Florida DME Competitive Bidding Provision Passes
TALLAHASSEE--A competitive bidding provision in the state budget for Florida Medicaid DME business has passed the state legislature and is expected to be signed into law within the coming weeks.

Stated in proviso language in the appropriations budget, the provision asks for a contract on Medicaid DME--excluding customized wheelchairs, colostomy and ostomy supplies, orthotics and prosthetics--with payments no more than 80 percent of current Medicaid rates.

Once signed into law, the competitive bidding provision goes to the state's Agency for Health Care Administration (AHCA), which, in turn, will formulate implementation proposals.

"[Our] next step is to work with [AHCA] to minimize the impact, if possible," said Javier Talamo, a health care attorney at Miami-based Kravitz & Talamo, and vice president of the Florida Association of Medical Equipment Services (FAMES). "We have a wait-and-see attitude. All options are open, which includes litigation. Hopefully, we don't have to go there, but, if we do, we will."

Talamo previously served as director of political services at PediStat, a Miami provider of pediatric DME and services, and is leading an informal coalition of about 25 companies against the competitive bidding provision. Although FAMES is putting its full support behind the coalition, the association does not have the financial resources to challenge the current provision, Talamo said.

This is the third time in three years Medicaid competitive bidding for DME has hit Florida. Two years ago, the state introduced a competitive bidding proposal that FAMES defeated in a $200,000 lawsuit. Last year, competitive bidding language was again written into the budget, but nothing came of the proposal.

Unfortunately, Talamo said, he does not expect this year's provision to go away so easily. "It seems to be the policy of the state," he said, explaining that similar bidding programs for Medicaid have been proposed for the state's medical labs and mental health services.

"We have a legislative mandate that has not been implemented," he said. "This could become anything. We don't know. The devil is in the details."

CMS Introduces New Wheelchair Cushion Codes
BALTIMORE--On Friday, the Centers for Medicare and Medicaid Services (CMS) sent out a change-request transmittal to its contractors spelling out 20 new codes for wheelchair cushions--and eliminating, among others, the broad E0192 code. To become effective July 1, the new codes include cushion depth and height parameters, wheelchair cushions for general use, skin protection, positioning and seat backs, along with new codes for mounting hardware.

"[This represents] a beginning of a more clear coverage policy," said Foster Davis, national sales manager for Freedom Designs, a seating and positioning manufacturer in Simi Valley, Calif., that was recently acquired by Elyria, Ohio-based Invacare Corp. "It creates a more complete system to understand what [reimbursed] products are supposed to look like."

Davis added, however, that exactly how payers interpret these codes remains in question due to the complexity of seating products. "The interpretation period is going to be interesting," he commented.

CMS Permits Home Oxygen Testing Device
BALTIMORE--CMS is allowing at-home oxygen testing using a specific product, a development that could help clear logjams at the nation's Independent Diagnostic Testing Facilities (IDTFs).

In an April 23 letter to Brighton, Mich.-based Oximetry Co., LLC, John Warren, a health insurance specialist at CMS' Division of Medical Review, said: "Medicare covers home oxygen therapy for a beneficiary when a qualified provider or supplier of laboratory services performs a blood gas study that was ordered by a physician; and that study indicates that the patient's blood oxygen levels meet Medicare criteria.

"The Program Integrity Group [at CMS] has determined that the Power-Ox system does not violate any portion of the Local Medical Review Policy or National Coverage Determination for home oxygen therapy. Test results obtained using the Power-Ox system are acceptable for qualifying patients for home oxygen therapy, so long as the testing meets all applicable Medicare guidelines."

Oximetry Co., an IDTF, processes test results from the Power-Ox, a home oxygen testing device manufactured by Michigan-based Newco Holdings and distributed by The Letco Companies, Decatur, Ala. Industry watchers say such technology, accepted by CMS, could give providers a competitive edge while eliminating delays at IDTFs, where it sometimes takes weeks for patients to obtain test results.

"Early providers utilizing this program have found it to be a resounding success," according to billing and reimbursement specialist Jane Bunch, CEO of JB&CS, Atlanta. "Most DME providers experience long waits for a local IDTF--if there is one left--to qualify their patients and also experience lost revenues since they are unable to bill Medicare until they receive IDTF qualification." However, Bunch advises, providers should consult with their health care attorney on use of the device.

While in the patient's home after delivery, the HME provider enters patient and physician information into the device. Then, the patient signs on the device--which uses signature technology similar to that UPS uses for package deliveries--verifying that the test results will be downloaded to the IDTF, and that the IDTF is authorized to bill Medicare on the patient's behalf.

The next day, the provider retrieves the system and sends the collected patient data, encrypted for HIPAA security and to prevent tampering, over the Internet directly to the testing facility. Once the provider returns to the office, he can log on to a secure Web site to view the results. According to Letco President Mickey Letson, these results, together with a completed and signed CMN from the treating physician, can be used to meet IDTF requirements to bill Medicare for oxygen.

"This entire process takes 24 hours or so," Letson said, adding that the results are valid for patients in all 50 states. Additionally, Letson said, this technology could make quarterly re-testing of oxygen patients--an issue CMS has been looking at for some time--logistically feasible.

NSC Gives Providers Additional Days to Prove Compliance
COLUMBIA, S.C.--Following a mid-April advisory board meeting with DME industry representatives, the NSC said it will, in certain instances, give providers an additional 21 days to prove compliance before beginning supplier-number revocation actions.

"All [21 supplier] standards are important. It is the responsibility of suppliers to be in compliance with each one of these standards at all times," the NSC said in a statement. "However, there are circumstances where it may be appropriate to develop ... more information before action is taken. All circumstances will be taken into consideration to determine whether or not additional development is warranted. The intent of this is to ensure the NSC has gathered all pertinent data and the supplier has had sufficient opportunity to provide evidence of compliance."

Previously, if the NSC found a violation of supplier standards, it would typically give suppliers 15 days to correct the violation and prove compliance. Now the NSC has said that, in certain circumstances, it will add 21 days to that 15-day window.

"It's the little wins," said Joan Cross, co-owner of C & C Healthcare in Bradenton, Fla., and a member of the NSC's advisory board. Revoking a supplier number because of a relatively minor violation can devastate a business, she explained. "It's often three months trying to get [the supplier number] back."

Nevertheless, "it's premature to suggest [this action] has or will make a difference," said Neil Ceasar of The Health Law Center, Greenville, S.C., adding that the NSC has not defined which violations qualify providers for the additional time. "I commend the intent, but it's premature to say we'll see any improvement." In March, Ceasar announced the formation of a task force to address the NSC's increased activity in assigning and managing provider supplier numbers.

GAO Recommends Medicare Clarify Supplier Standards
WASHINGTON, D.C.--Fraudulent DME suppliers should not be able to enter the Medicare business in the first place, and vague supplier standards are partly to blame. So said the General Accounting Office's (GAO) Leslie Aronovitz, the director of health care program administration and integrity issues who gave testimony last month during a Senate Finance Committee hearing on power wheelchair fraud and abuse.

"The standards NSC uses to evaluate suppliers are not explicit," Aronovitz said at the hearing. "Officials at CMS and NSC told us that some of Medicare's supplier standards lack specificity as criteria for NSC to use in determining the legitimacy of a supplier."

For example, Standard No. 4 requires that a supplier "fills orders, fabricates, or fits items from its own inventory or by contracting with other companies for the purchase of items necessary to fill the order. If it does, it must provide, upon request, copies of contracts or other documentation showing compliance with this standard."

The standard does not specify what defines a reasonable amount or type of inventory, Aronovitz explained. The standard also "does not preclude a supplier from using another supplier as its primary source of inventory--even if neither of the two suppliers had enough inventory to be viable businesses," she said.

According to the GAO, Standard No. 7, regarding maintaining a physical facility on an appropriate site, also presents some issues.

The standard does not adequately define "appropriate site," Sheila Avruch, an assistant director at the GAO, told HomeCare Monday. She explained that the standard is not specific enough to rule out providers who might operate in subdivided cubicles in a large office building.

"There is definite interest in the NSC to correct some of the problems," Avruch added, "and [the NSC is] having some discussion with CMS about that."

TracMed Signs Up Additional Providers
SCHENECTADY, N.Y.--Trac Medical Solutions (TracMed) has recently signed contracts with eight DME providers to use its CareCert e-CMN program. The companies include Health e-Quip, Hutchinson, Kan.; Home Care Concepts, Farmingdale, N.Y.; Home Therapy, Clifton Park, N.Y.; Hutchinson Medical Supply, Salem, Mass.; Knoll Patient Services, Topeka, Kan.; National Home Health Care Inc., Amarillo, Texas; Roberts Home Medical, Germantown, Md.; and Young Medical, Toledo, Ohio. All of the companies are members of AAHomecare.

Earlier this year, TracMed concluded an agreement with an affiliate of the Alexandria, Va.-based association for an open industry solution that will deliver a unified platform for the processing of e-CMNs and other electronic health care forms. Shortly after the agreement was announced, Lake Forest, Calif.-based Apria Healthcare, with 425 locations nationwide, and Lubbock, Texas-based The MED Group signed on with the company. According to George Suda, Apria's executive vice president for information services, the e-CMN system allows "doctors [to] do their work instead of filling out paperwork." Whether physicians decide to adopt the new system ultimately will determine its success, Suda said. "More and more doctors are in tune with computer technology, and this may be the next step."

Under The MED Group's agreement, the organization will pre-purchase blocks of transactions its members can use for e-CMN processing, which will help them achieve operational efficiencies, said Jeff Woodham, MED's senior vice president of operations.

According to TracMed estimates, about 52 million CMNs and written orders are generated annually. The company now has contracts with a total of 22 companies with 814 locations.

ACHC Achieves ISO 9001 Certification
RALEIGH, N.C.--The Accreditation Commission for Health Care (ACHC) has achieved ISO 9001:2000 certification. ISO, the International Organization of Standardization, is comprised of national standards institutes with delegates from 148 countries. ACHC also announced that it has been certified by SGS with its Systems and Services Certification. SGS, based in Geneva, Switzerland, and with U.S. offices in North Rutherford, N.J., is an international inspection, verification, testing and certification company.

ACHC's accreditation programs include HME; home infusion; rehab technology supplier services; home health; hospice; women's health care; specialty pharmacy; respiratory nebulizer medication programs; and medical supply provider services. The organization has performed accreditations in 45 states.

AAHomecare Conducts ASP Study
WASHINGTON, D.C.--The American Association for Homecare has contracted with Washington, D.C.-based Muse and Associates to perform a study on the operational and administrative costs connected with providing Part B respiratory drugs.

Under the Medicare Modernization Act (MMA), reimbursement for the medications will transition to an average sales price (ASP)-plus-6-percent system in 2005. Industry analysts have said that if such a system is implemented, it could drastically affect providers' ability to provide the drugs--and force some out of the market altogether.

Once the study is concluded, AAHomecare hopes to present the data to CMS to show convincing evidence that respiratory provider costs include more than just the cost of the medication. "We need every company that currently provides respiratory medications to Part B beneficiaries to participate in this survey, regardless of whether or not they are AAHomecare members," said the association's President and CEO Kay Cox. "To have any credibility with CMS and with Congress, the study needs hundreds of participants."

To participate in the survey, e-mail Asela Cuervo, vice president and general counsel, at aselac@aahomecare.org, or Penelope Solis, chief of staff, at penelopes@aahomecare.org, with the following information: company name, the contact person who should receive the survey, and the contact person's phone number and e-mail address.

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