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Headline News
Maybe No News Is Good News After All: Press Reports Damage HME Lobby Effort
ATLANTA--In an ironic twist of fate, the home medical equipment industry is finally getting the national recognition it has yearned for--but not the kind it envisioned.

Rather than being seen as the best hope to stem continually escalating health care costs, it has, through recent newspaper, radio and governmental reports, been painted as the scourge of the system, an industry of fraudulent providers and money-grabbers who exploit the oldest and sickest among us to ensure top-dollar reimbursement.

The persistent assault on HME has seriously damaged the industry's reputation, stakeholders say, and sent manufacturers, buying groups and national associations scrambling to respond in some productive way.

"There are so many things being shot at us you don't know how to respond," said Cara Bachenheimer, vice president of government relations for Elyria, Ohio-based Invacare. "This isn't the kind of press we were looking for."

The industry has been catapulted into the national limelight via a series of blistering reports. The most recent was an explosive New York Times article Nov. 30 that asserted Medicare is vastly overpaying for oxygen compared to "what somebody might spend at a drugstore." (See HomeCare Monday, Dec. 3.)

The story came on the heels of a segment on National Public Radio that depicted the entire HME industry as overrun with fraudulent providers and a report from the Office of Inspector General that maintained Medicare could save millions if it reimbursed providers for power wheelchairs at the same prices found on the Internet.

Another two-part report on HME fraud and abuse is scheduled to air tonight and Tuesday on "NBC Nightly News with Brian Williams." The reporter's field notes on the story, posted last week on the MSNBC Web site, preview what he describes as "the brazen, organized and widespread looting of Medicare, which seems all-too-easy prey for criminals hiding behind phony medical supply companies and clinics."

Discouraging to Advocates
"It does have a cumulative and negative effect on the attitudes and optimism of those of us who have spent most of our lives in the business," said Jim Walsh, president and general counsel of buying group VGM, Waterloo, Iowa. "And we wonder, how is all this happening now? Many of us who have spent time in Washington, D.C., understand the cozy relationships between the media and the legislative staffs. The timing is not coincidental."

It also couldn't be worse. Many HME advocates have been lobbying heavily to lessen the impact of competitive bidding, which is projected to kill off thousands of small providers, and also to forestall further reimbursement cuts by Congress.

As the days dwindle before their Christmas recess, both houses of Congress are working frantically to craft legislation on a variety of issues. One key measure is a Medicare package and its so-called "doc fix." Physicians are the target of a 10 percent reimbursement cut set to take effect Jan. 1, and legislators are seeking ways to sidestep that pay cut by cutting somewhere else. Both home oxygen and the first-month purchase option for power wheelchairs could get the axe.

With a barrage of such negative publicity, the industry's lobbying efforts, never easy under the best of circumstances, could be even harder. Stakeholders shifted into damage control with swift responses to the bad press, particularly the article, written by Charles Duhigg:

--In its response, the American Association for Homecare said the article "paints an extremely biased and misleading picture" of HME. "The fundamental flaw ... is the dangerously simplistic assumption that oxygen therapy delivered to Medicare patients in their homes should cost the same as the Internet or eBay price to buy the equipment only," AAHomecare said.

--Calling Duhigg's story "an inaccurate picture of the home oxygen industry," Invacare pointed out that "in reality, the costs of home oxygen therapy go beyond product acquisition costs to include the service that accompanies this medical therapy." The manufacturer's response also noted "the industry has withstood almost 50 percent in payment cuts over the last 10 years and has an additional 19 percent scheduled to take effect in 2008 and 2009."

--In a letter to Duhigg, the National Association of Independent Medical Equipment Suppliers noted "the cost of oxygen in the home for one year is less than one day in a hospital" and requested the opportunity for the industry to respond in an Op-Ed piece in the Times. "Remember that the $1.8 billion figure you quoted as the expense of oxygen equipment kept more than one million Medicare patients alive last year," the letter said.

--The Council for Quality Respiratory Care said the Times article "omits salient facts about home oxygen therapy and the critical role it plays in keeping some of Medicare's sickest beneficiaries in their own homes." The group also challenged the piece on its portrayal of home oxygen therapy "as though it is nothing more than the rental of inert equipment, when in fact home oxygen therapy is a prescribed therapy, that when properly administered, requires both medical devices and myriad patient services."

--VGM, which labeled the story "hack journalism," issued an alert to its members, urging them to contact their legislators immediately to set the record straight and plead for no more cuts either to oxygen or power mobility.

Can the Good Guys Win?
Despite those official rejoinders, the question remains: In light of the tidal wave of negative press, can the industry shore up its reputation?

Most stakeholders believe that will take all home care providers stepping up to the plate to ensure the accurate story of HME gets out to their legislators. While Washington insiders agree it is unlikely federal lawmakers will reach agreement on Medicare this year--"We are running out of time in terms of a Christmas deadline," said Bachenheimer--no one is suggesting waiting to lobby until Congress returns next year.

"The threat is really real," said Seth Johnson, vice president of government relations for Pride Mobility Products, Exeter, Pa.

As of Friday, the House Medicare package called for cutting home oxygen rental payments from 36 to 18 months. While the Senate package was not set, "we do know the Senate has a $77 reduction [for oxygen] in their package, which would take it down to around $120 a month," Johnson said. "As far as the first-month purchase option for power wheelchairs, we have heard conflicting information about whether it's in the Senate bill or not. Regardless, going into negotiations, it's clearly on the table for inclusion.

"What we need the industry to do is to pick up the phone and call their legislators and let them know what the impact of these two provisions in the Medicare package would be and what the impact would be on their companies if these changes are implemented," Johnson said.

Bachenheimer, too, stressed the need for provider lobbying. "People get frustrated or dismayed that they can't get a meeting [with their legislators], but they just have got to keep at it," she said.

Despite the bad news, Bachenheimer continued, "the industry has done a decent job [of lobbying] this year relative to previous years. There are a lot of folks who advocate for us."

She lauded in particular the support of Sen. Pat Roberts, R-Kan., a member of the powerful Senate Finance Committee, which oversees Medicare. "He's a huge advocate," Bachenheimer said. "He's really close to his constituents. Over the years, providers have been educating him, and he sees access to home medical products and services as critical ... It's wonderful to see some of the results of these efforts over the years."

Hoping for a Fair Shake
Raul Lopez, president of the Florida Association of Medical Equipment Services and director of operations for Bayshore Dura Medical in Miami Lakes, is hoping that education about HME will make the difference in NBC's upcoming report.

Lopez spent three hours with NBC News correspondent Mark Potter three weeks ago. The reporter, who was following the NPR story on fraud and abuse in Miami, had already spoken to Health and Human Services Secretary Michael Leavitt and gone on a ride-along with the FBI to a non-existent HME facility.

Lopez took him on a tour of Bayshore's 20,000-sq. ft. facility, explained the industry and even armed Potter with a General Accounting Office report on Medicare "that showed $70 million to $75 million of Medicare's own boo-boos."

He has no idea how much, if any, of his 25 minutes on tape Potter will use. But he is hopeful the NBC story will, at the least, present a balanced view of the industry. "Though the focus of the story is fraud, the fact that Mr. Potter went out of his way to look at our perspective and acknowledge that there are good providers out there serving beneficiaries was a great opportunity to change some minds," Lopez said in a FAMES memo about the reporter's visit.

"[Potter] was open-minded enough to look for legitimacy in the industry," Lopez told HomeCare Monday. "I was quite pleased with that. Even if it is a 10-second blurb, it's better than we've ever gotten before."

Said VGM's Walsh, "It's a continuing public relations battle, and it's always going to have to be fought. This is not a day-to-day battle, this is a decade-to-decade battle. We re going to have to make a convincing case that home care can effectively cut health care costs for everyone.

"I guess," he said, "it's shame on us for not being able to effectively get that message across."

For more information:
To read field notes on his report from NBC News correspondent Mark Potter, click here.

To read Charles Duhigg's New York Times article, click here.

For AAHomecare's response to the New York Times article, click here.

For a response to the New York Times article from the CQRC, click here.

For the OIG report on Medicare power wheelchair pricing, click here.

To read the PSC bulletin, click here.

MSA Selection Could Miss $1 Billion; Look Out, Anchorage
MELBOURNE, Fla.--When CMS chooses the next 70 MSAs for competitive bidding, the agency could be excluding $1 billion in annual Medicare DME expenditures from the program, according to industry consultant Wallace Weeks of Weeks Group.

To forecast which cities might be included in Round Two of the national bidding program, Weeks made a list based on the selection methodology described in CMS' final rule. He found the agency's scoring, which does not weight total DME spending in an MSA, would leave some of the nation's biggest cities off the list.

"I think that they are asking themselves if they made a mistake when they created the final rule," Weeks said. The current selection method would exclude some of the "really big MSAs and replace them with really small MSAs, some to the tune of 350,000 in population," he said.

Under the CMS method, Weeks' calculations showed, for example, that Chicago would miss the cutoff at No. 78; Jacksonville, Fla., would not be included at No. 81; and San Diego would be left off at No. 96.

Other MSAs with populations over one million that would be excluded, Weeks said, include Florida's Tampa-St. Petersburg-Clearwater, Rhode Island's Providence-New Bedford-Fall River and Connecticut's Hartford-West Hartford-East Hartford. But the CMS list would include a number of smaller MSAs, like Anchorage, Alaska; Provo-Orem, Utah; Ann Arbor, Mich.; and Brownsville-Harlingen, Texas.

In fact, Weeks said, Anchorage comes out in the No. 1 spot using the CMS method. That city was on the list of possibilities for the first round of bidding, Weeks said, "and it's staying on the list. It's a big-time target."

However, the CMS list would also include "a number of big cities you would expect to see," Week said, like Houston at No. 8, Atlanta at No. 10, Los Angeles at No. 13 and Detroit at No. 37.

Weeks said CMS' selection method would cover 12.4 million seniors in addition to the 4.2 million residing in the 2007 bidding areas. Not counting grocery chains, large pharmacy chains, discounters, optometrists and opticians, there are about 9,800 providers in the MSAs that would be covered.

But Weeks believes CMS will modify its selection method to give more weight to total spending for DME in each MSA. "It might not occur to them until they really look at all the big cities that will be left out," Weeks said.

To see what the next 70 MSAs might be with the scoring change in place, Weeks prepared a second list. "There were 17 cities in the CMS methodology that were not on my list, and those 17 MSAs I have dubbed 'on the bubble.' They are small MSAs, but I believe that CMS will opt to go to bigger MSAs," he said.

Scored by the CMS method, Weeks predicts the Top 10 cities selected for Round Two bidding will be:

1. Anchorage, Alaska
2. Provo-Orem, Utah
3. Raleigh-Cary, N.C.
4. Ann Arbor, Mich.
5. McAllen-Edinburg-Pharr, Texas
6. Baton Rouge, La.
7. Fayetteville, N.C.
8. Houston-Baytown-Sugar Land, Texas
9. Lexington-Fayette, Ky.
10. Atlanta-Sandy Springs-Marietta, Ga.

Scored using Weeks' modified method, the Top 10 list would include:

1. Houston-Baytown-Sugar Land, Texas
2. Los Angeles-Long Beach-Santa Ana, Calif.
3. Atlanta-Sandy Springs-Marietta, Ga.
4. Raleigh-Cary, N.C.
5. Baton Rouge, La.
6. Nashville-Davidson-Murfreesboro, Tenn.
7. Salt Lake City, Utah
8. McAllen-Edinburg-Pharr, Texas
9. Memphis, Tenn.-Miss.-Ark.
10. Austin-Round Rock, Texas

If the agency doesn't change its selection method, Weeks continued, "CMS will pass up a significant opportunity to reduce allowed charges." Saving money, he added, was what the agency said it intended to do.

To view Weeks' prediction of cities that will be included in 2009 competitive bidding, visit www.weeksgroup.com.

NCART Call-in Garners One More Co-Sponsor for H.R. 2231
WASHINGTON--According to Sharon Hildebrandt, executive director of the National Coalition for Assistive and Rehab Technology, there was some positive response from the organization's Washington call-in last week.

"I think it went quite well," Hildebrandt said of Tuesday's event. Members of NCART and the National Registry of Rehabilitation Technology Suppliers placed phone calls to federal legislators, customers and clinicians to drum up support for H.R. 2231, the Medicare Access to Complex Rehabilitation and Assistive Technology Act.

The bill would exempt complex rehab from Medicare's competitive bidding program.

"From our initial reports, it sounds like our members made many calls. For example, Permobil had 35 staff members who put in about 100 calls. United Seating and Mobility organized clinicians and consumers to call as well," Hildebrandt said.

Hildebrandt estimates that "several hundred" calls were made to ask representatives for their support. As a result, Florida Republican Bill Young decided to sign on to the bill, Hildebrandt said, bringing the total number of co-sponsors for H.R. 2231 to 26.

But Hildebrandt said little headway is being made in the Senate, where a companion bill has not been filed.

As to the future for the complex rehab carve-out, Hildebrandt said, "We'll just have to wait and see ... We're working with House Democrats to try to convince them to include the rehab exemption, and we're working with Senate Democrats, too. We just have to continue with the lobbying."

CMS Begins 2008 Provider Satisfaction Survey
BALTIMORE--CMS has begun its third annual provider satisfaction survey of Medicare fee-for-service contractors, who process and pay more than $280 billion in Medicare claims each year.

The Medicare Contractor Provider Satisfaction Survey, sent to 35,000 randomly selected providers, will ask those providers to grade their Medicare Administrative Contractors on provider inquiries, provider outreach and education, claims processing, provider enrollment, medical review and provider audit and reimbursement. All MACs will be required to achieve performance targets on the MCPSS as part of their contract requirements by 2009, CMS said.

For the survey, respondents will be asked to rate the MACs using a scale of 1 to 6, with "1" meaning "not at all satisfied" and "6" meaning "completely satisfied."

The results of last year's survey showed 85 percent of respondents rated their contractors between 4 and 6, with the provider inquiry function having the greatest influence on whether providers were satisfied with MAC service. Previously, the claims processing function was the strongest predictor of a provider's overall satisfaction.

"The shift from claims processing to provider inquiries as the top predictor of satisfaction is a perfect example of the type of trend data the MCPSS will reveal," CMS Acting Administrator Kerry Weems said in a press release about the survey. "Contractors are able to factor this insight into how they prioritize their provider-focused efforts."

Providers chosen to participate in the survey will be notified this month. CMS plans to make the survey results publicly available in July 2008.

For more information about the survey, visit www.cms.hhs.gov/MCPSS.

Newsmakers
Graham-Field Health Products, Atlanta, has named Rebecca Jackson as its new senior product manager. Jackson formerly served as marketing director of North American Medical's Imaging Division.

The National Association of Independent Medical Equipment Suppliers, Hailfax, Va., has appointed Kay E. Nichols as vice president of operation. Nichols, who has held various sales, marketing and management positions with the Marriott and Benchmark Hotel chains as well as with Belk Department Stores, will focus on membership growth for NAIMES. Formed this year as a grassroots advocacy organization, the association of independent HME providers currently has 53 members.

The University of Pittsburgh's Department of Rehabilitation Science and Technology has named Mark Schmeler, Ph.D., director of its continuing education program. Schmeler, who has been a member of the university faculty since 1996 and has nearly two decades of experience, succeeds Elaine Trefler, who is retiring.

The ROHO Group, Belleville, Ill., has announced that Tricia Henley will serve as the new clinical applications manager for the ROHO Institute for Continuing Education and Research. In her new role, Henley will present CEU programs to health care professionals and DME providers nationally and assist in the direction and management of case studies and research.

In Brief
If current smokers enrolled in Medicaid would quit smoking, the government program would save nearly $10 billion in five years, according to a study released by the American Legacy Foundation Nov. 29. The study, "Saving Lives, Saving Money II: Tobacco Free States Spend Less On Medicaid," found that, if Medicaid smokers quit, the decision would reduce current Medicaid costs by 5.6 percent--or $9.7 billion--in the next five years. Currently, Medicaid expenditures for tobacco-related illnesses account for as much as 8.2 percent of total expenditures in some states. To view the study, click here.

Out-of-pocket spending on health care by Medicare beneficiaries increased to 15.5 percent of income in 2003--up from 11.9 percent in 1997--according to a study published in Health Affairs. The study, "How Much 'Skin in the Game' Do Medicare Beneficiaries Have? The Increasing Financial Burden of Health Care Spending, 1997-2003," showed four in 10 beneficiaries spend one-fifth of their income on health care, with out-of-pocket spending outpacing growth in income over time. The study also found that median out-of-pocket health spending increased by $1,116, a 50 percent increase, while median individual income rose by only 15 percent.

U.S. adults caring for elderly people have average annual out-of-pocket costs of $5,531--approximately 10 percent of their salaries--according to a study conducted by the National Alliance for Caregiving and Evercare, a division of UnitedHeath Group. The study, which included a telephone interview of 1,000 adults who care for someone over the age of 50, also found that 37 percent of respondents had to quit their jobs or reduce working hours to care for elderly family members.

Nearly half of doctors do not report their peers' Medical incompetence, according to a survey of more than 1,600 physicians in Annals of Internal Medicine. The survey found that 45 percent of physicians with direct knowledge of impaired or incompetent members of their practice did not always report the incompetence, and 46 percent who knew of a serious medical error did not report it to authorities on at least one occasion. Conducted by the Institute on Medicine, an affiliate of Columbia University, the survey focused on anesthesiologists, cardiologists, family practitioners, pediatric and internal medicine physicians and surgeons. For the complete survey findings, click here.

The nation's next president should work with Congress to enact universal health care in addition to making extensive reforms in cost, quality and access, a Commonwealth Fund report has recommended. The 30-page report, "A High Performance Health System for the United States: An Ambitious Agenda for the Next President," was written by health policy experts from academia, government, health care delivery organizations and professional associations. Among the report's recommendations are provisions for provider payment reform based on quality and efficiency, fostering active support for those who live healthy lifestyles, a shift to universal electronic medical records and a system of linking physicians and hospitals for more coordination of care and better disease management. The report also recommends creating a new federal regulatory agency modeled after the Federal Reserve Board to oversee public and private insurance programs. To view the entire report, click here.

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