CMS Closes Out DME Advisory Committee Applications
BALTIMORE--Staff at CMS is going through a pile of papers--all nominations for potential members who will serve on the DME Program Advisory and Oversight Committee (PAOC). As mandated under the Medicare Modernization Act, the committee, which will have 12 to 15 members, is being formed to advise the agency on quality and financial standards, data collection strategies and, ultimately, logistics behind the implementation of competitive bidding for DME.

The deadline for committee nominations was July 2. "We received a lot of [nominations] during the last hour--a huge stack of them," a CMS official told HomeCare Monday. "It will take awhile to get through them all." He added that at the time the total number of applications the agency received had not been tallied, and that a date had not yet been set for the final selection of committee members. "We're just gathering names. [The selection process] has to move up many more levels," he said.

The official did say that members will be selected "in plenty of time" for the committee's first meeting, which is currently set for October. Before that happens, though, the committee membership must be approved by the CMS administrator's office as well as HHS Secretary Tommy Thompson's office. "[The secretary] makes the final decision and tells us who to pick on this committee," the CMS official said.

CMS has said that the committee will include beneficiary and consumer representatives, physicians and other health care providers, manufacturers, suppliers, professional standards organizations, financial standards specialists, data management specialists, association representatives and experts in shipping fragile medical materials. In the weeks leading up to the nomination deadline, stakeholders from these sectors scrambled to line up congressional "sponsors" for their nominations to committee slots.

CMS has also contracted the Research Triangle Institute (RTI) for assistance in implementing competitive bidding. "Specifically, [RTI] will be helping us gather all the recommendations that come out of the [advisory committee] meeting," the agency official said. The North Carolina-based company will also make its own recommendations about the DME bidding process.

RTI helped CMS evaluate previous DME competitive bidding demonstration projects held in Polk County, Fla., and San Antonio, Texas.

FAA Proposes Oxygen Concentrator Use Onboard Aircraft
WASHINGTON--The Federal Aviation Administration has proposed a regulation that could alleviate air travel headaches for those using portable oxygen concentrators.

"The FAA has been made aware of the critical need for improved service to passengers who must travel with oxygen while on aircraft," the agency stated in a proposal published in the Federal Register July 14. The rule proposes use of only the AirSep LifeStyle portable oxygen concentrator onboard aircraft, because "this is the only device of this type the FAA has evaluated and determined to be safe. Other devices may be added ... after the FAA has been satisfied that they can be safely used on board aircraft."

In addition to the proposed rule, the FAA said it will also make an "independent determination whether the devices pose a hazard in aviation."

The agency is seeking public comments on several questions surrounding the issue. For example, should a portable oxygen user be required to carry batteries for the duration of the flight? Also, should users be allowed to plug the units into available onboard power outlets?

To view the proposed rule and for information about where to send comments, due Aug. 13, click here.

Medicare to Consider Obesity Coverage
WASHINGTON--In a July 15 release, HHS announced that language stating obesity is not an illness had been removed from Medicare's Coverage Issues Manual, paving the way for possible coverage of obesity treatment.

In 2001, the Centers for Disease Control and Prevention asked CMS to review the issue of whether obesity should be considered an illness, but until now, the agency has denied coverage for obesity therapies. While the language change still does not define obesity as a disease, the revision makes it possible for beneficiaries to request coverage for anti-obesity treatments. "The critical issue is not the classification of obesity but whether particular items or services are reasonable and necessary," CMS said.

"With this new policy, Medicare will be able to review scientific evidence in order to determine which interventions improve health outcomes for seniors and disabled Americans who are obese and its many associated medical conditions," Health and Human Services Secretary Tommy Thompson said during U.S. Senate testimony last week. In a press conference on July 16, he reportedly stated that Medicare would decide on a "case-by-case basis" whether obesity should be considered as a disease for coverage purposes.

A statement from CMS Chief Medical Officer Dr. Sean Tunis said the agency will convene its Medicare Coverage Advisory Committee this fall to evaluate the evidence on obesity-related surgical procedures that could reduce the risk of heart disease and other illnesses.

Norwalk Is New Deputy CMS Administrator
BALTIMORE--On July 12, CMS Administrator Mark McClellan announced that Leslie V. Norwalk has been promoted to deputy administrator. Norwalk has been acting deputy administrator and COO of the agency since January 2003.

During the past year, Norwalk has met with HME stakeholders on various subjects, including issues surrounding K0011 fraud and abuse and, since its passage, has been the CMS lead in implementing provisions in the Medicare Modernization Act.

According to McClellan, who notified CMS employees in an e-mail about the appointment, in her new role Norwalk will continue MMA implementation efforts, focus on program integrity issues and act as liaison between Congress and other departments within HHS. Before assuming duties as acting deputy administrator, Norwalk was a counselor to former CMS Administrator Tom Scully.

McClellan also announced that John Robert Dyer will join the Office of the Administrator as CMS' new COO, responsible for overseeing the agency's day-to-day activities and new program initiatives. In the 1980s, Dyer served four years as director of management and budget for the Heath Care Financing Administration, the predecessor agency to CMS.

In another senior-level appointment, McClellan said Charlene Brown will change positions to become acting deputy COO for CMS. Brown is currently deputy director of the agency's Center for Medicaid and State Operations.

Collins Introduces Bill to Extend Home Health Rural Add-On
WASHINGTON--On Thursday, Sen. Susan Collins, R-Maine, introduced a bill to extend the 5 percent rural add-on payment for home health services for two years, according to a report from the American Association for Homecare. Cosponsors for S. 2659, the Medicare Rural Home Health Payment Fairness Act of 2004, include Sens. Blanche Lincoln, D-Ark.; Kit Bond, R-Mo.; Russ Feingold, D-Wis.; Craig Thomas, R-Wyo.; Kent Conrad, D-N.D.; and Conrad Burns, R-Mont.

"Delivery of home health services in rural areas can be as much as 12 to 15 percent more costly because of the extra travel time required to cover long distances between patients, higher transportation expenses and other factors," Collins said. "Many home health agencies operating in rural areas are the only home health providers in large geographic areas."

To revisit this news any time during the week, go to http://www.homecaremonday.com.

Houston Women Plead Guilty to K0011 Fraud
HOUSTON--K0011 fraud surfaced again in Harris County, Texas, when, on June 25, two women associated with a Lufkin company pleaded guilty to bilking Medicare of almost $2 million.

According to court documents, Becalo Utuk managed All Divine Health Services, a company that supplied motorized wheelchairs to Medicare recipients. Between December 2002 and the fall of 2003, the company claimed delivery of numerous motorized wheelchairs and billed Medicare in excess of $4 million. However, prosecutors claimed Utuk and her coworker Iris Bonilla conspired to submit fraudulent claims to Medicare for the power chairs, which were either not medically necessary or never delivered.

Utuk is accused of receiving $1.8 million from Medicare and diverting the fraud proceeds for her own use, and Bonilla is charged with defrauding Medicare of more than $150,000, according to Matthew Orwig, the U.S. Attorney for the Eastern District of Texas in Beaumont. Both women face a maximum sentence of five years in prison and a fine of $2.25 million.

The HHS Office of Inspector General and the FBI investigated the case.

The guilty pleas follow news from CMS' Dallas regional office that officials are in talks with Columbia, S.C.-based Palmetto GBA, which manages the Region C DMERC, about changing the strict review requirements for K0011 claims submitted in Harris County. "There could be some changes in the not-too-distant future," said Associate Regional Administrator Steve McAdoo at a CMS June 23 Home Health, Hospice and DME Open Door Forum.

A 100-percent review for all K0011 claims submitted in the Texas county has remained in effect since last September, when CMS and the OIG launched Operation Wheeler Dealer in response to a sharp rise in power wheelchair expenditures and a massive fraud scheme involving the expensive equipment in Houston.

2004 HomeCaring Awards
HomeCare is now accepting nominations for the magazine's 2004 HomeCaring Awards. These prestigious awards honor those whose dedication and commitment--in any aspect of the industry--defines the caring that HME is all about. Your nominations may recognize a lifetime of quiet, dedicated service to a small community miles from the nearest metropolis, or you may point out a person whose pursuit of excellence in service or advocacy has had a national impact. To nominate any individual who you feel has worked to better the HME community, visit www.homecaremag.com and click on the "HomeCaring Award" button to download a nomination form. A hard-copy form is available in both the June and July issues of HomeCare magazine. The HomeCaring Awards will be presented at Medtrade in Orlando, Fla., Oct. 26-28.

In Brief
A panel of investigators has said health care fraud crimes increasingly result in harm to patients. At a Blue Cross and Blue Shield Association (BCBSA) news briefing July 13, Timothy Delaney, chief of the FBI's Health Care Fraud Unit, said outpatient surgery fraud, in which unscrupulous providers pay patients to undergo cosmetic or medically unwarranted surgeries, is on the rise. Prescription drug fraud--where providers, in return for kickbacks, prescribe drugs to patients who do not need them--is also on the rise, the panel said.

CMS has announced increased funding to Medicare Advantage (formerly Medicare+Choice), the managed-care alternative to the traditional fee-for-service program. "The new funding is expected to help ensure that Medicare beneficiaries who count on Medicare Advantage plans will have reliable access to the additional benefits and significantly lower out-of-pocket costs typically provided by these plans," the agency said in a press release, adding that "the new funding is also likely to bring additional Medicare Advantage plans into more markets serving more beneficiaries."

As of July 12, approximately 3.9 million Medicare beneficiaries had signed up for prescription drug discount cards, and 25,000 more are signing up every business day according to CMS. The number is more than halfway to the 7.4 million seniors and people with disabilities that CMS projected would enroll in the drug card program, created as an interim step until the Medicare drug benefit is implemented in 2006. In a press release issued July 15, CMS announced it has made several improvements to its Web site, at www.medicare.gov, to make it easier for beneficiaries to compare the cards, including a "best choice" list of the top five cards that offer the lowest prices for a consumer's particular medications. According to CMS, there are now 3,000 operators answering an average of 50,000 calls a day to 1-800-MEDICARE, the program's information hotline.

Coming Up
CMS has rescheduled its next Open Door Forum on Home Health, Hopice and DME for Friday, July 23, at 2:00 p.m. EST. To participate by phone, call (800) 837-1935 and use conference ID 4354239.

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