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On the Editor's Desk

by: Liz Beaulieu - Wednesday, October 24, 2012

As users of our HME Databank very well know, we still don’t have 2011 data for Provider Share (top providers) and Product Share (product utilization), and I’m profusely sorry about this.

Believe me, I’m as upset about it as the Databank users that I’ve been talking to on a weekly, if not daily, basis.

I mean, it’s almost 2013.


For what it’s worth, I made the request for this data in May, as I always have for the past several years. Typically, it takes the good folks at the PDAC (CMS’s Pricing, Data Analysis and Coding contractor) three months to fulfill the request, which allows us to update the Databank with new data late August/early September.

Not this year, apparently.

I’ve been calling the PDAC regularly since August to ask when we’ll get the data, and every time I’m told that my request is in QA (quality assurance). This week when I called, I asked: What’s taking so stinkin’ long?

I was told that the PDAC has seen a significant increase in the number of requests for data, that many of these requests have come from “stakeholders” and that said requests from “stakeholders” must be given priority.


(I feel the need to point out, here, that we pay the PDAC to fulfill these requests. They’re not free. In fact, for the requests we file for the Databank, we have to pay in full in advance due to the size of the requests. Can you imagine all transactions worked this way?)

When I was told that the request was still in QA, I didn’t have a clear enough mind (see second paragraph above where I talk about being upset) to ask the natural follow-up question: Who are these “stakeholders”?

CMS? The Office of Inspector General (OIG)? The Government Accountability Office (GAO)? We all know there’s an unsatiated appetite for data related to health care right now.

God forbid we go into late November/early December without the new data, but if we do, the good news is that the 2012 State of the Industry Report will be included in the December issue. This will have data on the top providers across product categories and utilization for some of the most popular DME, diabetes, infusion, respiratory and mobility codes.

In the meantime, bear with me.

The HME News team got back from Medtrade last night via what turned out to be a fairly bumpy airplane ride. I felt better knowing, though, that Jim Greatorex (Black Bear Medical) was on the plane.

After helping to put together two Show Dailies in 48 hours, I'm pretty worded out.

Sooo, this blog is going to be all about some of my favorite scenes from Medtrade, like:

A tete a tete between these two HME powerhouses, Mal Mixon and Van Miller (thank you Carolyn Cole for sharing!)

A man known as the grandfather of HME, Shelly Prial, listening to the industry's newest champion, Rep. Tom Price

An exhibitor, Sky Med, taking advantage of Halloween to decorate its booth

That there were scantily clad men

To go along with the scantily clad women.

And on that note, I'm out.

by: Liz Beaulieu - Tuesday, October 9, 2012

I feel like I should apologize to many of you in advance for being missing-in-action from the HME News booth (2928) at Medtrade next week.

You see, the HME News team will be putting together the Show Dailies, which means we’ll be running around chasing stories (by we, I mean me, Managing Editor Theresa Flaherty, Associate Editor Elizabeth Deprey and Web Editor Leif Kothe), taking photos (that’ll be Production/Creative Director Glen Halliday) and polling attendees for the question of the day (that’ll most likely be Elizabeth and Glen).

When we’re not doing that, we’ll be chained to a desk in the Show Daily office, writing, laying out and proofing Show Dailies 2 and 3.

So be sure to wave hello when you see us zipping from a session like AAHomecare’s Washington Update (Wednesday, Oct. 17, from 1:30 to 3 p.m.) to an event like the welcome reception hosted by MK Battery for the consumer advocacy organizations (Tuesday, Oct. 16, Room 315, from 8 to 9:30) to the show floor (We hear Sky Med, booth 2625, will be giving out Halloween treats).

In any event, the HME News booth will be in the capable hands of Heather My-First-Name-Isn’t-Kelly Kelly, not to mention our publisher Rick Rector and our sales reps Jo-Ellen Reed and Steven Loerch.

We’ll also be taping HME News TV interviews, which will be in the capable hands of Jennifer Keirn, our contributing editor, and Shaun Clearie, our videographer. The TV studio will be at the top of the last set of escalators that you take to get down to the show floor. This year, we’re interviewing some new faces (Stephen Hodges from HME Solution) and some dynamic duos (not just Andrea Stark, but Andrea Stark and Derrick Stark).

Your best bet at finding me, Theresa, Elizabeth or Leif at the booth is on Thursday morning, when Show Daily 3 will be hot off the presses and that part of our Medtrade duties will be O-V-A.

See you next week (I hope)!

by: Liz Beaulieu - Monday, October 1, 2012

I don’t know about you, but I always have a mental checklist of things I need to worry about in my life.

This checklist runs from the mundane (did I lock the door when I left the house this morning?) to the more serious (will I get Chrone’s disease like my dad)?

I have a problem, I know.

What’s worse: I also have a mental checklist of things I need to worry about in the HME industry. I tend to think of this list more frequently on Friday afternoons—that’s when I fear those late announcements from CMS.

There are obvious things on my list right now:

What are the Round 2 single payment amounts (See note above about late announcements)?

But there are other things, too:

What’s the CBO score for H.R. 6490?

Will HME be exempted from the medical device tax?

Who will replace Phil Carter at Rotech Healthcare?

How am I going to get earnings data for Lincare now that it’s owned by Linde?

This one will be appreciated by those of you who subscribe to our HME Databank:

When will I get the 2011 data for top providers and top products? (For what it’s worth, I made my request to the PDAC at the same time I always do.)

The list goes on.

After covering the HME industry for going on eight years now, it’s more a part of my psyche than I’d like to admit—not as much as yours, perhaps, but a part nonetheless.

Let me know if there’s anything huge that I should add to my list.

by: Liz Beaulieu - Tuesday, September 25, 2012

Now that there’s a bill on the books in the House of Representatives for the industry’s market-pricing program (pop in H.R. 6490 here), it’s worth a few minutes to step back from all the hoopla (this is a big deal, after all) and review what it is you’re fighting for.

The summary below was included in email bulletins from AAHomecare, VGM and other groups this week, but I thought it was worth reprinting here in the event that you don’t belong to AAHomecare, VGM or other groups (which I frown upon highly, by the way) or in the event that said email bulletins got lost in your inbox (something that happens to me more and more frequently).

You’ll want to have this summary in hand when you lobby your members in the House to co-sponsor the bill and your members in the Senate to introduce a companion bill.

There’s enough ammunition here to put you on very firm ground with even the current program’s biggest proponents (Sen. Max Baucus, D-Mont., I’m talking about you).

I’ve heard the phrase “This is our time” used quite a bit in recent days to describe the industry’s position—not only in the fight to revise the current program, but also in the fight to make sure it plays a pivotal role in healthcare reform going forward.

You know what I like to say about time? Use it or lose it.

The Medicare DMEPOS Market Pricing Program Act of 2012


This legislation would replace the current Medicare DMEPOS competitive bidding program with a sustainable market pricing program (MPP) that is based upon sound economic principles that are embraced universally by auction experts across the country. The market pricing program would be implemented on the same timetable and apply to the same DMEPOS product categories as the current program, and it will reduce government spending for DMEPOS items nationwide. It is intended to be at least budget-neutral.

Bill Summary

Stop the Current Program

* The Round One rebid Medicare DME competitive bidding contracts and prices will continue through June 30, 2013, and then terminate (six months early), when the MPP pricing will take effect.

* In the nine Round 1 Rebid areas, the Secretary shall offer contracts to DMEPOS suppliers that submitted a bid for one or more of the Round One product categories, but whose bid(s) were rejected solely because of price considerations. Those bidders who accept a contract must accept the single payment amount in effect for the particular product category(s).

* The Secretary will take no further action to implement Round Two in the 91 new bid areas under the current competitive bidding program.

Establishment of the DMEPOS Market Pricing Program (MPP)

Use of Experts to Design and Monitor the MPP

* The Secretary shall, within two months of enactment, contract through a competitive process with an Auction Expert for the design and implementation of the MPP, and separately, also through a competitive process, contract with an expert to serve as Market Monitor for the MPP.

* Both the Auction Expert and Market Monitor may not be a current government employee, a current or former CMS employee, or a current or former CMS contractor involved in the competitive bidding programs undertaken to date by CMS.

* Both the Auction Expert and Market Monitor must have successful experience designing and implementing auctions of similar complexity in the public sector.

* The Secretary shall make available to the Auction Expert and Market Monitor all confidential information on the relevant markets.

* The Secretary and Auction Expert are required to operate the MPP with full transparency and to post on a public Internet site operated by the Secretary all information pertinent to the MPP.


* Within two months of appointment, the Auction Expert shall develop a draft auction design as the starting point for the collaborative rulemaking process.

* Within four months of appointment, the Secretary and Auction Expert shall convene a design conference to include all stakeholders, including CMS and other federal personnel, DMEPOS suppliers, beneficiaries and the DMEPOS competitive bidding Program Advisory and Oversight Committee (PAOC). The conference shall be recorded and available over the Internet.

* Within three months following the design conference, the Secretary and Auction Expert will publish the final MPP design, which, to assure transparency, shall include all financial and other qualifications for bidders, the eligible market areas and product categories to be auctioned, the protocols and timing for the conduct of the auction, the methodology by which prices will be set for the non-lead products within a product category, the methodology by which an auction price will be transferred to the same product in an economically similar eligible area in which no auction for that product was held, and an appeals process to protect suppliers.


* The auctions will commence no later than March 1, 2013.

* The auctions will consist of multiple rounds of bidding (descending price), concluding when supply (from DMEPOS providers) meets demand (expected utilization) and thereby establishing the clearing price.

* A cash deposit or irrevocable letter of credit bid bond, in an amount determined by the Secretary and Auction Expert, is required for a bidder to be qualified to participate. These deposits are returned to unsuccessful bidders and retained for the successful bidders as a guarantee of performance on the contract.

Implementation of the MPP by July 1, 2013

* MPP prices determined through the auction will be effective July 1, 2013, for all areas of the country not excluded by current law.

* The Secretary and Auction Expert will select a sufficient sampling of market areas for auction that will establish valid nationwide prices.

         •The first auction will cover a sample of at least 20 percent of the country and include a variety of geographic and socio-economic areas. Succeeding annual auctions to cover a sample of at least 10 percent of the country.

 Product Categories to Be Auctioned

* Same as in current program: oxygen, standard power wheelchairs, manual wheelchairs, enteral nutrients, CPAP, hospital beds, walkers, diabetic supplies, negative pressure wound therapy and support surfaces (Group 2).

* Secretary retains current authority to compete additional categories.

* Secretary is precluded from including in MPP adjustable skin protection cushions for wheelchairs, complex rehabilitative power wheelchairs and complex manual wheelchairs (HCPCS K0005 and E1161).

* No more than two product categories may be auctioned for exclusive contracts in any one market area (defined as a city/county/aggregation of counties).

* Any qualified and willing supplier may provide non-auctioned categories in market areas at the clearing price as determined from auctions in other market areas via MPP.

Price Determination

* A "lead product" is determined for each of the product categories.

* Other products are proportionately referenced (in terms of price) to the lead product price through a process designed by the Auction Expert with input from stakeholders.

* The "lead product" is auctioned (descending price) until supply (providers' capacity) equals demand (expected utilization).

* At this point, the "clearing price" is determined and all remaining bidders are offered, and must accept, a contract at this price.

* The Secretary and Auction Expert, using an econometric model developed from the auction process, which spans a full range of geographic and socio-economic factors nationwide, determine and announce prices for all market areas not specifically excluded from MPP.

* Prices are effective July 1, 2013, and each July 1 of succeeding years for all areas not under the two-year exclusive contracts. This process annually adjusts prices to reflect true costs and rewards the most efficient providers.

* Successful bidders (i.e. those whose bids are below the clearing price) will be offered a two year contract for that market area, and these suppliers must accept and perform the contract.

Bidding Requirements

* All bidders must provide a cash deposit or irrevocable letter of credit (LOC) from a qualified institution as a bid guarantee of good faith and ability to perform. This bond will be retained as a performance guarantee for winners and returned for unsuccessful bidders.

* The capacity of each bidder will be determined based upon the bidder's historical supply. Any new-to-the-market-area or new (start-up) suppliers having no historical supply will be assigned a standard base capacity of one percent market share.

Miscellaneous MPP Provisions

* A product-specific grandfathering period may be set by the Secretary on the recommendation of the Auction Expert with oversight of the Market Monitor, with qualified suppliers to furnish products under contract in market areas.

* Small businesses are defined as $3.5 million or less in annual revenues and shall represent at least 30 percent of total capacity in each market area.

Role and Responsibilities of the Market Monitor

* Reporting to the Secretary, the Market Monitor evaluates and reports on the design, implementation and functioning of MPP for the purpose of identifying weaknesses or problems and recommending adjustments and changes.

* The Secretary shall provide the Market Monitor with access to all confidential information on the relevant markets.

* The Market Monitor shall review and report on the draft and final auction designs and participate in and report on the designs and design conference.

* The Market Monitor shall monitor supplier performance and beneficiary experience to ensure supplier compliance with standards established in the MPP and beneficiary access to quality products and services and shall provide regular reports to the Secretary on the these matters and the overall operation of MPP.

* The Market Monitor shall provide an annual report to Congress on the development and operation of the MPP process, identifying potential problems and recommending solutions.

Other Provisions

* The PAOC is made permanent, subject to the Federal Advisory Committee Act (FACA), and terms of PAOC members extended for an additional 3 years.

* Negative Pressure Wound Therapy-Standards will be collaboratively developed in consultation with the stakeholders as part of a new appendix to the Medicare DMEPOS Quality Standards.

by: Liz Beaulieu - Friday, September 21, 2012

I just finished a wrap-up of the HME News Business Summit for the Newswire, but there’s still more I want to share.

It was that kind of event.

I mean, it was great to be in an environment with providers where they had the opportunity to learn from experts (about everything from healthcare reform to private equity to retail), brainstorm with their peers in small groups (on generating revenues, cutting costs and managing employee) and chatting up those experts and those peers on a river cruise and during a baseball game.

For me, there were so many ah-ha moments.

Here are a few from my notebook:

Speaker Ryan McDevitt spoke of an experiment he conducted with his internal marketing team. He took half of his team and gave them a 1-hour training presentation on how to sell supplies for CPAPs. He did not give the presentation to the other half of his team. These employees had the same opportunity for sale, the same work experience, and the same personality profile. Know what happened? The employees who received the training presentation made four times the number of sales. Still think training is something you can do only if you have time?

I really need to find out more about patient centered medical homes, which was mentioned during more than one session.

Speaker Everette James made it pretty clear that the HME industry has a long way to go toward having the data it needs about its cost effectiveness to change the minds of government officials who appropriate funds. As director of the Pitt Health Policy Institute, he’s interested in helping the industry find out how to do that.

Speaker Mindy Thompson-Banko told attendees that a woman who has a mastectomy spends about $400 a year on miscellaneous things like recovery camisoles—and they’re paid for in cash.

What happened to ActivStyle after it was acquired by a private equity firm? Speaker Jack Nestor said it went from generating $14 million in revenues and servicing half a dozen states to generating $55 million in revenues and servicing more than 40 states. How? Through organic growth, a direct response TV ad and four bolt-on acquisitions, including a catheter provider.

The PE panel discussed where a company has to be to attract interest. David Sturdee: $8 million to $9 million in EBITDA; Jack Nestor: $1 million to $5 million in EBITDA; Michael Holloway: $1.5 million to $2 million EBITDA.

I could go on.

If you attended the Summit, I hope your notebook is just as full.

by: Liz Beaulieu - Thursday, September 13, 2012

This afternoon, I had the pleasure of participating in HME Voice, the industry’s talk radio show. (And anyone who knows me knows it’s a big deal for me to say it was a pleasure. I’m a print journalist for a reason, people.)

The show, co-hosted by Emerge’s Mike Sperduti and Medtrade’s Kevin Gaffney, featured a news update from yours truly (I gave a sneak peek of the October issue) and several interviews, including one with Invacare’s Mal Mixon.

Mixon has so much insight on the industry—where it has been, where it is right now and where it is headed—so it’s always worthwhile to hear him speak.

This time was no different. He talked about Round 2 of competitive bidding (“Our customers are scared. It’s important that they deal with it and think about what’s going to happen to their businesses, so they can plan for it now”) and the market-pricing program (“We have a very good chance of moving forward”).

About where the industry is headed, Mixon said: “Before this is all over, we will be treated fairly. Maybe I’m overly optimistic, but that’s how I’m feeling.”

Mixon also talked about his desire to age at home (“I sure hope I don’t end up in an institution. I want to be near my pet and family, and in my home”) and what he’s learned over the years (“The one thing (Vietnam) did for me was to make me very calm and more resolute, and less likely to be rattled. People today get upset about the damnest things. I can tell you there are things to worry about and things not to worry about).

Talk about an HME Voice.

by: Liz Beaulieu - Tuesday, September 11, 2012

The HME News Business Summit takes place next week in Pittsburgh, so I thought I’d steal Liz’s blog to tell you a few reasons why I’m so excited about this year’s event.

First, the program is outstanding. Liz has outdone herself in identifying presenters who can provide solid information, along with new perspectives on our industry and how to be successful in it. Most of these speakers don’t appear anywhere else and for those that do, well, you probably heard them here first, so you know how valuable their presentations will be.

Second, we have a unique opportunity, made available by Philips Respironics, to visit their new manufacturing facility just outside of the city. I visited this plant right after it opened and I was mighty impressed. It’s state of the art in every way. I was delighted when they offered to open their plant for a tour as part of the Summit this year. If you haven’t signed up for the tour, please do so right away here. Philips has planned quite an event and will even provide transportation from there to the airport so you can go directly to your flight if you want. You won’t be disappointed.

Finally, the Pirates are just under .500 as I write this, 8-2 for their last 10 games. If they win more than half their games this season, it’ll break a 19-year losing streak. Wouldn’t it be great to say you were in the park during the Pirates first winning season in 19 years?

I hope you’ll join us and I look forward to seeing you in Pittsburgh!

Rick Rector, publisher, HME News

by: Liz Beaulieu - Wednesday, September 5, 2012

Over the weekend, I was on a boat anchored in Chandler’s Cove in Casco Bay Harbor when I picked up the latest issue of The New Yorker and read a profile of Scooter Braun, the guy who found and now manages Justin Bieber. (It was a 17-and-a-half-foot, center-console fishing boat lest you get any ideas of grandeur.)

I’m not a Bieber fan. I don’t even think I’ve ever heard one of his songs, let alone smelled his perfume. (It’s called “Someday.”)

But there’s one thing you need to know about The New Yorker: Its writers find a way to make almost anything interesting. (I still have fond memories of “They’re in the river,” an article by John McPhee about shad fishing. I mean, shad fishing?)

This profile of Braun was no exception. He has an interesting story: He went to Emory University in Atlanta to play Division 3 basketball but he quit the team and dropped out of college after he successfully launched a career for himself, first as a party planner, then as a head of marketing of a major record label. Now he manages Bieber, who rakes in a reported $50 million per year, and has a house in the Hollywood Hills.

But the article became even more interesting when I started making some parallels between the music industry and the HME industry, both of which are beleaguered, to say the least.

This pretty much sums up the state of affairs: A few years ago, when Braun met David Geffen, a famous record executive, Geffen told him, “Get out of the music business.”

Braun took Geffen’s advice seriously, but he didn’t get out of the music business. He changed the way he looked at the music business. He diversified into publishing, TV and film (Did a daughter or niece drag you to see “Never Say Never,” the 3-D concert film featuring Bieber?). He leveraged social media like Twitter and Facebook, and video-sharing websites like YouTube to further the careers of Bieber and new artists like Carly Rae Jepsen (Her “Call Me Maybe” has been dubbed the song of the summer).

“This isn’t a dying business, this is a changing business,” Braun told The New Yorker.

One could very much say the same thing about the HME business.

by: Liz Beaulieu - Tuesday, September 4, 2012

It’s appropriate that this year’s HME News Business Summit is in Pittsburgh. This city, once dominated by steel mills, now has an economy largely based on healthcare, education, technology and financial services. Like Pittsburgh, the HME industry needs to reinvent itself.

Competitive bidding is forcing providers to make changes to their business plans, and healthcare reform is forcing them to rethink their overall role in the care continuum. Providers can no longer do what they’ve always done, the same way they’ve always done them.

Fortunately, Pittsburgh is also home to the University of Pittsburgh, which has a strong academic presence in medicine and health and rehabilitation services. It’s the perfect backdrop for a frank discussion about where the HME industry goes from here.

At this year’s Summit, you’ll pick up an idea or two or 10 on how to make changes to your businesses and how to rethink your role. Want to add retail but want to take a scientific, data-driven approach to cash sales? Want to acquire another company to add economies of scale but don’t know how? Want to help hospitals reduce their readmission rates but feel overwhelmed by the process?

You’ll find guidance on this and much more from experts and your peers—all at the Summit.

It’s our goal to send you home feeling excited about opportunity rather than blinded by challenge.

Thanks, in advance, for joining us!