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Headline News
OIG Tells CMS to Reduce O2 Rental Period to 13 Months
WASHINGTON--As if the Deficit Reduction Act's 36-month cap on oxygen equipment rental wasn't bad enough, the industry may have to fight to keep the rental period from shrinking even more.

In a report issued Thursday, the HHS Office of Inspector General said that "further reform is warranted" and recommended that CMS work to reduce the oxygen rental period to 13 months.

"If Medicare rental payments for oxygen concentrators were limited to 13 months, the program and its beneficiaries would save approximately $3.2 billion over five years," the OIG report said, noting that home oxygen equipment accounted for $2.4 billion of the $11.1 billion Medicare paid for DME, prosthetics, orthotics and supplies in 2004.

The OIG said it found that "minimal servicing and maintenance for concentrators and portable equipment are necessary," and that suppliers teach beneficiaries routine maintenance and check concentrators more than manufacturer guidelines require.

According to the report, the DRA's oxygen cap did not go far enough, allowing up to $7,215 over 36 months for rental of stationary concentrators that average only $587 to buy. Beneficiaries add another $1,443 in copayments over that time, the OIG said. "Medicare and its beneficiaries will continue to pay more than 12 times the purchase price for concentrators under the new 36-month rental limitation," it said.

The study, "Medicare Home Oxygen Equipment: Cost and Servicing," set out to compare Medicare spending for oxygen concentrators with suppliers' average purchase price and to determine the nature and frequency of servicing for concentrators and portable equipment.

The American Association for Homecare called the report "deeply flawed" and said "the further erosion of the oxygen benefit recommended by the report and by CMS will put oxygen patients at even greater risk than they are already."

According to AAHomecare, the OIG study did not reflect the full range of services provided to patients or the actual costs in providing them. The association also noted that the OIG study looks at old cost data from 2003.

Among the association's other criticisms of the government study:

• It focuses primarily on the cost of acquiring oxygen concentrators, which is a small fraction of the complete cost of providing oxygen therapy to Medicare patients in the home;
• The OIG notes that other costs were not considered because they are included in the fee schedule amounts that are based on historical reimbursement levels of nearly 20 years ago. During recent decades, transportation, regulatory compliance, insurance, and other costs have increased while oxygen reimbursement under Medicare has declined sharply;
• The study only asked for cost information about oxygen concentrators. The study should have looked at all types of oxygen modalities including liquid and the full costs of portable oxygen systems;
• The report does not consider average delivery cost per patient, average miles driven, average customer service time, bad debt, or Medicare-required documentation and compliance costs;
• The OIG study gathered information only about new users of oxygen who began services in 2004 and who had no services previous to that year. Because COPD is a progressive disease, new users often start with nocturnal use only, and longer-term patients require more service;
• The OIG presented data that suggests that all patients rent oxygen for 36 months. Their own data shows that 78 percent never reach the 36th month; and
• The 145 patients in the sample represent only about "one one-hundredth of 1 percent" of total beneficiaries using oxygen therapy at home.

To view the OIG report, click here.

Roll Call Ad Asks Congress, HHS to Delay PMD Changes
WASHINGTON--Twelve organizations representing people with disabilities signed an advertisement in Capitol Hill newspaper Roll Call Thursday urging Congress and HHS to delay implementation of a power mobility device policy that they say would force Medicare beneficiaries into inadequate power wheelchairs and scooters.

"HHS secretary and members of Congress, stop implementation of this harmful policy!" read the ad, which was signed by members of the Independence Through Enhancement of Medicare and Medicaid (ITEM) Coalition including: the American Association of People with Disabilities, Amputee Coalition of America, The Arc of the United States, Christopher Reeve Foundation, Medicare Rights Center, National Council on Independent Living, National Multiple Sclerosis Society, National Spinal Cord Injury Association, Paralyzed Veterans of America, Rehabilitation Engineering & Assistive Technology Society of North America, United Cerebral Palsy and United Spinal Association.

For months, stakeholders have raised concerns about the new PMD codes and other changes that CMS intends to implement by Oct. 1. The most recent controversy surrounds the power mobility local coverage determination released by the DME contractors (see HomeCare, Aug. 21).

The LCD, which incorporates the 64 new codes and includes coverage criteria, identifies a number of situations in which a "least costly alternative determination" may be made.

Clinicians and HME advocates maintain that such downcoding will restrict Medicare beneficiaries to inexpensive, low-powered models, leaving people with diseases such as multiple sclerosis, Parkinson's disease or cerebral palsy in the position of no longer qualifying for a power chair appropriate for their current and future medical needs.

"What CMS is doing is wrong," said Henry Claypool, an advocate from the coalition. "We need for Congress to hold CMS accountable for this attempt to further restrict access to power wheelchairs in a fashion that undercuts the physician's role in determining which wheelchair will best promote the health and independence of those with Medicare."

Claypool added that under the new policy, many beneficiaries will be restricted to power wheelchairs and scooters that can only be used in their homes and "in some cases, may confine them to specific rooms in their homes because they cannot maneuver over door thresholds."

This, according to Andrew Imparato, president and CEO of the American Association of People with Disabilities, could endanger the lives of disabled seniors if their mobility equipment doesn't allow them to flee an emergency in their home. "Essentially, Medicare will be making beneficiaries prisoners in their own homes," he said.

Although current Medicare policy officially restricts coverage of powered equipment to in-the-home use, up until now, beneficiaries have been allowed to receive power wheelchairs that could also be used outdoors, allowing them to leave their homes to go shopping, visit doctors or take part in community activities.

Laura Cohen, a co-coordinator of the Clinician Task Force, said CMS' new guidelines must be changed because they do not address the functional needs of patients, which should be the foundation for the coverage policy. "Their approach is based on cost-cutting standards that require individuals to be completely non-ambulatory to receive an appropriate mobility device," she said. "These rules will undoubtedly force many beneficiaries into inappropriate and low-functioning mobility devices. And that is not in the best medical interest of these individuals or fiscally responsible to taxpayers."

In recent letters to CMS and HHS, Sens. Arlen Specter and Rick Santorum and Rep. Don Sherwood, all Pennsylvania Republicans, asked CMS to delay the implementation and make significant changes in the guidelines on coding, pricing and coverage policies for the medical equipment.

Sen. Santorum "strongly urged" that implementation be postponed until January "so that access to medically appropriate equipment is not compromised."

Rep. Sherwood said that the recent changes "will create major disruptions to the power mobility industry and result in denial of coverage in appropriate devices."

And Sen. Specter urged CMS to rectify problems raised by stakeholders, and that CMS then provide a 45-day comment period and a 45-day notice period followed by a 90-day transition period. "These adjustments," he said, "will provide for a transition period for new codes, pricing and coverage policies that will allow for appropriate education and adaptation to the significant changes."

AAHomecare's Rehab and Assistive Technology Council also sent a letter Tuesday to HHS Secretary Mike Leavitt and CMS Administrator Mark McClellan requesting a delay.

"We believe the policy as currently written contains significant health and safety concerns and we strongly recommend that CMS postpone implementation until these concerns are addressed and a revised LCD is issued that ensures access to medically appropriate equipment," the letter stated.

To view the LCD, click here.

Last Chance for Patient Choice: 'Lawsuits Ready to Go When CMS Is'
WATERLOO, Iowa--Last Chance for Patient Choice said it is continuing plans to challenge the legality of the DME competitive bidding portions of the Medicare Modernization Act. All the organization is waiting on is additional information from CMS.

Two separate teams of lawyers are making preparations to be ready whenever CMS announces which metropolitan areas will be the "victims of the scheme in the first round of bids," according to John Gallagher, vice president of Last Chance, an advocacy organization formed by The VGM Group.

"As soon as we know where they are going geographically, we will need to quickly identify beneficiaries in those areas who wish to challenge the law," Gallagher said. "VGM members have already told us there are many patients who are outraged with the idea that their current provider may well be excluded from continuing their service and are eager to challenge the law."

Last Chance said the suits will likely face an uphill battle in the courts because government programs are often presumed to have constitutional validity.

VGM has selected two law firms that would be within range of a number of the metropolitan statistical areas that might be selected by CMS, according Jim Walsh, VGM general counsel. VGM said that for "strategic reasons" it is not disclosing the names of the firms.

In one of the planned court actions, Last Chance will argue that the MMA creates a "second class" of Medicare beneficiaries, which is unconstitutional. That class, according to the group, is created by virtue of the law's "competitive acquisition" provision, which requires CMS to select a group of low-cost providers to serve Medicare beneficiaries in selected metropolitan areas.

Last Chance plans to argue that the selection process will guarantee that these beneficiaries will be served by providers who will be unable to provide the same level of quality service available to others in the Medicare system not constrained by having to offer the lowest cost service.

Whether or not the argument is accepted, said Walsh, "we are entitled to make the arguments necessary to 'out' this ridiculous idea that you can cut price, cut price, cut price and still get the same levels of quality and service simply by publishing something called quality standards."

Medtrade 2006
Medtrade 2006 Opens This Week
ATLANTA--Competitive bidding, accreditation, reimbursement changes--the current state of the industry may look to providers more like a war zone than a marketplace. But with more than 800 exhibitors and a slew of educational seminars on tap, Medtrade 2006 looks ready to arm them for battle.

The venerable trade show kicks off Tuesday with sessions in 13 tracks, including accreditation, business operations, industry updates, oxygen/respiratory issues, reimbursement and sleep-disordered breathing. In addition to the conference program, the three-day event will feature an expansive exhibit floor, pavilions highlighting the latest technology and networking events for attendees to connect with peers.

"The industry is really at a crossroads based on all the recent legislation that has passed and/or is about to happen this year," said Art Ellis, group vice president of the Medtrade shows. "I'm talking of course about competitive bidding, oxygen provisions, reimbursement and [new power wheelchair] codes, just to name a few. Medtrade provides many of the solutions to these challenges through the educational sessions.

"A vast majority of providers need to change the way they currently conduct business," Ellis continued. "It starts with looking closely at their current business model and not being afraid to make difficult decisions. I strongly urge attendees to take advantage of the conferences at Medtrade that will enable them to better understand new opportunities for future growth. More importantly, the conference addresses many of the topics providers need to stay in business."

To maximize your time at the three-day event:

Kick Off the Show with What You Need to Know! Get started early with an overview from the experts on HME's most pressing topics. Presented by HomeCare, members of the magazine's Editorial Advisory Board will share up-to-the-minute reports on quality standards and accreditation, competitive bidding, reimbursement changes and more.

• Cara C. Bachenheimer, vice president, government relations, Invacare Corp.--Get the scoop on competitive bidding, and hear the latest on CMS' implementation timeline.
• Neil B. Caesar, president, Health Law Center--You can't forget that along with everything else on your plate, CMS has renewed its efforts on fraud and abuse and compliance issues.
• Mary Ellen Conway, president, Capital Healthcare Group--Hear the play-by-play of CMS' most recent turnaround on supplier quality standards and mandatory accreditation--and the questions that remain.
• Miriam Lieber, president, Lieber Consulting--Steel yourself for this comprehensive update on reimbursement changes and the new forms and claims requirements that continue to roll out.
• Wallace Weeks, President, Weeks Group--Leave this high-impact session with a "Provider Action Plan" of the steps you need to take NOW to protect your business.

For a full schedule, visit www.medtrade.com.

HomeCare, HME News to Present Industry Awards
ATLANTA--Come celebrate Tuesday as the industry's HME Excellence and HomeCaring Awards™ are presented to a handful of the year's HME standouts.

For its HME Excellence Award, HME News will present awards to nine companies with a winner, first runner-up and second runner-up in three categories: rehab, DME and respiratory. The excellence awards judge companies on their financials, marketing, community involvement, staffing and quality control.

Given in recognition of service and commitment to the HME community, HomeCare magazine will present its 2006 HomeCaring Awards™ to three outstanding individuals whose efforts on the industry's behalf have distinguished them at the highest level. Open to those in all aspects of HME, the awards are chosen from nominations sent in by the magazine's readers.

The presentation ceremony will be held immediately following AAHomecare's Washington Update at approximately 5 p.m. Tuesday outside Room B312 at the Georgia World Congress Center.

Annual Humanitarian Dinner Will Benefit Patient Groups
ALEXANDRIA, Va.--The American Association for Homecare will hold its second annual Humanitarian Dinner during Medtrade.

Funds raised at the dinner, which will be held at the Atlanta Marriott Marquis, will be given to home care patients' organizations, including several that serve the oxygen/respiratory and rehab communities, the association said.

For details, contact Kim Kianka-Roberti at kimk@aahomecare.org or call (703) 535-1887.

Questions about Accreditation?
ATLANTA--If you've got questions about mandatory accreditation, get them answered at Accreditation Central during Medtrade 2006.

Which accreditor is best for your company? How do you begin the process? How much does it cost? Find the answers at Accreditation Central, where representatives from a variety of organizations will be on hand to talk with you during exhibit hall hours all three days of the show: 10 a.m.-5 p.m. Tuesday; 10 a.m.-5 p.m. Wednesday; and 10 a.m.-3 p.m. Thursday. Sponsored by HomeCare on the 5000 aisle.

• Accreditation Commission for Health Care
• American Board for Certification in Orthotics & Prosthetics
• Board for Orthotist/Prosthetist Certification
• Community Health Accreditation Program
• Healthcare Quality Association on Accreditation
• Joint Commission on Accreditation of Healthcare Organizations
• The Compliance Team

Through its MestaMed, Dezine and Ac-Cura products, CareCentric provides business operation systems in the home health, hospice, HME, home pharmacy, long-term care and assisted living markets.

Graham-Field's Selinger Resigns as CEO
ATLANTA--Following the loss of his appeal in federal court, Irwin Selinger has resigned as CEO of GF Health Products.

Selinger was convicted of conspiracy and securities fraud in 2004 and sentenced to 18 months in prison and three years probation. The United States Court of Appeals for the Second Circuit upheld the conviction on Aug. 31 (see HomeCare Monday, Sept. 11). GF Health Products was known as Graham-Field when Selinger was convicted.

"I'm confident that in my absence, the leadership of the company is in the hands of people I trust and respect," Selinger said in a company statement. "The owners remain fully committed to the company and its management."

Beatrice Scherer, who has been part of the Graham-Field management team for more than 40 years, will assume the position of CEO and president. She most recently served as senior vice president of administration.

"During my 40-year career with Graham-Field, I have been afforded the opportunity to be involved in all facets of the company," Scherer said. "More importantly, our customers, vendors and employees can be assured that with my experience and the leadership capabilities of the senior management team, the company will continue its growth and profitability."

Scherer said that she will retain the existing GF management team.

SeQual Gets FAA Clearance for Portable Concentrator
WASHINGTON--The Federal Aviation Administration has approved SeQual's portable Eclipse Oxygen System for use on commercial airliners.

The Special Federal Aviation Regulation ruling, which makes the Eclipse the third portable oxygen concentrator allowed onboard, took effect Tuesday.

Last year the FAA approved AirSep's Lifestyle and Inogen's Inogen One as the first oxygen concentrators permitted for onboard use (see HomeCare, July 18, 2005).

In other company news, SeQual has been awarded a $5 million contract by the U.S. Army to create the next-version portable oxygen system for use wherever the military operates, including front line combat zones. The contract is an extension of an initial contract awarded to SeQual in 2004 to develop a rechargeable oxygen concentrator that could meet the needs of oxygen patients and trauma victims anywhere in the world, the company said.

SeQual said it has already developed prototypes for the military that decreased weight by 50 percent. The contract will finance ongoing development to a production model and validation by the Army, with FDA clearance and production anticipated in 2008.

In Brief
The Home Oxygen Patient Protection Act and the Hobson-Tanner bills are continuing to pick up new co-sponsors in the House. Eleven new co-sponsors have signed on to the oxygen bill (H.R. 5513), bringing the total to 59: Reps. Jeb Bradley, R-N.H.; Howard Coble, R-N.C.; Elijah Cummings, D-Md.; Lloyd Doggett, D-Texas; Barney Frank, D-Mass.; Stephanie Herseth, D-S.D.; William Jefferson, D-La.; Michael Michaud, D-Maine; Rob Simmons, R-Conn.; John Tierney, D-Mass.; and Joe Wilson, R-S.C. Also, seven new co-sponsors have signed on to the Hobson-Tanner bill (H.R. 3559), bringing the total to 139: Reps. Sanford Bishop Jr., D-Ga.; Elijah Cummings, D-Md.; J.D. Hayworth, R-Ariz.; William Jefferson, D-La.; Candice Miller, R-Mich.; David Scott, D-Ga.; and Roger Wicker, R-Miss.

CMS announced last week that the standard Medicare Part B monthly premium will rise $5 in 2007 to $93.50. The 5.6 increase is the smallest percentage rate increase since 2001 and fell short of the 11 percent hike that Medicare actuaries had projected. But about 1.5 million wealthier beneficiaries will pay a higher Part B premium beginning next year. Seniors who earn at least $80,000 a year, or married couples who earn at least $160,000, will pay premiums of $106, $124.70, $143.40 or $162.10 per month, depending on their incomes. To access a Medicare fact sheet on the changes, click here.

If you'll be at Medtrade, stop by Booth 1749 for your FREE subscription to HomeCare. See you in Atlanta!

Visit this week's sponsor at www.arsmeds.com.