WASHINGTON – AAHomecare is asking lawmakers for relief from a “double-dip” oxygen cut in the 2017 Medicare fee schedule for stationary oxygen.
The move reinforces a letter that the association sent to previous leadership at CMS in December, asking the agency to recalculate its rates, which have dipped below competitive bidding rates in rural and non-bid areas.
“We would like to reinforce these efforts by generating congressional interest and support on the issues, as well,” the association states.
AAHomecare is also engaging the new leadership at CMS and the Department of Health and Human Services.
The association is calling HME providers to action, asking them to contact their members of Congress to educate them about the issue and have them contact CMS.
AAHomecare argues that CMS has improperly reduced payments for E1390 by applying a regulation introduced in 2006—called the budget neutrality offset—that only should be applied to unadjusted fee schedules. The association says the 2017 fee schedule for stationary oxygen must be consistent with those based on regional single payment amounts from competitive bidding areas.
Legal action: Apria Healthcare, Lincare
LAKE FOREST, Calif. – A man from Santa Ana, Calif., has filed a class-action lawsuit against Apria Healthcare for allegedly contacting him without his permission regarding money he allegedly owed the provider. Frank Gutierrez filed a complaint on April 3 in the U.S. District Court for the Central District of California, alleging Apria violated the Telephone Consumer Protection Act. Between July 2015 and July 2016, Apria allegedly contacted Gutierrez on his cell phone to collect payment on an alleged outstanding debt, according to the lawsuit. Apria has been charged with allegedly failing to receive prior express consent to contact Gutierrez and using an automatic dialing system.
Former employee sues Lincare
Charles Hartwig, the former CIO for Lincare, has filed a wrongful termination lawsuit against the company, according to local news reports. Hartwig in November 2015 accepted Lincare’s employment offer, which included a base salary of $325,000 a year, a $50,000 signing bonus and relocation expenses to move his family from New Jersey to Florida, according to the lawsuit. Five months later, however, he was fired. Hartwigargues in the lawsuit that Lincare allegedly failed to pay all of his relocation expenses and that it must repay his signing bonus. Hartwig, who previously worked at Johnson & Johnson, says in his lawsuit that Lincare hired him, in part, for helping the company complete its acquisition of American Home Patient
Many sleep apps lacking in basic information
YARMOUTH, Maine – Apps for sleep apnea may not be going far enough to help users understand the importance of a good night’s sleep, researchers say. There are hundreds of apps available that use soothing sounds to help people fall asleep, but less than half of the apps researchers looked at offer information about sleep or its importance, according to the Voice of America. “We were surprised that some of the apps didn’t say anything about the recommended amount of sleep someone should get on a regular basis,” said Diana Grigsby-Toussaint, a kinesiology and community health professor at the University of Illinois, who led the new analysis with colleagues at the New York University School of Medicine.
Cardinal Health expands scope in home health care
DUBLIN, Ohio – Cardinal Health has entered into a definitive agreement to buy the patient care, deep vein thrombosis and nutritional inefficiency business of Medtronic for $6.1 billion in cash.
Total revenues for that business, which encompasses 23 product categories across multiple market settings, were $2.3 billion for the 12 months ending October 2016. More than 70% of total sales were in the U.S., according to a press release.
“Given the current trends in health care, including aging demographics and a focus on post-acute care, this industry-leading portfolio will help us further expand our scope in the operating room, in long-term care facilities and in home healthcare, reaching customers across the entire continuum of care,” said George Barrett, chairman and CEO of Cardinal Health, in the release.
Cardinal Health says the business is complementary to its medical consumables business and, once the transaction is complete, it will become part of its medical segment, which is led by Don Casey, that segment’s CEO.
Cardinal Health expects to finance the deal with a combination of $4.5 billion in new senior unsecured notes and existing cash. It expects to close the deal in the first quarter of its fiscal year 2018.
UPitt develops waterproof power wheelchair
PITTSBURGH – The University of Pittsburgh Human Engineering Research Laboratories (HERL) has designed, developed and constructed a patent-pending waterproof power wheelchair that runs entirely on compressed air. The PneuChair pneumatic wheelchair was unveiled this month at Morgan’s Wonderland, a 25-acre theme park in San Antonio that was built specifically for people with disabilities. Ten of the wheelchairs will be available for use at the venue’s new splash park, Morgan’s Inspiration Island, when it opens this spring. The wheelchair uses high-pressured air as an energy source instead of batteries and electronics. It weighs about 80 pounds and takes 10 minutes to charge, compared to eight hours for an electric mobility device. HERL, which is a joint effort between UPitt, the University of Pittsburgh Medical Center and the U.S. Department of Veterans Affairs, was already working on a prototype of the PneuChair when it was contacted by representatives from Sports Outdoor and Recreation (SOAR), which oversees Morgan’s Wonderland, to help develop a power wheelchair for the splash park.
Numotion buys Horn’s
BRENTWOOD, Tenn. – Numotion has acquired Horn’s Medical Supply in Athens, Texas, the company announced April 14. The acquisition allows Numotion to better serve customers in eastern Texas, it says. Horn’s has been in business for more than 20 years and serves thousands of customers, according to a press release. “Expanding our presence in East Texas brings more mobility options to those who need them most,” said Mike Swinford, CEO of Numotion. Numotion will continue to serve customers from the Horn’s location in Athens. Horn’s employees, including founders Jim and Jerry Horn, will support customer sales and care, and product service and repair. As part of Numotion, they will have access to a larger product offering and support infrastructure that will help increase efficiency, according to the release. Numotion now has locations in nearly every state and serves more 250,000 customers annually, it says.
Thelma Prial passes away
GOOSE CREEK, S.C. – The wife of Sheldon Prial, a long-time advocate of the HME industry, passed away on April 17. Thelma Prial is survived by her husband of 67 years, and her children and grandchildren. “Mom and Dad were truly inseparable in both their lives and their careers,” wrote Pam Stein and Jon Prial, their children. “From the pharmacies they ran to the home health care dealer co-operative they established, they made every decision as a team and they never disagreed on anything (according to Dad).” Sheldon Prial, who turns 90 on May 5, will be moving from their home in Goose Creak, S.C., to an assisted living facility in Summerville, S.C. He will continue to have access to email at firstname.lastname@example.org.
GAO studies challenges, opportunities surrounding remote patient monitoring
WASHINGTON – Concerns over payment and coverage restrictions are barriers to healthcare providers and patients using telehealth and remote patient monitoring to improve quality of care, according to a new study from the Government Accountability Office. An example of such a restriction, the GAO says: Medicare telehealth coverage limits the geographic and practice settings in which beneficiaries may receive these services. For the study, the GAO reviewed Medicare documents and regulations, and interviewed agency officials. It also selected nine general and medical specialty associations with expertise and interest in telehealth or remote patient monitoring, and interviewed representatives from each of those associations. The GAO also found that Medicare models, demonstrations and a new merit-based incentive payment system have the potential to expand the use of telehealth and remote patient monitoring. It notes that CMS supports eight models and demonstrations in which certain Medicare telehealth requirements have been waived, such as requirements for the locations and facility types where beneficiaries can receive telehealth services.
DME MACs move custom items to set allowables
WATERLOO, Iowa – Custom cushions and backs—codes E2609 and E2617—now have set allowables in jurisdictions B and C, VGM Group reports. Previously, the custom items were individually priced and were averaging about 70% of MSRP/supplier price. Now E2609 has a set price of $450 and E2617 $550, VGM reports. “We are hearing that the new established allowables will not even cover acquisition cost for any of the products that are coded as custom fabricated,” it stated in a bulletin to members. Stakeholders are also concerned with the way the DME MACs in the two jurisdictions made the change—internally and without notice to the provider community. “There are many issues that are unsettling with how this came about and all are being addressed with CMS and the DME MACs,” VGM stated. “All industry advocates are aware of these issues and are reaching out to get answers and request that this change be rescinded.” Jurisdictions A and D have not implemented the change, VGM says.
Rotech Healthcare buys Griffin Home Health Care
ORLANDO, Fla. – Rotech Healthcare has bought Griffin Home Health Care, which has locations in Charlotte, Concord and Gastonia, N.C. Bill Griffin opened Griffin Home Health Care in 1983. “Griffin Home Health Care has been a quality provider for years,” said Tim Pigg, CEO of Rotech, in a press release. “They have a broad range of services and we are pleased to be able to bring them into the Rotech family of locations.” Rotech currently operates in 18 markets in North Carolina. This appears to be Rotech’s first acquisition this year. It had a quiet 2016, after a busy 2015, when it bought a number of HME companies, including Alert Medical in Fort Myers and Naples, Fla., in July. Duckridge Advisors served as the exclusive M&A adviser to Griffin Home Health Care.
Philips says its Trilogy 100 saves big money
AMSTERDAM – Royal Philips says its new Trilogy 100 non-invasive ventilator can reduce hospital readmissions for COPD patients, compared to patients not using NIV or using less advanced NIV therapy, following discharge. As a result, both hospitals and payers can see a significant cost savings, Philips says. Among a study’s findings for hospitals: After examining 1,000 COPD patients being treated with a multifaceted therapy approach using the Trilogy versus no NIV treatment or less advanced NIV therapy devices, hospitals saved $1.6 million in the first 30 days and $1.8 million in 90 days. For payers, the study found: Payers studying admissions of 100,000 severe COPD patients found cumulative three-year savings of $326 million. The study was paid for by Philips.
VGM: Take impact survey
WATERLOO, Iowa – The VGM Group is asking HME providers who haven’t already done so to take its Supplier Impact Survey. The survey measures the impact of policies and reimbursement cuts implemented in 2016 on providers and patients. Since launching in late 2016, the survey has garnered more than 350 responses.
Short takes: BOC appoints new board members
The Board of Certification/Accreditation (BOC) has named Margy Imlay and Richard Todd to its board of directors. Imlay is owner and president of Just Like a Woman, a women’s health boutique in Portland, Oregon. She is also a consultant and instructor for OandPEdu, where she is the principal instructor for hands-on mastectomy fitter classes around the country. Todd is owner and managing partner of Collier Orthotics and Prosthetics, KneedABrace Inc. and Comfort Sleeves, with locations in Sacramento and Pleasant Hills, California. He has more than 30 years of experience in the orthopedic field.
CORAL SPRINGS, Fla. – Arriva Medical, a provider of diabetes testing supplies, remains confident that it will get its Medicare billing status reinstated.
That may be a big reason why Abbott Laboratories last week finally agreed to buy Alere, Arriva Medical’s parent company, after months of court battles.
“Arriva is continuing to support its patients while working through the process of resolving the revocation of the billing number,” a spokesperson for parent company Alere told HME News in an email. “Arriva is in the midst of the administrative appeals process, with an appeal pending before an administrative law judge.”
Arriva Medical is not currently listed as one of the 11 mail-order contract suppliers for diabetes supplies on Medicare’s online supplier directory.
In the meantime, in March, the U.S. District Court for the District of Columbia denied Arriva Medical’s motion for interim relief and denied CMS’s motion to dismiss Arriva Medical’s complaint. Arriva Medical is considering an appeal.
In both cases, Arriva Medical argues that the administrative review process must be completed before CMS can revoke its billing status.
CMS revoked Arriva Medical’s billing status in 2016, alleging the provider submitted 211 claims for deceased patients between April 15, 2011, and April 25, 2016. Arriva Medical says the problem was with the agency’s HIPAA Eligibility Tracking System—it crashed due to the nearly 5.8 million claims the provider submitted during that time period.
Arriva Medical’s troubles were part of the reason why Abbott has agreed to buy Alere, but at a lower price than previously offered. Under the new terms, Abbott will pay $51 per common share to acquire Alere, for a new expected equity value of approximately $5.3 billion, reduced from $5.8 billion.
Abbott had previously filed a complaint in the Delaware Court of Chancery, asking a judge to terminate the deal, saying Alere was no longer the same company it tried to buy. Alere sued Abbott in the same court, asking a judge to enforce the deal.
ELYRIA, Ohio – The U.S. Food and Drug Administration will now pick back up on a third and final certification report submitted by Invacare’s third-party auditor.
The FDA on April 13 notified Invacare that it has accepted an updated second certification report submitted by the company’s third-party auditor, allowing it to resume design activities at its corporate headquarters and Taylor Street manufacturing facilities in Elyria.
“It’s good to have this milestone, but there’s more work ahead,” said Lara Mahoney, Invacare’s senior director of investor relations and corporate communications.
The FDA had originally accepted a first and second certification report in 2013, but after a follow-up inspection in 2015, the agency told Invacare it had more work to do. That work included applying its design control process to additional products and remediating certain design history files, Mahoney says.
Invacare’s third-party auditor submitted a third and final certification report to the FDA in February 2016, but that was “essentially paused” until work was completed on the second certification report, Mahoney says.
“Now that the FDA has accepted the updated second certification report, we are able to proceed,” she said.
The acceptance of the third and final certification report, which relates to Invacare’s entire quality system, will pave the way for lifting a consent decree that has limited the company’s ability to manufacture and sell certain products since 2012. Invacare must also submit its own report detailing its remediation work over the years, and the FDA must re-inspect the facilities.
“The big question is how long all of this will take,” Mahoney said. “It’s hard for us to say.”
In the meantime, the clearance to resume design activities couldn’t come at a better time for Invacare. The company plans to launch an update to its TDX line of power wheelchairs later this year.
“It’s important,” Mahoney said, “as we are now able to proceed with new design and product development work at the Taylor Street facility. This includes transferring the design of our new TDX SP2 power wheelchair to the facility and getting it into production there later this year.”
YARMOUTH, Maine – After a slow first quarter, buyer appetites for HME businesses are picking up, say M&A analysts.
“There’s still more sellers than buyers, but transactions are getting done,” said Rick Glass, president of Steven Richards & Associates. “I think we are bottoming out on the reimbursement, and we’re slowly starting to get some appetite even in the traditional HME and respiratory space.”
While reimbursement remains dire, the business-friendly new administration, along with new leadership at the Department of Health and Human Services and CMS, has analysts cautiously optimistic.
“We’re not going back to the good old days, but some fairer treatment of providers might allow them to move forward,” said Glass.
Still casting a shadow on the improving market, however, is uncertainty around what could happen to the Affordable Care Act.
“We’re seeing hesitation from people with the uncertainty over how a (healthcare overhaul) might impact Medicaid,” said Brad Smith, managing director/partner at Vertess. “If we could get some direction one way or another, I think that would help a lot.”
Where there isn’t hesitation, say analysts: Buyers—whether they are national or regional players—are looking to expand their geographical footprint. Case in point: Rotech Healthcare last week announced it had acquired Griffin Home Health Care, which has three locations in North Carolina. Rotech currently operates in 18 markets in the state.
Also in Griffin’s favor: It’s simply a good business, says Don Davis, president of Duckridge Advisors, which advised Griffin in the deal.
“That was a good, family-run business over the years with a good reputation and also access to bid contracts,” he said. “There’s not overwhelming value in the contracts—the value is in being able to offer the full line of products for referral sources.”
The supply space, which was hot in 2016, will stay hot in 2017, say analysts.
“CPAP supplies, urologicals, wound care—yes, I would expect we would continue to see consolidation there,” said Pat Clifford, managing director, home medical equipment, for The Braff Group.
YARMOUTH, Maine – A whopping 65% of respondents to a recent HME Newspoll say they can sustain their businesses for less than a year, if they don’t get reimbursement relief.
Thirty-six percent of respondents say they can sustain their businesses for up to six months, and 29% say they can sustain their businesses for six to 12 months.
“I have laid off long-time employees and cut benefits like health care, but there is no way to make up for 50%-plus cuts in Medicare,” wrote Don Chrysler of National Home Health Care in Amarillo, Texas.
CMS’s decision to apply competitive bidding reimbursement rates to non-bid areas in two waves in 2016 has sent ripples throughout the HME industry, forcing many providers to make drastic changes to their businesses.
The largest number of respondents—37%— says the biggest impact of the cuts on their businesses has been dropping certain products and services. It’s a tough decision that has made some providers more financially viable but has put patients in a bind.
“The biggest impact for us has been to drop certain categories, i.e. nebulizers, hospital beds, walkers, and only bill them unassigned for Medicare beneficiaries,” wrote Jim Lehan of Lehan’s Medical Equipment in Rockford, Ill. “We do enough cash business and non-Medicare business to most likely stay in business, but the patients have suffered as no one will take assignment on a lot of Medicare business.”
Twenty-eight percent of respondents say the biggest impact of the cuts has been going into debt, both professionally and personally, to keep their businesses afloat.
“We have debt now of $100,000, when we were debt free before the price reduction,” wrote Diane Friend of Valley Home Health Care in Roanoke, Va. “I have not received a salary for more than 11 months as an owner. We still cannot pay for our equipment and have to continue to finance. With rent, utilities, payroll, insurances, bonds, we still cannot pay the bills.”
Sixteen percent of respondents say the biggest impact has been cutting staff, 11% say closing locations, and 8% say putting growth plans on hold.
For many respondents, the impact spreads across their businesses.
“We have laid employees off, and we have had to borrow money to say open,” wrote Lana Cochrane of Personal Medical Equipment in Anna, Ill. “If things keep going as they are we will not be able to provide equipment to our customers much longer, and we service a very rural, impoverished area.”
For some providers, diversity has been a lifeline, whether it’s an accompanying retail business or other homecare-related business.
“We have survived by the skin of our teeth due to the fact that we also provide pharmacy services and state bid contract medications,” wrote Melissa Hammett of Professional Care Pharmacy in Monroe, La. “Had it not been for these private contracts, we would certainly be in a much different situation.”
But even after making changes to their businesses and leveraging diversity, it’s not enough for some providers. For them, the sense of despair is palpable.
“It’s been a slow, painful death, but they’ve gotten what they wanted: the shutdown of an industry of small, service-oriented businesses,” wrote Kathleen Weir Vale of HOPE Medical in San Antonio. “Another fiendish arrow in their quiver has been the bureaucratic documentation requirements. Those alone made our services marginally profitable, without even considering the first fee cuts, not to mention the auction. They’ve won. We all need to face it, close up shop and get a life.”
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