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June 13, 2011 Volume 17, Number 22


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Table of Contents
- Consumer Groups: Exempt HME from Medical Device Tax
- Tennessee Companies Form HME-Only State Association
- NGS Begins Anti-Fraud Card Swipe Pilot
- HMEs Should Be Part of ACOs, AAHomecare Says
- Take Me Out to the Ball Game—Courtesy Mobility Warehouse
- Make Plans Now to Attend Medtrade 2011
- ATG Acquires WestMed Rehab Division
- $25M Crystalizes for The Scooter Store
- Neighborhood Move for Insulet
- Heartland Tops 1,000; 'No Turning Back' for Bryan Anderson; More News in Brief

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

- Headline News
Consumer Groups: Exempt HME from Medical Device Tax
WASHINGTON—Consumer and advocacy groups for those with disabilities last week called for HME to be exempted from a medical device tax required under health care reform, saying it would prevent consumers from obtaining needed devices.

In separate letters to U.S. Treasury Secretary Timothy Geithner, 30 members of the consumer-led ITEM Coalition and a group of 18 disability-related organizations urged the secretary to exempt HME from the tax.

Set to begin in 2013, the 2.3 percent tax on medical device company revenues is required under the Affordable Care Act and is estimated to raise $20 billion over 10 years. HME leaders, however, have warned it will send more of the industry's manufacturing jobs offshore and curtail research and development. Providers also fear the tax will have a trickle-down effect, causing them and their patients to have to shoulder greater product costs.

“We believe that Congress intended device sales to consumers to be exempt from the medical device tax so the tax does not directly flow downstream to impact consumers,” said a June 7 letter signed by the group of 18 organizations, among them the American Association of People with Disabilities, Christopher and Dana Reeve Foundation and United Spinal Association. “Application of this tax to medical equipment used by individual consumers could inevitably restrict access to necessary and appropriate medical devices and supplies.”

The groups went on say the exemption should include “a broad array of devices and supplies that are used to improve mobility (e.g., wheelchairs, canes, crutches, walkers, prosthetics, orthotics, etc.), or improve the ability to breathe via prescribed oxygen (e.g., oxygen devices and supplies), and other items such as home care beds, bath safety aids, commodes and other devices that enable consumers to live in their homes and communities, rather than in a health care institution.”

Read the full letter from the groups under “What’s New” at

In their June 8 letter, the ITEM Coalition members, among them Easter Seals and United Cerebral Palsy, pointed out that “Americans paid over $18 billion out of pocket to purchase durable medical equipment in 2009 (over 50 percent of all DME expenditures and $2 billion more than all private and public health insurance payers combined for that year).

“Failure to exempt from the tax medical devices that are purchased by individual consumers will result in increased costs for individuals with disabilities and could result in consumers going without needed devices,” the coalition said.

The organizations’ comments support those from HME providers and manufacturers, who have been pushing for the exemption through comments to the Department of Treasury and talks with the IRS.

Under the health reform law, a “taxable medical device” is defined in section 201(h) of the Federal Food, Drug and Cosmetic Act and includes class I, II and III medical devices—which cover HME. Exceptions to the ACA requirement would be eyeglasses, contact lenses, hearing aids and “any other medical device determined by the Secretary to be of a type which is generally purchased by the general public at retail for individual use.”

“[HME devices] are for an individual consumer,” said Cara Bachenheimer, senior vice president, government relations, for Elyria, Ohio-based Invacare, which also sent comments to the secretary earlier this year. She said Congress’ intent was not to burden individual consumers with more expense but instead to tax such entities as hospitals and nursing homes, which buy medical devices in bulk.

“There is a pretty distinct marked line,” she said, adding that there are “strong arguments for the secretary of the treasury to provide an exemption” for HME.

Alex Bennewith, senior manager of government relations for the American Association for Homecare, said the association also submitted comments to Geithner noting an explanation made by then-Speaker of the House Nancy Pelosi, D-Calif., on the tax: “Sales of wheelchairs and other medical devices to individuals are exempt from the tax; the tax only applies to sales of medical devices to health care institutions, such as hospitals,” Pelosi stated.

Whether Geithner agrees with that explanation remains to be seen.

Bachenheimer said a proposed rule on the tax would likely be issued later this year. “We are expecting to see their initial thinking sometime this fall,” she said.

Letters such as those sent to the secretary last week are important in keeping the issue on the Treasury radar, Bennewith said.

“This is equipment that folks rely on for independence and quality of health,” she said. “We don’t want to make it even more difficult to obtain the equipment.”

Meanwhile, Minnesota Republican Rep. Erik Paulsen’s Protect Medical Innovation Act (H.R. 436), which would repeal the device tax, has picked up 154 cosponsors in the House.

Paulsen has said the tax hike on medical device makers “will cripple an important engine of opportunity, job growth and innovation, while hurting the advancement of technologies essential to improving patient care.”

How would you fix Medicare? To vote in HomeCare's monthly Web poll, visit

Tennessee Companies Form HME-Only State Association
NASHVILLE, Tenn.—The HME Advisory Committee of the Tennessee Association for Home Care announced in a unanimous decision June 7 they will not renew their TAHC membership once the group’s year ends on June 30. Instead, the HME members will be moving from TAHC to a new state association for HME.

Called AtHomeServices, which stands for Association for Tennessee Home Oxygen & Medical Equipment Services, the new association will begin operations in early July.

AtHomes will be jointly managed by longtime industry executive Mike Hamilton, who will also continue as executive director for the Alabama Durable Medical Equipment Association (ADMEA), and James Herren, who most recently served as senior outreach and education liaison for Cigna Government Services, the Jurisdiction C DME MAC. Herren will be the organization’s executive director, and Hamilton will serve as its senior executive advisor and executive director emeritus.

“Unfortunately,” according to a release from the new association, “the government and private insurance payers in today's economy have created such hurtful and damaging financial and regulatory burdens on the HME sector that the HME provider’s needs have become greater than the group believes can reasonably be addressed and maintained by the broadly-focused TAHC organization in its finite and limited resources.”

“TAHC is one of the only remaining associations in the country that represents all sectors of home care—home health, personal support services, hospice—and each one of those sectors as well as ours have our plates full,” said Randy Wolfe, president and CEO of Lambert's Health Care, Knoxville, Tenn., and a past president of TAHC.

“Every single one of these sectors are getting their own lap full of rules and cuts,” he continued. “It’s become more difficult for us to do all the things we need to do under that one umbrella, and the economies of scale would work better for us if we start an HME-only association like all the other states have today.”

Because of its broad-based structure, TAHC dues had also become an issue, Wolfe said, noting that at $750, Tennessee “is the third-highest dues state in the country.”

While the HME sector of the group had fluctuated between 45 and 60 members, Wolfe said, “we think there are a couple hundred active providers in the state that are candidates … We believe that with lower dues, which is also a significant part of this, we can probably grow that to about 125 or 150 this year.” That, he said, would give the new association more resources to devote solely to HME issues.

“TAHC has done a great job through the years,” Wolfe said. “For our guys with all they’ve been through, it’s been a great thing to have this big umbrella to tell the story of home care, and I’m still a big advocate for that, but the kinds of issues we’ve got to deal with now are so intense we just have to have more focus.”

Chief among those issues, Wolfe said, is competitive bidding. In Round 2, he pointed out, “Tennessee has got four metropolitan cities in a state that only has a 6.5 million population. We may have the worst ratio of cities hit for the size of the state.”

In addition, he said, the state’s TennCare managed care program “is very aggressive and even in the last year has moved into some pretty toxic pricing, making that very difficult.” Tennessee’s involved licensure laws also require a lot of activity, Wolfe added, and while audits have not really been a major issue yet, he said, “We know they’re coming.

“There are so many issues affecting our sector that we just have to get some additional help and spend time focusing on them.”

AtHomes’ release said the new HME group plans to work alongside TAHC to continue to promote the home care agenda in Tennessee.

“This will be positive,” Wolfe said. “It’s a changing world and we have to adapt.”

AtHomeServices’ website ( is currently under construction. Information about how HME providers in Tennessee can join the new association will be sent during the next few weeks. Until then, interested providers can contact Mike Hamilton at 205/824-6204.

NGS Begins Anti-Fraud Card Swipe Pilot
INDIANAPOLIS—CMS and NGS, the Jurisdiction B DME MAC, are looking for Indianapolis area physicians and DME suppliers to participate in a pilot program to “fight fraud and ensure Medicare dollars are used appropriately.”

The objective of the voluntary program, which will focus on physicians and suppliers with Marion County ZIP codes, is to reduce inappropriate DMEPOS payments by tracking the items ordered. By verifying that a legitimate physician wrote an order for DME and that it was dispensed by a legitimate supplier, the DME MAC said, “certain types of fraud and abuse can be eliminated from the program.”

The project stems from the Affordable Care Act, “which requires that physicians and suppliers keep and provide upon request, documentation related to the ordering and/or referring of DMEPOS,” according to a post on the NGS website.

Here’s how the program will work, the post explains:

“By using your existing credit card terminals and networks, and a designated magnetic swipe card, we’ll capture and track DMEPOS orders. We will use the data we get to validate which DMEPOS orders were appropriately initiated in your office and then filled accordingly by the DMEPOS supplier.

“You will receive free magnetic swipe cards in the mail that can be read by your existing credit card terminals. Whether you’re a provider placing an order or a supplier filling an order, the process is the same. You will swipe the card and enter a code into the credit card terminal. CastleStone Advisors, who have access to the credit card network, will receive the information that the cards capture and then send it to National Government Services.”

NGS noted that data captured by the cards would not include any protected information about the beneficiary or the business, such as an NPI. In fact, the pilot should help to protect provider-specific information such as an NPI from misuse or identity theft, the DME MAC said.

For more information, access the portal.

HMEs Should Be Part of ACOs, AAHomecare Says
ARLINGTON, Va.—In a formal comment letter last week, the American Association for Homecare urged CMS to identify HME providers as “essential components” of an accountable care organization, or ACO.

Last year’s Affordable Care Act authorizes the formation of ACOs, in which entities like hospitals and physicians work to coordinate care delivery across a variety of settings. To promote the concept, the health reform law also provides that those participating in ACOs would share in any savings to Medicare that result.

But CMS didn’t specifically include HME providers in the mix.

In its June 6 comments, AAHomecare said CMS acknowledges that program savings will derive mostly from a decrease in hospitalizations, especially for beneficiaries with chronic conditions.

“To achieve this goal, it is imperative that beneficiaries with chronic conditions have access to and receive quality, cost-effective care in their homes,” the association said. “ACOs must be able to ensure smooth patient transitions from inpatient settings to home care. Moreover, DMEPOS providers—working in close collaboration with primary care practitioners and specialists—can reduce or delay repeat hospitalizations or more costly skilled nursing care.”

Read AAHomecare’s comment letter in full.

While Office of Management and Budget estimates have pegged savings from the ACO program at $510 million, the American Group Management Association has also warned that the government’s expectations shouldn’t be so high. Unless some changes are made, the group said, CMS’ stringent regulations regarding ACOs will discourage providers from participating.

Take Me Out to the Ball Game—Courtesy Mobility Warehouse
ATLANTA—Some 3.5 million listeners hear his radio spots during game day broadcasts. An average 30,000 attendees see his company’s public service announcement on the big screen at Turner Field.

Darren Tarleton, president and CEO of Stockbridge, Ga.-based Mobility Warehouse, thinks that’s a pretty good play for his sponsorship of wheelchair service during Atlanta Braves home games.

In fact, Tarleton said, “For the number of people we are reaching at every game, it’s a lot cheaper than paying a marketing person’s salary.”

The wheelchair service is offered at no charge to attendees who request it, or stadium staffers can call a central wheelchair dispatch for people who show up on site and need assistance.

Patrons get picked up at the stadium location of their choice and taken to their seats in Staxi wheelchairs, which carry signage on each side with the Mobility Warehouse logo and website. The users are given a ticket on which they write the time they would like to leave, then a staffer returns to wheel the baseball fans back to a central pickup point. From there, they are given a golf cart ride to their vehicle.

“When those patrons leave, they are given a postcard with all of our company information on it. Every person who uses the service gets one of those cards,” Tarleton said. “Depending on whether it’s a day or a night game and who we’re playing, there can be anywhere from four to 11 people just working with the wheelchairs.”

Three hours before game time the company can set up a booth at the stadium to show its products, and can also use the Braves logo on its website, vans and shirts, etc.

This season’s sponsorship is only one of the things Tarleton is trying out as he readies Mobility Warehouse for business in the changing HME environment.

“When we first opened the doors [in 2002], we were probably just like many companies at 80 to 85 percent Medicare,” he said. But over the past several years, the provider has made a concerted effort to move in a different direction.

“We have focused on other revenue streams,” Tarleton said, among them cash sales and hospice. “Now we’re down to 18 percent, and I’m projecting that next year Medicare will make up only 12 to 15 percent of our business.”

That means even though the company, located about 20 miles south of Atlanta, will be affected by Round 2 of competitive bidding, “I don’t care,” Tarleton said. “I’ll probably bid, but whatever happens won’t kill us.”

Make Plans Now to Attend Medtrade 2011
ATLANTA—Registration is now open for Medtrade 2011, the largest national educational and buying event for the home medical equipment industry. This year’s show will take place Oct. 24–27 at the Georgia World Congress Center in Atlanta.

As a special offer, show producers have announced early-bird pricing that includes:

• A $255 rate for the Pre-show Seminars that includes free registration for the Medtrade Educational Conference and Medtrade Expo;
• A $99 rate for the Medtrade Educational Conference that includes a free pass to the Medtrade Spring Expo; and
• A $25 rate for the Medtrade Expo.

“This year’s event is designed to highlight the numerous opportunities that exist to strengthen the industry, create new business plans and support the legislative efforts that are underway,” said Show Director Kevin Gaffney.

For details on the conference and pre-show seminars, including course descriptions, speakers and continuing education opportunities, see

Save the Date - Stand Up for Homecare Reception, Oct. 25
Join AAHomecare for the Fall 2011 Stand Up for Homecare reception at Medtrade on Oct. 25 during Medtrade. This fundraising reception supporting the public awareness campaign for the home care community will be held from 5:30-7:00 p.m. in the Maple Point Room, Hall B, Georgia World Congress Center. To learn more or to lend your support, visit

HME Company Newswire
ATG Acquires WestMed Rehab Division
ROCKY HILL, Conn.—ATG Rehab announced June 9 it has acquired the mobility and complex rehab division of Rapid City, S.D.-based WestMed Rehab.

Founded by Tim Pederson, Deb Holso and John Nesland, WestMed serves more than 800 clients per year in South Dakota’s Black Hills area through the region’s hospitals, rehab clinics and long-term care facilities, according to a release.

The company will become part of ATG’s Mountain Region under Regional President Michele Longo, ME, ATP. Mobility and complex rehab customers will continue to receive support from WestMed ATPs Tony Holso and Joe Luciano and technician Kary Fahrner.

The addition gives ATG Rehab 28 offices across 20 states, the release said. In March, the company acquired the complex rehab segment of Warwick, R.I.-based Vanguard Home Medical Equipment, a subsidiary of Landauer Metropolitan, and Peak Wheelchairs of Colorado with offices in Lafayette (Denver) and Windsor. Last fall, ATG added four locations in Oklahoma City, Okla.; Chattanooga, Tenn.; and Lynnwood (Seattle) and Tacoma, Wash.

Pederson, WestMed’s former CEO and president and past chair of the American Association for Homecare's Complex Rehab Mobility Council, now leads The National Orthotics & Prosthetics Network at The MED Group. For more on his new position, see MED's Pederson: O&P Might Be Just What the Doctor Ordered, April 25.

$25M Crystalizes for The Scooter Store
BOSTON—Crystal Financial announced June 9 that it has closed on $25 million in financing for New Braunfels, Texas-based The Scooter Store.

Based in Boston, the commercial finance company originates, underwrites and manages secured loans to middle market companies in all industries. The company’s debt-structuring team has made over $20 billion in loans, according to a release.

“We are looking forward to a long partnership with Crystal. Their knowledge and creativity throughout the process make them an ideal partner as we look to continue our growth,” said Doug Harrison, CEO of The Scooter Store.

In February, Harrison told HomeCare that elimination of the first-month purchase option for standard power wheelchairs had “a dramatic impact” on The Scooter Store’s cash flow but that new financing would set the stage “for future growth and potential acquisitions.” (See Scooter Store's Harrison: Industry Consolidation Will Be 'Painful,' Feb. 7.)

Last year, the company added 51 locations and broadened its product offerings, formalizing a home care equipment division that will eventually expand nationwide.

The Scooter Store is an affiliated portfolio company of private investment firm Sun Capital Partners. The provider was advised in the financing deal by McColl Partners, an investment bank based in Charlotte, N.C.

Neighborhood Move for Insulet
BEDFORD, Mass.—Insulet Corp., which manufactures the OmniPod insulin pump, announced June 2 that it has acquired Neighborhood Diabetes for $63 million in cash and stock.

Based in Woburn, Mass., with offices in Brooklyn, N.Y., and Orlando, Fla., Neighborhood Diabetes serves more than 60,000 customers, primarily in the Northeast and Southeast, with more than 15,000 of its insulin-dependent clients using multiple daily injection therapy. Combined with Insulet’s base of 25,000 OmniPod customers, “we believe this combination best positions both companies to accelerate growth and achieve the vision of providing a full-service diabetes offering to our now more than 85,000 combined customers," said Tom Cronin, Neighborhood’s CEO, in a release.

Insulet president and CEO Duane DeSisto added that the acquisition brings “critical infrastructure” to the company and “immediately strengthens our back office processing capacity, a necessary investment to support additional domestic commercial expansion in advance of the expected approval of the next generation OmniPod.”

In Brief
Heartland Tops 1,000; 'No Turning Back' for Bryan Anderson; More News in Brief
WATERLOO, Iowa—More than 1,000 attendees including providers, manufacturers, speakers and other friends of the industry gathered in VGM’s hometown of Waterloo, Iowa, June 6-9 for the group’s annual Heartland Conference. “The 10th anniversary edition of the Heartland Conference built on the successes of the previous decade,” said Ron Bendell, VGM & Assoc. president. “We want to thank our members, our vendors who support the event and the VGM associates who work year-round to bring the best presenters and newest information to our attendees. We heard excellent comments about the relaxed atmosphere, the midwestern hospitality and the limitless opportunities to network.”

‘No Turning Back’ for Bryan Anderson
CHICAGO—Pride Mobility-Quantum Rehab spokesman Bryan Anderson’s new book No Turning Back (Penguin Group) is now available for presale at, and As a U. S. Army sergeant in Iraq, Anderson was the war’s fourth triple amputee from a roadside explosive. After losing both legs and his left hand, he went through 13 months of rehabilitation at Walter Reed Army Hospital. But according to Anderson, his book is not about war or rehab. “Those are in there, too,” he said in an email, “but it’s really about my experiences and things I’ve learned. There’s also funny stories in there, too.”

On Oct. 23, 2005, the moment he looked down and realized he no longer had legs, Anderson cracked a joke, the book’s description says. “It was a tragedy that could break many, but Bryan transformed it into something positive, something that propelled him forward … In this inspiring memoir, Bryan shares his infectious love for life that touches anyone who’s faced hardship. Anyone, in any circumstance, can overcome the toughest challenges, by not just surviving, but thriving. No Turning Back is a testament to pure hard work, perseverance, and hope for a better life—no matter what shape it takes.”

The book is scheduled for full release in November. For a preview, see Anderson’s website at

Claims Edit on DME Repairs
BALTIMORE—Effective Oct. 1, 2011, Change Request 7212 instructs Medicare DME MACs to prohibit separate payment for repairs to capped rental DME during the rental period. View a PDF of MLN Matters Article 7212 on the edit.

MedForce Employees Assist in Alabama Cleanup
PRATT, Ala.—CEO Esther Apter and several other employees from Chestnut Ridge, N.Y.-based MedForce Technologies headed to Alabama over the weekend to help clean up in the wake of the devastating tornadoes that ripped through the state on April 27. Working through disaster response organization Nechama, the team is helping residents clean up the damage in the city of Pratt, in the Birmingham area, June 12-14. “We have customers in all of the areas affected by the recent natural disasters, so it really hit home for us,” said Apter. “My daughter’s work with Nechama motivated us to find the next available weekend to go to Alabama and do what we can to help the residents of at least one affected area put their lives back together.” Apter encourages others who would like to help to visit or any other disaster relief organization.

Ms. Wheelchair America to Headline NCAMES Event
RALEIGH, N.C.—The North Carolina Association of Medical Equipment is hosting Tar Heel native Alexandra McArthur, Ms. Wheelchair America 2011, as a special guest at its 2011 Summer Meeting this week. Diagnosed with muscular dystrophy at age 7, the 23-year-old McArthur will be speaking to attendees on how HME mobility products and services have helped her overcome her disability and enjoy everyday life. The meeting runs Wednesday through Friday, June 15-17, in Wrightsville Beach, N.C. For information, visit

OIG Nabs Another One
WASHINGTON—The Office of Inspector General announced Thursday it has captured another on its roster of “Most Wanted” health care fugitives. According to a 2010 indictment, Perez and a co-conspirator operated Miami’s Rx Plus Medical Care, a DME company that allegedly submitted over $2.5 million in fraudulent claims to Medicare. Prior to his arrest, Perez was living in Cancun, Mexico. See the OIG’s current Most Wanted lineup.

PFQC Video: Nurse Speaks Out against Competitive Bidding
DENTON, Texas—People for Quality Care has recently completed several videos in its documentary series on how competitive bidding affects Medicare beneficiaries, this time turning the camera on patients and patient advocates in the Dallas area. Registered nurse Cathy McMullen works for a home health agency in Denton, Texas, where the program was implemented in January. “The small DME companies that we counted on that we had a relationship with who would come forward and say, ‘We’ll get this out there for you this afternoon even if we have to stay late,’ that’s gone,” McMullen says. For more, see Nurse Speaks Out on Competitive Bidding, June 8.

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


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