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Headline News
Bid Window Opens; Providers Cautioned Not to Rush In
BALTIMORE--Two weeks past its end-of-April target date, CMS flung open the bid window Tuesday for the first round of national DMEPOS competitive bidding.

All bids are due by 9 p.m. ET on July 13. The contract period for mail-order diabetic supplies is April 1, 2008-Dec. 31, 2009. The contract period for all other product categories is April 1, 2008-March 31, 2011.

Product categories and competitive bidding areas were announced in early April when CMS released its final rule (see HomeCare Monday Special Alert, April 2).

Charts with key information for suppliers in each of the CBAs have been posted on the Competitive Bidding Implementation Contractor Web site (www.dmecompetitivebid.com). CMS said providers should use the charts in preparing their bids, which will be submitted through an Internet-based system.

The request for bids did not catch providers unaware, although it evoked differing responses.

"We'll be ready shortly [to submit a bid]," said Chris Rice, director of marketing for Diamond Respiratory Care in Riverside, Calif., one of the 10 CBAs included in this round. "Starting next week, we'll be entering the basic data. I want to make sure I understand the online interface and have plenty of time to work through it."

Rice, who administers an online provider forum (www.competingbid.com), has been preparing for the CMS project for a year-and-a-half, and his company will bid on all product categories, he said.

On the other hand, James Bailey, owner of A Medical Equipment in Plano, Texas, is still on the fence about bidding. He's kept up with the massive changes in the HME field, but like most smaller providers, he's in a tight spot.

"We are in the process of getting accredited so we can bid but, honestly, I don't know [whether to bid]," he said. In order to be awarded a contract, suppliers must meet quality standards and be accredited by a CMS-approved accreditor by Aug. 31.

Bailey fully expects to meet that deadline, but he's still uncertain what he will do. His small, family-run company has four national competitors. It generates more than 30 percent of its revenue from Medicare, but the company doesn't have the personnel or the products to cover the entire Dallas-Ft. Worth CBA were it to win a bid.

"The area that ... they are mandating we service is just way beyond the scope of what I do now," Bailey said. "We were considering bidding in a network, but that hasn't been decided. I'm still trying to decide whether I want to accept assignment anymore."

Bailey said he is looking for a different approach to HME, maybe in retail or billing everything unassigned. In any case, he said, the possibility of losing his Medicare business is daunting.

"It's been the majority of my business since I opened up 10 years ago," he said. "My whole life is tied up in this business. Every dime I have or could borrow is tied up here. It's not simple."

If he does bid, it won't be right away. And that is OK, stakeholders say.

"It's not a race. There are no points awarded for being first in line," said Rice. "Providers really need to understand that and take the time to ensure their bid is both competitive and livable."

Cara Bachenheimer, vice president, government relations, for Elyria, Ohio-based Invacare, agreed. "Suppliers should spend the necessary time and resources to put together the best possible bid," she said. "They should not rush to submit it now ... There is no advantage to submitting a bid earlier in the 60-day window.

"I would suggest, however, that suppliers not wait until the absolute last day--July 13--because there may be significant volume, which may result in technical issues," she advised.

Mark Higley, vice president of development for Waterloo, Iowa-based VGM Group, conducted a seminar on competitive bidding for the California Association of Medical Product Suppliers the day after the RFB was issued. "The consensus is early June will likely be the time the majority will bid," he said.

Higley, along with Bachenheimer and Walt Gorski, vice president of government relations for the American Association for Homecare, strongly urged providers who have not already done so to register immediately for a user ID and password so they can access the bid submission system.

"It is my understanding that only between 800 and 900 suppliers have registered with the CBIC," Gorski said. "This seems to be somewhat low, so my advice is to make sure that if you plan on bidding, you register with the CBIC as soon as possible."

Higley said only half of the CAMPS seminar attendees who said they intended to bid had registered for the user ID and password, and only one had received it.

Bachenheimer added that, because the ID and password are mailed, the process takes a week or two--a significant amount of time lost out of the bid window.

While the RFB did not hold any surprises for providers, there are some questions about the process.

Soon after the final rule was issued, AAHomecare sought clarification from CMS on a variety of topics but has not received answers, Gorski said. "However, we have been informed that questions about competitive bidding and key issues will be posted on the CBIC Web site in the form of fact sheets and other educational material.

"Clearly there are some basic issues that we believe CMS must address in order for suppliers to be able to properly bid," Gorski continued. "For example, how will CMS address an issue in a case where a CBA crosses state lines, and one state levies state sales tax [on HME] and the other does not?"

That is the case in the Charlotte, N.C., CBA, which reaches into South Carolina, Gorski said. South Carolina levies a 6 percent sales tax on HME; North Carolina does not. The situation could result in some providers in the same CBA having an advantage over others, he said.

Gorski also noted that CMS has not announced educational efforts for providers. "We still believe that more time is necessary for educational opportunities. However," he said, "we are not extremely hopeful that a grace period or a delay will be forthcoming."

Link to the CBIC Web site by clicking here.

For questions, call the CBIC competitive bidding help line at (877) 577-5331.

The text of the bill should be available shortly at http://thomas.loc.gov.

The Scooter Store, DOJ Settle Lawsuits
WASHINGTON--The Scooter Store will pay the government $4 million and give up millions more in reimbursement for pending claims to settle fraud allegations, the Department of Justice said in a statement issued May 11.

Along with the cash payment, the New Braunfels, Texas-based provider will give up reimbursement for pending Medicare claims totaling more than $43 million, but Medicare estimates that payments based on those claims would actually have been $13 million.

The settlement includes a $500,000 contribution by The Scooter Store founder and CEO Doug Harrison, who the DOJ said agreed to forego dividends from his shares in the company for the next year in exchange for a release of his personal liability.

In addition, for the next five years the company will operate under a corporate integrity agreement with the HHS Office of Inspector General.

The settlement resolves a 2005 government lawsuit alleging the company "engaged in a multi-media advertising campaign to entice beneficiaries to get power scooters paid for by Medicare, Medicaid and other insurers. Instead of the 'zippy' power scooters that were advertised, The Scooter Store sold the beneficiaries expensive power wheelchairs that they did not want, need, and/or could not use."

"Many beneficiaries had no idea what kind of equipment they were getting, until it was delivered by The Scooter Store," according to the DOJ.

In addition, the government's lawsuit alleged the company sold used power mobility equipment to beneficiaries and billed Medicare as if the equipment were new, and alleged the company charged Medicare millions for unnecessary power mobility accessories.

The settlement also resolves several lawsuits filed by The Scooter Store alleging that Medicare unfairly denied claims it had submitted with valid certificates of medical necessity.

In a company statement, however, The Scooter Store said it relinquished its right to collect Medicare reimbursements for certain power wheelchairs and scooters, "which the company maintains were properly delivered to qualified Medicare beneficiaries."

"Unfortunately, the unstated policy of this government is to limit costs to the Medicare program and do whatever it can to curtail access to power wheelchairs and scooters," The Scooter Store's Harrison said. "Our company got caught in the middle. We did nothing wrong."

The DOJ said the settlement also resolves claims in a suit brought by a whistleblower who was a former Scooter Store employee. The whistleblower will receive $3,228,251 as the statutory award, and the whistleblowers' suit also will be dismissed.

Cardinal Health to Buy Viasys for $1.5 Billion
DUBLIN, Ohio--Cardinal Health announced Monday that it will acquire Viasys Healthcare for about $1.5 billion, including the assumption of outstanding debt.

Under the agreement, Cardinal will make a cash offer to acquire all outstanding shares of Viasys common stock for $42.75 per share.

With 2006 revenue of $610 million, Viasys focuses on respiratory care systems used to diagnose and treat pulmonary disease and sleep disorders. The company also manufactures neurological, audio and vascular diagnostics, disposable medical products used in surgical procedures and enteral feeding, orthopedic implant manufacturing and clinical services.

Cardinal said the acquisition would help solidify its presence in the respiratory care market. Additionally, the deal will expand Cardinal's clinical and medical product offerings and supplement its hospital selling organization.

With more than 7,000 hospital customers in 100 countries and 40 percent of its revenue generated from customers outside the U.S., the addition of Conshohocken, Pa.-based Viasys will also bolster the company's international presence, Cardinal said.

"With a strong platform and excellent momentum in our clinical and medical products businesses, we think the timing is ideal to broaden our offering," said R. Kerry Clark, Cardinal Health CEO.

An $80-billion company, Cardinal includes a DME division, manufactures medical and surgical products and distributes pharmaceuticals and medical supplies. The company employs more than 40,000 people on five continents.

The deal is expected to be completed this summer.

Florida Provider Calls on SBA to Halt Competitive Bidding
MIAMI--Following a May 10 meeting in Miami where 70 small providers pledged to help, Rob Brant of City Medical Services in North Miami Beach, Fla., has scheduled a meeting in Orlando to spread the word about his grassroots effort to stop--or at least delay--CMS' national competitive bidding roll-out.

To do so, Brant and his partner Ron Bibace are appealing not only to CMS but to the Small Business Administration, arguing "that CMS improperly interpreted the congressional mandate and did not provide the appropriate 'protection of small suppliers.'"

While the final rule on competitive bidding includes a 30 percent target for small providers to secure bid contracts, Brant said based on the amount of the nation's DME business that is transacted by small businesses--which some estimates place as high as 90 percent--that just isn't enough.

In the Miami competitive bidding area, for example, Brant said there are 450 listed oxygen providers likely to bid on that category. "This will almost certainly have a very severe adverse financial impact on 98 to 99 percent" of those companies, the vast majority small providers, that don't win bids, he said.

The negative financial effect on the Miami CBA, which includes 6,000 square miles in Miami-Dade, Broward and Palm Beach counties, will be far-reaching, he said.

"It's a chain reaction that won't affect only small DME providers," Brant said. "If those companies downsize or close, it will hurt their landlords, their billing companies, their software companies and the mom-and-pop 02 repair companies and the small manufacturers they deal with ... and all of these people could be going to collect unemployment."

CMS Acting Administrator Leslie Norwalk has said the agency estimates that when competitive bidding is fully implemented, the program would save $1 billion annually.

"On one hand the government said it will save money with competitive bidding, but if people start closing down their companies, they could lose $1 billion in commerce from small business," Brant said.

He has filed a formal complaint with the SBA Ombudsman.

Although Washington observers say it is unlikely, "we're hoping this could delay the implementation of competitive bidding," Brant said, adding that he has been encouraged by the "overwhelming support" for his effort so far. "It's worth it to save my business," he said.

The Orlando meeting will be held Wednesday, May 23, at 7:00 pm ET at the Holiday Inn Altamonte Springs. For additional information, contact Brant at rob@citymedical.com.

AAHomecare Set to Storm the Hill
WASHINGTON--Propelled perhaps by the fact that the HME industry is in a state of crisis unparalleled in its history, twice as many providers as in previous years have so far registered for the American Association for Homecare's annual Legislative Conference, set for June 5-7.

The conference comes as the industry is being bombarded by competitive bidding, the Deficit Reduction Act's 36-month oxygen rental cap, vastly changed mobility policies and a host of other issues, not to mention rapidly declining reimbursements.

Last week in its newsletter, AAHomecare reported that Rep. Pete Stark, D-Calif., chair of the House Ways and Means Subcommittee on Health, noted the likelihood of "across-the-board" cuts to Medicare providers in all sectors unless the providers help by identifying what to cut. "It's going to be a busy summer," Stark said.

But Michael Reinemer, the association's vice president of communications and policy, said he is encouraged by response to the upcoming conference. "It's a very positive trend compared to recent years," he said. "More people understand two things: 1) what's at stake in terms of home care policy decisions made in Washington; and 2) the growing realization that home care can achieve progress when everyone pitches in and puts their shoulders into a unified effort."

Sen. Arlen Specter and CMS Acting Deputy Administrator Herb Kuhn are among those speaking at the event. Attendees will also have the chance to meet with their state's federal legislators in a lobbying day on Capitol Hill.

"We will push hard for changes to the competitive bidding program, chiefly via the Tanner-Hobson bill, H.R. 1845, and we will push for repeal of the Deficit Reduction Act changes to oxygen policy via the Home Oxygen Patient Protection Act, H.R. 621," Reinemer said. "We expect to achieve expanded support for these priorities and make significant progress in educating members of Congress, especially some of the new members, about our issues."

The Tanner-Hobson bill would allow eligible providers who do not win bids in CMS' competitive bidding project to continue to service Medicare beneficiaries at the bid rate. The HOPP bill would repeal the rental cap on home oxygen and allow providers to retain ownership of the equipment.

"We'd like to get providers and manufacturers to bring patients again this year if possible," said Reinemer. "Teaming up providers with some of their home care patients is a very good way to convey the importance of home care policies to members of Congress."

Conference participants can attend briefing sessions on the issues as well as on how to lobby legislators effectively, he said.

"I hope we get a big turnout," said Tom Ryan, AAHomecare chair and president and CEO of Homecare Concepts in Farmingdale, N.Y. "If we can't get the industry to turn out now, that's pretty amazing ... Now is the time."

For more information about the conference, visit www.aahomecare.org.

Newsmakers
Mason Joins Paragon Ventures
NEWTOWN, Pa.--Paragon Ventures announced Friday that longtime home care veteran April H. Mason has joined the firm as a lead merger and acquisition advisor.

Until its sale to Apria in 2004, Mason was president of Raymond, N.H.-based HME Lifeplus Inc. That same year, she was elected to the New Hampshire House of Representatives.

Mason has also served as president of the New England Medical Equipment Dealers Association and as a director of the American Association for Homecare, appointed to the association's inaugural board in 2000.

In 2005, NEMED honored Mason by developing the "April Mason Homecare Advocacy Award," which is awarded annually to an individual who supports and promotes access to the HME industry. Last year's recipient was Congressman Rob Simmons of Connecticut.

In a 2000 interview, Mason told HomeCare she had instructed Lifeplus employees "to strike the word 'can't' from their vocabulary."

In the Paragon announcement, she said, "I realize that many providers are navigating similar challenges that I faced at Lifeplus, and they need real-life insight to see the tremendous opportunities that lay ahead."

Formed in 1994, Paragon represents sub-acute care providers of HME, home infusion, specialty pharmacy, respiratory care, sleep labs, diabetic supply, medical product distribution and home health in the M&A process.

Mason, who will be based in New Hampshire, follows another high-profile provider into the M&A sector. In March, former AAHomecare Chairman Tim Pontius joined Steven Richards & Associates. Pontius, former owner of Maumee, Ohio-based Young Medical and Toledo I.V. Care, sold his business to Apria in 2005.

Coming Up
CMS will hold a Home Health, Hospice & Durable Medical Equipment Open Door Forum Wednesday at 2 p.m. ET. To participate, call (800) 837-1935 and use Conference ID 4775216.

The Pennsylvania Association of Medical Suppliers (PAMS) will present a nuts and bolts overview for responding to the Medicare competitive bidding process May 30 in Pittsburgh. For more information, call (717) 795-9684 or e-mail kathryn@pamsonline.org.

Medtrade Conferences On the Road will hold a one-day session called "Turning a Challenge Into an Opportunity: How to Succeed with Competitive Bidding" June 4 in Miami. For more information, visit www.medtrade.com and click on Medtrade Conferences On the Road.

The American Association for Homecare has scheduled its annual Legislative Conference June 5-7 in Washington, D.C. For information, call (703) 535-1887 or visit www.aahomecare.org.

The Associated Professional Sleep Societies (APSS) will hold its annual meeting June 6-7 in Minneapolis. For more information, call (708) 492-0930 or visit www.apss.org.

The Healthcare Distribution Management Association (HDMA) will hold its Distribution Management Conference & Technology Expo June 10-13 in Boston. For more information, call (703) 787-0000 or visit www.healthcaredistribution.org.

VGM will open the doors for its annual Heartland Conference June 11-14 in Waterloo, Iowa. For more information, call (866) 227-8171 or visit www.heartland2007.com.

The Rehabilitation Engineering & Assistive Technology Society of North America (RESNA) will hold its annual conference June 15-19 in Phoenix. For more information, call (703) 524-6686 or visit www.resna.org.

The Tri-State Convention (Alabama, Georgia and Mississippi associations) will be held June 17-19 in Orange Beach, Ala. For more information, call (205) 824-6204 or visit www.admea.net.

The New England Medical Equipment Dealers Association (NEMED) will hold its annual meeting June 20-22 in Hyannis, Mass. For more information, call (508) 993-0700 or visit www.nemed.org.

America's Health Insurance Plans (AHIP) will hold its annual meeting June 20-22 in Las Vegas. For more information, call (202) 778-3200 or visit www.ahip.org.

Medtrade Conferences On the Road will present a one-day workshop on "Landing a Managed Care Contract (and how to handle it once you do)" June 21 in Dallas. For more information, visit www.medtrade.com and click on Medtrade Conferences On the Road.

The North Carolina Association for Medical Equipment Services (NCAMES) will hold its Summer Meeting and Exhibit June 21-23 in Wrightsville Beach, N.C. For more information, call (919) 387-1221 or visit www.ncames.org.

The American Physical Therapy Association (APTA) will hold its annual conference and expo June 27-30 in Denver. For more information, call (703) 684-2782 or visit www.apta.org.

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

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