HME News Top Stories

CMS revamps PMD demo, sets start date

Fri, 3 Feb 2012 00:00:00 EST

WASHINGTON - CMS will drop the prepayment review phase from its planned power mobility device demonstration, it announced today.

CMS also said that PMD providers will be allowed to submit prior authorization requests on behalf of physicians.

The demo, announced in November, was originally slated to start Jan. 1. It will now start on or after June 1 in seven states--California, Texas, Florida, Michigan, Illinois, North Carolina and New York. The demo was delayed in late December after industry stakeholders, consumers and physicians raised concerns with the demonstration.

Among those concerns: that the demonstration could create cash flow issues for providers, and access problems for beneficiaries.

Other changes in the demo: there will be a 60-day public comment period on reducing paperwork burdens; and the demo will start at the approximately the same time in all seven states.

CMS said it will hold Open Door Forums prior to the implementation of the demo.

CMS today also announced that the Recovery Audit Prepay Review demonstration, which was also delayed from its Jan. 1 start date, will begin on or after June 1.

The 11-state demo calls for RACs to review claims before they're paid to ensure providers have complied with Medicare payment rules. Claims included in that demo will include those that historically result in high rates of improper payments.

The Feb. 3 announcement is available here.

Setbacks at The Scooter Store

Thu, 2 Feb 2012 00:00:00 EST

NEW BRAUNFELS, Texas - Between changing up his management team and taking legal action against some of his former employees, The Scooter Store President Doug Harrison had his hands full in early 2012.

The Scooter Store lost two executives in January: chief financial officer (CFO) Tom Shaw and chief sales officer (CSO) Mike Pfister. But the vacancies shouldn't result in structural or strategic changes within the company, Harrison said.

"Those are both positions that we will keep on my staff," he said. "One has been filled and one's about to be filled."

The Scooter Store hired Shaw as an interim CFO in mid-2011. But his family remained in California, meaning he had to commute to Texas every other week. That's what led him to take a new position there. At press time, a replacement had not yet been named.

Pfister has returned to the oil and gas industry. Steve Tatarian, who was executive vice president of managed care, will step in as interim CSO. Tatarian has been with the company for eight years and has worked in several sales capacities during that time.

Also in January: The Scooter Store sought legal action against ex-employees for violating non-compete agreements. Employees who sign the agreements are barred from competing against The Scooter Store within certain geographic areas, for a certain amount of time. The areas and times vary by state, Harrison said.

"We have lots of people that come to us that are brand new to the industry, so everything they know about it, they learn from us," he said. "We have a very thorough training process for all new employees and lots of ongoing training, as well, which is at no small expense to us."

Typically, employees honor the agreements, and there are few problems, Harrison said.

"Sometimes it is a problem, and then we have to pursue it legally and we will," he said.

Despite these setbacks, The Scooter Store is here to stay, Harrison said.

"The Scooter Store, like other companies in the DME industry, is faced with some serious challenges and also some tremendous opportunities," he said. "The increasing pressure may cause many, if not most, providers to go out of business. However, my faith in the American entrepreneurial spirit says that many companies will find a way to survive."

Bidding has ripple effects beyond provider

Wed, 1 Feb 2012 00:00:00 EST

Through a combination of luck and persistence, provider Robert Salmon has "grown a nice" diabetes supply business in rural Tallahatchie County, Mississippi.

But it's more than just a nice business for himself and his employees, he's learned. It turns out that his company, The Diabetic Shoppe, has a large impact on the local economy, according to a recent economic impact study by Mississippi State University graduate students. The study found that for every dollar generated by the provider, it adds an additional 27 cents, or $2.1 million to the local economy. It also generates local and state tax revenues of $576,339.

"We were really surprised that a company the size of ours can have such an impact on the local community," said Salmon, president and founder of the Charleston-based company.

The study also highlights the impact the provider has on jobs in the region. The Diabetic Shoppe, the third largest employer in this county of about 15,000, has 60 employees. Another 85 jobs are dependent on the provider by way of those who supply directly to the provider and those who supply to its suppliers.

"If we reduced (our workforce) by 10, then there's another 24, more or less, that would ultimately be laid off," said Salmon. "(For instance) we have a printer. They are almost in business just because we are. We are not their only customer, but without us, they probably wouldn't exist for very long."

In addition to diabetes testing supplies, The Diabetic Shoppe does therapeutic shoes and inserts, and CPAP. Still, if the provider doesn't win a mail-order contract, he stands to lose several million dollars "overnight," he said.

"That's a lot for a small business," said Salmon. "Let's do this auction in a fair minded way so we have an opportunity to say yes or no, but not this all-or-nothing deal where we will most likely be shut out."

With a lot of focus in Congress these days on creating jobs, Salmon finds it hard to fathom why such a job-killing program is being allowed to continue.

"We are talking constantly about jobs and helping small businesses thrive, and they are running a program that will slam the door on thousands of small businesses," he said. "Our politicians need to understand what happens when you put hundreds and even thousands of businesses out of business." HME

Craftmatic courts providers

Tue, 31 Jan 2012 00:00:00 EST

MIAMI – After selling its adjustable beds direct to consumers for the past five years, Craftmatic Industries now wants to sell them through home medical equipment providers, too.
Traditionally, Craftmatic’s business model has been to advertise heavily in the Yellow Pages, on TV and through the web, and direct customers to its 1-800 number to complete sales.
“We’re looking to expand the number of units we deliver a year by offering our product to DME providers,” said Eric Kraftsow, vice president. “We’ve heard repeatedly from them over the years that people come into their stores and ask if they have a Craftmatic. We don’t want those people to leave and go to Mattress Giant.”
Since it went into business in 1974, Craftmatic has spent $1 billion on advertising (adjusted for inflation), fielded more than 30 million phone calls for more information, and sold 1,300,000 beds, according to Kraftsow.
Craftmatic will attend Medtrade Spring in Las Vegas in April for the first time, and it expects to be well-received by HME providers scrambling to increase their non-Medicare business, Kraftsow said.
“It’s a 100% cash sale,” he said. “Our wholesale program allows them to purchase the product for about 45% off retail, so it allows them to make a nice profit.”
Craftmatic will go up against the likes of Flex-A-Bed and GoldenRest, two manufacturers of adjustable beds that already sell through HME providers. Kraftsow says that Craftmatic’s branding efforts—it once had TV host Art Linkletter as a spokesman—make it stand out.
“Our name means something to the consumer,” he said.

Q and A: Cramton goes behind the numbers

Fri, 27 Jan 2012 00:00:00 EST

BALTIMORE - Prof. Peter Cramton set the competitive bidding debate on fire earlier this month when he reported that the number of claims submitted for home medical equipment in Round 1 areas plunged in 2011. Cramton, an economist with the University of Maryland and an outspoken critic of the program, obtained the data through the Freedom of Information Act (FOIA). He spoke with HME News last week about some of his preliminary conclusions.

HME News: Did you expect to see such a steep decline in claims in Round 1 bid areas?

Peter Cramton: I would have expected some drop, but I am surprised it's as large as it seems to be. The biggest explanation, as we learned from the auction outcome, is that the whole market was radically transformed, with the vast majority of providers being removed from the supplier list.

HME: The data shows that there are claims being made by non-contract suppliers.

Cramton: I suspect that is the grandfathering aspect. For most of the products, there was a period where (the beneficiaries) could continue with their existing supplier. That, to me, is cause for concern because grandfathering will end and when it does end, if they haven't found a new supplier, that's going to be a serious issue.

HME: The data also shows an increase in negative health outcomes in bid areas vs. non-bid areas.

Cramton: The point of that set of figures is to show that the sharp decline in claims, assuming that it isn't all attributable to fraud--and I would be shocked if it was--is likely leading to a decline in utilization. The decline in utilization means there are more non-utilizers, which means there are more bad health outcomes. Those are all indicators that the program, rather than saving the taxpayers money, has a very real but hidden cost, which is that the cost simply falls in a different category within the Medicare system.

HME: Why were complex rehab codes included? They weren't in Round 1.

Cramton: The FOIA request was just for the categories that were included under the program. I think what happened--I am not sure--is that some product codes within the standard and complex wheelchairs categories changed, and so it caused that anomaly.

HME: Do you think CMS could spin this data to prove competitive bidding has resulted in a decline in fraud and abuse?

Cramton: I don't see how they could draw that conclusion. Driving down claims and driving out fraud is largely a separate issue. It's not the auction itself that prevents fraud. I guess what they would argue is, absent competitive bidding, CMS was required to deal with a potentially unlimited number of suppliers that they didn't really have the resources to check who is doing the right thing and who is not. I think it's not so much the number of suppliers but rather the checks that you make to confirm that the services being provided are legitimate.

Stakeholders push new bid data

Fri, 27 Jan 2012 00:00:00 EST

WASHINGTON - Industry stakeholders last week were still getting their arms around Round 1 claims data released by Prof. Peter Cramton, but early reaction was that it was powerful stuff.

"We are certainly talking about it on the Hill," said Cara Bachenheimer, senior vice president of government relations for Invacare. "It tells a very interesting story and if people aren't wanting to ask more questions and get more answers, something's wrong."

The data shows that the number of claims submitted in Round 1 bid areas plunged by as much as 82% in 2011 compared to 2010. Cramton obtained the data through the Freedom of Information Act (FOIA).

But could CMS, which has long touted the competitive bidding program as a tool to reduce fraud, counter that the figures point to a decline in fraud?

"To infer that a 60% or 70% decrease in utilization is a result of (a decrease) in fraud, one would have to assume that there has been a massive conspiracy between physicians and homecare suppliers," said Walt Gorski, vice president of government affairs for AAHomecare. "That's a jump that even Evel Knievel couldn't make."

Stakeholders say CMS, which hasn't commented publicly on the data, believes it is flawed. Still, they have confidence in what it shows.

"We can take this to be a preliminary warning sign that it appears there are access issues in the nine CBAs," said Gorski.

With a full Congress back in session, the data is spurring a renewed push for the market pricing program designed by Cramton and supported by the industry. Gorski, for one, would like to see that momentum carried forward to AAHomecare's Washington Legislative Conference on Feb 15-16.

"This is a make or break kind of visit," he said. "We've said that before, but it's really getting down to it."

5010 troubles some

Fri, 27 Jan 2012 00:00:00 EST

YARMOUTH, Maine - The transition to HIPAA version 5010 on Jan. 1 has been fairly smooth for Medicare, but there have been bumps in the road for commercial payers, resulting in delayed payments to home medical equipment providers, industry sources say.

Even if HME providers and their software vendors are up to speed with 5010, when they send their claims to commercial payers that haven't made the transition yet, those claims are getting rejected by clearinghouses, sources say.

"This has been my biggest priority since Jan. 1," said Sylvia Toscano, owner of Professional Medical Administrators, a billing and consulting firm in Boca Raton, Fla. "In general, I don't think anyone has been fully prepared for this, and the call volumes at the clearinghouses have been three times higher than they usually are, but everyone is working together."

Although Jan. 1 was the implementation date for 5010, a new standard for electronic claims submission, for Medicare, at least, there's a grace period until March 1.

For the time being, when payers aren't ready to receive claims in 5010, most clearinghouses are able to translate them back to 4010, but that often opens the door for mismatches and other errors, sources say.

"We'll be better off when we have everyone operating from the same sheet of music," said Andrea Stark, a reimbursement consultant for MiraVista, a billing and consulting firm in Columbia, S.C.

Providers have also run into problems with Medicaid programs that transitioned to 5010 on Jan. 1 but didn't do proper due diligence beforehand, sources say.

"The Medicaids have been a challenge," said Eric Arnson, vice president of marketing and product management at Capario, a clearinghouse for Brightree. "They didn't have the resources to do the kind of testing like Medicare."

In addition to claims submissions, there have been hiccups with other parts of the claims process, including acknowledgement transactions and electronic remittance advice or ERA transactions. The good news: There's light at the end of the tunnel, sources say.

"We think most problems will be smoothed out by February," Arnson said.

Medical device tax looms

Fri, 27 Jan 2012 00:00:00 EST

WASHINGTON - The witching hour for an annual excise tax on medical devices is quickly approaching, and the fate of HME manufacturers is still in the hands of the IRS.

HME manufacturers are still waiting for the IRS to decide whether or not it will exempt HME from the 2.3% tax.

"We're still waiting for them to interpret and implement the provision," said Cara Bachenheimer, senior vice president of government relations for Invacare. "They said they would come out with a proposed rule last year and then it was January. Now they're saying the first quarter."

The $20-billion tax is a provision of the Affordable Care Act signed into law in 2010. It will be levied on a company's total revenues, regardless of whether it generates a profit.

Under law, the secretary of the treasury has the power to exempt "any medical device determined by the secretary to be of a type which is generally purchased by the general public at retail for individual use." Stakeholders believe HME fits that description to a T.

"Congress' intention is to tax scalpels sold to hospitals," Bachenheimer said. "Our products are sold to individual customers."

Stakeholders have had several meetings with IRS officials and have submitted numerous comments and other information to them. They've also made a case to exempt HME that are used in both the home and institutional settings, like beds, manual wheelchairs and wound care supplies.

"We've provided them with everything they've needed," said Seth Johnson, vice president of government affairs for Pride Mobility Products. "We believe we're in a pretty good position."

There are also bills in the House and Senate to repeal the tax, but in an election year and with a weak economy, stakeholders give them only a 50/50 chance of going anywhere. That's why they're focusing on getting an exemption from the IRS.

"The addition of this tax would be significant," Johnson said. "It's another increase in the cost of doing business that would have an impact company wide."

Diabetes: GE challenges 'four titans'

Fri, 27 Jan 2012 00:00:00 EST

FAIRFIELD, Conn. - GE's diagnostic imaging and other healthcare products may dominate hospitals and clinics, but with its latest product, the company hits home.

GE has signed a licensing agreement with Bionime to provide a GE-branded line of diabetes products. The first such product to launch: the GE100 blood glucose monitoring system, which is available now through home medical equipment providers and will be available some time this year through major retailers.

"This is GE's first consumer diabetes brand, which is an exciting milestone for the company," said Rebecca Hayne, global public relations manager for GE Healthcare. "As healthcare delivery is increasingly extended from the clinical setting to the home environment, GE is committed to helping expand access to innovative home health consumer products."

GE estimates that the over-the-counter blood glucose monitoring is a $7 billion market--and growing. There are 2 million new diabetes cases diagnosed in adults 20 and older each year, Hayne says, citing data from the American Diabetes Association.

To date, the blood glucose monitoring market has been dominated by "four titans," according to Peter Weedfald, president of Gen One Ventures, a sales and marketing consulting firm that is working with GE and Bionime: Johnson & Johnson, Abbot, Roche and Bayer. He believes GE will be a force to reckon with for two reasons. First: GE, a $12.6 billion company that operates in 100 countries and employs about 300,000 people worldwide, is a trusted household name for everything from appliances to light bulbs.

"It's a huge, world-class brand," Weedfald said.

Second: GE believes in Bionime's technology, which includes a strip design that eliminates the need for users to touch the sample after testing; and a coding design that eliminates the need for users to code each strip lot but doesn't sacrifice accuracy, Hayne said.

"GE is a great brand and we have a great technology, so it's a great partnership," said Steve Millilo, a product manager at Bionime.

GE selected Bionime, which is based in Taiwan and has a sales and marketing office in San Diego, after "extensive due diligence," Hayne said. In addition to its technology, GE was attracted to Bionime's business model: It's a vertically integrated company, meaning it has better control of design, manufacturing, quality--every step of the process.

"GE and Bionime are poised to go head-to-head with the other companies in the market," Millolo said.

Bill will give advocates an edge at CELA

Fri, 20 Jan 2012 00:00:00 EST

WASHINGTON - Stakeholders planning to attend CELA may have a big boost when they hit the Hill as part of the April event: a bill to create a separate benefit for complex rehab.

Stakeholders scored a victory in October, when Rep. Joseph Crowley, D-N.Y., agreed to sponsor a separate benefit bill. Since then, they have worked to find a Republican co-sponsor.

"There is every indication that we'll have a bill introduced in Congress before (CELA)," said NRRTS Executive Director Simon Margolis. "We're hopeful it will be introduced by the end of February."

Registration for CELA, which takes place April 18-19 at the Hyatt Regency Hotel-Crystal City, opened last week.

Margolis said lobbying for the expected bill will be the main focus of CELA. The event will also include a keynote from United Spinal Association President Paul Tobin, and strategy and information sessions to prepare attendees for a busy day of meetings with lawmakers on the Hill.

Additionally, prior to CELA, on April 16, there will be a national call-in day for stakeholders and consumers to lobby lawmakers to support a separate benefit for complex rehab. Making lawmakers aware that their constituents care about a separate benefit before CELA is key to holding successful meetings during the event, Margolis said.

"It will be very easy if there's a bill," he said. "People won't have to make explanations. They'll call and say 'I'm a constituent of so-and-so and I'm asking them to support the bill.'"

Learn more: http://www.nrrts.org/cela.