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In brief: PAYGO cuts, fee schedule update, FDA warning letter

In brief: PAYGO cuts, fee schedule update, FDA warning letter

WASHINGTON – AAHomecare is calling on stakeholders to contact their members of Congress to ask them to prevent broadly applied “deep” Medicare cuts for 2022.  

The potential cuts stem from the application of pay-as-you-go (PAYGO) legislation that was enacted in 2010.  

“If not addressed, PAYGO provisions would trigger automatic cuts across a range of federal programs to cover recent deficit spending increases – in this case, red ink incurred via the $1.9 trillion American Rescue Plan relief package,” the association wrote in a bulletin. “Under the current scenario, the broadly applied Medicare reimbursement cut for health care providers would be 4%, starting in FY2022.”  

AAHomecare has been part of coalition efforts to address this issue since early 2021.  

Specifically, the association is calling on stakeholders to ask their members of Congress to join efforts to include language waving the PAYGO requirements in continuing resolution legislative packages that could move as early as this week.  

It’s also calling on stakeholders to ask them to support extending the current pause to the 2% Medicare sequester cuts that was originally granted in April 2020 and is currently set to expire at the end of this year.  

“It was surely not Congress’ intent to finance COVID-19 relief measures through deep Medicare cuts for health care providers who are currently going all-out to protect patients and prevent a resurgence of the virus nationwide,” AAHomecare wrote. 

CMS posts 2022 fee schedule adjustments 

WASHINGTON – CMS has published fee schedule adjustments of +5% or more for DMEPOS for calendar year 2022.   

Adjustments differ depending on whether the items serviced are part of the competitive bidding program (CBP) or in former competitive bidding areas (CBAs). 

The adjustments are: 

  • CBP items in former CBAs: +5% 
  • CBP items in non-CBAs: +5.4% 
  • Non-CBP items: +5.1% 

"While suppliers will welcome these increases, the DME community still needs additional rate adjustments to account for the widespread product price hikes, shipping surcharges and new operational requirements that have increased costs for our industry," said Tom Ryan, AAHomecare president and CEO. "Suppliers need Medicare reimbursement rates that truly reflect the market realities they face." 

Typically, the CPU increases for DME have been 1% to 3%. Last year, the inflation adjustment was less than 1%. 

In addition, CMS affirmed the continued adjustments for rural and other non-bid area relief included in the CARES Act as follows: "Since the public health emergency has not ceased, the update for the 2022 DMEPOS and PEN fee schedule files continue to include the rural and non-contiguous non-CBA 50/50 blended fees and the non-rural contiguous non-CBA 75/25 blended fees required by section 3712 of the CARES Act." 

CMS will publish the official CY 2022 fee schedule soon. See the Calendar Year 2022 Update for DMEPOS Fee Schedule (CMS’ Claims Processing Update Change Request 12521) for more information. 

Philips updates providers on FDA report 

AMSTERDAM, the Netherlands – Philips does not anticipate a delay to its recall or replacement program as a result of a recent report from the U.S. Food and Drug Administration, the company told its provider customers in a Nov. 23 letter. 

The FDA recently published the results of its inspection of Philips’ manufacturing facility, noting the silicone-based foam used in a singular, similar CPAP/BiPAP device marketed outside of the U.S. failed one safety test for the release of volatile organic compounds. 

“In its observation from the inspection, the FDA has maintained its recommendations related to the continued use of devices for patients and health care providers,” the letter states. “Philips does not anticipate delay to the recall or replacement program as a result of the FDA report.” 

Philips says it continues to collaborate with the FDA on additional testing on the silicone-based foam in its DreamStation 2 and repaired DreamStation CPAP/BiPAP devices, noting the material passed applicable testing, with the exception of the one test. 

The company also noted in the letter that it has updated the language* included in the recall to align it with the current FDA recommendations. For CPAP and BiPAP users, the update includes a recommendation that patients speak with their clinicians to determine the risks and benefits of continued therapy on recalled devices. 

“The previous version of the Urgent Medical Device Recall directed patients to stop use, prior to consulting with their clinician,” the letter states. “This update was made to align to the FDA’s recommendations, and to provide clinicians with a wider range of options to consider for each individual patient.” 

FDA warns Invacare about its complaint process 

WASHINGTON – The U.S. Food and Drug Administration on Nov. 18 sent Invacare a warning letter outlining a number of violations found during an inspection earlier this year. 

The violations include, but are not limited to, the following: 

Failure to investigate any complaint involving the possible failure of a device, labeling or packaging to meet any of its specifications, unless such investigation has already been performed for a similar complaint and another investigation is not necessary. 

Failure to establish and maintain adequate procedures for receiving, reviewing and evaluating complaints by a formally designated unit. 

Failure to establish and maintain adequate procedures for implementing corrective and preventive action that shall include requirements for using appropriate statistical methodology where necessary to detect recurring quality problems. 

Failure to establish and maintain procedures for implementing corrective and preventive actions. 

Failure to submit a report to FDA no later than 30 calendar days after the day that your firm received or otherwise became aware of information, from any source, that reasonably suggests that a device that your firm markets has malfunctioned and this device or a similar device that it markets would be likely to cause or contribute to a death or serious injury, if the malfunction were to recur. 

“Your firm should take prompt action to correct the violations addressed in this letter,” the FDA states. “Failure to promptly correct these violations may result in regulatory action being initiated by the FDA without further notice.” 

The FDA asked Invacare to notify the agency in writing within 15 business days from the date they received the letter of the specific steps they have taken to correct the noted violations, as well as an explanation of how they plan to prevent these violations for occurring again. 

Invacare says it plans to address all of the FDA's concerns in a timely manner.

"Invacare wants to assure our customers that we stand behind the quality and efficacy of our products," said Matt Monaghan, chairman, president and CEO in statement to HME News. "The FDA letter guides us to expanded processing of post-market complaints and related procedures. We take these matters seriously and will continue our substantial efforts to improve the robustness of our processes and procedures.”

 AAHomecare, CHEST launch Oxygen Toolkit 

WASHINGTON – AAHomecare and the American College of Chest Physicians have released an Oxygen Toolkit to support oxygen users and clinicians. 

“We’re excited to collaborate with the CHEST Foundation to educate patients with lung disease about oxygen therapy,” said Tom Ryan, AAHomecare president and CEO. “Better-informed patients and caregivers will allow suppliers to more effectively support individuals who depend on home oxygen. These new guides are a terrific resource that will help patients and caregivers understand and confidently utilize these essential devices in their homes and when they travel.” 

The toolkit features four components: 

Complete oxygen therapy guide  
This provides basic information, including the benefits of oxygen therapy, a look into different systems and a guide for paying for therapy. 
Getting started  
This covers what to do before, during and after delivery of the equipment, with a focus on the relationship between patient and the durable medical equipment supplier. 
Trip planning guide: Traveling with oxygen therapy 
This provides everything someone traveling with supplemental oxygen would need to know for traveling by car, bus, train, cruise ship and by plane. 
Does your patient need oxygen therapy?  
Written for clinicians, this covers determining how to know if your patient needs oxygen therapy, how to order systems and how to educate a patient. 

“Driven by our commitment to make an impact on the quality of life of patients, the CHEST Foundation creates quality resources such as the Oxygen Toolkit for people who are grappling with navigating their day to day, while managing their disease,” says Ian Nathanson, MD, FCCP, president of the foundation. “Equally, we recognize that there are knowledge gaps of our own membership—writing a prescription that meets reimbursement criteria—and are committed to eliminating all the barriers patients face.” 
The guide is available *here on the CHEST website. 

Owlet pulls Smart Sock from market 

YARMOUTH, Maine – Owlet has halted sales of its Smart Sock vital sign monitors for babies after the U.S. Food and Drug Administration said the devices were improperly brought to market. 

In a recent warning letter, the FDA said the company has sold the product, which it characterizes as a medical device because it provides heart rate and oxygen levels, without proper “marketing approval, clearance, or authorization” from the FDA. 

“As a result of the letter and in light of our plans to submit a device application to the FDA, we will no longer be selling the Smart Sock,” said Owlet in a letter posted to its website. “We plan to offer a new sleep monitoring solution, which we believe will be available soon. We also plan to continue to support our current customers.” 

Owlet pointed out the FDA didn't “identify any safety concerns about the Smart Sock,” and claimed the safety of the socks had "been validated by third parties, in which it was shown to be safe." 

The company said it would notify customers of any updates to Smart Socks products that have already been distributed.  

Invacare realigns Europe, Asia Pacific operations 

ELYRIA, Ohio – Invacare plans to realign its Europe and Asia Pacific businesses under a single leader to streamline operations and enhance the customer experience. Geoff Purtill has been appointed senior vice president and general manager, EMEA and Asia Pacific. He brings a strong customer, supplier and employee perspective to the role, having served the needs of more than a dozen countries with a wide range of cultural, product, market and regulatory differences. “As we finish the second year in this challenging and dynamic pandemic environment, we continue to look for ways to satisfy our customers more efficiently and effectively to drive sustainable growth,” said Matt Monaghan, chairman, president and CEO. “As we extend our leadership in the markets we serve, we must also make bold changes to reduce complexity and simplify and integrate how we operate in order to ensure we can quickly evolve with the marketplace.” Also as part of the realignment, Ralf Ledda, senior vice president and general manager, EMEA, will leave the company to pursue new opportunities. 

ResMed invests in Scottish tech start-up 

SAN DIEGO – ResMed has made a minority investment in Lenus Health, an Edinburgh, Scotland-based health-tech startup that specializes in improving outcomes and lowering costs for people with chronic obstructive pulmonary disease, according to the Scottish Business Times. “Lenus Health’s achievements underscore the power of digital health to improve people’s lives, delivering care closer to home while also significantly reducing health care costs for whole systems,” said Antoine Valterio, ResMed UK country manager. “ResMed is looking forward to helping Lenus Health accelerate the adoption of digital health and AI technologies in the NHS and abroad, as part of our ongoing commitment to supporting a thriving UK health tech sector.” Lenus Health’s technology combines wearables and artificial intelligence to remotely monitor a COPD patient’s wellbeing, predict when their condition may worsen, and enable their care teams to intervene earlier, helping prevent exacerbations and hospitalizations. 

It’s a ‘battle’: Pharmacy groups file PBM court brief 

ALEXANDRIA, Va. – Four pharmacy groups, including the National Community Pharmacists Association, filed a court brief this week in support of a Louisiana law requiring pharmacy benefit managers administering Medicare Part D plans to reimburse pharmacies a 10-cent provider fee. 

The case, Louisiana Independent Pharmacists Association v. Express Scripts, is the first test of a recent decision by the 8th Circuit Court of Appeals that allows North Dakota and other states in the jurisdiction to regulate PBMs. Express Scripts, owned by Cigna, is one of the three largest pharmacy benefit managers in the country, collectively controlling nearly 80% of all prescriptions, according to the NCPA. 

“Consumers and independent pharmacies have been subjected to the enormous market leverage PBMs, and now their health insurance plan owners, exert to drive small pharmacies out of business with unfair practices like the ones on display in Louisiana,” Doug Hoey, NCPA CEO and pharmacist. “NCPA has been fighting them in court for many years. The Supreme Court decision was a major breakthrough, and now pharmacies and consumers are in a 50-state battle that we aim to win. NCPA is proud to support our members in the 5th Circuit who will be directly affected by this decision.” 

In December 2020, the U.S. Supreme Court ruled unanimously in Rutledge v. PCMA that Employee Retirement Income Security Act of 1974 (ERISA) does not prohibit states from regulating PBMs. In November 2021, the 8th Circuit Court of Appeals affirmed the Supreme Court’s decision in PCMA v. Wehbi and confirmed that in some circumstances states may regulate PBMs in Medicare Part D. 

Lifeway Mobility opens new location 

ST. CLOUD, Minn. – Lifeway Mobility has expanded its footprint in central Minnesota, with a new location in St. Cloud. Lifeway St. Cloud will offer stair lifts, wheelchair ramps and a variety of basic transfer aid solutions, as well as installation services. “We are looking forward to providing extended coverage to welcome even more satisfied customers from St. Cloud and surrounding communities in central/east-central Minnesota to the Lifeway Mobility family,” said Bruce Stevenson, general manager, Lifeway Mobility Minnesota. The new location will initially be supported by Lifeway’s nearby legacy location, Lifeway Mobility Minneapolis / Ability Solutions in Burnsville, Minn., which has more than 20 years of experience in providing accessibility solutions in Minnesota and western Wisconsin.  
Eitan Medical joins NHIA council 

ALEXANDRIA, Va. – Eitan Medical, a global manufacturer of drug delivery and infusion solutions for hospital, ambulatory and home care settings, has joined the National Home Infusion Association’s Future of Infusion Advisory Council. “The needs of the infusion industry have evolved, requiring infusion providers to adapt and elevate their solutions with connected, patient-centric technologies that allow for the easy administration and management of infusions in alternate sites, especially in the home setting,” said Ben Noonan, general manager, North America at Eitan Medical. “We are eager to partner with NHIA and collaborate with our peers at FIAC to further support the home and specialty infusion industry.” The FIAC is an advisory group comprised of manufacturing and service companies invested in the home and alternate site infusion industry. 

Applied Home Healthcare announces new FDA drug reporting service 

WESTLAKE, Ohio – Applied Home Healthcare Equipment, which offers oxygen filling, technical and regulatory support for HME providers, has launched a drug reporting service to help transfillers ensure they are meeting the U.S. Food and Drug Administration’s new requirement to report the amount of medical oxygen filled and released to patients annually. “The new drug reporting service we’re offering takes the worry out of annual reporting for our transfillers,” said Jim Christ, general manager. “Many providers are confused on how to and what to provide to the FDA, so we are offering this service to make it as easy as possible.” The reported data will improve the FDA’s visibility into the drug supply chain and will help the agency identify, prevent and mitigate drug shortages. The new drug reporting service will expand on the FDA registration and drug listing service currently offered by Applied’s FDA registration department. To learn more: 

NRRTS announces keynote 

ALEXANDRIA, Va. – NRRTS has announced Christian Bagg as the speaker for its 2022 Keynote Webinar on Jan. 6. During the .1 CEU session, “The Flow of Innovation in adaptive design,” participants will learn to describe the information gathering process for adaptive design; evaluate and integrate the design needs of a broad range of users; and describe how to incorporate the user experience to inspire the next innovation project. Bagg, a paraplegic, is the founder of BowHead Corp. and the designer of the Bowhead Reach, an off-road electric trike. Register for the free webinar here.  

Permobil commits to sustainability 

NASHVILLE, Tenn. – Permobil has formalized its approach to sustainability by identifying seven focus areas. Those focus areas include two KPIs specific to the company’s core business: improving quality of life for the people who use its products and diversifying workplace diversity, and reducing its CO2 emissions by 70% by 2030. “Our purpose of innovating for individuals shapes everything we do,” said Bengt Thorsson, president and CEO. “It takes a long-term commitment. We believe we have a special obligation to stakeholders now and in the future to continuously improve – and that means we will always do better.” Permobil will measure and managing its impact and reports its progress annually in a Sustainability Report. Other areas of focus: product quality, a safe and respectful workplace, a minimized impact, business ethics and responsible sourcing. 

NHIA adds PlayMaker to council 

ALEXANDRIA, Va., and NASHVILLE, Tenn. – The National Home Infusion Association has added PlayMaker Health to its Future of Infusion Advisory Council. PlayMaker adds a unique perspective to the council supporting data-driven programs critical to expanding access of home and alternate site infusion. “We are pleased to expand our partnership with NHIA through FIAC and connect with other industry leaders to provide members with guidance and support as the health care landscape continues to evolve,” said Holly Miller, chief revenue officer at PlayMaker. The FIAC is a strategic advisory group to NHIA comprised of manufacturing and service companies that are deeply invested in the home and alternate site infusion industry. It works with the association staff and board of directors to address critical issues, challenges and opportunities facing this growing community. 

Belluscura gets seal of approval from MAC 

LONDON and PLANO, Texas – Belluscura has announced that Palmetto GBA, a DME Medicare Administrative Contractor, has issued a final local coverage determination for the X-PLOR2R portable oxygen concentrator. The company estimates that Medicare reimbursement covers about 50% of the oxygen concentrator market in the United States and, therefore, the MAC’s seal of approval will have a positive impact on its financials. “Receiving the two Medicare reimbursement codes should further expand access and the use and distribution of the X-PLOR2R throughout the U.S.,” said Robert Rauker, CEO. “We believe many Medicare patients will ask their health care providers and DME providers to issue them the lightweight X-PLOR2R.” Belluscura says the X-PLOR2R, weighing only 3.25 pounds, is the world’s first portable modular oxygen concentrator. The product won the Providers’ Choice Gold Award at Medtrade East in Atlanta in October

PlayMaker expands leadership team with new role 

NASHVILLE, Tenn. – PlayMaker Health has appointed Julie Kopp as vice president of product, a newly created role at the company. Kopp, who brings more than 25 years of experience, will be responsible for managing the company’s overall product strategy and roadmap to deliver expanded offerings to home health, hospice, infusion and medical device sales agencies. “From conception to delivery, Julie brings a wealth of knowledge and experience and a passion for building solutions with a customer-driven approach, and we are pleased to welcome her to the leadership team,” said Gregg Boyle, CEO. “As we enter the next phase of innovation and growth Julie’s proven success in building products and successful teams will be invaluable to delivery best-in-class software and data services.” Kopp has held multiple leadership and advisory roles specific to the health care vertical, including vice president of product and design at CirrusMD; and executive-in-residence at TechStars, where she serves as a key consultant for tech entrepreneurs focused on health care in the accelerator program. 

Golden names new CFO 

OLD FORGE, Pa. – Golden Technologies has appointed Paul Yurko as CFO, with responsibilities including leading the financial management and information technology strategy of the company and improving processes to achieve profitable growth. “As a key member of our executive management team, Paul will serve in a strategic role in the overall management of the company,” said Rich Golden, CEO. “We welcome his contributions as he assumes the primary day-to-day responsibility for planning, implementing, managing, and controlling all financial-related activities of the company. I am confident that Paul will be an excellent match for this position and a strong asset to the organization.” Yurko has more than 25 years of financial management experience in the service, foods, transportation and manufacturing industries. He has held various executive-level positions at large companies, including Metz Culinary Management, Martz Group, Kraft Foods, Nabisco, and Rosenn Jenkins & Greenwald, LLP. 

Golden honored for growth, culture 

OLD FORGE, Pa. – Golden Technologies recently won Business of the Year and the IMPACT Award for People & Culture at a gala hosted by the Greater Scranton Chamber of Commerce. “Over 20 years ago, we remember being awarded Small Business of the Year and how much that means to us,” said President & CEO Rich Golden. “To achieve this huge milestone years later and be honored with the 2021 Business of the Year award is truly an honor and we are so proud. Something that we're even more proud of is receiving the IMPACT Award for People & Culture. This award recognizes a business that has gone above and beyond in responding to the COVID-19 crisis in terms of creativity, adaptation, and perseverance to ensure the well-being of its team members. We are very proud of these awards and recognition by our business community leaders.” Golden received the award at a gala celebrating the SAGE Awards and Scranton Awards for Growth and Excellence. The company, which has stayed open as an essential business during the pandemic, recently opened a new 170,000-square-foot distribution center. It has also increased minimum wages to retain and attract more workers and implemented training programs to improve efficiency. 

DOJ charges two in $25M scheme 

NEWARK, N.J. – Two Florida men have been indicted for their roles in DME and compound medication schemes involving kickbacks and fraud, the Department of Justice and the U.S. Attorney’s Office for the District of New Jersey have announced. Thomas Farese of Delray Beach, Fla., and Domenic Gatto of Palm Beach Gardens, Fla., are charged in an 11-count indictment with conspiracy to commit wire fraud, conspiracy to commit health care fraud, conspiracy to transact in criminal proceeds, transacting in criminal proceeds and conspiracy to violate the federal Anti-Kickback Statute. Farese and Gatto, according to documents filed in the case, played key roles in a scheme to defraud health care benefit programs by allegedly offering, paying, soliciting and receiving kickbacks and bribes in exchange for doctors’ orders for DME without regard to medical necessity, namely orthotic braces. Farese, Gatt and their conspirators had financial interests in multiple DME companies that paid kickbacks to suppliers of DME orders, in exchange for DME orders. The suppliers, in turn, used telemedicine companies to obtain DME orders without regard to medical necessity. The DME companies owned by Farese and Gatto subsequently fraudulently billed Medicare, TRICARE, CHAMPVA, and other health care benefit programs for the DME orders. The defendants concealed their ownership of the DME companies by using straw owners who were falsely reported to Medicare as the owners of the companies. Gatto also brokered a kickback relationship whereby he received an illegal kickback each time specific DME suppliers provided DME orders to the DME companies controlled by him and his conspirators. Gatto and his conspirators then laundered the proceeds of the scheme through several layers of bank accounts under their control. The defendants caused losses to Medicare, TRICARE and CHAMPVA of approximately $25 million. 

NCPA president participates in economic town hall 

ALEXANDRIA, Va. – Michele Belcher, owner of Grants Pass Pharmacy in Grants Pass, Ore., and president of the National Community Pharmacists Association, joined a Dec. 2 virtual town hall hosted by the American Economic Liberties Project to discuss the harmful impact of pharmacy benefit managers. “The massive consolidation has hurt my small business, my patients and many pharmacies like mine,” said Belcher. “It’s almost like the CIGNAs and CVSs of the world are too big to regulate. Who is coordinating efforts between the FTC, DOJ and HHS to stop the anticompetitive nature of these behemoths?” The virtual town hall also featured White House National Economic Council Director Brian Deese, National Economic Council Deputy Director Bharat Ramamurti, and Special Assistant to the President for Technology and Competition Policy Tim Wu. The event included discussions about President Biden’s Executive Order on Promoting Competition in the American Economy and how it seeks to support the country’s workers, entrepreneurs and business owners. Participating business and labor leaders, including Belcher, discussed the harms they experience from monopoly power and engaged in a Q&A with White House officials. 

Medtrade West offers saver rates 

PHOENIX – SmartSaver rates for Medtrade West 2022 are now in effect through Dec. 10. These rates offer the lowest available registration price for the event, which is scheduled for April 4-6 at the Phoenix Convention Center. “Whether you opt for the conference pass, which includes access to the Expo floor or the Expo pass, this is the best time to buy,” said York Schwab, associate show director, Medtrade West. “The show is only five months away and it’s not too early to make a commitment to improve your business and add inspiration, knowledge and new products to your 2022.” Under SmartSaver rates, an expo pass is $25 and a conference pass is $99. A conference pass includes admissions to the expo floor and all conference sessions. Register here.


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