Voinovich Writes Leavitt about Competitive Bidding, Mobility Coverage
WASHINGTON--Ohio Sen. George Voinovich, one of the HME industry's staunchest political advocates, recently sent two letters to HHS Secretary Michael Leavitt pointing out his constituents' concerns about CMS' plans for DME competitive bidding and Medicare's new mobility coverage policy.

"While I understand the need to control Medicare's costs, I continue to have concerns about how the national competitive bidding program for durable medical equipment will affect beneficiary access to quality services and supplies, as well as the livelihood of small businesses currently providing durable medical equipment in local or regional areas," Voinovich wrote in a letter dated June 29.

He also said home care providers have stressed to him the importance of finalizing supplier quality standards as soon as possible to give their businesses time to become accredited and prepare for the bidding process. "Without standards, my constituents argue, even with the federal protections governing all government contracts and contractors, competitive acquisition could attract providers who may not be committed to quality and who may provide substandard services to beneficiaries," the letter stated.

CMS has said that it plans to release a draft of the quality standards this summer, and a proposed rule on national competitive bidding is scheduled for release in September. Both are mandated by the Medicare Modernization Act.

In a separate letter, Voinovich addressed CMS' new mobility NCD, which was released May 5. Of primary concern, he said, CMS needs to release companion regulations and policies--including a face-to-face physician exam requirement and a clearly defined set of documentation requirements for those providing equipment--so physicians, clinicians and suppliers can better understand the new policy. (See story above.)

Another provider concern, he wrote, is that CMS needs to explain that a beneficiary will qualify for coverage of equipment if it is needed to participate in any mobility-related activity of daily living in the home--not just those listed in the NCD.

HHS Announces Plans to Shorten Medicare Appeals Process
WASHINGTON--After taking control of the Medicare appeals process at the start of the month, the Department of Health and Human Services said last week that it plans to use technology to speed up the process and increase access to hearings.

One way the agency said it will reduce hearing times is by increasing use of video teleconferencing technology to hold electronic hearings. HHS currently has access to VTC sites in more than 1,000 cities. If an in-person hearing is required, according to the agency, an Administrative Law Judge will travel to a location convenient to the parties involved.

Despite concerns that have been raised about possible staffing shortages (See HomeCare Monday, April 4), HHS said the new approach will bring quicker resolution to fee-for-service Medicare claims, which must be resolved within a 90-day timeframe under a mandate in the Medicare, Medicaid and SCHIP Benefits Improvement and Protection Act of 2000. The ALJ function moved from the jurisdiction of the Social Security Administration to HHS under a requirement in the MMA.

"As HHS assumes responsibility for handling Medicare hearings, we are committed to making the appeals process better, faster and more convenient for seniors and other people with Medicare," said HHS Secretary Michael Leavitt. "Our goal is to eliminate the need for an aged or disabled beneficiary to travel if other resources are available closer to home."

The transfer is among the first steps in the government's plan to reform the Medicare claims appeals process. For more information, visit HomeCare Monday, June 27 and the Office of Medicare Hearings and Appeals.

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

Provider News
Apria Acquires Air Liquide's U.S. Home Care Division
LAKE FOREST, Calif.--Apria has snatched up another competitor, closing a deal to acquire Paris-based Air Liquide's $20 million U.S. home care business, VitalAire. Terms of the acquisition were not disclosed.

"Air Liquide Healthcare will continue to focus on the fast-growing markets where it has established solid positions," Jean-Marc de Royere, Air Liquide's senior vice president, health and specialty chemicals, said in a July 1 statement. "We will pursue our development, particularly on the basis of our European activities, and will consider, in the large markets including the USA, any attractive opportunity which would allow us to achieve critical mass."

Last year, Air Liquide said it had plans to become more active in the U.S. market, acquiring businesses with problems resulting from decreased oxygen reimbursement. The company's Air Liquide Sante subsidiary serves 300,000 patients and 5,000 hospitals worldwide with medical gases and respiratory equipment.

For Apria, say observers, the acquisition is proof-positive that the giant provider's own possible sale has not put a damper on its acquisition strategy. Last month, the company confirmed it had brought on Morgan Stanley to consider potential offers. According to the New York Post, insiders have speculated those offers to be as high as $2.5 billion.

"Apria has continued [its acquisition strategy] at full-speed ahead, and that message seems to be resonating throughout the whole organization," said The Braff Group's Bob Leonard, who managed the recent transaction for Air Liquide. "What made sense before [exploring potential buyers] will continue to make sense now."

Apria closed seven deals worth $28.1 million during the first quarter this year.

Manufacturer News
Vail Products Closes Shop after FDA Action
TOLEDO, OHIO--After the Food and Drug Administration issued a nationwide recall warning consumers against the use of its enclosed bed system, Vail Products announced it will be shutting its doors.

Because the company has not been able to reach "satisfactory accommodation" with government regulators, "Vail Products has ceased operations and has begun the process of winding up its business," President Joy Vail wrote in a statement on the company's Web site. "We are truly sorry that it came to this, but the FDA's positions made it impossible for Vail Products to continue or survive."

Last month, the FDA issued a Class I recall of Vail's enclosed bed systems, advising consumers to stop using the product. According to the agency, Class I recalls are the most serious type and "involve situations in which there is a reasonable probability that use of the product will cause serious injury or death."

Vail's canopy-like beds, covered with nylon netting zipped in place to enclose the patient, are designed for at-risk patients with cognitive impairment, unpredictable behavior, spasms, seizures and other disorders. The FDA said patients can become entrapped between the side-rail and mattress, or between the canopy and mattress. In a June 30 notice, the FDA said it is aware of approximately 30 entrapments, of which at least eight resulted in death.

"The FDA is making every effort to make sure that patients and health care providers are aware of this problem, and are given information needed to help minimize the risk," said Dr. Daniel Schultz, director of the FDA's Center for Devices and Radiological Health.

Vail sent new equipment manuals and warning labels informing consumers of the FDA's advice to discontinue use of the product, but wrote on its Web site that the FDA action "is not a recall" and "the beds are safe and effective for continued use as long as the instructions are carefully followed."

In March, the government ordered U.S. Marshals to seize the Vail 500, 1000 and 2000 enclosed bed systems, claiming the products pose a public health risk, are misbranded and lack adequate warnings and directions.

The FDA has updated its Public Health Notification, available by clicking here, to reflect the latest information on the matter.

ContourMed Wins Community Service Award
LITTLE ROCK, Ark.--Post-mastectomy product-maker ContourMed has received a corporate Arkansas Community Service Award, sponsored in part by the state's Department of Human Services Division of Volunteerism and the governor's office. In honor of Breast Cancer Awareness Month in March 2004, ContourMed donated more than $100,000 worth of its breast prosthetics to uninsured cancer survivors in Arkansas and other states the company serves.

Invacare Lowers Earnings Outlook
ELYRIA, Ohio--Invacare Corp. has lowered its earnings outlook for the second quarter and for the full year, blaming lower-than-anticipated revenues and higher freight costs, particularly in North America due to the high cost of oil.

"With continuing pressures from Medicare and Medicaid reimbursement and the generally slow growth across geographies outside the U.S. ... the company has not seen the further improvement in sales that was anticipated," Invacare said in a statement released last week. Net sales for the quarter will likely increase 16 percent compared to last year versus the previously expected 18 to 20 percent, according to the company, which believes it will have a net sales increase for the year between 14 and 15 percent, instead of the prior guidance of between 17 and 19 percent.

Commenting on the anticipated results, Invacare Chairman and CEO Mal Mixon said the company "remains committed to its strategic vision to reduce costs with its Chinese manufacturing facilities and grow its sales line with innovative products such as the HomeFill oxygen system." He said the company also will pursue additional cost reduction actions.

Despite the difficulties in the first half of 2005, Mixon continued, "with the momentum building during the next two quarters along with the cost reduction actions, we expect to enter 2006 generating strong earnings improvement compared to first half 2005 and to build on the expected resolution of the Medicare coding for the power wheelchair segment."

Pride Sales Manager Is NEMED's Vendor of the Year
EXETER, Pa.--Pride Mobility Corp.'s Wayne Grau, area sales manager in New England, has received the New England Medical Equipment Dealers (NEMED) Association Vendor of the Year award for 2005. Grau was recognized for his lobbying efforts regarding FEHBP (federal employee health benefits plan)-based reimbursement cuts and initiatives working with Medicaid cuts in Massachusetts and Connecticut.

ResMed Plans New U.S. Headquarters
SAN DIEGO--ResMed has purchased a 9.78-acre site with plans to build a new U.S. headquarters facility in San Diego. The respiratory manufacturer paid $21 million for the property in the city's 244-acre Spectrum business and residential community. "Our purchase of the Spectrum site is a reflection of our confidence in ResMed's future growth and of our commitment to the San Diego community," said Keith Serzen, ResMed's COO of the Americas. "When we relocated to Poway almost five years ago, we projected that the facility would provide adequate space for seven to 10 years. Our growth has far outpaced those projections." Construction on the facility, which will more than double the company's headquarters space, is expected to begin in 2006.

The Roho Group Wins President's Export Award
BELLEVILLE, Ill.--Support surface manufacturer The Roho Group has won the 2004 President's "E" Award for excellence in exporting. The award recognizes U.S. companies for their competitive achievements in world markets and increased exports abroad. Roho was the only consumer-product-use health care firm to receive the award, and one of only 11 companies to be honored. Roho President Tom Olesky accepted the award during a June 10 ceremony at the company's facility in Belleville. The company currently does business in 66 international markets.

Sunrise Medical Opens New Distribution Center
LONGMONT, Colo.--Sunrise Medical has opened a new distribution center in High Point, N.C. The second to open within the past five months, the center is part of a 13-month expanded distribution strategy aimed at increasing the company's overnight delivery coverage. The 24,000-square-foot building will accommodate 400-plus SKUs that represent 90 percent of the manufacturer's historical product orders from North Carolina's Triad area. In other company news, privately owned Sunrise announced that its sales increased by more than 6 percent for fiscal year 2005, which ended June 30, due largely to a steady stream of new products introduced during the year, and growth in its Quickie wheelchair and DeVilbiss respiratory lines.

In Brief
Beginning this month, CMS is enforcing its requirement for all Medicare claims to be submitted electronically. As part of the Administrative Simplification Compliance Act, small providers with fewer than 10 full-time equivalent employees, and those who meet other exception criteria, can continue to submit paper claims. For more information, click here.

Senate Finance Committee Chair Charles Grassley, R-Iowa, and ranking member Sen. Max Baucus, D-Mont., have introduced a bill that would provide incentives for quality in home health care by instituting pay-for-performance for Medicare reimbursement. The Medicare Value Purchasing Act would award incentive payments to Medicare providers--including home health agencies, hospitals, physicians, health plans, nursing homes and dialysis facilities--for meeting health care quality thresholds or improving the current level of care.

The Ms. Wheelchair America 2006 pageant will take place July 19-24 in Albany, N.Y., with participants from 28 states and the District of Columbia. This will be the pageant's 33rd year. For more information, visit www.mswheelchairamerica.org.