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February 28, 2011 Volume 17, Number 6

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Table of Contents
- CMS' Blum Gets No Positive Feedback on Competitive Bidding
- Industry Won't Give Up on Competitive Bidding Repeal
- AAHomecare Alert: RAC Is Wrong in CPAP Audits
- AMEPA Report: 'Bugs' Cause PWC Denials for Round 1 Winners
- Drive Begins for Complex Rehab Separate Benefit
- Face-to-Face Exam Goes on the List of Medicaid Questions
- Texas Medicaid Wrangles with Incontinence Supplies, DME 'Competitive Procurement'
- From HomeCareMag.com: News You Can Use
- Apria Reports Losses for Q4, 2010
- Graham-Field Expands Atlanta Operations
- Liberator Ups Advertising, Revenues
- PromptCare Acquires PRO2 Philadelphia
- Issa Interested in HME Regs; CMS Wants CERT Documentation, Too; More News in Brief

For more industry news, features and highlights from our latest issue, please visit our Web site at www.homecaremag.com.

- Headline News
CMS' Blum Gets No Positive Feedback on Competitive Bidding
It’s not working for patients and businesses are going down, Florida providers tell agency’s deputy administrator

ORLANDO, Fla.—Apparently hoping to better understand the effects of Round 1 competitive bidding, CMS’ Jonathan Blum heard from Florida providers last week in a quick meeting that nevertheless pointed up the severe cracks in the program, according to attendees.

“It seems as though he was there to collect information and see how they could improve Round 2,” said Sean Schwinghammer, executive director of the Florida Alliance for Home Care Services. “But there are fundamental problems here; they are not little clean-ups.”

Blum, CMS deputy administrator and director of the Center for Medicare, called the Orlando, Fla., meeting. He was accompanied by Robert Foster, special assistant to the Office of the Regional Administrator (Atlanta); Elaine Hensley, the chief ombudsman for the CBIC; and Letisha Davis, the CBIC ombudsman for the Miami area.

Schwinghammer said he had two days’ notice (one of which was Presidents’ Day) that the Feb. 23 meeting was to occur. Still, more than a dozen providers including members of FAHCS and the Florida Association of Medical Equipment Services showed up, and three dozen sent in letters detailing their experiences with competitive bidding since its implementation Jan. 1.

Attendees included bid winners in multiple categories, winners in only one category and non-winners, “each with their own perspective on the program, no one with a positive perspective,” Schwinghammer said.

Blum started off the hour-long session with a single question: “How do you think it is going?”

Provider Fino Randazzo of Florida Home Health Equipment & Supplies in Orlando was the first to respond, Schwinghammer said, telling Blum that he won a contract in oxygen but because he won in only one category he was not getting any referrals.

After that, “It was just a layering and layering of the problems. No one said anything positive about the program, even the people who had won in all the categories,” Schwinghammer said. “There wasn’t a grain of goodness you could take out of this, other than the fact that [Blum] was there. His presence made it significant. And it is a compliment to take the time.”

In an atmosphere that was characterized by attendees as “respectful” and “calm,” providers brought up a host of issues including “fundamental points about the cost of products, unemployment, lack of calls to a majority of bid winners because discharge planners only call those who won in each category, the failure of subcontracting, suicide bids and more,” Schwinghammer said.

One provider admitted submitting lowball bids because he thought he could float his business “until this goes away,” Schwinghammer said. “Now he doesn’t think he can survive.”

When Schwinghammer asked the group if anyone there was being reimbursed at the rate at which they bid, no one was. The rates were all lower.

“We’d like to know who set the bids,” Schwinghammer told Blum.

Another notable issue, attendees said, came from a provider who told Blum he had gotten a call on Monday from a hospital wanting him to provide oxygen. He explained that as a non-bid winner he was unable to service the patient. At 5 p.m. on Tuesday, he was called by a company from out of state that had won a bid. Could he service an oxygen patient so the patient could be released from the hospital?

It was the same patient, who spent at least one day more than needed in the hospital.

“If you look at a night’s stay in the hospital, it’s a year’s worth of oxygen [at home],” said Lori Danford, director of Wuesthoff Home Medical Equipment in Melbourne, Fla. “So they’re not saving money.”

Danford said her company was the only one attending that was not in Round 1, and she was struck by the fact that whether or not a company won a contract, it was struggling to survive.

“They talked about suicide bids and how they really hurt everybody,” she said. “You think that people who didn’t win the bids are suffering, but the ones that won are, too. Patients are suffering and businesses are going down. They are closing their doors right and left.”

Another issue, according to both Danford and Gene Sego, owner of Sego’s Home Medical with locations in Orlando, Titusville and Clermont, Fla., was the lack of education about the program. Sego noted that CMS was supposed to alert winning providers at least 90 days before implementation of the program. In reality, providers were notified 32 days before—not nearly enough time to educate everyone.

Those at the meeting said physicians, beneficiaries and referral sources received little, if any, education about the program.

“No one knows how the program works or what the rules are or where to get the equipment,” said Sego. “It’s doomed for disaster.”

One of the key misunderstandings concerns repairs, he said. “Repairs are not in the bid. Anybody can take care of it,” he said. However, Medicare help line personnel are telling beneficiaries that bid winners are required to do repairs. Sego, who won in every category except mail-order diabetics, recently opted not to repair a broken CPAP.

“It makes me look like I am not doing the right thing,” he said. “I am fulfilling the obligations of this contract to the best of my ability, but it makes it very hard when Medicare is giving misinformation. It’s very hard on the beneficiaries and the providers.”

Continued Sego, the third generation to operate Sego’s, “I like this business. I like competition. That’s what America was founded on. I think a lot of good companies are getting put out of business by competitive bidding or audits—a lot of good, family-run companies like mine that I know take good care of their patients. [CMS is] making the patient suffer.”

He hopes that Blum got that message.

“I hope Mr. Blum hears some of our concerns if they want to make this program work,” Sego said. “Right now, I don’t think it is working very well for anyone.”

Providers at the meeting said Blum appeared attentive and engaged, taking notes, and that he asked for suggestions about how to improve the program.

“’I know there are some issues out there,’” Schwinghammer said Blum told him.

The FAHCS executive director said he has sent Blum an email requesting another meeting to discuss achieving CMS’ goals “without destroying the industry.”

Schwinghammer has no idea whether that will happen or what Blum’s perceptions were of the meeting. Now, he said, “It’s up to CMS to react.”


Andrea's 2011 Audit Outlook
Join DMEPOS consultant Andrea Stark on March 22 as she takes you inside the world of Medicare's latest weapons in its audit arsenal—RACs and ZPICs. If you are looking for proactive steps to protect your business, then this webinar is for you! Learn how to avoid common billing errors that could be increasing your odds of being audited, simple procedures you can implement to protect yourself and your business—and your options if you find yourself caught in the throes of a ZPIC or RAC audit. Co-hosted by HomeCare, this is NOT your typical "how to submit an appeal" webinar. The webinar will be held on Tuesday, March 22, at 11 a.m. and 3 p.m. ET—two time slots! Register today at www.miravista.com.
Will your revenue increase, decrease or stay the same this year? To vote in HomeCare's monthly Web poll, visit www.HomeCareMag.com.


Industry Won't Give Up on Competitive Bidding Repeal
Advocates looking for new bill by mid-March

ATLANTA—Here's the HME industry's response to CMS, the GAO and the Obama administration: We're not giving up on a repeal of competitive bidding.

Last year, H.R. 3790, which would have repealed the entire bidding program, gained 259 cosponsors in the House but never made it to the floor. Earlier this month, just as the American Association for Homecare announced a renewed "full-court press" to stop the CMS project, the industry was again hit by a slew of negative announcements.

On Feb. 14, President Obama unveiled his 2012 budget, which would tie federal payments for Medicaid to Medicare's bid rates and put all power wheelchairs through prepayment review. The same day, the General Accountability Office called on CMS to further slash oxygen reimbursements. Later in the week, the Medicare Fraud Strike Force made national headlines when it nailed 111 people for more than $225 million in Medicare fraud. The bad news was, some of those accused were HME providers.

In addition, headline-grabbing Medicaid woes are causing a budget meltdown across the states, and Congress' attention is elsewhere as members on both sides of the aisle focus on a possible government shutdown—which could happen Friday if legislators don't agree to stop it.

Despite the tough climate, stakeholders said they were not deterred in the competitive bidding battle.

"Congress has been debating a long list of budget cuts, and, of course, we'll fight any proposals to make more cuts to our sector. But budget proposals or agency reports calling for cuts don't always make it out of the parking lot," said Michael Reinemer, vice president, communication and policy, for the American Association for Homecare.

"On the other hand," he added, "the bidding system is the mother of all threats. It's real, it's now, it's wreaking havoc, it's spreading."

"While the confluence of yet another prepayment review, the potential of further cuts to oxygen and yet another fraud report will again tax the tolerance of the HME community, these companies are a hardy bunch," Mark Higley, vice president for development for the VGM Group, Waterloo, Iowa, said of home medical equipment providers. "The industry will deal with each of these threats, but certainly there will be no reduction in efforts to derail competitive bidding."

Implemented in nine cities Jan. 1, the DMEPOS bidding program has already seen its share of casualties as businesses have closed, jobs have been lost and Medicare beneficiaries have experienced longer hospital stays.

Rob Brant of City Medical Services in Miami said his company has heard from Medicare patients who cannot find anyone to service or even provide their equipment.

"We have CMS saying, 'We have created this bidding utopia and everything is perfect,' and it is far from the truth," Brant said. He refers the frustrated beneficiaries who call him to the Medicare answer line, he said, but often they call back even more frustrated because they have been steered to "companies that don't answer the phone or companies that didn't win contracts."

Some give up trying to find a legitimate provider, Brant said, and pay out of pocket.

"It isn't right," he said. "And what about those others who can't afford to pay out of pocket and have just given up? Those are the ones we will never know about."

It is incumbent upon the industry to fight to repeal competitive bidding before more serious problems erupt and before Round 2 gets underway later this year, Brant and other advocates said. Many are looking to AAHomecare's March Legislative Conference as the vehicle for driving home to legislators the need for a repeal.

"The bottom line is, now more than ever we need everyone in the country to come to the Legislative Conference," Brant said. "It seems the Obama administration feels that all the health care problems can be resolved by beating up the HME industry. We are not the problem. We are the solution."

The Legislative Conference will be held March 16-17 at the Westin Washington, D.C. Speakers include Reps. Jason Altmire, D-Pa.; Phil Gingrey, R-Ga.; Tom Price, R-Ga.; Heath Shuler, D-N.C.; and Glenn Thompson, R-Pa. But the event's focus will be taking the industry's positive message — and how it will be affected by competitive bidding — to lawmakers on Capitol Hill.

"No amount of misguided policies or reports can undermine the fact that home care is vastly more cost-effective than the alternative, it's vastly preferred by the people and it's clinically proven to produce good outcomes," Reinemer said.

"We need to remind each legislator and their staff both in Washington and back home about the value of home care and about the severe downside of this bidding system," he said. "For new members in the House and Senate, it may be the first time they hear about this problem. So we need to quickly get the full volume of our complaints and concern to these offices now, and again during the March Legislative Conference, and again after that."

While some have wondered if, at this point, getting competitive bidding repealed is too much of a long shot, others are hankering to push the effort against the Medicare bid.

"We were really happy to hear the news that that is what we are taking to the Hill in March," said Karen Estrella, executive director of the New England Medical Equipment Dealers association. "A lot of people think it's a pipe dream that we can get it repealed. A lot of us are saying, 'Give us that fight. That's a fight that we want.'"

Higley also thinks it is the right tack.

"We as an industry need to continue to drive this point forward to both the legislative and executive branches that the CMS competitive bidding rule costs jobs," he said.

"A task force of industry stakeholders is leading an effort to convince Congress that it must act now to repeal the program via legislation," he said. "I believe the industry is making headway in suggesting that the bidding program stands squarely in the way of saving thousands of small businesses and tens of thousands of jobs."

As to whether or not it will be hard to find a champion to carry a new repeal bill, Brant thinks not.

"I don't perceive it as a problem," he said. "Obviously, we have new legislators and people who are no longer in Congress, but there are so many from the Round 1 areas that are aware of this problem, I really don't perceive it as a problem in finding someone."

Reinemer is even more optimistic.

"In terms of timing, we hope to have a bill introduced by the Washington Legislative Conference," he said.

For details or to register for AAHomecare's Legislative Conference, go to www.aahomecare.org/cde.cfm?event=306263.


AAHomecare Alert: RAC Is Wrong in CPAP Audits
ARLINGTON, Va.—According to a late Friday message from the American Association for Homecare, RAC audits in Jurisdiction D are targeting CPAP equipment and supplies for recoupment when the Medicare program did not pay for the sleep test.

“The association is very concerned that because CPAP therapy is frequently prescribed prior to an individual becoming Medicare eligible, many providers who furnish replacement equipment and supplies will be targeted for recoupment,” the message said.

Based on advice from its CPAP workgroup, the association had these recommendations and reminders for HME providers targeted for such a RAC audit:

1) Make sure it is a RAC audit.
2) Remittance advice remark code N432 is used to identify RAC adjustments. This code appears on the claim level header detail line of your Medicare remittance advice.
3) Offset of the overpayment will occur on day 41 from the date of the demand letter if payment has not been made or there a request for an appeal.
4) File a Medicare DME redetermination request form.

AAHomecare said it is bringing up the issue with DME MAC officials in Jurisdiction D (Noridian Administrative Services) as well as CMS staff who oversee RAC activities “in an effort to correct the interpretation now being applied by the RAC contractor.”

Health Data Insights is the RAC contractor in Jurisdiction D.


AMEPA Report: 'Bugs' Cause PWC Denials for Round 1 Winners
MIAMI—In a Friday newsletter, the Accredited Medical Equipment Providers of America said Round 1 contract providers in the Charlotte, Miami and Orlando competitive bidding areas have reported CO-108 denials—“Payment adjusted because rent/purchase guidelines were not met"—on standard power wheelchair claims.

According to the report, a representative from Cigna, the Jurisdiction C DME MAC, said the problem was caused because the claims system is not recognizing that the patient is in a competitive bid area. On Jan. 1, removal of the first-month purchase option changed the type of sale in power wheelchairs from a purchase to a rental in all areas, except those in the Round 1 CBAs.

The representative said “they can see in the system that the provider is a bid winner, but as for beneficiaries residing in a CBA (where the first-month purchase option is still applicable), the ‘bugs’ have not been worked out of the system yet.”

Here’s the rest of AMEPA’s report:

For contracted supplier David Warren, from First Choice Medical in Matthews, NC, that excuse is unacceptable.

"It is bad enough that we have to try and survive with an eleven hundred dollar cut in reimbursement, but how does Medicare expect us to continue to service patients, when they are not even paying our claims."

So far First Choice has received the CO-108 denial code on all three claims that were sent in January, and they are awaiting an answer on seven other claims that are still in process.

Warren explained, "I can't just tell Pride and Invacare, 'Sorry I can't pay you for 10 power chairs, because I got denied by Medicare,' they will cut me off.

"I can't tell these beneficiaries, 'Sorry, I can't send a technician to retrain you, adjust or fix your power wheelchair, because Medicare denied it,’ I am now responsible for these patients."

Warren added, "In addition to the financial strain, I now have to deal with calls and complaints from patients who received denial letters from Medicare. They fear they will lose equipment they rely on. The patients think we are doing something wrong. It hurts our reputation with physicians. The entire process is very aggravating."

Warren said he will bring the denial letters with him to Washington when he attends AAHomecare's Legislative Conference next month to meet with his congressmen and senators.

"Congress needs to know that Medicare is making it impossible for contracted suppliers to serve patients and stay in business."


Drive Begins for Complex Rehab Separate Benefit
Lawmakers want to know costs

WASHINGTON—It wasn't Forrest Owens' first time lobbying in Washington, D.C., but this time, it was a lot more successful: One of the congressmen he visited agreed to cosponsor a bill to create a separate Medicare benefit for complex rehab.

"I was jumping up and down when I left that office," said the co-owner and CFO of Glass Seating and Mobility in Memphis, Tenn.

Owens and 159 other providers, clinicians and consumers attending the annual CELA (Continuing Education and Legislative Advocacy) Conference Feb. 16-18 helped push a separate benefit the first step of the way with more than 220 visits to legislators on Capitol Hill.

The annual conference, sponsored by the National Coalition for Assistive and Rehab Technology and the National Registry of Rehabilitation Technology Suppliers, kicked off the formal drive for the separate benefit, which would split off complex rehab from traditional durable medical equipment. CELA attendees presented a package of information to legislators that included draft legislation, a position paper and the proposal for the benefit.

"I think we had very positive responses with people," said NCART Executive Director Don Clayback. Legislators were familiar with complex rehab after last year's Hill visits, he said, and "they now have a clear understanding of the issues we are facing."

Those two factors made the visits more successful than in the past, Owens said. "This time we had the [draft] legislation. We had it right there and we could give it to them," he said. "The legislation just makes sense, so it's hard to discount that." As a result, Owens said, Rep. Steve Cohen, D-Tenn., agreed to cosponsor the bill.

Legislators also heard by phone from those who couldn't attend the CELA conference.

"We had a national call-in day for complex rehab," said Simon Margolis, executive director of NRRTS. "We had close to 800 register on the website. A few people that we were meeting with mentioned that they had gotten some calls."

While a leader in the effort hasn't yet surfaced, plenty of support has, Clayback said. "We do have several offices we are talking to we feel may champion the bill for us … but they want us to get more information on the cost of the legislation."

Owens said that was a common refrain among the legislators he visited, since lawmakers caught in the heat of a national economic crisis are particularly wary of any legislation that might further deplete the nation's coffers. "I got to meet with a first-time senator, Sen. [John Boozman, R] from Arkansas. He was very aware about what complex rehab was. He was concerned, as a lot of the representatives we met with were, with the score — the cost analysis," Owens said.

Margolis said stakeholders are already working with a Washington group to compile the score.

"That's critical," he said. "We are going to have to have those numbers. Even something that is only costing a couple of million dollars — you still have to have the combination of a good cause that people can get behind and an appropriate score."

Organizers said they do not expect creating a separate complex rehab benefit to be very costly. In the draft legislation, reimbursement is set at no less than 100 percent of 2009 allowable charges for various complex rehab codes and no more than 110 percent. There are stipulations for a hike in reimbursement for inflation, as well as for fees for repairs and rental equipment.

Even if the score is high, it doesn't mean hope is lost. "You're not dead if it isn't a good score—you're just slowed down a bit," Margolis said. "I don't think that will be an issue … The bill will be introduced this year, I am absolutely certain."

"All we have to do now is follow up with the cost analysis and the ball is really rolling," agreed Owens.

Clayback, too, was encouraged by response from legislators. In an email to CELA attendees last week, he encouraged them to send thank-you notes to their legislators and reinforce the benefit request with a copy of the draft bill and a letter from the Independence Through Enhancement of Medicare and Medicaid Coalition (ITEM).

The group is a coalition of more than 30 organizations that support a separate benefit, including the American Academy of Physical Medicine and Rehabilitation, the American Association of People with Disabilities, the Christopher and Dana Reeve Foundation, Easter Seals, National Multiple Sclerosis Society, Rehabilitation Engineering and Assistive Technology Society of North America and United Cerebral Palsy.

Clayback also suggested including a link in the follow-up email to a video of Jenny Siegle, a complex rehab technology user from Denver who has advocated for the separate benefit at both this year's and last year's CELA conferences.

"Stay engaged and stay in touch with your congressional contacts," he urged. "It's all about follow up, follow up, follow up!"

"This is only the beginning," Margolis said. "If people don't follow up with members of Congress, then they have really wasted their time on the Hill." Advocates must hold legislators and aides accountable for whatever they said in the Washington meetings.

Margolis said the industry has spent $200,000 on the initiative, with about $120,000 from NCART, NRRTS and the American Association for Homecare.

"I believe this is our last, best hope," he said.

As for Owens, he knows it will be a battle to get the separate benefit legislation introduced and passed. But he was encouraged by his reception in Washington and he came home reinvigorated and enthusiastic.

"It was an opportunity to meet other people in the trenches fighting like we are for our patients' rights," he said. "It sort of reaffirms that there are other people out there fighting the good fight, too."


Face-to-Face Exam Goes on the List of Medicaid Questions
ATLANTA—When it comes to home medical equipment, government agencies have never been known for their promptness or clarity when it comes to notification or guidance on new policies.

In Georgia, providers were notified Dec. 28 that the face-to-face requirement under the Affordable Care Act would be effective Jan. 1, 2011, when serving the state’s Medicaid patients.

Under the nation’s new health reform law, Medicare beneficiaries are required to have an in-person doctor's visit in order for a physician to prescribe any items of DME. The face-to-face exam must be within six months of the physician order. The Department of Health and Human Services also can apply the requirement to items paid for under state Medicaid programs.

The Georgia Association for Medical Equipment Suppliers has asked for a delay in the state’s implementation until major questions about the new policy can be resolved: “Can you offer clarification on the new face-to-face requirement? How should the doctor visit be noted in the provider's records? Do we need to submit this to anyone? Does this requirement apply to disposable supplies? Enteral nutrition? Wheelchair repairs?”

State association members have pointed out their concerns about the “burdensome” requirement to officials at the state’s Department of Community Health, according to GAMES Executive Director Teresa Tatum, but so far, there have been no answers.

“The only response we got back was an email that said ‘the requirement stands as is,’” Tatum said.

Although CMS has issued no guidance on the new requirement, state personnel have indicated Georgia’s Medicaid program must be compliant with the federal law, Tatum said. “But how do you actually do it?” she wondered. “The doctor and the patient have to make it happen, but how do we enforce it?”

The association has requested that the issue be addressed at the next meeting of the state’s Medical Care Advisory Committee. In the meantime, Tatum said, the new requirement puts providers in the middle and leaves them holding the bag.

Georgia’s Medicaid providers have also been left hanging with a reimbursement issue on claims for Medicare-Medicaid dual eligibles, Tatum said. When the state changed processors to HP Enterprise Services last year, payments for the crossover claims stopped.

“We’re not getting responses from DCH or HP about the claims,” she said. “It’s just another frustrating situation where we’re caught in a circle and getting no answers.”


Texas Medicaid Wrangles with Incontinence Supplies, DME 'Competitive Procurement'
AUSTIN, Texas—On Feb. 11, Texas Medicaid providers were surprised to learn of changes to incontinence products quantities that will take effect April 1. According to Barry Johnson, president of the Texas Alliance for Home Care Services, the change was posted on the state’s Medicaid website “literally overnight with no notice.”

“The manufacturers we contacted were very concerned and uninformed,” Johnson said. “They must now re-tool their packaging to meet the new supply requirements,” he said, noting at least one major vendor has said meeting the April 1 date isn’t possible.

Johnson said affected items include diapers, pull-ups and liners, which will be reduced from 300 per month per beneficiary to 240; and underpads, which will be reduced from 150 per month per beneficiary to 120.

If beneficiaries need more, providers must get a letter of medical necessity from the physician demonstrating need, although “we have no guidance what would qualify on the LMN for approval of additional supplies,” Johnson said.

“This is absolutely ridiculous because it affects special needs beneficiaries with diseases such as cerebral palsy, spina bifida and muscular dystrophy,” he continued, pointing out that patients with “these and other neuromuscular diseases never experience improvement in their urinary control. In fact, the loss of bladder control becomes worse by age.

“These reductions will severely affect special needs beneficiaries ... most are children,” Johnson said. “Guess nobody said the state had a heart for less fortunate individuals who cannot go to the Capitol and complain.”

Another issue for Medicaid providers, Johnson said, has added Texas to the list of states eying “competitive procurement” for DME.

Based on a proposal from Thomas Suehs, executive commissioner of the Texas Health and Human Services Commission, the new system would take effect in September 2012 and would either limit Medicaid providers to those selected through a competitive procurement process or through competition for exclusive manufacturer agreements.

“Either approach will result in lower reimbursement rates,” Suehs said in a report presented Feb. 17 to the state’s Senate Finance Committee on Medicaid.

Johnson said he would be testifying before the committee about the effects of such a change “if they will listen.”

Last year, Texas Gov. Rick Perry threatened to opt out of Medicaid. The state is now asking the federal government for permission to operate the program as it sees fit.

Texas Medicaid covers 3.6 million beneficiaries, and the state spends 25 to 30 percent of its budget on the massive program. That figure could rise to 40 percent if growth trends continue, state officials believe.


From HomeCareMag.com: News You Can Use
Having trouble keeping up? Check www.HomeCareMag.com for these stories and other recent headlines:

Obama Budget Lands DME Sucker Punch

GAO: Reduce Home Oxygen Pay

Divide Grows Greater in Competitive Bidding War of Words

Fraud Takedown Nets 111 in False Billing Schemes


HME Company Newswire
Apria Reports Losses for Q4, 2010
LAKE FOREST, Calif.–In a financial statement issued Feb. 18, Apria Healthcare announced net revenues decreased for the fourth quarter and year ended Dec. 31.

For the final three months of 2010, net revenues slid $8.4 million, or 1.6 percent, to $527.7 million from $536.1 million in the fourth quarter of 2009. The company reported a net loss of $19.9 million for the quarter.

“The decrease in revenue was due primarily to the non-renewal or termination of, or changes to, certain payor contracts, partially offset by an increase in home infusion therapy revenue. We expect to continue to strategically evaluate our payor contracts,” the company stated.

For the year, net revenues were $2.08 billion compared to $2.09 billion in 2009. Apria’s net loss for 2010 was $17.4 million.

Looking to its performance in 2011, the statement said Apria will be affected by “increased selling, distribution and administrative costs related to the return of certain offshored billing and collections functions to our personnel in the United States as we will no longer have the benefit of favorable offshore labor rates; a full year impact of additional sales personnel that were only added for a portion of 2010; and an unfavorable impact related to Medicare competitive bidding.”

In addition, according to the company, “the collection of accounts receivable is expected to remain one of our most significant challenges.”

Earlier this month, the 500-branch provider announced it would acquire Praxair’s U.S. home care division.


Graham-Field Expands Atlanta Operations
ATLANTA—GF Health Products announced last week it is relocating its Lumex recliner production from Taiwan to Atlanta. With help from a local economic development program, the company will renovate a 96,000-sq. ft. facility in the city’s Doraville suburb and add another 7,200 square feet to that footprint.

Marking the third phase of the manufacturer’s “Made in the USA” initiative, the move represents $1.75 million in capital investment and 17 new jobs.

“We began our Made in the USA initiative to provide our customers with a more unique and ‘only from Graham-Field’ product,” President and COO Ken Spett said in a release. “Producing and assembling products in the States provides several advantages such as streamlined logistics and qualified workforce—both of which we found to be very strong in the [Metro Atlanta] region.”

The company kicked off the initiative in July 2009 with production of the Patriot Homecare Bed at its Fond-du-Lac, Wis., facility. The bed integrates headboards and footboards manufactured overseas with a domestically produced sleep surface.

Graham-Field said it is working “to provide the highest quality products at the right price” by combining global component sourcing with in-house engineering and manufacturing.

In addition to its Atlanta and Fond du Lac operations, the company also has a manufacturing facility in Warwick, R.I., and distribution centers in St. Louis, Los Angeles and East Rutherford, N.J.


Liberator Ups Advertising, Revenues
STUART, Fla.—Liberator Medical Holdings reported record revenue for its first fiscal first quarter ended Dec. 31. Sales for the three months increased 33.3 percent to $12.2 million compared to $9.6 million for the same quarter in 2009. Gross profit for the three months rose 33.1 percent to $7.87 million compared to $5.91 million for the three months in 2009.

The increase was primarily due to an emphasis on the mail-order supply company’s direct response advertising campaign, according to a release. Liberator’s advertising expenses increased by $1.1 million, or 135.9 percent, to $1.9 million for the quarter, compared to the same period in 2009.

"The company has experienced substantial growth over the past three fiscal years despite the downturn in the U.S. economy. We have increased sales for eleven consecutive quarters,” President and CEO Mark Libratore said. “We plan to continue our advertising efforts over the next twelve months to attract new customers and expand our operations to service our new and existing customers. We expect our revenues to continue to grow over the next three quarters of fiscal year 2011 due to our advertising and marketing programs."

The company provides diabetes and general medical supplies, personal mobility aids and urological, ostomy and mastectomy products.


PromptCare Acquires PRO2 Philadelphia
CLARK, N.J.—The PromptCare Cos. has acquired substantially all of the operating assets of PRO2 Philadelphia, which provides ventilator therapy and specialty respiratory products and services. PRO2, which will now be operated as PRO2 Respiratory Services, has three offices serving the greater Philadelphia, southern New Jersey and Delaware markets. Terms of the transaction were not disclosed.

"PRO2 is a long-standing specialized provider of pediatric care with a reputation for high quality clinical products and services,” Tom Voorhees, PromptCare president, said in a release. “The acquisition of PRO2 facilitates PromptCare's continued strategic focus on higher margin, pediatric oriented products and services and significantly expands our geographic service footprint.” In addition, Voorhees said, the transaction is expected to generate payer, operational “and best practice synergies."

Founded in 1985, PromptCare provides specialty respiratory products and services and home infusion therapy in New Jersey, New York, Connecticut, Massachusetts, Pennsylvania and Delaware for children and adults. PromptCare is a portfolio company of MidMark Capital.


In Brief
Issa Interested in HME Regs; CMS Wants CERT Documentation, Too; More News in Brief
WASHINGTON—AAHomecare has met again with senior staff from the House Oversight and Reform Committee on HME regulations that negatively impact the economy and jobs, its newsletter reported last week. Chaired by Rep. Darrell Issa, R-Calif., the committee is examining regulations–existing and proposed–that result in lost jobs. The association said it has brought up a number of regulations related to competitive bidding, respiratory therapy, power mobility devices, diabetes testing equipment and supplies and Medicare audits that do just that. AAHomecare noted Issa’s staff was interested in its concerns, particularly in “examples of how CMS has not followed the proper regulatory process relating to HME issues.”

CMS Wants CERT Documentation, Too
BALTIMORE—CMS will be conducting follow-up calls to providers for the Comprehensive Error Rate Testing (CERT) program. According to a message from the agency: “Our staff may contact you to obtain all necessary medical record documentation for claims reviewed under the CERT program. Although you may have already received letters and telephone calls from the CERT contractor, these additional efforts by CMS to obtain adequate documentation may change your claim's status from ‘improper payment’ to ‘proper payment.’ This will allow us to calculate a more accurate Medicare FFS error rate, while also reducing the amount of improper payments.”

Medicaid RAC Deadline Delayed
BALTIMORE—CMS will delay its April 1 deadline for states to implement their Medicaid Recovery Audit Contractor programs until sometime later in 2011. "Out of consideration for state operational issues and to ensure states comply with the provisions of the final rule, we have determined that states will not be required to implement their RAC programs by the proposed implementation date," the agency said in a bulletin. Instead, an implementation date will be included when a final rule for the Medicaid RAC program is issued. States were required to set up RAC programs to audit payments to Medicaid providers under the Affordable Care Act.

Medtrade Spring Debuts Pre-Show Seminars
LAS VEGAS—Medtrade Spring organizers have announced a full day of pre-show seminars for the mid-year event, which will take place April 12–14 at the Sands Expo and Convention Center in Las Vegas. To be held on April 12, the seminars will provide in-depth education on a range of topics including audits, competitive bidding, compression therapy, mobility, oxygen therapy, sales and marketing and sleep therapy. “The need for clinical and operational information continues to be critical for HME providers and other home care professionals,” said Kevin Gaffney, show director. “These seminars will address the topics that are at the forefront of our attendees’ needs.” Registration costs and detailed descriptions for individual seminars can be found at www.medtrade.com. Register before March 14 to take advantage of special pricing.

Invacare Offers eBook
ELYRIA, Ohio—Invacare has launched an electronic book that offers tools providers can use to help redefine their business approach. The interactive ebook includes building blocks for a business plan, with information on financing, non-delivery oxygen technology, merchandising, repairs and co-pay collection. “National competitive bidding is changing the business landscape for those in the initial bid areas, as well as providers preparing for the possibility of widespread reimbursement changes,” said the company’s Carl Will, senior vice president, global commercial operations, said in a release, adding that focusing on the fundamentals of business is critical. The One Partner ebook is available at www.invacare.com to those accessing Invacare Pro.

Pride Sets 2011 Tour
EXETER, Pa.—Pride Mobility Products and Quantum Rehab have announced the new 2011 Professional Education Partnership tour dates. The 24-city national tour begins March 16 in Orlando, Fla., and continues through October, with a final stop in Wilkes-Barre, Pa., near company headquarters. This year’s curriculum includes sessions on “Mobility Product Troubleshooting and Repair,” “Complex Mobility: Solutions to Meet the Client’s Needs” and “The Science of Mat Evaluations & Wheelchair Prescription.” Featured speakers include Jodie Stogner, PT, ATP, founder of Southeastern Assistive Technology Solutions in Jackson, Miss., and Bill Pierce, PT, a clinician specializing in neuro-rehab at Sacred Heart Medical Center in Eugene, Ore. See a complete schedule and course list at www.prideprovider.com.

VGM Promotes Morris
WATERLOO, Iowa—Alan Morris has been promoted to director of alternate care programs for VGM Group and “will be responsible for leading VGM into new opportunities in the health care marketplace, as well as continuing to develop some of our current offerings,” VGM & Assoc. President Ron Bendell said in a release. Morris will work on developing the group’s Home Nursing Network of America, which offers independent home health agencies participation in national managed care contracts, into a group purchasing alliance, along with developing new alternate care programs in telehealth and infusion drug services. Morris has been a regulatory analyst with VGM.


To revisit this news anytime during the week, check www.HomeCareMag.com. We welcome your comments. Drop a line to HomeCare Editor-in-Chief Gail Walker at gwalker@homecaremag.com.



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