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March 7, 2011 Volume 17, Number 7



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AnCor Healthcare Consulting provides reimbursement and operational consulting, project management, interim management and computer conversion services designed to assist home medical equipment and home infusion companies improve operating efficiency and reduce bad debt. If you would like to improve your company’s operating performance call AnCor today at 954-757-3121 for a free telephone consultation or visit our website for more information on our services at

Table of Contents
- Cramton to Stage Mock HME Auction
- CMS to Start New Screening Procedures for DMEPOS Enrollees
- Refunds for RAC Audit Snafu in Jurisdiction D
- GOP Senators Urge President to Pull Berwick Nomination as CMS Chief
- Congressional Staffers Get the Word on Competitive Bidding
- ‘Broad Brush of Fraud’ Tars Legitimate Providers
- Loaded Letter: CRE Takes New Aim at Competitive Bidding
- Medtrade Spring 'Lunch and Learn' Sessions to Promote Best Practices in HME
- CMS Issues FAQs on Competitive Bidding Transition; No Info on Face-to-Face Exam, But Form C ‘Coming Soon;’ More News in Brief

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

- Headline News
Cramton to Stage Mock HME Auction
COLLEGE PARK, Md.—Peter Cramton, the economist who has warned Congress about the flaws in CMS’ competitive bidding design, is planning a mock HME auction “to show what a well-run auction would be like,” he said Friday.

Cramton has put together a Medicare auction conference to be held at the University of Maryland April 1. The event will include a mock auction for home medical equipment products.

According to the conference invitation, “This is a critical opportunity to debate the basic issues, as well as learn about the latest auction methods that could simplify and improve the effectiveness and sustainability of the auction program. In addition, the conference provides a forum to debate whether auctions are feasible in the Medicare setting and how they can best be structured.”

Sponsored by the National Science Foundation and the university, the event could draw as many as 200, Cramton said, noting that he is inviting HME providers, representatives from the White House, CMS, the Office of Management and Budget, the Congressional Budget Office, congressional staff and auction experts from around the country.

“I am in discussions with people in the [Obama] administration, and there is a desire to think about the auctions and how they can best be done,” he said. “My view was that the next step would be to really get people up to speed on how modern auctions are conducted and bring those DME providers and the government—especially CMS—to an event where they actually get to have an auction.”

Cramton said he and his colleagues have held similar conferences and mock auctions for several other industries, including transportation (Federal Aviation Administration), communication (Federal Communications Commission) and energy (Federal Energy Regulatory Commission).

Last fall, Cramton spearheaded a letter to Congress signed by 166 world-renowned economists warning that CMS’ competitive bidding system was designed to fail. A mock auction, he said, “is a great example of learning by doing, and I have found it to be very effective with parties that are new to auctions.”

Participants will be broken into two-person bidding teams, Cramton said.

“In the mock auction, about 90 bidding teams compete to be DME providers for six product categories in nine regions,” he explained. “Each team is given a specific business plan, including the company’s cost of providing service for the product categories and regions the company is interested in.

“At the end, there will be prizes for those who have performed especially well with the hand they were dealt and the outcomes,” the economist said.

It is conceivable that a provider could be paired with a CMS representative to make up a team, Cramton said. He recognizes that could be a big stretch.

“Ultimately, CMS and providers are going to have to work together, and this sort of thing makes perfect sense even though it is challenging,” he said. “The nice thing about it is that they both are pretty much coming from the same place. Neither of them is familiar with how auctions should be done, so they both have a lot to learn.”

He understands, he said, that CMS is staunch in its belief that its competitive bidding design is a good one. After a November meeting with CMS officials including Jonathan Blum, deputy administrator and director of the Center for Medicare, Cramton said CMS was “very defensive” about its approach.

He also knows that providers are strongly opposed to the idea of competitive bidding, believing that HME products and services do not lend themselves to such a program. The industry is currently endeavoring to get the entire project repealed.

“I certainly expect that a lot of people are set in their ways,” Cramton said. “But I really do think that the most powerful form of expression is actually letting them see and experience how an efficient auction works. I just found it incredibly powerful in helping people to understand the simple economic forces that are at work.”

It’s too late for Round 1, Cramton said, but the mock auction could show CMS where its competitive bidding design needs to be fixed for Round 2.

“We’ve got a lot of spilled milk with Round 1, but Round 2 is now urgent in my mind,” he said. According to an agency timeline, CMS will initiate Round 2 bidding within the next few months, expanding the program to 91 more areas around the country.

“My hope is that CMS is going to realize that if they do an efficient auction, it is going to reduce their administrative cost and free them up to focus on critical tasks, such as performance monitoring, rather than putting out fire after fire trying to sustain an unsustainable program,” Cramton said.

He believes providers, too, might find something to like about a well-run auction.

“An efficient auction establishes the lowest sustainable prices for Medicare supplies and will result in substantial savings for CMS. It’s good for efficient providers, because they can live quite comfortably with those prices,” he said. “In an efficient auction, they are all getting prices higher than they bid.”

Under the current Round 1, contract winners have reported that they are paid less—sometimes far less—than they bid.

Cramton said he hopes HME providers will attend, if only to find out how an efficient auction actually operates. He is pressing the issue, he said, because the stakes are high.

“I wouldn’t be so stubborn about this if it wasn’t for the fact that it is so important. There’s a lot riding on the economics of Medicare as we go forward,” Cramton said. “If we don’t figure out a way to bring quality health care at affordable prices, then that is very serious for our economy. I think the stakes are actually in the trillions, not the billions.”

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

CMS to Start New Screening Procedures for DMEPOS Enrollees
BALTIMORE—CMS announced last week that beginning March 25, newly enrolling and revalidating providers and suppliers will be placed in one of three screening categories—limited, moderate or high—representing their level of risk for fraud. Newly enrolling DMEPOS suppliers have been assigned to the high-risk group.

“The use of risk categories and associated screening levels will help ensure that only legitimate providers and suppliers are enrolled in Medicare, Medicaid and CHIP, and that only legitimate claims are paid,” according to a March 3 listserv notice.

The level of risk will determine the degree of screening to be performed by the Medicare Administrative Contractor (MAC) processing the enrollment application, the agency said.

Providers in the high-risk category will undergo all current screening measures in addition to a site visit and, at a future date, a fingerprint-based criminal background check.

Currently enrolled (revalidating) DMEPOS providers will be designated a moderate risk, except for those traded on the NYSE or NASDAQ that will be considered limited risk. Screening for the moderate category will include all current measures as well as a site visit. Procedures for the limited screening category will largely be the same as those currently in use, CMS said.

The Affordable Care Act included a requirement for the screening categories, and CMS published a final rule in the Feb. 2 Federal Register implementing the new system.

In addition to the screenings, the MACs will also begin collecting a $505 application fee with certain enrollment applications. The fee, which will vary from year to year based on the CPI-U, does not apply to physicians, non-physician practitioners, physician organizations and non-physician organizations. For more information, go to

Refunds for RAC Audit Snafu in Jurisdiction D
FARGO, N.D.—The Recovery Audit Contractor in DME MAC Jurisdiction D will no longer target CPAP equipment and supplies for audits when Medicare did not pay for the required sleep test, AAHomecare reported last week.

HDI, the RAC in the 17-state region, had been recouping money for CPAPs and supplies if the beneficiary did not have a sleep test paid for by Medicare. But CPAP therapy is frequently prescribed before patients are Medicare-eligible.

“They did not know how to interpret the policy,” said The MED Group’s Kelly Riley, who chairs the sleep task force for the association’s HME/RT Council and is a member of the Region D DME MAC Advisory Committee.

CMS staff acknowledged that the practice was a misinterpretation of Medicare policy and said the automated audit reviews would be stopped, AAHomecare said.

“CMS said that if they do suspect problems, they will use discretion to conduct complex reviews,” according to the association's March 2 newsletter. “Staff also indicated that they would be refunding money that has been collected due to the misapplication of the policy.”

For providers who have already filed appeals resulting from such audits, Riley said, “Wait, the money will not be recouped." Generally, she said, "without an appeal, the funds are recouped per the policy at around day 41 post notification. The appeal stops the clock until a determination is made.”

While neither CMS nor NAS, the Jurisdiction D DME MAC, has issued a notice about how the issue will be handled, more information could be forthcoming on a DAC call scheduled for March 8, Riley said.

She said the sleep task force had verified that the same types of audits were not occurring in any other region.

If other issues with the RACs arise, Riley said, providers should “reach out to other stakeholders” and work collaboratively toward a solution. That, she said, “is exactly what happened this time.”

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

GOP Senators Urge President to Pull Berwick Nomination as CMS Chief
WASHINGTON—In a letter to President Barack Obama sent yesterday, 42 Senate Republicans asked him to withdraw the nomination of Donald Berwick to lead the Centers for Medicare and Medicaid Services.

Spearheaded by Sens. Orrin Hatch, R-Utah, ranking member of the Senate Finance Committee, and Mike Enzi, R-Wyo., ranking member of the Senate Health, Education, Labor and Pensions Committee, the letter said Obama’s recess appointment of Berwick last year was completed before a hearing could be held, short-circuiting the Senate’s ability to consider his nomination in the 111th Congress.

According to the letter, “This abrupt and unilateral action meant that no Senator—Democrat or Republican—was given the opportunity to ask Dr. Berwick a single question before he was placed in charge of an agency with a budget larger than the Department of Defense, which controls 4 percent of our nation’s gross domestic product (GDP), and, most importantly, directly impacts more than 100 million American lives every single day.”

Obama first nominated the Harvard professor and pediatrician for the CMS post in April 2010. But when Republicans threatened to stall his confirmation saying Berwick’s past statements showed support for health care rationing, the president used a recess appointment to put him in the job last summer.

Under recess appointment rules, Berwick can remain as administrator of the massive agency only until the end of 2011 unless he can be confirmed. The president renominated Berwick in January when the 112th Congress began.

“You repeatedly pledged, both as a candidate and as President that you would usher in a new era of transparency in our government. However, the process used in the enactment of the health care law, combined with the end-run around Congress with the recess appointment of Dr. Berwick, both contradict your pledge,” the senators wrote.

They added, “Once you have withdrawn his nomination, we are confident we can all work together to find a nominee for Administrator we can support and confirm after appropriate hearings are held.”

Five GOP senators—Scott Brown of Massachusetts, Susan Collins and Olympia Snowe of Maine, Lisa Murkowski of Alaska, and Rob Portman of Ohio—did not sign the letter. Republicans would need 41 votes to block Berwick’s confirmation by the full Senate.

In response to the letter, a White House spokesman told The Associated Press that Berwick is “far and away the best person for the job.’’

Read the full text of the senators’ letter.

Congressional Staffers Get the Word on Competitive Bidding
WASHINGTON—“If you understand the fundamentals of competition, it is easy to see that the Medicare competitive bidding program is anything but competitive … You cannot eliminate 80 or 90 percent of competitors and expect to arrive at a competitive outcome,” said John Shirvinsky, executive director of the Pennsylvania Association of Medical Suppliers.

“The program is already leading to a fast race to the bottom in terms of quality and access to health care. Services related to home medical equipment are being reduced or eliminated in response to artificially low prices caused by market dysfunction,” said AAHomecare President Tyler Wilson.

“Good providers will find it unprofitable to remain in business. Home medical equipment provision is so service-intensive, and the bidding program payment so low due to suicide bidding, that the entire system may become unsustainable,” said provider Georgie Blackburn of Tarentum, Pa.-based Blackburn’s.

“It appears [CMS] is wedded to the structure of this program and advancing it at all costs, rejecting the advice from the Program Advisory and Oversight Committee, requests for information from Congress to make the program more transparent and recommendations from 167 of our nation’s top economists and auction experts,” said Pride Mobility’s Seth Johnson, vice president of government affairs.

Those are a few of the points about national competitive bidding that congressional staffers heard from HME advocates at a March 1 briefing called by Pennsylvania Reps. Glenn Thompson (R) and Jason Altmire (D).

The idea was to help make sure legislative staff, especially freshman members, learn about the bidding program, said AAHomecare’s Michael Reinemer, vice president, communications and policy. Stakeholders are hoping to get a new competitive bidding repeal bill introduced before the association’s Washington Legislative Conference, which begins March 16.

“The two hosts this morning are key champions on that front,” Reinemer said Tuesday.

In Congress’ last session, H.R. 3790, which would have repealed the entire bidding program, gained 259 cosponsors but failed to make it out of committee. The industry is working to float the measure again before Round 2 of the program moves forward. The catch is finding the funds to offset a repeal of the bid system, which CMS estimates could save $17 billion for Medicare.

No matter what, Wilson told the Capitol Hill staffers that “the bidding program designed by CMS is faulty, and its administration has been a lesson in poor planning, arrogance and clumsiness.” He added that the agency has been “alarmingly dismissive” toward a number of issues in the two-month run of Round 1, including difficulty finding local providers to get DME.

“The only way to stop the problems is to stop the program,” Wilson said. “We urge Congress to step in and enact legislation to repeal bidding. If Congress fails to act, the economic fallout and the harm to the home care system and those that rely upon it will be irreversible.”

Blackburn noted CMS required only one year of financial data from bidders, which she said benefitted “less solvent companies.” As a result, bid winners include “companies that have been previously bankrupt, have been on the brink of bankruptcy or have poor or absent credit ratings with major manufacturers,” she said.

“Yet, these firms are to honor a three year contract period at unsustainably low levels of payment. How exactly is that to occur without diminishing product quality or the level of service to the patient?”

Despite Congress’ full plate of issues—including averting a government shutdown—the briefing drew a crowd.

“It was standing room only and at least 25 staffers were turned away,” said Johnson.

Those who made it into the packed room also heard from speaker Cynthia Morton, executive vice president of the National Association for the Support of Long Term Care.

“If I had to summarize our perspective in one sentence, it would be that the current competitive bidding program simply is not properly designed, is fundamentally flawed and the ramifications for patients will be serious and long-lasting,” said NASL’s Morton.

The bidding process allowed bidders to submit low bids “ostensibly to gain access to the market,” she explained, but they were not bound by their bids and could later drop out. The resulting rates “were unduly influenced by what I would describe as drive-by bidders who did no more than drive the rates down and then left the scene,” Morton said.

“It appears that some of the aspects of the competitive bidding program are based more on math than on good policy. The focus on cost savings has driven the program beyond rational limits and rational processes—this needs to be fixed,” she concluded.

Laurence Wilson, director of CMS’ Chronic Care Policy Group, spoke to the group in defense of the bidding program, which rolled out to nine Round 1 cities in January. According to CMS, things are going fine. The agency plans to bid Round 2 in another 91 cities as early as this spring.

Johnson, however, said he was happy with the legislative aides’ interest in hearing more about the bid program, even though they “only had about 48 hours’ notice” in advance of the meeting.

PAMS’ Shirvinsky echoed the sentiment. “Congressmen Thompson and Altmire were extremely supportive toward us and our position in introducing our panel to the assembled staffers, many of whom were representing freshmen members and were hearing about competitive bidding for the first time,” he said. “Briefings like this are very much of an inside-the-Beltway thing, but extremely important because the sponsorship by a bipartisan team of congressmen gives us a seal of approval and helps to put the issue on their radar screens.

“I circled back to Congressman Thompson's office later in the day and was informed that they had already received numerous calls for more information and requests to sign onto any legislation that may be introduced,” Shirvinsky said.

“All in all, I'd say that made for a pretty good day.”

‘Broad Brush of Fraud’ Tars Legitimate Providers
Congressional hearings focus on Medicare fraud; ‘We’ve been telling you,’ industry says

WASHINGTON—In three separate House and Senate hearings on health care fraud and abuse Wednesday, legislators got an earful from representatives of the Office of Inspector General, who said they were making headway in the fight to get rid of it.

Committee members also heard how easy it was to game the system from a man convicted of Medicare fraud.

In testimony to the House Ways and Means Subcommittee on Oversight and Investigations, Aghaegbuna “Ike” Odelugo, a native of Nigeria, said he cheated the Medicare system out of $10 million with a sham DME company.

According to Odelugo’s testimony, it was "incredibly easy." All he needed were data-entry skills and a few “marketers” to recruit patients, because claims can be submitted based on forged prescriptions, multiple billing codes for similar items make it possible to avoid Medicare’s red flags and unique physician identifier numbers are available to the public online.

“One of the easier things to acquire in the DME fraud arena is a Medicare provider number,” Odelugo said.

OIG representatives, on the other hand, said they were closing loopholes and making significant strides in reducing fraud throughout the health care system.

“Over the past fiscal year, OIG has opened more than 1,700 health care fraud investigations,” said Inspector General Daniel R. Levinson, speaking before the Senate Finance Committee. “Additionally, our enforcement efforts have resulted in more than 900 criminal and civil actions and more than $3 billion in expected investigative recoveries in fiscal year 2010.” Those recoveries, he added, include more than $1 billion in audit receivables.

Levinson was one of four OIG representatives testifying before the congressional committees: Lewis Morris, chief counsel to the Inspector General, appeared before the House Subcommittee on Oversight and Investigations; and Gerald Roy, deputy inspector general for investigations, and Omar Perez, special agent with the OIG, both testified before the House Energy and Commerce Committee on Waste, Fraud and Abuse.

As industry-watchers had predicted, in each testimony legislators heard about the prevalence of DME fraud.

Levinson applauded the success of Medicare Strike Force efforts targeting DME providers in Los Angeles, Miami, Detroit, Houston, Brooklyn, Baton Rouge, Tampa, Dallas and Chicago.

Roy illustrated his testimony with an example of a California crook who established multiple DME companies by paying gang members $5,000 to set up bank accounts and fill out Medicare enrollment paperwork, then submit claims for power wheelchairs and orthotic devices.

“Not only is this investigation an example of one of the more prevalent fraud schemes that OIG is seeing, but it also highlights the increasing number of violent criminals entering the health care fraud arena,” he said.

Perez told committee members about unscrupulous DME operators in South Florida. “Some of these companies started out as legitimate operations with a Medicare billing number; however, they were unsuccessful as the market was saturated with illegitimate DME companies. As a result, these companies were sold and all too often, their new owners had one idea in mind: steal from Medicare.”

The new owners obtained lists of stolen Medicare beneficiary information and stolen UPINs, he said. With those two key pieces of information, they were able to submit fraudulent claims for equipment that “ranged from nebulizers and corresponding medications to incontinence supplies to motorized wheelchairs.”

Once CMS paid the claims, the money was withdrawn from the company’s bank account, the company would change ownership and then bill Medicare again for millions of dollars, Perez said.

There are 10 Strike Force teams investigating Medicare fraud in Miami alone, he said.

While pointing out the OIG’s successes, Morris said the problem still exists. “Those intent on breaking the law are becoming more sophisticated and the schemes are becoming more difficult to detect,” he said. “Some fraud schemes are viral, i.e., schemes are replicated rapidly within geographic and ethic communities. To combat this fraud, the government’s response must be swift, agile and well-organized.”

It also may require the help of providers. Speakers acknowledged that the preponderance of providers were not involved in fraud and abuse. In fact, said Levinson, the OIG wants to work with them.

“We recognize that the vast majority of health care providers and suppliers are honest and well-intentioned,” Levinson told the Senate committee. “Health care providers and suppliers are valuable partners in ensuring the integrity of federal health care programs and preventing fraud and abuse. OIG seeks to collaborate with health care industry stakeholders to foster voluntary compliance.”

We’ve Been Telling You, Industry Says
The American Association for Homecare would like nothing better, pointing to the HME sector’s “long history of advocating better fraud prevention” in a statement distributed at all three hearings.

But AAHomecare also cautioned against placing “unreasonable burdens” on legitimate providers.

The association statement reads in part:

“As we have stated, our Association and members have zero tolerance for fraud and will continue to work with federal officials to prevent fraud. In fact, in 2009, the American Association for Homecare proposed to Congress an aggressive 13-point Medicare Anti-Fraud Legislative Action Plan that includes tougher penalties for fraud, more site visits, and real-time claims audits to prevent fraud at the front-end of the process rather than relying on the ineffective pay-and-chase system.

“The majority of the Association’s recommendations have been adopted by Congress and the Centers for Medicare and Medicaid Services (CMS). However, we encourage Congress to adopt all of our proposals to ensure a comprehensive approach that directly shuts down avenues for Medicare fraud.

“A number of important new anti-fraud measures are now in place, which were long overdue. But Congress, CMS, and the Office of Inspector General (OIG) should not impose unreasonable burdens on the existing, accredited home medical equipment providers.

“It’s important to point out that providers of home medical equipment must now be accredited by a deemed accrediting organization and they must also post a surety bond. These two requirements took effect in October 2009, and fraud associated with the home medical equipment sector has likely declined since then. We encourage federal officials to assess and report the rate of fraud since these requirements took effect.”

Read AAHomecare’s entire statement.

These Are Criminals, Not DME Suppliers
Wayne Stanfield, president and CEO of the National Association of Independent Medical Equipment Suppliers, said he was “very disappointed” in the way the hearings turned out.

“There was no opportunity for the industry to respond,” Stanfield said, noting that government witnesses citing examples of DME fraud “didn’t bother to mention all of the things that are now in place to prevent it.”

The situation “is discouraging, and it’s frustrating,” Stanfield said, “especially right before the industry is headed to Washington in two weeks [to lobby for a repeal of competitive bidding].”

In a commentary on fraud last week, the NAIMES president said most fraudsters “are not DME suppliers, but are people out to make easy money on the backs of seniors and legitimate suppliers.”

With the critical fight against competitive bidding on their hands, Stanfield urged providers to make the distinction to lawmakers.

“When you talk to your legislators, tell them holding CMS and its contractors accountable is the only way to stop these bad actors from stealing from Medicare,” he said.

“Not one of these so-called suppliers billed one dime to Medicare without first getting a supplier number from the NSC, a CMS contractor. They billed Medicare and got paid because the DME MACs did nothing to identify aberrant billing patterns of claims submitted by these individuals.

“The DME industry wants these bad elements gone just as much as the government,” Stanfield said. “Government is killing this honorable industry with the broad brush of fraud rather than addressing the root of the problem.”

Loaded Letter: CRE Takes New Aim at Competitive Bidding
WASHINGTON—The Center for Regulatory Effectiveness fired another shot against competitive bidding last month, sending a letter to the Department of Health and Human Services that asks for a retrospective review of the CMS program.

In the Feb. 15 letter, addressed to HHS acting General Counsel Sally Howard, the CRE, a regulatory watchdog organization, cited President Obama’s Jan. 18 executive order calling for a new regulatory strategy as the catalyst for such a review. In his order, the president directed federal agencies to submit plans for review of existing regulations to the Office of Information and Regulatory Affairs (OIRA) within 120 days.

“The Retrospective Review Plan developed by HHS needs to provide highest priority to conducting a retrospective review of CMS’ durable medical equipment (DME) competitive bidding regulations because they are poorly designed, contradicting the president’s regulatory goals by needlessly sacrificing thousands of small businesses and tens of thousands of jobs,” read the letter, which was copied to Cass Sunstein, OIRA administrator.

“We have three guns pointed at CMS’ head,” said the CRE’s Jim Tozzi, the letter’s author and a former regulatory official in the White House Office of Management and Budget. “One gun is the litigation, the second gun is the letter on the executive order and the third gun is the [auction design] theory.”

Last year, the CRE sued CMS for refusing to release the financial standards to which it was holding bidders in its DMEPOS bidding project. The case is still before the courts, Tozzi said.

President Obama’s executive order, he said, provides a foundation for more immediate action.

“Every president I knew—and I worked for five presidents—always went out and said we have to get rid of all the bad regulations,” Tozzi recalled. “The thing that is different now from other administrations is that there is this huge jobs issue. If there is anything that is going to lose jobs, it is [competitive bidding].”

According to the CRE letter, “Protecting jobs is the focal point of the president’s new regulatory strategy. CMS’ competitive bidding rule stands squarely in the way of saving tens of thousands of small business and their jobs” and is “antithetical to the president’s regulatory and economic agenda.”

The letter said the program “imposes needless burdens on Medicare beneficiaries and on companies that have a proven track record of reliably, efficiently and honestly meeting beneficiary needs,” in addition to denying beneficiaries’ freedom of choice since it forces them to find new providers.

Tozzi also brought up CMS’ program design and its violation of accepted auction principles, challenging the agency’s refusal to either seek or accept advice from experts in the field.

“Competitive bidding is an extensively analyzed academic discipline. When agencies have had questions and concerns regarding current or planned auctions, they have sought expert advice from scientists and other academicians,” he wrote. “For example, the Federal Communications Commission held a series of conferences on combinatorial auctions in conjunction with the National Science Foundation and other outside experts.

“CMS, by contrast, has refused outside advice on how to improve their competitive bidding system.”

Tozzi said that is another violation of the president’s order, which requires that agencies “ensure the objectivity of any scientific and technological information and processes used to support the agency’s regulatory actions.”

A retrospective review would allow HHS the opportunity—“and duty,” he said—to correct those mistakes.

Tozzi said he purposely did not send the letter to CMS Administrator Donald Berwick. “If I had sent it to CMS, it would never have seen the light of day,” he said. “They would toss that in a minute.” Tozzi added he believes the letter will make its way to Congress.

“The letter has a weight of its own,” he said. “They are going to pick that up with hot tongs. That’s one they aren’t going to just toss away.”

Read the entire letter on the CRE website.

Medtrade Spring 'Lunch and Learn' Sessions to Promote Best Practices in HME
LAS VEGAS—Nielsen Expositions, owner and producer of Medtrade Spring, has announced a new “Lunch and Learn” roundtable event. To be held on Tuesday, April 12, from 12 noon to 1:30 p.m. the educational and networking session will offer attendees an opportunity to meet with leading industry experts and their peers to discuss current issues facing the home medical equipment industry.

Medtrade Spring will take place April 12–14 at the Sands Expo and Convention Center in Las Vegas.

The roundtable discussions will focus on six topics moderated by experts in that specific area of home care. The event, sponsored by QS/1 and The VGM Group, will be facilitated by HME consultant Mary Ellen Conway, president of Capitol Healthcare Group, Bethesda, Md.

The discussions offer an opportunity for attendees to share their successes, voice their concerns, ask questions and learn best practices from their peers.

“The Educational Advisory Board is continually striving to offer new and dynamic opportunities for attendees,” said Conway. “In these interactive sessions, providers will have the opportunity to meet with those who share their interests and concerns in an informal environment that will lend itself to great discussions.”

The event, which is limited to the first 150 registrants, costs $25 and includes a box lunch.

“We know that learning comes in many shapes and forms and peer-to-peer education is a proven means of deciphering and applying best practices in all aspects of an organization,” said Kevin Gaffney, show director. “The topics that have been chosen for this event speak directly to the foremost issues in running a home medical equipment company.”

Attendees can choose from the following topics:

· Intake, facilitated by Miriam Lieber, president, Lieber Consulting

· Inventory and Purchasing, facilitated by Bruce Brothis, president, Allegient Billing & Consulting

· Your Compliance Program, facilitated by Wayne van Halem, president, The van Halem Group, and Clay Stribling, president, HC Compliance

· HR Best Practices, facilitated by Richard Davis, vice president, Barnes Healthcare Services

· Marketing Best Practices, facilitated by Colette Weil, managing director, Summit Marketing

· Ask the Attorneys, facilitated by Jeffery Baird, chairman, Health Care Group, Brown & Fortunato; Denise Fletcher, attorney, Brown & Fortunato; and Neil Caesar, president, Health Law Center

See detailed descriptions for individual roundtables at

In Brief
CMS Issues FAQs on Competitive Bidding Transition; No Info on Face-to-Face Exam, But Form C ‘Coming Soon;’ More News in Brief
BALTIMORE—CMS has issued frequently asked questions related to competitive bidding when a change in suppliers takes place. Find the FAQS on the newly revamped Competitive Bidding Implementation Contractor website at Under “What’s New,” select “Transition from Non-Contract Suppliers to Contract Suppliers FAQs.” The updated CBIC site includes an interactive map with information on the competitive bidding areas and new bookmark, e-mail, save and print functions.

No Info on Face-to-Face Exam, But Form C ‘Coming Soon’
BALTIMORE—CMS representatives on an Open Door Forum March 2 said they had no information yet on the new DME face-to-face exam requirement. They did say, however, that instructions for Round 1 contract winners who must submit information on the products and brands provided to Medicare beneficiaries would be out shortly. “I hope it’s very shortly,” commented Apria’s Kimberly Rogers-Bowers on the call, “because it’s going to be difficult for companies to be in compliance to get the information reported back if we are not given some extra time.” The report is due within 10 calendar days of the end of each quarter. (Following the call on March 4, the CBIC posted a preparatory notice about the report, referred to as “Form C,” on its website and said further instruction would be “coming soon.”) Information the agency did confirm? The date for the next DME Open Door call will be April 13.

Roberts to Present Keynote at AAH Legislative Conference
WASHINGTON—Home care champion Sen. Pat Roberts, R-Kan., will present the keynote address at AAHomecare’s Washington Legislative Conference March 16-17, the association announced last week. Other speakers confirmed for the conference include Reps. Jason Altmire, D-Pa.; Heath Shuler, D-N.C.; Glenn Thompson, R-Pa.; and Georgia Republicans Phil Gingrey and Tom Price. For more information, go to

CMS Sets PAOC Meeting April 5
BALTIMORE—CMS will hold a meeting of the Program Advisory and Oversight Committee (PAOC) on April 5 to discuss the status of the Round 1 rebid and upcoming rounds of the Medicare DMEPOS competitive bidding program, according to a notice. Scheduled to run from 8:30 a.m. to 4 p.m. ET, the meeting will be held at the CMS building at 7500 Security Blvd. in Baltimore, Md. The agency said it would open registration for the meeting within the next few weeks.

NAS Scores New Contract
FARGO, N.D.—Noridian Administrative Services has received another contract as the DME MAC for Jurisdiction D, which includes 17 states and three U.S. island territories. The new contract is valued at $86.2 million and includes the base year plus four one-year options to renew. CMS awarded the contract Feb. 16, and it took effect on March 1. NAS has been the DME MAC for the jurisdiction since late 2006, and since then through 2010, has processed more than 65 million Medicare claims with benefit payouts in excess of $8.7 billion.

Rotech Reports Q4, Year-End Results
ORLANDO, Fla.—Rotech Healthcare reported its fourth quarter and year-end financials last week, and the company is pleased with its performance, President and CEO Phil Carter said in a release. For the three months ended Dec. 31, net revenues rose slightly to $123.8 million compared to $123.2 million for the same period in 2009. For the year, net revenues grew to $496.4 million from $479.9 million in 2009. In 2010, revenue-generating patients in the company’s core product lines of oxygen and CPAP grew 8.2 percent compared to 2009, the release said. “We continue to experience positive organic growth in our core oxygen and sleep therapy programs,” Carter said. “In addition, we continue to identify equipment purchase opportunities from competitors exiting the home health care market. Using this newly acquired equipment, during the first two months of 2011, we have begun transitioning new patients. When fully implemented by the end of the second quarter, this process should contribute approximately $10.0 million of additional adjusted EBITDA on an annualized basis.”

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