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March 21, 2011 Volume 17, Number 10


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Table of Contents
- H.R. 1041 Rocks the House
- Last Chance to Register for Andrea's 2011 Audit Outlook!
- Thompson, Altmire Start the Ball Rolling for Competitive Bidding Repeal
- Reduce Oxygen Cap to 13 Months, OIG Repeats
- HHS, CMS Officials Concede Most Improper Payments Just Errors, Not Fraud
- Medicare Docs in a 'Fix'
- From HomeCare Magazine: Could You Live With It?
- CMS Sets Calls on OIG Reports; NAS Continues Oxygen Review while NHIC Starts One; More News in Brief

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

- Headline News
H.R. 1041 Rocks the House
Industry on the hunt for Senate support

WASHINGTON—More than 250 HME providers and other advocates called on members of Congress to cosponsor H.R. 1041 during the American Association for Homecare’s Legislative Conference last week, and their efforts paid off. As of Friday, 20 representatives from both sides of the aisle had signed on to the bill.

Introduced March 11 by Reps. Glenn "GT" Thompson, R-Pa., and Jason Altmire, D-Pa., the Fairness in Medicare Bidding Act calls for an immediate repeal of DMEPOS competitive bidding. To "pay for" the $20 billion the government expects in savings from the program over 10 years, the bill taps discretionary funds that Congress had earmarked for other projects but never actually used. (For more, see Thompson, Altmire Start the Ball Rolling for Competitive Bidding Repeal.)

H.R. 3790, a similar repeal bill, picked up 259 cosponsors in the House last year. Speaking to the AAHomecare audience March 16, Thomson said, "I’m hopeful the new bill will gain just as much or more than that.

"All indicators are we're on the track," said Thompson, a former recreational therapist and EMT. "Most bills like this rarely pass in the first cycle," he added, "but I think the dynamics are pretty good for us right now."

Providers, too, said they were confident the new repeal bill could make headway in the House.

"I think we can get 100 cosponsors in the first month," predicted Rob Brant of City Medical Services in Miami. The key, he said, is getting those members who signed on to last year's bill to do so again, and to gain support from as many of the 87 new House freshmen as possible. Ten of those are in Florida, and providers from the state held meetings with all of them during the AAHomecare lobbying event March 16-17.

"It's definitely worth the effort," said Mike Hamilton, executive director of the Alabama Durable Medical Equipment Association. "It sometimes takes years to make things happen up here, and you have to be persistent. But I really believe we’ve got the best opportunity we've ever had to get competitive bidding repealed at no cost to the industry.

"After a few more months of the current program running," Hamilton continued, "it will be so obvious to anyone that it isn't working that I think anybody would vote to repeal it."

Coastal Med Tech's Catherine Hamilton (no relation) agreed. "I think [the bill] has potentially a greater chance than it did a year ago to go somewhere," said Hamilton, who traveled from her home base in Hancock, Maine, to take part in the Capitol Hill lobbying effort. "While competitive bidding doesn't directly affect us right now in Maine, it's certainly going to have that trickle-down effect, and that's something that we just can't tolerate in the industry."

When "You can't help but feel you’ll have a positive effect."

Providers were cautiously optimistic that positive energy might extend to the Senate. H.R. 3790 never picked up a companion bill in that chamber, but there's hope for H.R. 1041 in Congress' new session with several senators targeted as champions of the proposed legislation.

That's the challenge this time around, said David Petsch of Petsch Respiratory in Martinez, Ga. "We'll obviously get support for 1041 but we're going to need to find an equal track on the Senate side. We have the opportunities … and we've got an outside chance to get something going," he said.

While he and others acknowledged that coming up with a Senate bill could be a heavy lift, Petsch said it's one the industry has to shoulder.

"I'm convinced that all of our energy needs to be on repeal," Petsch said of competitive bidding. "Reforming this program isn't going to work."

Stuart Pace of Med-South in Homewood, Ala., said he feels the same way but wishes more providers would share the load. "We had 250 at the conference," he said, "but there should have been 2,500."

Will you bid in Round 2 of competitive bidding? To vote in HomeCare's monthly Web poll, visit

Last Chance to Register for Andrea's 2011 Audit Outlook!

Webinar tomorrow!

Andrea's 2011 Audit Outlook: Strategies for Surviving in a 'Guilty until Proven Innocent' Environment

Date: Tuesday, March 22 – Tomorrow!
Time: 11 am ET & 3 pm ET (two separate time slots available!)
Duration: 90 minutes with a Q&A

Register today!

If you are looking for proactive steps to protect your business for audits, then this webinar is for you!

Join DMEPOS consultant Andrea Stark of MiraVista LLC as she takes you inside the world of the latest weapons in Medicare's audit arsenal — RACs and ZPICs. Andrea will provide a clear understanding of how'looking for, and how the audit landscape is changing in 2011.

You’ll learn:

• How to avoid common billing errors that could be increasing your odds of being audited.
• Your options if you find yourself caught in the throes of a ZPIC or RAC audit.
• Simple procedures you can implement to protect yourself and your business.
• Which DMEPOS supplies are most prone to audit and why.
• What to expect from audit contractors in 2011.

This is NOT your typical "how to submit an appeal" webinar. Don't miss out!

Only $99 per line.

Register at:

For questions, contact Michelle Hamel @ 803.462.9959 x 252

This webinar is co-hosted by HomeCare.

Thompson, Altmire Start the Ball Rolling for Competitive Bidding Repeal
WASHINGTON—U.S. Reps. Glenn 'GT' Thompson, a Republican, and Jason Altmire, a Democrat, began a bipartisan push for newly introduced H.R. 1041 on Tuesday.

At a press conference held in the Rayburn House Office Building on Capitol Hill, the Pennsylvania congressmen told reporters the budget-neutral bill would immediately repeal Medicare's competitive bidding program for DMEPOS.

The Fairness in Medicare Bidding Act (dubbed FIMBA), would use $20 billion in unobligated discretionary appropriations to offset the government's estimate of savings from the bid program, "not adding one dime to the deficit," Thompson and Altmire said in a letter to colleagues about the bill.

Under the legislation, the Office of Management and Budget would decide where the unobligated agency funds would come from, although the Departments of Defense and Veterans Affairs would be exempt.

Both Thompson and Altmire have fought against the CMS bidding program, which Congress delayed after only two weeks in 2008 due to complaints from beneficiaries and providers. Since then, the representatives said, there have been no significant improvements to the program, which began again in nine cities on Jan. 1.

Last year, both representatives were cosponsors of H.R. 3790, similar repeal legislation that garnered support from 259 House members.

"Medicare beneficiaries are entitled to high-quality, low-cost medical equipment and we intend to deliver on this promise by reforming the current bidding program," Thompson said. "We must allow for a marketplace where seniors have quality and choice, smaller providers are competing to deliver these supplies, and I ask my colleagues to join in cosponsoring H.R. 1041."

Under the current program, the representatives said small HME providers would continue to be forced out of the marketplace.

"CMS' competitive bidding program limits seniors' ability to buy highly specialized medical equipment from the local suppliers they know and trust," Altmire said. "We have introduced legislation to repeal this misguided program at no new cost to taxpayers."

Within days of introducing H.R. 1041 March 11, the representatives told reporters, a number of patient advocacy groups have announced their support, among them the Muscular Dystrophy Association, Christopher and Dana Reeve Foundation and the National Association for the Support of Long Term Care.

In a statement following the press conference, American Association for Homecare President Tyler Wilson said Thompson and Altmire "recognize that the Medicare bidding program is a severely flawed approach to providing care to seniors and people with disabilities. Home-based care is already the most cost-effective setting for post-acute care, and this bidding system is merely a badly designed solution in search of a problem."

Read Thompson and Altmire's "Dear Colleague" letter about H.R. 1041.

Read the bill text for H.R. 1041 at (Click the "bill number" option and enter H.R. 1041 in the search bar.)

Reduce Oxygen Cap to 13 Months, OIG Repeats
WASHINGTON—Most oxygen providers are still trying to cope with effects of the 36-month rental cap, which took effect in 2009. But according to an OIG report released March 16, CMS should work with Congress to further reduce the rental period for oxygen.

In its Compendium of Unimplemented Recommendations, an annual report to Congress that summarizes cost-saving recommendations for Medicare and Medicaid that haven't been implemented, the OIG reminded lawmakers of its ongoing recommendation based on data from a 2006 report. If Medicare rental payments for oxygen concentrators were limited to 13 months, the report said, the program and its beneficiaries would save about $3.2 billion over a period of five years.

The industry strongly disputed the 2006 report. (For more, see AAHomecare Details Flaws in OIG Oxygen Report, October 2006.)

Nevertheless, the OIG said in its March 16 compendium, "We continue to encourage CMS to work with Congress to reduce the rental period for oxygen equipment."

The recommendation follows a Feb. 14 Government Accountability Office report that found "Medicare's payment for home oxygen overcompensates suppliers for providing stationary oxygen concentrators." As a result of its findings, the GAO also said Congress should consider reducing home oxygen payment rates.

In its FY 2011 report, the OIG said CMS concurred with its recommendation but noted that reducing the rental period from 36 to 13 months "requires a statutory change. Although bills have been introduced in the past, none has passed."

The recommendation even made the report's seven-item "priority list" for Medicare Parts A and B, which the OIG believes represent the most significant opportunities to impact HHS programs. Three others on that list also involve DME:

• Ensuring DME suppliers' compliance with Medicare enrollment standards;
• Eliminating Medicare's vulnerability to fraudulent or excessive inhalation drug claims; and
• Ensuring that Medicare power wheelchair suppliers meet documentation requirements.

Overall, the OIG said in its report, Medicare and Medicaid could have saved $8.7 billion in FY 2011 if all of its recommendations had been implemented.

View the entire compendium. The section on DME begins on page 43.

HHS, CMS Officials Concede Most Improper Payments Just Errors, Not Fraud
WASHINGTON—After years of being tarred with the black brush of fraud, HME and other health care providers got a bit of redemption last week when two top health care officials testified before a House subcommittee that most improper health care payments were the result of errors, not fraud.

According to Daniel R. Levinson, inspector general for the Department of Health and Human Services, improper payments for fiscal year 2010 totaled $56.8 billion—most of which was not the result of fraudulent providers.

"We … found that insufficient documentation, miscoded claims and medically unnecessary services and supplies accounted for 98 percent of the improper payments" made by the government to HME providers, hospitals, physicians, skilled nursing facilities, home health agencies and hospital outpatient departments, Levinson told members of the House Appropriations Subcommittee on Labor, Health and Human Services, Education and Related Agencies March 17.

Those figures, he said, came from the 2009 Comprehensive Error Rate Testing program, the latest available such report.

Deborah Taylor, CFO and director of CMS' Office of Financial Management, also told committee members that errors were mostly to blame for improper payments.

"They are usually not fraudulent nor necessarily payments for inappropriate claims," she said."Rather, they tend to be an indication of errors made by the provider in filing a claim or inappropriately billing for a service."

Those comments got a thumbs-up from industry consultant Miriam Lieber of Sherman Oaks, Calif.-based Lieber Consulting.

"For so many years the unscrupulous providers that were let into this industry were really the fault of CMS," she said. "They gave them the provider numbers, we didn’t."

The vast majority of providers are honest and have no intent of defrauding the government, Lieber said. For example, she said just last week she spent an entire day working with a young woman new to billing who did not understand the intricacies of the Medicare coding system.

"Do you think that she, at age 22, was trying to defraud the government?" Lieber asked. "No, she was literally a young woman trying to do her job, and no one would give her information."

While Lieber said she appreciated the officials' comments, she's not so sure they will go very far in erasing the black mark that the industry has carried for so long.

"Will they take the black mark off us? I don't know," she said. "Then they would have to admit they are fallible."

At Thursday's hearing, Levinson and Taylor said the OIG and CMS were working in concert on remedies to avoid improper payments.

For example, Levinson said, after finding pervasive documentation errors in some services—including claims for standard and complex wheelchairs, 60 percent of which did not meet one or more documentation requirements, he said—"we recommended that CMS take several actions to address these errors, including improving controls, educating providers and clarifying guidance."

Taylor noted that CMS expects to process 1.2 billion claims in 2011. The agency has some automated safeguards in its system that could detect and reject payments for "medical services that are physically impossible, such as a hysterectomy billed for a male beneficiary."

It also has implemented edits aimed at stopping payment of claims after a beneficiary's date of death; for HME while the beneficiary is receiving care in an inpatient setting; and for individual services that should have been bundled into another payment.

In addition, she said, local system edits have been enacted to halt improper payments related to such things as HME bundling (wheelchairs and accessories and knee prosthetics).
"Some vulnerabilities cannot be fixed with automated edits and may require ongoing medical review and other more resource intensive activities," she said in her testimony. "As such, the president’s FY 2012 budget request includes a legislative proposal that would allow CMS to retain a dedicated portion of the funds recovered by recovery auditors to implement additional corrective actions to prevent future improper payments, such as targeted prepayment review and provider education."

That could achieve net savings of $230 million over 10 years, Taylor said. "CMS is exploring way[s] to leverage existing compliance programs within the provider community to inform and educate providers about payment vulnerabilities," Taylor told the committee.

She said CMS is committed to cutting its Medicare fee-for-service error rate in half by 2012, from 12.4 percent to 6.2 percent.
"CMS is making progress in meeting this goal, with a 1.9 percent point reduction in the error rate between FY 2009 and FY 2010," Taylor said.

Read Levinson's full testimony.

Read Taylor's full testimony.

Medicare Docs in a 'Fix'
WASHINGTON—A coalition of physician groups has again called on legislators to put together a new Medicare payment system for doctors. Under the current formula, if Congress doesn't act to stop reimbursement cuts scheduled for Jan. 1, 2012, the docs are looking at a 29.5 percent pay cut, according to CMS.

In his 2012 budget, President Obama proposed putting off the cuts for another two years at a cost of $62 billion. But Medicare officials have since upped that figure by another billion. The president's budget estimates the cost of eliminating the current payment formula over 10 years at $369.8 billion, but that figure could go higher, too.

Physicians have been asking for years for a permanent fix to the sustainable growth rate (SGR) formula under which their payments are calculated. Every year since 2002, that formula has resulted in a negative update, but Congress has passed a series of temporary "doc fixes" to stop the rate reductions. In mid-December, the Medicare and Medicaid Extenders Act of 2010 prevented any cuts for 2011.

In a March 10 letter to the House and Senate, the American Medical Association, along with 130 other physician and related groups, urged Congress to "begin working in a bipartisan, bicameral manner to enact legislation this year that will eliminate Medicare's sustainable growth rate (SGR) formula and lay the groundwork for adoption of broader physician payment and delivery reforms."

"The new estimate from CMS should serve as a wake up call to Congress that physicians who serve Medicare and TRICARE patients are facing a debilitating cut of nearly 30 percent on January 1," AMA President Cecil B. Wilson said in a statement. "This cut is the highest ever scheduled under the broken Medicare physician payment system, and it threatens access to care for our nation's seniors, military families, and the baby boomers now entering Medicare."

In a letter to the Medicare Payment Advisory Commission about the physician cuts, CMS' Jonathan Blum, deputy director and director of the Center for Medicare, said that a long-term solution is needed. "We will continue to work with Congress to fix this untenable situation so doctors no longer have to worry about the stability and adequacy of their payments from Medicare," he wrote. MedPAC advises Congress on issues affecting Medicare.

From HomeCare Magazine: Could You Live With It?
Economist Peter Cramton explains his redesign of competitive bidding

The Centers for Medicare and Medicaid Services' DMEPOS competitive bidding project has been rolling along—merrily, according to CMS—since Jan. 1, but via conference calls and meetings across the nation, home medical equipment providers are still trying to find a way to stop it before it kills the industry—or people.

They are not alone.

From his office at the University of Maryland, economist Peter Cramton is waging a battle to reform what he and scores of other experts have determined is a fatally flawed design that fails to meet any of the best standards related to auction (competitive bidding) science. With research funding from the National Science Foundation and the University of Maryland and input from many quarters, including HME providers, Cramton has put together a redesigned competitive bidding proposal that addresses the CMS project's myriad defects. Read more

In Brief
CMS Sets Calls on OIG Reports; NAS Continues Oxygen Review while NHIC Starts One; More News in Brief
BALTIMORE—CMS will hold three national listening sessions this week on Tuesday, Wednesday and Thursday from 1 to 4 p.m. ET. Called the Provider Compliance Group Outreach Calls, the sessions will focus on several Office of Inspector General reports "to educate providers and suppliers on specific vulnerabilities that exist in DME, Part A, Part B and home health and hospice related to the reports," a CMS notice said. One of the subjects scheduled for the March 22 (Tuesday) call is Part B enteral nutrition therapy services during non-Part A nursing home stays. The March 24 (Thursday) call will include a review of claims for capped rental DME. For the schedule of calls and the OIG and audit reports to be discussed, go to

NAS Continues Oxygen Review while NHIC Starts One
FARGO, N.D.—Noridian will continue its widespread complex review of oxygen claims, the Jurisdiction D DME MAC said March 14. Its third quarter review of claims for HCPCS E1390 and E0431 resulted in an overall error rate of 66 percent, an increase from 54 percent during the first quarter and a decrease from 67 percent in the second quarter of the review. However, because the error rate remains high, the review will continue. See the complete notice.

Meanwhile, NHIC, the DME MAC for Jurisdiction A, will begin a widespread documentation compliance prepayment review for oxygen and oxygen equipment. The review is being initiated due to a high volume of claim errors identified by the CERT contractor for missing and/or incomplete documentation. Read the complete notice.

VADMEC Elects New Officers
RICHMOND, Va.—At its winter meeting March 9, the Virginia Association of Durable Medical Equipment Companies elected new officers including: President, Tina Godfrey of Advanced Home Care in High Point, N.C.; Vice President, Tom Inman of Virginia Home Medical in Newport News; Treasurer, Robin Powers of Friendship HME in Wise; Secretary, Stephanie Hess of Community Home Care Services in Richlands; and Immediate Past President, Angie Fishel, Valley Home Care of Winchester. At-Large directors are: Shawn Steffey of Respiratory Care Assoc. in Winchester; Sam Clay of Clay Home Medical in Petersburg; Bob Evans of Roberts Home Medical in Ashland; Anthony Ellis of Ellis Home Oxygen in Marion; Mark Bragg of Atlantic Medical in South Boston; LaDonna Malie of Philip Respironics; and Bryce Aho of LifeGas. VADMEC Executive Director Beth Bowen is serving her sixth year.

Braun, Bruno Go Halvsies on Autoadapt
STENKULLEN, Sweden—The Braun Corp. has acquired “a substantial ownership position” in Swedish company Autoadapt from Bruno Independent Living Aids, according to a March 14 release. The majority of Autoadapt shares are now owned in equal parts by Bruno and Braun. A smaller number of shares are held by Autoadapt founders Peter Wahlsten and Hakan Sandberg, who will continue to run the company. The goal is to increase the turnover in Autoadapt from SEK 160 million in 2010 to SEK 500 million in 2016 (or about $79.53 million U.S.). “The demand for our solutions continue to increase each year as more people become aware of the possibilities,” said Autoadapt’s Wahlsten. Autoadapt is also expanding into new areas such as taxis, community transport and buses, which it said are growing markets for increased accessibility for people with limited mobility.

In conjunction with its investment in Autoadapt, Winamac, Ind.-based Braun, which makes wheelchair-accessible vans, ramps and wheelchair lifts, has merged its wholly owned European company, UVL Lift AB, into Autoadapt. Bruno, headquartered in Oconomowoc, Wis., offers automotive lifts along with stairlifts and vertical platform lifts.

DJO Acquires Dr. Comfort
SAN DIEGO—DJO Global announced March 15 that it has signed a definitive agreement to purchase therapeutic footwear maker Dr. Comfort for $254.6 million in cash. The acquisition gives DJO the number one share in the "large and underserved diabetic footwear market," which is "rapidly growing" for podiatry practices, orthotic and prosthetic centers, HME providers and independent pharmacies, the company said in a release. The transaction is expected to close within 30 to 45 days.

Otto Bock Offers Repairs at 2012 Paralympics
LONDON—Otto Bock, with U.S. headquarters in Minneapolis, has announced that the company will once again provide repairs at the upcoming 2012 Paralympic Games in London. The 88-member Otto Bock team includes 76 technicians who will offer their services in nine locations at various venues for 26 days before, during and following the Games, which run Aug. 29 to Sept. 9, 2012. More than 2,000 work orders are expected, the company said.

Permobil on a 'Power Trip'
LEBANON, Tenn.—Permobil has launched a cross-country "Power Trip" to show off its new M300 mid-wheel drive wheelchair and Corpus 3G seating system. Begun March 14 in Miami, the 34-city tour will end June 16 in St. Louis. For more information, go to

Philips Sponsors World Sleep Day
AMSTERDAM, The Netherlands—Royal Philips Electronics partnered with the World Association of Sleep Medicine as official sponsor of the fourth annual World Sleep Day 2011, which was held across the globe on Friday. The aim is ”to increase people’s understanding of the seriousness of sleep disorders, such as obstructive sleep apnea (OSA) which, if not properly managed, can have a significant impact on a person’s health and well-being,” said Dr. David White, chief medical officer for Philips Home Healthcare Solutions and a professor of sleep medicine at Harvard Medical School, in a release. Philips and WASM also launched a new educational module on sleep for children around the world as part of the SimplyHealthy@Schools program, which aims to support teachers in educating children ages 8 to 12 on the importance of sleep and how it can help to improve their health and well-being.

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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