-oxygen focused consolidation strategies, including rehab, supplies and sleep.  What will the next wave bring? Even Carnac would struggle with this one. But would anyone be surprised that, as margins continue to eat away at the value-added services that once defined the industry, if “Big Box” retailers (or the manufacturers themselves) see an opening to leverage their purchasing power and distribution capabilities to “out-efficient” even the best of the traditional providers?