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by: Liz Beaulieu - Friday, March 23, 2012

Vince Crew, a familiar and friendly face at HME conferences for 15 years, has decided to take his consulting company, Reach Development, in a new direction by working with other healthcare companies like hospitals. Here’s what Crew had to say in an “exit interview” with HME News this week.

HME News: What’s one thing that you have witnessed in the HME industry in the past 15 years that sticks out in your mind?

Vince Crew: It’s the only industry I know of that, the better they’ve gotten, the less money they make. There have been more and more demands on HME providers to raise the bar—get accredited, make more investments, get leaner, do more strategic planning, hire better, deliver better service. Do all of that and, by the way, you’re going to make less money and your cash flow is going to stink. It’s just so sad.

HME: It’s been a struggle for providers.

Crew: It has. But is there a future? Yeah, there are good days ahead. Every industry has gone through this—the automakers, the banks.

HME: Where should providers be focusing their attention to get through it all?

Crew: My mentor, Shelly Prial, the godfather of HME, was preaching about retail sales 15 years ago. The future is retail sales. The future is collaboration with others to get some synergies going, whether that’s working with other providers with tangential services or looking at M&A. The future is no longer, “I’m an independent and proud of it.” The days of being a lone wolf are gone.

HME: Where has the HME industry made the biggest strides in the past 15 years?

Crew: I’ve seen HME providers become better business people. Accreditation was just a thorn in the side of so many providers and yet it was all about bringing solid business, strategic, operational and ethical stuff into companies that needed it. Sure, a lot of providers were delivering those things already, but it still raised the bar.

HME: In what kind of state do you leave the HME industry?

Crew: One of the best things that has happened to me at every HME conference I’ve ever spoken at: I see all these young people in the crowd. You know, the industry isn’t in trouble as long as you see those young people in the crowd. We just need to find better business models to give these young people a chance to come in and do what they want to do, which is to help people stay in their homes.

Liz Beaulieu

Tags:
On The Editor's Desk, retail, Retail, Vince Crew, future
by: Liz Beaulieu - Tuesday, March 20, 2012

We're starting to report on our May issue this week, so I've been talking to a lot of folks, digging around for story ideas. Competitive bidding, of course, is top of mind for most folks. (Except, perhaps, one stakeholder in Ohio, who, at the moment, is enjoying serving several rural areas that are not part of Round 1 or 2.)

With the bid window for Round 2 closing next week, on March 31, I've  had some interesting conversations with folks about what the single payment amounts will be this time around. I'm sure I don't have to remind you that they were, on average, 32% below the current fee schedule amounts for Round 1.

One stakeholder and I were thinking positively that maybe the payment amounts for Round 1 will come in at a more reasonable reduction, say 15%, proving to CMS, Congress and whomever else that the payment amounts that came out of Round 1 were the result of a bad cocktail of 1.) a new way of doing business, 2.) providers not knowing what they were doing and 3) no one realizing the consequences of their actions.

With more than a year of Round 1 under the industry's belt, this stakeholder and I, again thinking positively, talked about how this can't possibly happen again.

But then I talked to another stakeholder who made a good point: If you're dealing with the same program (the one mentioned above that  guarantees failure thanks to, among many other things, using non-binding bids and a median price), how can the outcome be any different?

Thinking negatively, how can the outcome not be worse?

And this, my friends, is why the industry's alternative to competitive bidding, the market-pricing program (MPP), needs to be, and from what I can tell is, the industry's No. 1 priority.

We've been writing stories about MPP since, at least, last fall, but the good folks at People for Quality Choice (PFQC) recently sent me an article about the alternative to competitive bidding that spells everything out clearly and concisely. Consider it CliffsNotes for those tough conversations you're having with lawmakers.

Liz Beaulieu

Don’t know what to say about MPP?

By Beth Cox

As we reach the one-year anniversary of pushing H.R. 1041 to eliminate competitive bidding, we now need all of our allies to include the Market Pricing Program (MPP) in their conversations to Congress. Whether you have a strong understanding of MPP or haven’t yet grasped the concepts, it’s important to communicate how the proposed program will promote better access to quality equipment and service. Speaking out at every opportunity has the potential to multiply one conversation by thousands.

The challenge is in what to say about MPP. What is MPP? While we can fight for support for H.R. 1041, which would repeal the legislation that enacted the competitive bidding program, members of Congress are always looking for a more realistic approach. “Yeah, we understand this program is bad, but how can we fix it while keeping cost in mind,” they ask.

Given this charge, the homecare industry went to work to develop a program that would still cut costs for Medicare, while doing a better job of protecting the beneficiary option to choose the equipment provider who serves them the best. This will keep more providers open for business with more product variety and focus on customer service.

We’re asking for all of those who contact Congress asking for the repeal of the competitive bidding program to mention the program as a viable alternative. Is it really a viable alternative that will help beneficiaries while maintaining a stable medical equipment industry as a service to the elderly and disabled? The answer is yes. Here are three talking points to explain:

Providers who won the bid must provide you products

The initial auction process to determine who can supply home medical equipment and oxygen to beneficiaries is an extremely complicated process that has been denounced by 244 economists as a flawed method of doing business. One of its greatest flaws is that a provider who wins a bid to supply a certain product and service is not bound to actually provide that service. In other words, the existing competitive bidding rules do not require a bid-winning provider to stick with the business. This is the primary reason we saw ridiculously low bids for some areas during Round 1.

PFQC received many complaints from beneficiaries in competitive bidding areas who could not find a Medicare-approved provider to serve them. Part of the problem was that some bid-winning providers were not fulfilling their contracts, leaving few providers to serve many beneficiaries. MPP will put an end to that by requiring providers to fulfill their contracts. This is good news for beneficiaries and providers.

Under MPP, your local provider can stay in business

It’s evident all over the country that Medicare’s competitive bidding program is detrimental to homecare providers. Who has been hit the hardest? Your local, community-based home medical equipment providers who have served their communities quite well for many years are being forced to close. There is a valid argument out there that local is better, and we believe that to be true. Local providers have strong ties to their community, making service personal and business reputation a big deal.

In the current auction process, bid winners are located all over the country. Every major home medical equipment product category is bid on in each major metropolitan area, with limited bid winners for each product. As a result, beneficiaries and clinicians might be forced to call up to five providers for the multiple products needed.

Under MPP, only two product categories are bid per metropolitan area. The remaining products will adopt the price submitted by bid winners in other areas of equal size, keeping costs low. However, all providers who are Medicare-certified will have the opportunity to sell and service the remaining products to beneficiaries. This means your provider will maintain the opportunity to serve you many products and get to compete based on quality service. You will maintain the choice to stay with your local provider or have the choice to find a new one. After all, you, your caregivers and doctors should be the ones to choose what equipment is best for you, not a Washington bureaucracy.

Prices make more sense

Everyone is in agreement that this is a time to save money, while maintaining quality products and service as an option for beneficiaries. This is why the homecare industry offers MPP as a solution to the Medicare competitive bidding problem.

But setting prices must be fair for all involved. Just like the cost of a gallon of milk in Denton, Texas, will vary from the cost of gallon in New York City, the cost of medical equipment varies by region. MPP program will do a better job of accommodating variations throughout the country, so that smaller communities are not charged the price of equipment in big cities.

Beth Cox is the communications and marketing specialist for People For Quality Care, the advocacy division of The VGM Group. Reach her at beth.cox@peopleforqualitycare.org or 888-544-7913.

Tags:
competitive bidding, market pricing program, On The Editor's Desk, MPP
by: Liz Beaulieu - Friday, March 16, 2012

It didn’t surprise HME consultant Karen Moore when Rotech Healthcare announced this week, as part of its latest financial earnings, that its bad debt was too high and that it would fight to get it under control.

Moore, vice president of AnCor Healthcare Consulting, says many HME providers are looking to reduce bad debt as a way to make up for lost revenue.

“With all the decreases in reimbursement, that’s where you can do some picking up,” she said. “The industry standard is 3% but a lot of companies are running as high as 6% to 8%. If you can reduce that and put it directly to your bottom line, that’s major.”

Rotech reported contractual and bad debt adjustment levels of $6 million higher than expected for the fourth quarter. That’s on top of a $17.8 million reduction in net revenue due to various reimbursement cuts last year.

Before providers get too excited about boosting their bottom lines, though, Moore says reducing bad debt isn’t always easy.

“Everyone wants a simple answer, but I’ve been in the HME industry for 20 years, and there’s no simple answer,” she said. “It’s almost 100 small things.”

Some of those “small things”: Making sure you hold employees accountable for their quality of work and productivity, and making sure you have systems in place to collect co-pays and other secondary payments upfront, Moore says.

About the latter, Moore says: “The clinics in hospitals are getting a lot smarter about this. I’ve read where some clinics, if you don’t give them insurance, they request a fairly larger retainer amount before they’ll even see you.”

Reducing bad debt also takes time—three months if a provider’s company is in fairly good shape, at least six months if it’s not, Moore says.

“If it’s an ideal situation and you have a team of well trained and well managed employees in place, and you just need tweaks and processes and controls, then you can see results in a few months,” she said.

Liz Beaulieu

Tags:
On The Editor's Desk, rotech, Rotech, bad debt, financials
by: Liz Beaulieu - Tuesday, March 13, 2012

Last week, we kicked off our new schedule of HME New TV interviews for the next two months. This round of interviews covers a pretty wide range of topics. I'm pretty sure there's something here for everyone.

Win or lose at competitive bidding, you're scrutinizing your operations, right? Tune in right now for Miriam Lieber of Lieber Consulting on "Change your attitude about operational efficiency."

Wondering how much money you'll save with a modern software platform? Tune in tomorrow for Jana Macon of Brightree on "The new math: Let automation multiply your efforts."

Looking for a way to rejuvenate your sales team? Tune in March 21 for Michael Sperduti of Emerge Sales on "Sales reps: Try the French-fry close," and April 25 for Eric Kline of HME SalesPro for "Sales reps: Build a reputation by listening."

Considering retail and want tips from a colleague who's a pro? Tune in on March 28 for Jim Greatorex of Black Bear Medical for "Consider everyone who walks through the door a retail transaction."

Scrambling to deal with an audit? Tune in April 4 for Stephanie Morgan Greene of The Audit Team for "When you get hit with an audit, stay away from extremes."

And there's more: Tune in April 11 for Sarah Hanna of ECS Billing & Consulting for "Teach delivery techs their impact on revenue cycle"; and April 18 for Tom Hopkins of Wright & Filippis for "Cut costs with propane autogas fueled vehicles."

Happy viewing!

Liz Beaulieu

Tags:
HME News TV, On The Editor's Desk, operations, retail, Retail, sales, software
by: Liz Beaulieu - Wednesday, March 7, 2012

I've been talking to a lot of HME providers in the past few weeks about our HME News Business Summit. In a nutshell, I've been asking them: What do you want to know more about?

One provider summed it up pretty succinctly this way:

1.) What are new sources of revenue (mainly new sources of revenue that have nothing to do with the product categories included in competitive bidding)?

2.) How can I improve efficiency (win or lose in competitive bidding, you're going to have to make due with significantly less reimbursement)?

3.) What are some strategies for managing growth (as Kyle Miko at VirtuOx told me recently of a series of steep cuts to Medicare reimbursement for overnight oximetry: "The first thing we did was to grow through it.")?

Notice that, while it may be the driving force behind this list, competitive bidding isn't, technically, on the list.

I like that.

Granted, it has a little something to do with timing. When the Summit takes place Sept. 18-20 in Pittsburgh, providers in Round 2 will have submitted their bids, and they'll all be waiting for CMS to announce the single payment amounts and to begin the contracting process.

In other words, they'll all be in limbo land.

So, meanwhile, at the Summit, we'll be getting down to the business of running a business. That's always been our MO, whether the industry is facing inherent reasonableness (remember that?), competitive bidding or the next short-sighted and ill-designed savings scheme.

I'm still in the beginning stages of programming the Summit, but I'm keeping this provider's list in the back of mind. I'm happy to report that the sessions that I do have set meet one or more of the items on the list.

More to come.

Liz Beaulieu

Tags:
competitive bidding, efficiency, growth, HME News Business Summit, On The Editor's Desk, new sources of revenue
by: Liz Beaulieu - Thursday, March 1, 2012

We get emails all the time from HME providers and other stakeholders pointing stuff out. These emails often sit in my inbox for some time. They're interesting and noteworthy, but there's no way we can write stories about them all.

So in an effort to clean out my inbox (a great activity when you're working at home because it's blizzarding outside and you're avoiding programming the HME News Business Summit), I'm going to share a few of them with you here.

Former provider Dominic Rotella recently pointed out to me that the government is being a bit of a hypocrite in its crackdown on healthcare fraud. You remember Rotella, right? He fought an audit and won and is now suing TriCenturion, the CMS contractor that conducted the audit, for $10 million in damages. Rotella shared two announcements related to the government's healthcare fraud efforts.

The first: The government announced recovering $4.1 billion in improper payments to Medicare providers in fiscal year 2011. The release on this big news had "fraud and abuse" stamped all over it.

The second: The government announced plans to save $370 million this year, and more over time, from improper payments to Medicare Advantage plans. The release on this big news had "problem" stamped all over it, even though it was estimated to be a $12 billion "problem" in 2011 alone.

Note the difference in how the government views Medicare providers and private health plans? As Rotella points out, Medicare providers being paid improperly is "fraud and abuse"; private health plans being paid improperly is "a problem."

Another provider pointed out a comment made by Dr. Doran Edwards on a discussion board for a LinkedIn group. You remember Edwards, right? He's a consultant and former CMS medical director. He wrote:

Round Two absolutely must happen. Law requires the successful launch of two rounds of competitive bidding. Then the Secretary has the authority to apply an across the board cut to all DMEPOS in which significant savings may be realized. By presidential mandate, competitive bidding for all HCPCS codes and across the US and all territories must be completed by 2016. With the mid-2013 launch of Round Two, there will not be sufficient time for subsequent rounds. So it appears that the present process will result in a successful launch of Round Two, a short period of experience and then a determination of a percentage of savings. A rollout to all locations and the majority of HCPCS Level II codes will follow. Various estimates abound but most frequently heard is the figure that about 50% of the current suppliers will be eliminated or forced out of business. As time progresses, the results of healthcare reform, competitive bidding, ACOs and a host of other changes will become clearer. Wise use of resources, business sense and commitment to this segment of patient care will be required for the winners to survive and maybe even thrive.

The provider wrote that he thought the most telling part of Edwards' comment was that competitive bidding will result in 50% of providers being eliminated. He sees that as proof that part of the government's goal with the program is job loss.

To me, the most telling part of Edwards' comment was the rallying call to providers for "wise use of resources, business sense and commitment to this segment." He sees that, and I see that, as keys to surviving competitive bidding.

Liz Beaulieu

Tags:
competitive bidding, On The Editor's Desk, healthcare fraud
by: Liz Beaulieu - Friday, February 24, 2012

Ahhhh, when I was much younger and writing my "Wheels in Motion" blog about all things mobility, I'd often post something fun on Fridays.

You know, something about a wheelchair that could be controlled with your eyes.

Now that I'm older and writing this "On the Editor's Desk" blog, I feel like I've been writing about more mature topics, like competitive bidding and FDA negotiations and layoffs.

(There's an occasional anomaly, like this "rock star" post on the HME Excellence Awards.)

But Managing Editor Theresa sent me a link to this story this week about a brother-and-sister team who have developed O2ool (pronounced: otool), a device that holds a nasal cannula oxygen tube in the mouth or on the nose for delivery of oxygen.

They're part of a "Shark Tank" like contest hosted by the University of Northern Colorado to win $36,000 in seed money to build a business around their product.

One of their competitors: A man who uses an old-fashioned cider press to process apples collected from neighbors' apple trees and produce Branch Out Cider.

There are three other finalists, too, but my bet's on O2ool.

Here's why: Lincare has already picked it up.

Liz Beaulieu

Tags:
On The Editor's Desk, entrepreneur, new product, contest
by: Liz Beaulieu - Wednesday, February 22, 2012

Reading and reviewing the HR Special Report this week, I had an epiphany. I hope it won’t be an epiphany for you, but it sure was for me.

Managing employees, I’ve learned, is mostly about what you can do for your employees, not about what they can do for you.

This is a theme that runs through many of the articles in this special report.

Contributor Ana McGary, president of PeopleFirst Enterprises, says one of the biggest mistakes that she sees small- and mid-sized companies make is not continually demonstrating to employees the value of working for them.

Contributor Mike Sperduti, president and CEO of Emerge Sales, shares a mantra his mentor shared with him: “The best way to win in business is to make sure your employees are the best and highest paid in their industry.”

But it’s not just about demonstrating your value or paying your employees above-average wages.

As contributors Carrie Robinson and Lisa Wells point out it’s also about the little things, like accommodating flexible work schedules and relaxing your business casual dress code to allow for warmer and more comfortable clothing during winter months. Carrie is an HR consultant, and Lisa is director of marketing for UroMed.

In fact, contributor Erika Feinberg says that keeping employees satisfied is such a big part of her job that her official title at ActiveForever is not only CEO but also Chief Happiness Officer.

Of course, the beauty, here, is that if you do all you can for employees, they will do all they can for you, and the rest is a business success story.

Our HR  Special Report will be posted to our website soon. Stay tuned!

Liz Beaulieu

Tags:
human resources, On The Editor's Desk
by: Liz Beaulieu - Friday, February 17, 2012

Ever since Prof. Peter Cramton came out with an analysis of Medicare data that showed a 60% to 80% drop in the number of claims for HME in Round 1 competitive bidding areas, I've been wondering: How is that possible? I mean, 80%?!?!

It turns out it is possible, and there are a myriad of reasons why, the least of which is—ahem, CMS— a reduction in fraud and abuse. If you want proof that competitive bidding has made a mess of the DME benefit, read on.

Unsolicited, several providers emailed me reasons why they think the number of claims have fallen off a cliff in bid areas.

One provider emailed me these reasons:

  • Contracted suppliers not able to get documentation/CMNs/written orders are delivering items but not submitting claims. This would be because the incumbent DME supplier had a good relationship with "the person" that got all the documentation before and the contracted suppliers have no relationship with the referring physician's office.
  • Suppliers aren't "making" orders "happen." Example: A contracted supplier gets an order for a PWC but all the required elements are not present. The contracted supplier employs fewer "sales" staff than before (getting paid less, someone had to go) so rather than sending a person to the doc's office, they send a fax or make a call. The doc's office sends some more stuff over but not enough to qualify the patient. The contracted supplier's business is up 30% (in units) so they do not chase orders as hard and the beneficiary never gets the PWC.
  • Referral sources have long wait times and are either not ordering products or suggesting patients "find it on their own." For example, a doc used to "arrange" orders for oxygen by calling the DME provider, getting saturations over to the DME provider, etc. But the two DME providers they used to use are not contracted. So now the doc hands the beneficiary a 4"x4" script and tells them to go to www.medicare.gov and find a supplier. Which never happens.

Another provider, John Reed, formerly of Pro2 Respiratory and now of Central Ohio Specialty Care, emailed me these reasons:

  • Claims for the period Jan. 1, 2011, through Sept. 30, 2011, for any "contract winner" who was being acquired by another company like Lincare or Apria among many others would have been "held and not submitted" until CMS approved novation agreements around the conditions of acquisition. These acquisitions were taking as long as 12 months for CMS to review and approve. Lincare reported in its second quarter, 2011, release that it had acquired companies in eight of nine Round 1 markets and were still awaiting approval of those agreements as of June 30, 2011.  A conspiracy theorist might even suggest that the novation agreement timeline was deliberately lengthened to allow for such claims reduction totals.
  • A large number of "contract losers" (if not every non-contract supplier) continued to take on new Medicare referrals believing that the unbiased work of 244 economists would support an eventual repeal or delay.  This condition occurred well into 2011, possibly through the entire nine-month period analyzed by Dr. Cramton.  The suppliers would "delay" requesting Medicare CMN forms from physicians and delay billing until the repeal occurred.
  • A large amount of subcontract activity delayed the traditional revenue cycle for processing these claims. Managing execution was weak in many areas as non-contract suppliers or out-of-area contract winners struggled to efficiently establish and manage the fundamental subcontractor arrangement.
  • Contract suppliers, especially out of area, were actively seeking a buyer, while developing subcontractor agreements, thus multiplying the effects above.
  • The number of patients shifting from traditional to Medicare Advantage plans continues to grow. Cincinnati, for example, has about 30% of Medicare beneficiaries in managed Medicare plans that were unaffected by Round 1 rules.  In late 2010, many companies actively worked to protect their affected patient bases by helping patients about to be impacted by Round 1 into Managed Medicare plans not controlled by the Round 1 rules.
  • Anytime a beneficiary changed suppliers, a physician was required to complete a new CMN, resulting in a flood of hitting their offices. The combination of delays due to acquisitions as described above, due to transfers of service, or due to new services from suppliers otherwise unknown in a Round 1 area, subsequently caused delays in processed claims to the Medicare program. These will eventually be gathered and submitted prior to Dec. 31, 2012, by the supplier.

So there you have it. It's much more complicated than you or I or, most importantly, CMS expected.

But I guess, as far as CMS is concerned, it's much easier to explain everything away under the veil of fraud and abuse.

Liz Beaulieu

Tags:
competitive bidding, On The Editor's Desk, bid data
by: Liz Beaulieu - Wednesday, February 15, 2012

I've had the HME Excellence Awards on my mind this week.

First, after a week on the road in southern California, I went to my mailbox here at HME News headquarters in Yarmouth, Maine, on Monday and found our very first application for the 2012 HME Excellence Awards. I'm not going to name names, but it's for Best HME Provider and the company is in Jacksonville, Fla. Thank you, thank you!

Second, today, while looking at the proofs for our March issue, I noticed an ad for the HME Excellence Awards created and developed by our fab marketing and creative team here at HME News:

I love the ad's rock star vibe.

Because that's what I imagine our 2011 HME Excellence Awards winners felt like. They got to have their names announced and their pictures taken (with me and publisher Rick Rector, no less) at the Power For Funding event at Medtrade in the fall:

That's Best Rehab Technology Provider Teresa Glass Owens and her crew at Glass Seating & Mobility.

They also got to speak on a panel at our HME News Business Summit, also in the fall.

That's how much we think of these best-in-class HME providers.

Are you a rock star? The application deadline is May 25.

Liz Beaulieu

Tags:
HME Excellence Awards, On The Editor's Desk

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