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Headline News
CMS on NCB Rule: 'Just Be Patient a Little Longer'
BALTIMORE--In an Open Door Forum on Wednesday, CMS officials said once again that the final rule on DMEPOS national competitive bidding is on the way. But when it is issued, providers still will not get all the information they've been waiting on for months.

The agency has previously said that its final rule would contain the methodology for selecting the 10 metropolitan statistical areas where bidding will roll out, but that the names of the cities and the products selected for the bid would follow. The timing of that next communication and the form it might take has not been decided, according to Joel Kaiser of CMS' Center for Medicare Management.

"We have to wait for the final regulation to see what our final decision is on that ... We haven't determined exactly how we're going to be issuing the information on the areas and the product categories and the items under bidding, so just be patient a little longer and it will come," Kaiser said.

When an audience member at the Open Door session pointed out that "the lack of knowledge" about the cities is an issue, Kaiser reiterated, "Unfortunately, again, we have to wait for the rule."

Mandated by the Medicare Modernization Act to phase in NCB in 2007, it seems CMS may also be feeling the time pressure.

On Tuesday, the agency sent the rule to the Office of Management and Budget for a final regulatory review, estimating savings from the bidding program at $110 million the first year and more than $1.2 billion by the fourth year.

But CMS added this note for the OMB: "If this regulation is not published timely, we will be unable to meet the statutory implementation schedule and receive the anticipated savings."

According to the American Association for Homecare, once the rule is through OMB, it goes to the Government Printing Office to be published in the Federal Register. "Due to the short time frame CMS has to begin implementation of competitive bidding before the end of 2007," the association said, it expects that the rule "will be cleared by OMB quickly."

Even so, "CMS is really backing themselves into a corner now that they haven't released that final rule if they are going to be able to implement competitive bidding in 2007," said Seth Johnson, vice president of government affairs for Pride Mobility and a member of the Program Advisory and Oversight Committee, an industry panel formed to advise CMS on NCB.

According to Johnson, the PAOC was told by CMS that once the final rule is out, then the agency will follow with its Request for Bids, which will provide "details of what products will be chosen for what MSAs. But once the RFB documents are out," Johnson said, "we were told that it would be at minimum a 42-week process until implementation. And that's if everything goes smoothly and ... there are no hiccups in the process."

Assuming the rule comes out by April 1, Johnson continued, "42 weeks from then is early January, and we are no longer in 2007."

There are other indications that the agency is ramping up for publication of the rule. At the Open Door, Kaiser repeated the agency's admonition to providers to get accredited. "It is very important that suppliers begin that process now if they haven't already done so because there are a number of suppliers out there in those large MSAs, and they will need to be accredited for competitive bidding."

He also reminded providers to update their supplier information when enrolling with the National Supplier Clearinghouse, and noted that the Palmetto CBIC Web site will be up "in the near future." CMS has selected Palmetto GBA as its Competitive Bidding Implementation Contractor to process and evaluate bids, select Medicare's contract winners and set payment rates for bidding areas. (See HomeCare Monday, Oct. 16, 2006.)

To meet CMS' increasingly tight timeline on bidding implementation, some industry observers have said they expect a joint posting of some sort that would include the names of the cities chosen as bid areas at the same time the final rule is published.

Johnson noted, however, that CMS "has a lot of flexibility within the MMA statute as to how they roll it out, so in theory, CMS could, for example, implement bidding for some products in [one city in late December] and not implement it in the other nine until 2008 and still technically meet the statutory requirements of the law.

"Unfortunately, the longer they delay, the wilder and crazier it will get," he said.

The future for repairs could look a little different if Invacare has its way. "We've been working with [the American Association for Homecare] to put together a comprehensive list ... of replacement parts for CPAPs, wheelchairs and oxygen concentrators so there will be a coding system and reimbursement for these items," Bachenheimer said.

AAHomecare Fixes Sights on HME, Drops Home Health Council
WASHINGTON--With the intent of focusing its resources squarely on the volatile home medical equipment industry, the American Association for Homecare will discontinue its Home Health Advisory Council on April 1.

"To best reflect the current membership, AAHomecare will focus its efforts on home medical equipment, therapies, services, and supplies such as oxygen, rehab and assistive technology, inhalation drugs, medical supplies, medical gases, sleep apnea, infusion therapy and related areas," the association announced in its weekly newsletter.

Home health companies (those that have listed home health as comprising half or more of their business) now make up only about 5 percent of the AAHomecare membership, according to Michael Reinemer, vice president, communications and policy.

"The vast majority of our members provide oxygen, rehab and mobility services, medical supplies, inhalation drugs and other equipment and therapies along those lines," Reinemer said, adding that the association estimates its 600 members operate about 3,000 facilities in 50 states. AAHomecare membership also includes manufacturers, consultants and state associations.

With industry-altering changes on the horizon such as competitive bidding, mandatory accreditation and continuing cuts in reimbursement, it makes sense to focus on HME, association leaders said.

"This change reflects the fact that we intend to increase our attention on core HME areas," said Tom Ryan, CEO of Homecare Concepts and AAHomecare chair. "HME benefits are again targets for federal budget cuts and require undivided attention from the association in terms of government affairs, research, public relations and grassroots activities."

In 2000, the former NAMES, HIDA and Home Health Services Staffing associations joined to establish AAHomecare, hoping to promote the industry's agenda with a stronger voice in Washington.

Despite disbanding its home health council, AAHomecare will "continue to champion the value and cost-effectiveness of all forms of home care," the newsletter said.

Reinemer said some home health agencies have said they intend to retain their AAHomecare memberships, and state associations representing HHAs have also said they will stay on.

SB840 has 38 co-authors, is supported by the state's entire Democratic leadership and has been endorsed by labor, including the powerful Service Employees International Union, United HealthCare Works West. It is now waiting to be assigned to its first committee, according to Podolsky.

Georgia Officials Announce Temporary Funding For PeachCare
ATLANTA--Georgia will temporarily use state funds already in its budget for Medicaid to cover a $131 million shortfall in PeachCare for Kids to keep low-income children insured, Gov. Sonny Perdue and other state officials announced last week.

The fix will be used while Congress finalizes its shortfall funding proposal for the State Children's Health Insurance Program, the officials said.

Last month, the Georgia Department of Community Health announced that PeachCare, the state's SCHIP program, would no longer accept new enrollees as of March 11, 2007.

On Tuesday, Perdue, along with Lt. Governor Casey Cagle and state Speaker Glenn Richardson, said the fix would not move children into the Medicaid program but would change state law to allow Georgia to borrow funds already slated for Medicaid to cover PeachCare costs. Any Medicaid funds expended would then be repaid from the SCHIP shortfall funds upon their approval.

The U.S. House version of the supplemental appropriations bill would include an additional $735 million to address shortfalls in the SCHIP programs of 14 states, Purdue said.

"Congress' recent action gives me confidence that using these funds as a stopgap is appropriate to meet the needs of our children," said Perdue. "This will allow us to keep this important program intact while we wait for our federal partners to finish their work in Washington, D.C."

PeachCare for Kids covers more than 270,000 children.

Judge Orders Missouri to Come Up with New DME Coverage Plan
ST. LOUIS--Earlier this month, a federal judge ruled that the state of Missouri must reinstate Medicaid coverage for some DME through March and present a new proposal for what equipment the state will cover.

In 2005, Missouri dropped Medicaid coverage for much adult equipment, but opponents alleged that the cuts were illogical; for example, wheelchairs were covered but accessories and batteries weren't, and neither were canes or crutches. (See HomeCare Monday, May 2, 2005.)

On March 2, Judge Dean Whipple ruled that if the state wanted to cover only some equipment, it must use a reasonable standard to decide what is covered.

In response to the ruling, the Missouri Department of Social Services issued a statement to health care providers that DME claims for services provided to the state's Medicaid recipients from March 2-31 would "be paid consistent with the reimbursement policy that was in place Aug. 30, 2005."

Citing a news release from the Saint Louis University School of Law, one news report said the ruling would restore DME for 370,000 Missourians.

Rose Schafhauser, executive director of the Midwest Association for Medical Equipment Suppliers, called the ruling "a sticky situation" for providers in the state: While it's good that the ruling could restore beneficiary access, she said, MAMES has spent the past two years developing relationships with Missouri legislators figuring out other ways to do that. Some of them may not think forcing the state to cover the items is the best plan, she said.

"This accelerates the whole process of being able to get some of the beneficiaries their coverage back, but we're ... trying to fix the whole system, and [legislators are] actually listening to us," Schafhauser said. "We don't want to wreck that."

Manufacturer News
Manufacturing Trio Forms Users First Alliance
ATLANTA--Three rehabilitation industry heavyweights have banded together to form an alliance aimed at ensuring that end-users get quality rehab products suited to their needs and not just the government's pocketbook.

Permobil of Lebanon, Tenn., The Roho Group of Belleville, Ill., and TiLite of Kennewick, Wash., have formed the Users First Alliance.

"With so much focus on declining reimbursement and the resulting financial implications to providers and manufacturers, the industry seems to be losing sight of the most important component of our business--the consumer," said Tom Borcherding, Roho executive vice president. "The founding members of the Users First Alliance believe that consumers and clinicians should expect more than the equipment that is considered just 'good enough.'"

"Push for More" is the group's motto, and that is what Users First will attempt to do through education of clinicians, providers and end-users, the manufacturers said.

Noting that only a handful of wheelchair users currently have access to state-of-the-art technology that offers not only expanded freedom, but health benefits, David Lippes, chairman and CEO of TiLite, noted: "During the equipment selection process, wheelchair users should not sacrifice equipment performance or medical outcomes based upon apparent reimbursement limitations. We can help."

The alliance aims to do that through educating users, clinicians and providers about the selection process for rehab equipment; emphasizing the direct relationship of equipment quality and performance to long-term medical outcomes; providing information about insurance coding and reimbursement solutions; and guiding users, clinicians and providers through the reimbursement process to "help ensure accessibility of and appropriate reimbursement for this equipment," the companies said.

The three companies also will offer continuing education opportunities in their individual areas of expertise.

Newsmakers
Pontius Moves to M&A Firm
TARPON SPRINGS, Fla.--Tim Pontius, former chairman of the board of the American Association for Homecare and past president of the Ohio Association of Medical Equipment Services, has been named managing director of Steven Richards & Associates, the company has announced.

SRA, based in Tarpon Springs, Fla., is a merger and acquisition firm specializing in sleep, home medical equipment/respiratory and infusion companies.

Pontius said the new role has renewed his sense of excitement about the industry and given him new energy. "It keeps me attached to the industry, helps me to continue to be motivated and to keep up on what's happening on a legislative and regulatory basis," he said.

Pontius, a licensed, registered respiratory therapist, owned Young Medical in Maumee, Ohio, and Toledo I.V. Care before selling them to Lake Forest, Calif.-based Apria Healthcare in June 2005. He agreed to stay on for two years and run the company, a position he maintained until moving to SRA, which brokered the Young Medical-Apria deal.

Pontius said his job now is to explore with providers whether selling their businesses is the right move and, if indeed they do sell their companies, what they plan to do afterward. "My role, having been on both the acquisition side and the selling side, is to get their heads right and their planning done before we even get their business looked at," he said.

It is easy for HME providers working in such a volatile legislative and regulatory climate to throw up their hands and, in frustration or fear of the future, decide to get out of the business, Pontius said.

"It's the biggest disservice in the world to let someone make a decision based on fear and emotion. That's a decision that will be followed by lots and lots of regret," he said. "The reality is that ... this is probably the No. 1 or 2 most important decision someone will make in their lifetime. You may only get one chance to get it right."

Pontius will remain in Toledo and will continue his involvement with AAHomecare and OAMES, he said. And without a company of his own to be concerned about, he said he is hopeful he will be able to work on industry issues more effectively.

In Brief
CMS has extended the acceptance period for its old Form CMS-1500 (12-90) version beyond the original April 1, 2007, deadline because incorrectly formatted versions of the revised form have been sold by print vendors. Medicare contractors will now accept the older version of the form until June 1, 2007. During the interim, contractors will be directed to return, not manually key, any CMS-1500 (08-05) forms received that are not printed to specification. To download a notice, click here. To properly identify which form is which and to read more about the implementation of the CMS-1500, go to http://www.cms.hhs.gov/ElectronicBillingEDITrans/16_1500.asp. Questions may be directed to Brian Reitz at Brian.Reitz@cms.hhs.gov.