Court Convicts Graham-Field Chief of Stock Fraud
ISLIP, N.Y.--A federal jury has convicted Irwin Selinger, president and CEO of Graham-Field Health Products, of conspiracy and stock fraud. According to a June 11 statement issued by the company, however, Selinger will continue as Graham-Field's CEO.

"This development will have absolutely no impact on the company's growth plans or our ability to serve our customers," said Lawrence de la Haba, Graham-Field's vice president of marketing. "The owners remain fully committed to the company and its management. While we are deeply disappointed with the decision, we have a strong management team in place with extensive industry knowledge that has a business to run. Our primary focus remains taking care of our distributors, caregivers and customers."

An indictment filed with the U.S. Attorney's Office for the Eastern District of New York, where Graham-Field was located at the time, alleges that in 1997 Selinger fraudulently inflated the company's profits during a deal to acquire Fuqua Enterprises, the parent company of Lumex, an acquisition that depended on Graham-Field's stock staying above a certain price.

The five-week trial ended after the jury deliberated three days and delivered its verdict June 9, said U.S. attorney spokesperson Robert Nardoza, adding that the CEO was convicted on two counts of conspiracy to commit fraud and the fraud itself. Selinger faces sentencing Oct. 1 and could get up to 10 years in prison, Nardoza said.

The verdict is "an absolute outrage," Selinger told Newsday in an interview. "There was zero evidence presented to the jury. I believe that over time I will be vindicated and I will be found innocent."

Selinger's attorney, Gerald Walpin, told the newspaper that he will attempt to have the verdict dismissed and, if necessary, conduct an appeal.

Since the late 1990s, Graham-Field has filed for and emerged from bankruptcy, endured an internal audit revealing accounting irregularities, explored a possible sale, seen frequent top-management turnover and moved its base operations from Long Island to Atlanta.

In May 2003, the company announced its reorganization and began a push back into the home care market, reintroducing its Everest & Jennings, LaBac, Simmons Healthcare, John Bunn, Grafco, Labtron and Lumex product lines. "Those brands continue to be very strong," said Mike Norby, senior vice president of sales and marketing, "and for the past year and continuing on, we've been dedicated to building back what was taken away [during the bankruptcy].

"We've brought the quality back to every product ... and our distributors and our dealer partners will be much better served with a healthy Graham-Field in the market."

AAHomecare Members Fight MMA's Reimbursement Changes
WASHINGTON--As Washington rushed to prepare for former president Ronald Reagan's funeral, 200 industry stakeholders fanned out over Capitol Hill to drive the home care message.

Last Tuesday during the American Association for Homecare's Legislative Conference, held June 7-9, HME providers and manufacturers skirted hastily erected security fencing and crowd-control rails to keep appointments with 165 members of Congress and their legislative aides. Chief topics of discussion with the federal representatives were the DME reimbursement cuts and revised pricing for inhalation drugs mandated under the Medicare Modernization Act (MMA).

In meetings with the legislative aides for Georgia Sens. Zell Miller and Saxby Chambliss, Dave Hunter of Air Products Healthcare laid out a case against the 2005 transition to an ASP (average sales price) plus-6-percent pricing system for Part B respiratory drugs. "From a provider standpoint, what that really means is that the only reimbursement we would see above our cost is a 6 percent margin, which is not even going to be enough for us to deliver the medications.

"While we will continue to honor and support the patients we currently have in providing respiratory medications," Hunter said, "we're going to literally have to look at getting out of the business. We believe strongly that this is going to lead to an access issue."

Phil Stone of Atlanta-based American Homecare Supply, another member of the lobbying group from Georgia, told the congressional staffers that he is concerned about the impact the FEHBP (Federal Employees Health Benefits Plan)-based pricing cuts to oxygen and other DME products will have on beneficiaries. "It's getting to the point where we are going to have access issues," he said.

WestMed Rehab's Tim Pederson carried a similar message to all three of his state's Washington legislators, including South Dakota Sens. Tom Daschle and Tim Johnson, and newly elected Rep. Stephanie Herseth. Pederson's Rapid City business has 21 employees and serves 6,000 patients, some of them in outlying American Indian reservations.

"We do a lot of outreach to the reservation communities, and the margins are very tight," he explained to Herseth. "If those [reimbursement] reductions are implemented, we may have to reevaluate the types of services we offer on an outreach basis. Now we do it because it's the right thing to do ... but we don't make a great deal of return. We would like to continue to do it, but we have to do what's best for our business as well."

Throughout the day in meetings with officials from 34 states, AAHomecare members asked for support for H.R. 4491, a bill recently introduced by Reps. David Hobson, R-Ohio, and Harold Ford, Jr., D-Tenn., to repeal the FEHBP-based reimbursement cuts. And as the association attempts to educate policymakers about the effects of the reimbursement changes in MMA, the industry is picking up friends on the Hill.

A June 8 address by Sen. Blanche Lincoln of Arkansas buoyed conference attendees as she related a personal experience with home care during her father's battle with Alzheimer's disease. "I've been your customer ... I understand what [home care] has been able to do for my family and our ability to provide the quality of life and care for a lengthy amount of time in a setting where we wanted to be.

"You've got to make people understand that the options you provide are good options," continued Lincoln, who is a member of both the Senate Finance Committee and the Special Committee on Aging. "They're productive options; they're economical options ... for a large portion of the American population who are very interested in being able to manage their health care in a more direct way. I hope that you will ... work with me to continue the discussion in Washington in terms of improving the Medicare reform bill that we have put into law."

In Washington, Lincoln said, legislation "is not a work of art, it's a work in progress."

Idaho Sen. Mike Crapo drew loud applause in a final conference keynote when he told the audience that home care can play a vital role in the fight against chronic illness--and that the new payments for inhalation drugs may be inadequate. Crapo recently announced formation of the Congressional COPD Caucus, which also includes Sen. Lincoln and Reps. John Lewis and Cliff Stearns, to educate the public about chronic obstructive pulmonary disease and promote policies to improve the lives of COPD patients.

In addition to lobbying, on June 9 conference attendees elected a new slate of AAHomecare officers, including Chairman Tim Pontius, president and CEO of Young Medical Services, replacing outgoing Chairman Joel Mills, president and CEO of Advanced Home Care; Vice Chair Tom Ryan, president and CEO, Healthcare Concepts; Treasurer Larry Higby, president and CEO, Apria Healthcare Group; and Secretary Todd Brason, CEO of Willcare Inc.

NCART Holds Medicaid Summit
WASHINGTON--The National Coalition for Assistive and Rehab Technology (NCART), a group focusing on issues for high-end rehab providers, held its first Medicaid Summit June 9. The summit focused on what rehab companies can do at the state level to improve or maintain their current Medicaid program.

Lew Golinker, director of the Assistive Technology Law Center, encouraged attendees to respond to Medicaid cutbacks by emphasizing potential access problems that would result for Medicaid beneficiaries.

Henry Claypool, co-director of Advancing Independence, a Washington-based advocacy group for disabled people, spoke of the necessity of involving consumer and disability-related groups as a strategy to counter reimbursement cutbacks. He also urged participants to support the agendas of consumer and disability groups.

Participants also discussed components of NCART's Medicaid Advocacy Program, which includes a monitoring alert system covering state regulatory and legislative activity; a consulting and strategy development team; a grassroots action center; and an information and data center helping providers advocate appropriate Medicaid coverage.

Gloria Murray, president of the New York Medical Equipment Providers (NYMEP) association, said the meeting helped rehab companies "develop unified strategies so that we are not always re-fighting the same battles that have been fought in other states."

A second NCART Medicaid summit is scheduled for Aug. 8 in St. Louis. For more information, visit www.ncart.us.

CMS Moves Toward Implementing Chronic Care Improvement Program
WASHINGTON--At a House Ways and Means Subcommittee on Health hearing last month, CMS Administrator Mark McClellan testified that the new Chronic Care Improvement Program (CCIP) created by MMA will eliminate the fragmentation in provision of Medicare services that has led to poor outcomes and high program costs for chronically ill patients. CCIPs are expected to prevent acute episodes by monitoring patients and coaching them to follow their physician's care plan so that they can remain at home.

According to a report from the American Association for Homecare, CMS intends to award 10 contracts in traditional Medicare, with only one to an area. Bids, due Aug. 6, must be based on enrollment of 20,000 beneficiaries diagnosed with at least one of three diseases: congestive heart failure, diabetes and chronic obstructive pulmonary disease (COPD).

Eligible organizations include disease management companies, health care systems, physicians' practices, insurance and others meeting requirements spelled out in CMS' Request for Proposal, published in the Federal Register. Home care providers can bid themselves, form consortia to submit bids or seek a subcontract if a CCIP bid is awarded in their area.

For more information on the program, click here. To view the Request for Proposal, click here.

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

More Wheelchair Fraud Hits Texas
HOUSTON--Power wheelchair fraud made news again last week in Texas as two DME company owners pleaded guilty to defrauding Medicare.

Anietie Edoho-Ukwa owned Grace Medical Services in McKinney; his brother Ukwa Edoho-Ukwa owned Genesys Medical Equipment in Frisco. According to the indictment, between August 2002 and July 2003, each submitted fraudulent bills for power wheelchairs to Medicare.

Matthew D. Orwig, U.S. Attorney for the Eastern District of Texas, announced the guilty pleas June 9. In their plea agreements, the brothers said that their companies submitted fraudulent claims totaling nearly $95,000 and $75,000, respectively, for power chairs that were either never provided or replaced by less expensive scooters. Each has agreed to forfeit a luxury automobile as well as money obtained through the fraudulent billing.

Each DME owner, both of whom face sentencing Sept. 30, could receive a maximum of 10 years in prison and a $250,000 fine.

Provider News
Air Products Opens Two New Jersey Locations, Signs on with TracMed
CONSHOHOCKEN, Pa.--Air Products Healthcare has opened two satellite locations in New Jersey. The facilities, located in Cape May Court House and Cedar Grove, are an extension of COPD Services in Bellmawr. The company now has 10 branches and three satellite locations in the Philadelphia tri-state region and 60 branches nationwide.

"In addition to our growth from strategic acquisitions, we continue to establish relationships with key hospitals, secure contracts with managed care providers and open locations like our newest ones in New Jersey," said Robert Cucuel, CEO of Air Products' U.S. home care business.

In other company news, Air Products has signed an agreement with Trac Medical Solutions (TracMed) to use its CareCert eCMN program. Air Products will initially implement the program in 24 locations in Illinois, New Jersey, New York and Pennsylvania, and has pre-purchased 50,000 eCMN transactions.

VGM Publishes Marketing Survey
WATERLOO, Iowa--The VGM Group has published a survey of how 315 independent HME providers market their products and services. Developed and conducted by sales expert Louis Feuer, founder of Dynamic Seminars & Consulting, Pembroke Pines, Fla., "HME Uncovered: An Analysis of the Industry" covers sales commissions, performance reviews, marketing opportunities and other topics.

"We believe this project is the first of its kind, and it will provide independent providers with information about what their peers are doing to increase referrals and business in general," said Ron Bendell, president of VGM & Associates.

For more information about the survey, call VGM LEARN (Learning, Education And Research Network) at (800) 642-6065.

In Brief
CMS has created a new e-mail list serve exclusively for DME providers. Part of an overall expansion of the agency's e-mail service, the new information service will be available immediately. To sign up, visit www.cms.hhs.gov/mailinglists/.

On June 3 HHS announced it will launch its two-year "homebound" demonstration project in Missouri, Colorado and Massachusetts. The agency hopes the project will clarify what defines a "homebound" patient under Medicare's home health benefit to determine if a broader definition of the term will result in an unreasonable increase in expenditures. CMS has invited home health agencies and other parties interested in the demonstration to participate in an Open Door Forum June 25 at 2 p.m. For more information, visit www.cms.gov/opendoor.

Medicare payments to HHAs would rise 2.5 percent in 2005 under a proposed rule published in the June 2 Federal Register. Under MMA, the home health agency update was set at market basket minus 0.8 percent. The market basket for HHAs is expected to increase by 3.3 percent in 2005. The proposal would mean payments to the country's 7,200 HHAs would rise by $270 million. Comments on the proposed rule are due 60 days after publication. To view the proposal, click here.

HHS television spots about the MMA and its new drug benefit violated federal law, according to a legal opinion issued by the General Accounting Office (GAO). At issue was the government's prohibition on using appropriations for publicity or propaganda. Federal law requires the source of such publicity to be identified. The GAO found no problems with flyers and print advertisements about Medicare's drug benefit, which identified HHS as the source, but the television spots had no such identification. After viewing the ads, part of HHS' campaign to educate the public on the new Medicare law, congressional Democrats called the campaign an inappropriate allocation of funds and subsequently requested the GAO investigation.

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