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by: Liz Beaulieu - Monday, December 10, 2012

A relatively small group of vendors dominated the headlines of HME News in 2012.

Four of the most read stories in 2012 had to do with three vendors that found themselves in the crosshairs of the Food and Drug Administration (FDA) for much of year, each for numerous violations. As 2012 wound to a close, Invacare, GF Health Products and Merits all maintained that they had made significant progress in returning to the FDA’s good graces. Invacare was prepping for a third-party audit early in 2013, followed by an FDA inspection. Merits was hoping to have an FDA inspection under its belt by the end of 2012. And GF was waiting for the agency to approve corrective actions for one last violation.

Another troubled vendor that popped up in three of the most read stories: Agape Medical Management, a consulting and billing firm that helps providers submit their bids for competitive bidding. Agape Medical Management came under fire for not submitting the bids of some providers on time. In July, we reported that some of these providers were trying to take advantage of an arbitration clause in their contracts to resolve their disputes outside the courts.

On a more positive note, two of the most read stories involved vendors helping providers with two of their biggest challenges in 2012: decreasing their dependence on Medicare reimbursement, and documenting CPAP compliance. Vendors like Invacare have ramped up production of retail-only products that providers can sell for cash, and vendors like U-Sleep (now owned by ResMed) have developed software programs that providers can use to obtain and manage compliance data for CPAP patients.

The remaining most read story on the list—“Heard at VGM: ‘The future looks good. It’s just different.’—is the best way to close out 2012 and welcome 2013.

Most read vendors stories for 2012

#1 Group of Round 2 bidders cry foul

#2 FDA also warns GF, Merits

#3 Providers to Agape Medical: We’re not going away

#4 Heard at VGM: ‘The future looks good. It’s just different.’

#5 Agape Medical update: arbitration, credit card reversals and an investigation

#6 Invacare talks demand, FDA

#7 Invacare, FDA in negotiations

#8 Invacare briefs shareholders on FDA, earnings

#9 Vendors target mobility for cash sales

#10 U-Sleep simplifies compliance

by: Liz Beaulieu - Monday, December 3, 2012

I have a good idea for a study by the Office of Inspector General (OIG) or the Government Accountability Office (GAO).

How well-versed are Medicare’s customer service reps (CSRs)?

I got an email from a provider last week who recounted a story about how he has been unable to pick up the wheelchair of patient that had reached 10 months on a 13-month rental, despite that patient being admitted into a skilled nursing facility (SNF) permanently.

When Kyle Hoffman at Anderson’s Medical Products notified the patient’s daughter that he would need to pick up the chair, she was reluctant. She said she uses the chair to take her mother to lunch on occasion.

No problem, Hoffman told the patient’s daughter, if you complete the rental on the chair as a private pay, you can keep it.

She didn’t want to do that and agreed to release the chair the following day.

But five minutes before Hoffman was supposed to pick up the chair, the patient’s daughter called and told him that she had been on the phone with a CSR at Medicare and the CSR told her that the provider could not pick up the chair without a discharge order from a physician.

The CSR told the patient’s daughter, according to Hoffman: “It’s a life-sustaining piece of equipment and, regardless of the client’s SNF status, (not having it) would put her at risk.”

That didn’t sit right with Hoffman. So he called Medicare and spoke with a CSR who told him, no, what really needs to happen is that the SNF needs to change the patient’s status from SNF to a permanent resident.

This CSR said, according to Hoffman: “Once the process is complete, you will be able to obtain your last three payments.”

This didn’t sit right with Hoffman, either. So he called the line again and spoke with a different CSR. This CSR agreed with him.

“I then requested that someone from Medicare call this client’s daughter, apologize and explain that she had been misinformed,” he wrote. “Of course, I was told Medicare will not do that.”

So Hoffman is currently out a wheelchair that did not meet purchase point and he has Medicare to thank. Why doesn’t he call back the patient’s daughter and explain what Medicare should have explained in the first place?

Would you?

“It seems as though Medicare uses the term ‘fraud and abuse’ quite loosely,” he wrote. “However, when the shoe is on the other foot, they love to claim immunity.”

by: Liz Beaulieu - Thursday, November 29, 2012

In honor of 1.) the 2011 data finally being added to our HME Databank (thank you for your patience!) and 2.) the 2012 State of the Industry Report appearing in our December issue, I have a little pop quiz for you.

HME Databank

1.)    Who were the top five providers of CPAP devices (E0601) in 2011?
2.)    Who was the No. 1 provider of blood glucose strips in New York?
3.)    How much did Medicare spend on oxygen concentrators (E1390) in 2011?
4.)    How much did Medicare spend on oxygen concentrators in Allegheny County in Pennsylvania, a Round 1 competitive bidding area, in 2011?
5.)    How much did Medicare spend on oxygen concentrators in Allegheny County in Pennsylvania in 2010?

2012 State of the Industry Report

1.)    How many DMEPOS providers billed Medicare more than $10 million per year in 2011?
2.)    Which product in the respiratory category experienced the most growth in utilization in 2011?
3.)    Which product in the DME category experienced the least growth in utilization in 2011?
4.)    Where did the national providers rank in 2011?
5.)    Who is Zoll Lifecor Corp., ranked 28 on the top providers list?

You can sign up for the HME Databank at www.hmedatabank.com, and you can download the 2012 State of the Industry Report from the resources page on our web site (it’s the third report listed).

Happy data crunching.

Answers

1.)    Apria (about $6.6 million in Medicare reimbursement), Lincare (about $4.8 million), Braden Partners (about $3.2 million), American HomePatient (about $1.5 million), Sleepmed Therapies (about $888,000)
2.)    Oxford Diabetic Supply (about $2.3 million)
3.)    About $1.4 billion
4.)    About $2.2 million
5.)    About $4.2 million

1.)    69
2.)    Replacement nasal cushion (A7032), up about 30%
3.)    Powered pressure reducing air mattress (E0277), down about 21%
4.)    Lincare: 1; Apria Healthcare: 2; American HomePatient: 14; and Rotech: 86
5.)    Zoll Lifecor Corp. develops wearable defibrillators for persons with SCA/SCD risk in the United States and Europe. It offers LifeVest wearable cardioverter defibrillator, which is worn outside the body to monitor the patient's heart with non-adhesive sensing electrodes to detect life-threatening abnormal heart rhythms and alert the conscious patient if a life-threatening rhythm is detected, as well as release a gel over the therapy electrodes and deliver an electrical shock to restore normal rhythm when the patient is unconscious.

by: Liz Beaulieu - Wednesday, November 21, 2012

If you think Medicare’s fraud and abuse efforts are limited to unmarked and unmanned HME storefronts in Hialeah, Fla., think again.

Steve Palacioz is the owner of Advanced Medical Concepts in Wichita, Kan., which bills Medicare about $1 million per year for walkers, wheelchairs and hospital beds. For going on 20 years, he’s operated his DME company from an office in his home. The office has a dedicated door with posted hours of operation. His accreditation was renewed by HQAA this summer.

None of this, however, stopped Medicare officials from visiting Palacioz in March, August and September of 2012, the last visit resulting in a letter notifying him that his supplier number had been revoked.

“They said I wasn’t staffed,” he said. “We’re a two-person operation: me; my son, who is the delivery person; and my wife, who is almost always home. There’s no leeway in the standards.”

Those standards, implemented in 2010, require, among other things, that providers have a physical facility that’s staffed during posted hours of operation.

Even though Palacioz had his cell phone number posted to the door—a number Medicare officials didn’t bother to use—that’s not enough, says Neil Caesar, president of the Health Law Center in Greenville, S.C.

“They want a warm body,” he said.

While business setups like Palacioz’s are less common, they can be done within the law, says Mary Nicholas, executive director of HQAA. 

“There have been single-person operations that we’ve dealt with where they’d do the required 30 hours of operation, but they give themselves a three-hour noon hour to do deliveries, and they post hours until 7 p.m.,” she said.

Now Palacioz is working through the maze-like process of getting his supplier number back. He plans to respond to Medicare within the required timeframe, explaining that he will adjust his hours of operation.

Caesar recommends that Palacioz be “relentless” on his company’s behalf.

“You have to be proactive about this, because communication and verification with the NSC can be difficult,” he said.

That’s what Palacioz plans to do, but he can’t stop feeling like Medicare is making much ado about nothing.

“Why am I getting hassled,” he said.

The take-away, here, for all providers, Caesar said: “These standards may be old, but they can still nail you.

by: Liz Beaulieu - Thursday, November 15, 2012

When we wrap up an issue, I always take the same issue for the previous year and dump it.

Before I dump it, I usually look at the front page to see what has changed, what hasn’t.

A few things about the cover of the December 2011 issue caught my eye (See image below).

The biggest: the top story about AAHomecare pushing unity on the market-pricing program (MPP). A year ago, there was a fear that providers would split hairs about the details of the program, particularly one provision that would maintain Round 1 until MPP was implemented.

I guess a year ago, the industry had the luxury of debating whether this was fair or not. Now, staring down the barrel of a Round 1 re-compete and a Round 2 that expands the program to 91 additional cities—not so much.

We haven’t heard a peep lately from any providers who think MPP isn’t a good idea. For the most part, I think AAHomecare got the unity it was pushing for.

Overall, what surprises me about this front page is how it really set the stage for 2012, a year that has been dominated by H.R. 6490, a bill that would replace competitive bidding with MPP; H.R. 4378, a bill that would create a separate benefit for complex rehab (of course, later on in 2012, a PMD demo requiring prior authorizations in seven states and attempts to create a clinical template would take over much of the industry’s attention); an Apria Healthcare-Humana preferred provider contract that got providers rethinking the importance of contracts and networks; and a good-sized acquisition (this year has to be some sort of record for those, both on the manufacturer and provider sides).

If my theory is true, looking at the December 2012 issue, some of the themes for next year will be MPP (can the industry get it done before Round 2 is scheduled to start July 2013?); more strenuous requirements, not only from Medicare but also private payers (especially in the growing sleep market); and providers doing what they do best (taking care of patients, come hell or high water).

by: Liz Beaulieu - Monday, November 12, 2012

Our HME Newspoll for the December issue takes a look at your net revenues for 2012—will they meet your expectations, will they be up or down for the year, how will they compare to last year?

We selected this topic for two reasons: 1.) With so few public companies in the HME industry, we thought this would be a god way to get a feel for the financial health of the industry; and 2.) it’s the end of year, so we thought it would be a good time to look back at 2012 and look forward at 2013.

So far, 59 providers have taken the poll, which is disappointing to say the least. (We grimace at any response below 100.)

But I hope more providers take the poll in the next two days (we kick the December issue out the door end of day on Tuesday), because what we are seeing so far is pretty interesting.

Here’s a peak at the results as of Monday morning:

Will your total net revenues for 2012 meet expectations?
Yes – 41%
No – 59%

How did your company perform this year compared to 2011?
Increased revenues – 37%
Decreased revenues – 43%
Stayed about the same – 20%

If revenues increased, by how much?
0-5% - 66%
6-10% - 20%
More than 10% - 14%

If revenues decreased, by how much?
0-5% - 68%
6-10% - 12%
More than 10% - 20%

What are your expectations for 2013?
Increased revenues – 37%
Decreased revenues – 37%
Stay about the same – 26%

I’m not going to deny that the fact that nearly 60% of respondents reporting that their net revenues for 2012 won’t meet expectations is pretty ugly, but 57% of respondents reported that their net revenues will increase or stay the same this year compared to last year. That’s a majority, albeit a slight one.

Also, for those providers who reported that they’re net revenues will decrease in 2012, 68% reported that they will decrease by only 0-5%.

Finally, 63% of respondents reported that they expect revenues to increase or stay the same in 2013. That’s an even healthier majority. And that’s in a year that the industry expects CMS to roll out Round 2 of competitive bidding in 91 cities.

With the U.S. economy, in general, having a tough year, I’d say the industry’s not doing all that bad.

Your thoughts? Chime in here.

by: Liz Beaulieu - Thursday, November 8, 2012

I love getting feedback from HME News readers, especially when they’re taking us to task.

I received an email this week from a reader who complained —very nicely, for the most part—that all of the most read stories in our Top 5 Respiratory for October were about CPAP and none were about oxygen. (We consider “respiratory” to cover both product categories.)

The reader wrote: “Could you possibly consider adding at least one non-CPAP story to the fold, as many of your readers provide more than just CPAP. We could use a story or two on O2 delivery models, innovative products and such articles that help us provide better outcomes to our oxygen patients.”

I had also noticed that all of the most read stories for October were about CPAP.

But when we pull the most read stories from Google Analytics, we don’t cherry pick. We literally go down the list of most read stories for the month and pick the stories that have to do with CPAP or oxygen.

For October, there were five stories about CPAP before we could get to any stories about oxygen.

I have several thoughts about this:

Does this happen often, or is this just an anomaly? (In the Top 5 Respiratory for September, there were three stories about CPAP and two about oxygen; in June, there were, again, three stories about CPAP and two about oxygen.)

Are there more CPAP stories in the past few months because of a major change to how providers provide supplies? (I bet when the 36-month cap went into effect for oxygen, there were stories about oxygen than CPAP.)

Are more providers talking about CPAP, because more of them are moving into that business or trying to grow the supply side of that business? (At least 75% of the stories we write, we get from talking to people with boots on the ground, not from press releases and the like.)

The reason I love getting feedback like this: Now I have oxygen on the brain. What are providers doing in this area? Like the reader mentioned, how are providers changing their delivery models, how are they improving outcomes? These are questions we’ll be asking when we make our cold calls for the January issue. (The December issue, believe it or not, is out the door early next week!)

In the meantime, two oxygen-related items that have been posted to our website in the past few weeks include this interview with Todd Anzalone at Inova Labs on competitive bidding fueling adoption for portable oxygen concentrators (POCs) and this interview with Bob McCoy of Valley Inspired Products on the changing business model for respiratory providers.

While I’m thankful for this reader’s feedback, I’m not thankful for how he closed his email:

“I know you pull this from a readership ranking but, darn, it looks like either someone on your editing staff is a former CPAP therapist or your selection is biased to your full page ResMed and Respironics advertisements.”

No, and no.

by: Liz Beaulieu - Friday, November 2, 2012

As I was listening to the Nov. 1 call about waivers for Medicare, Medicaid and CHIP providers in New York and New Jersey, I couldn’t help but wonder how this all worked out the last time we had a hurricane that caused this much damage.

Hurricane Katrina in 2005?

I made a few calls to industry stakeholders in Alabama and Mississippi, where that hurricane hit hardest. I left a lot of voice mail messages, but I was able to get Michael Hamilton, the executive director of the Alabama DME Association, on the line.

I asked him whether or not these waivers made a big difference for providers that, then during Katrina and now during Sandy, are working 24/7 to make sure their patients have the products and services they need.

Where the waivers came in handy, Hamilton said: They allowed providers to file claims without paperwork that’s usually required in advance; and they allowed providers to service patients that had relocated temporarily.

Other than that, not so much, he said.

“The process is so convoluted and complicated,” Hamilton said. “I’m not sure anyone thought it was worth it.”

At the end of the day, “most of the work was done for free or for cash,” he said.

Hamilton noted that President Barack Obama, during a speech following Hurricane Sandy, promised “No bureaucracy, no red tape” in the government’s response. That’s nice in theory, he said.

“Once they start reading the regulations and figuring out which apply and which don’t, things always get bogged down,” Hamilton said. “That’s the nature of a bureaucracy I guess.”

by: Liz Beaulieu - Tuesday, October 30, 2012

I had an interesting conversation with Bob McCoy this week. McCoy is a respiratory therapist (RT) and the managing director of Valley Inspired Products.

It turns out he’ll be giving a presentation at the AARC Congress 2012 next month in New Orleans about how RTs need to be identifying opportunities to provide value-added care in this challenging environment.

Sounds like your standard fare, right? Opportunities and challenging environment have to be three of the most frequently written words by the HME News team.

As we continued talking, however, I learned that McCoy has a different take on how he thinks these opportunities should play out, at least in the respiratory space.

Let me back up: I hear a lot from HME providers that if only lawmakers and government officials knew and understood the services they provided and the impact those services can have on patient care and outcomes, they wouldn’t be pulling the rug from underneath their feet all the time.

This is true.

But instead of trying so hard to fight the image that some lawmakers and government officials have about HME providers as drop-shippers, McCoy believes the industry should move on.

He explains:

“There’s going to be a model change. If we still have HME providers in the future, they’re going to be efficient UPS people. If you’re a typical HME provider and you’re still just doing the equipment model, you’re going to have to get real efficient at it. The models that are coming up spin off the service component. You spin off the service component, so it’s not bundled to the equipment, but it works in conjunction with your HME.”

McCoy says he’s putting his money where his mouth is with a new company called Valleyaire Respiratory Services dedicated to providing RT services to hospitals and healthcare systems to help them educate patients, improve outcomes and reduce re-admissions.

“They think hospital RTs are going to solve the problem, but it’s not going to work, because they don’t know the home,” he said. “The clinical issues and needs in the home haven’t been defined. There are no standardized procedures. There’s a wide-open opportunity to provide professional RT services in the home.”

As for reimbursement: McCoy has no problem with swapping Medicare reimbursement for hospital contracts, especially when he knows his services can help those hospitals save big money on patients with congestive heart failure and other chronic conditions.

“It’s the new frontier,” he said. “It has to happen.”

by: Liz Beaulieu - Friday, October 26, 2012

The amount of talk and activity around the market-pricing program (MPP) is really at a pitch and fever that I’ve never heard and seen before.

That’s a big deal.

I know I haven’t been around the HME industry as long as some of you, but I’ve been around long enough to remember the Hobson-Tanner bill, one of the first efforts to squash competitive bidding, which made the rounds in D.C. at least six years ago.

When it comes to the industry’s current efforts with MPP, I know there’s never too much talk and too much activity, but there was so much of it this week that we decided to do a separate roundup for our HME Newswire on Monday. (We posted it to the website today if you want to take an advance look.)

A few more things have come in post-press time, too, like another roundtable sponsored by a state association (MAMES), The VGM Group and PFQC to educate lawmakers on competitive bidding’s negative impact and on MPP as an appropriate solution.

Such as the way things are, MPP crept into a lot of the HME News TV interviews that we taped last week at Medtrade.

That’s why for the first three weeks in November, we’ll be playing interviews on HME News TV that focus on MPP and the industry’s efforts as part of an “MPP madness” special package:

Nov. 7: Tyler Wilson of AAHomecare, “Don’t leave any representative unapproached”

Nov. 14: Wayne Stanfield & Steve Ackerman, NAIMES, “Time to close the deal”

Nov. 21: Cara Bachenheimer, Invacare, “It’s crunch time”

In the days and weeks that follow, if you ever need some motivation to call your representative for the second, third or fourth time, watch one of these videos.

They’ll get you moving.

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