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Headline News
Count the Ballots for Home Care, New Survey Says
ARLINGTON, Va.--Seventy-eight percent of voters would pull the lever for congressional candidates who would strengthen Medicare coverage for power wheelchairs, oxygen devices, hospitals beds and other DME and services, according to a new survey.

The survey results also show 74 percent of Americans think home care is part of the solution to the problem of rising Medicare spending, and 82 percent said they would prefer home care over institutional care if they needed medical services.

Commissioned by the American Association for Homecare, a national telephone survey of 1,000 adults found strong majorities of both Democrats (85 percent) and Republicans (71 percent) support home care-friendly candidates. The survey was conducted in December by Harris Interactive, which also conducts The Harris Poll, the longest-running independent opinion poll.

People age 55 and older--a population of 69 million Americans--are more likely to favor candidates who support home care (83 percent) than those who are younger (76 percent), the survey found. But AARP has dubbed the 2008 election as "the 50-plus election," estimating that voters age 50-plus will turn out in even greater numbers than during the 2006 elections.

AAHomecare is hoping Congress will get the message when HME advocates converge on Capitol Hill for its Washington Legislative Conference, scheduled March 4-6. On track for a big turnout at the annual lobbying event, the association has booked overflow rooms in addition to conference headquarters at the L'Enfant Plaza.

"We should use this survey as a springboard to talk with policymakers because it does show that Americans believe home care providers are valuable to disabled and elderly beneficiaries," said AAHomecare's Walt Gorski, vice president, government relations.

"I cannot think of a time in recent memory where so many issues are breaking at once," he said. "With the magnitude and sheer number of issues that we have on Capitol Hill, our goal should be to meet with every member of Congress. Power wheelchairs, oxygen, competitive bidding, payment updates--these are critical issues to the industry, and without providers educating their members of Congress, it is much harder to defend the field from these issues.

"The fraud-and-abuse issue also creates a poisonous environment for HME on Capitol Hill," Gorski continued, "and, truly, the only way to change that perception is for providers who are furnishing the care and patients who receive that care to put a face on HME. Otherwise, in many people's minds, HME is drop-shipping a quad cane to a beneficiary."

At a recent congressional briefing on competitive bidding, in fact, CMS staff slammed the industry "as a hotbed of fraud," AAHomecare reported. (See HomeCare Monday, Jan. 28.)

In addition, President Bush's 2009 budget request is expected to call for a massive decrease in Medicare spending, press reports said last week. The New York Times put the number at $97 billion by 2013. Medicaid spending would be cut by $15 billion over five years, according to the report.

Although Congress may balk at the request, the nation's legislators must still figure out what to do about a physician fee cut currently set for July. In wrangling over funding to avert that cut last year, HME narrowly escaped a reduction of the oxygen rental cap and elimination of the first-month purchase option for power chairs.

"The timing of this survey is critical," said AAHomecare President Tyler Wilson in the association's weekly newsletter. "This is a very competitive election year. The president's proposed 2009 budget, which will be released [today], is expected to include cuts to DME, and some members of Congress will be looking at DME as a target for budget savings. But we have the voters on our side if we can make home care a campaign issue."

For details of the survey and information on AAHomecare's Washington Legislative Conference, visit www.aahomecare.org.

The view the current supplier enrollment standards, click here.

Accreditors Will Hold Providers to New Standards
ATLANTA--Providers scrambling to become accredited could have a new hurdle to overcome in the form of CMS' proposed supplier standards, industry accreditors said last week.

"The new CMS supplier standards will have a significant impact on accreditation standards, as all accrediting organizations must incorporate them within their existing accreditation standards," said Tom Derrick, director, public relations, marketing and professional discipline, for the American Board for Certification in Orthotics, Prosthetics & Pedorthics.

"This effectively establishes the CMS supplier standards as a baseline set of minimum competency standards; all DMEPOS organizations must meet these standards, regardless of which accrediting organization they chose to work with," Derrick added.

During a Jan. 22 conference call on accreditation sponsored by CMS--the first of four teleconferences planned on the subject--the agency's Sandra Bastinelli reiterated that each accrediting body "must accredit based on our supplier standards."

Bastinelli repeated upcoming accreditation deadlines: Jan. 1, 2009, for providers applying to the National Supplier Clearinghouse before March 1, 2008; on or after March 1, 2008, those seeking enrollment must be accredited prior to submitting an application; and by Sept. 30, 2009, all providers must be accredited. The agency has not released the date by which providers must be accredited for round two of competitive bidding.

CMS is accepting comments on the proposed standards rule until March 25. After that, what the final standards will look like--and when they might take effect--is anybody's guess.

"There's a public comment period, and what is proposed at this point in time may look very similar or it may not," said Gwen Franzgrote, director of HME services for the Community Health Accreditation Program. "We are encouraging organizations to review [the proposed standards] and be prepared for what may be final."

And what about those businesses that are already accredited? Will accrediting organizations have to reassess them for compliance with any new standards?

"That's based on how [CMS] applies the new standards to the already-accredited organizations," said Franzgrote.

In other words, no one yet knows.

CMS has scheduled its next teleconference on accreditation April 17.

For a list of CMS' approved DMEPOS accrediting organizations, click here.

Invacare Improves Financials, Will Pull Back on Business 'Impacted by Medicare'
ELYRIA, Ohio--Despite the nature of the current market, both net earnings and sales were up for HME manufacturing giant Invacare, according to the company's posting of fourth-quarter figures on Wednesday.

In financial results for the quarter and year ended Dec. 31, 2007, Invacare reported Q4 earnings were $19.9 million versus $10.4 million in 2006, and sales increased 10.8 percent to $426.8 million versus $385.1 million. For the year, earnings were $42.9 million compared to $37.8 million in 2006, and sales increased 7 percent to $1.6 billion from $1.5 billion.

"I am extremely proud that our management team met and exceeded challenging commitments for adjusted earnings per share, free cash flow and cost reduction," said Invacare Chairman and CEO Mal Mixon. "We are also encouraged by the improving organic net sales growth trends. As well, during 2007, two national accounts have made significant purchases of our HomeFill oxygen technology. European business continues to perform well with improved sales and earnings over last year.

"We also generated strong free cash flow, totaling $44 million for the quarter and $73 million for the year, driven by stronger than expected cash collections on receivables and by inventory reductions," Mixon continued. "This enabled the company to reduce debt in the quarter by approximately $38 million. Cost reduction and reducing our debt levels were our top priorities for 2007 and we were successful in achieving both."

The company's cost-reduction initiatives, principally related to product sourcing savings, headcount reductions and manufacturing consolidation, totaled $40 million for 2007, slightly better than expected. A company statement, however, said "a significant portion of this benefit was offset by continued pricing pressures and product mix shift toward lower-margin product in the U.S. as a result of Medicare-related reimbursement changes."

The company said it intends to continue and expand cost-savings initiatives in 2008 for additional savings. Even so, Invacare anticipates the benefit will be "tempered by continuing reimbursement uncertainties, primarily the implementation of competitive bidding in the U.S., and continued global pricing pressures in the industry."

"Don't expect more acquisitions in '08," Mixon told reporters in a Q&A session following the company's presentation. "We're looking to pay down debt and get earnings up."

In additional comments on the domestic market, Mixon said it's hard to anticipate the effects of competitive bidding "realizing that we have never been through something like this before, and there are a lot of unanswered questions."

As far as pricing resulting from the program, he said, "It's strictly conjecture at this point. We don't even know how many bidders there are at this point."

While Invacare's business in the first 10 MSAs--which Mixon put between $25 million and $30 million--will be impacted in the last half of the year if CMS hangs to its current July implementation date, he has other concerns about the program. "We think competitive bidding will be traumatic enough this year, not only in terms of the pricing, but we're very concerned that it's going to put hundreds of small players out of business and will be very disruptive to patients. I don't think the government understands what they have done yet," he said.

The company is "lobbying in Washington heavily to amend or end this program, which I think is very ill-conceived ... and we intend to pursue vigorously and aggressively legislation to affect it," Mixon said, referring to the Tanner-Hobson (House) and Hatch-Conrad (Senate) bills currently in Congress.

Another rough spot could be the oxygen rental cap that will kick in Jan. 1, 2009, when Mixon said "the first of patients who received 36 months of reimbursements will suddenly learn they don't have the government paying for their reimbursement anymore at sufficient levels, and I think Congress is going to get thousands of phone calls from these beneficiaries who suddenly aren't being recognized.

"By leading a call for reform, we intend to ask the government to stay any further cuts in oxygen," Mixon continued, pointing to the possibility that oxygen reimbursement cuts and elimination of the first-month purchase option for power wheelchairs could be included in a Medicare bill later this year.

He noted, however, that new oxygen technologies should remain at current reimbursement levels. "While we don't want any cuts in oxygen and we are the industry's largest creditor and don't want to see any of our customers have their P&Ls hurt," he said, "we are very encouraged that CMS and the House and Senate and the president all in one way or another have recognized this new technology."

Observing that the industry is better organized than ever, Mixon said, "Together we continue to fight these battles. We had a lot of ups and downs during the year of '07 but we were successful and perhaps lucky that there were no reimbursement cuts ... and we're hoping to get back-to-back years here of getting through this and working with the government to lead in the reimbursement reform."

But like many of the industry's providers, Mixon said Invacare is preparing to reduce its dependence on Medicare-related business:

"The component of our business that is impacted by Medicare--and by 'impacted by Medicare' I mean Medicaid and insurance companies that follow suit--today represents probably 40 percent of our business. We are working hard to reduce our dependence on U.S. Medicare-Medicaid, and we've set an internal goal of trying to reduce that to 25 percent over the next three years ... We want to fix it if we can, but we'd like to be less dependent on [government]."

AASM Weighs in on Proposed CPAP NCD
WESTCHESTER, Ill.--The comment period is closed, and a final decision is expected in March on CMS' draft proposal for changes to its National Coverage Determination on CPAP therapy for obstructive sleep apnea. But between now and then, CMS will have its hands full analyzing the remarks from commenters.

Current policy requires a sleep test, or polysomnography, to be performed in a facility-based sleep lab, but the agency has recommended changes, which, among others, would allow the use of home sleep testing.

Among those to weigh in was the American Academy of Sleep Medicine (AASM), which sent a four-page response to the proposed decision memorandum, issued Dec. 14. (See HomeCare Monday, Dec. 17, 2007.)

AASM challenged what it calls "inconsistencies and omissions" within the draft memo. In particular, the Academy said it is contesting "CMS' inclusion of Type IV portable monitoring devices as acceptable for home sleep testing, and raising concern over the vagaries regarding an acceptable CPAP trial, requirements for clinical evaluation and a paradigm for follow-up and long-term management."

In addition, the AASM pointed to concerns regarding the evidence CMS used as the base for its proposed decision, noting that "the studies cited in the proposed draft did not include the patient population covered by Medicare." AASM also said other important topics are not addressed in the proposed decision, including documentation of OSA and determination of severity, which, the Academy contends, is best measured through in-lab polysomnography.

Among issues the Academy addressed:

--"The proposal fails to define the measures by which any physician, especially those inexperienced and untrained in sleep medicine, would assess the benefit of therapy and also does not call for long-term management through programs that emphasize education and follow-up care."

--"While the AASM supports the use of Type II and III [home sleep testing] devices by board certified sleep specialists in patients with a high pre-test probability of moderate to severe [OSA], it does not support the indiscriminate use of HST by physicians untrained in sleep medicine."

--"Consistent with its clinical guidelines, the AASM supports Type II and III HST devices. However, the AASM does not support the inclusion of Type IV HST devices." Such devices have only one or two monitoring channels, the Academy said, the use of which "makes ripe the potential for substandard patient care and a substantial increase in unnecessary tests."

While AASM supports some of the recommendations in the CMS draft, the organization said CMS needs to clarify who exactly is covered by the NCD and answer additional questions before rendering its final coverage determination.

To view CMS' proposed decision memo, click here.

Supplier Standard No. 1: What the Changes Could Mean for You
By all accounts, the effects of CMS' proposed revision and expansion of supplier standards for DMEPOS will be far-reaching. In a special series for HomeCare Monday leading up to the March 25 deadline for comments, health care attorney Neil B. Caesar, president of the Health Law Center, Greenville, S.C., will help provide clarification and insight on several provisions of the draft rule.

This week, Caesar's comments are directed to a change in existing standard No. 1, which deals with state and federal licensure and regulatory requirements:

This standard right now states that a supplier must operate its business according to all state and federal licensure and regulatory requirements. Basically, that's been interpreted to date to require a supplier to have all the necessary DME licenses, specialty certifications, occupancy permits and everything else required under federal, state or local law.

The proposed changes include a clarification and a modification. The clarification is that CMS is making it clear the government has no responsibility whatsoever for helping the supplier determine what licenses or other kinds of requirements are necessary to operate in that state.

"While the [National Supplier Clearinghouse] maintains information regarding state licensure laws, we do not believe that the NSC is responsible for notifying any supplier of what licenses are required or that any changes have occurred in the state licensing requirements," CMS' comments say.

This will mean any supplier who historically has taken the attitude "If I missed something, the NSC will tell me and I will fix it then," cannot embrace that lackadaisical approach after this clarification takes effect.

Further, CMS makes clear that if a supplier contends that there is an exception to some state rule, the supplier will have to show clear evidence that the state has that exception in place. That means a supplier would not be able to rely on a telephone comment from some state official or an inference about what other companies are doing to conclude that the state rules do not apply to that supplier. Clear, written evidence will be necessary.

Most important is an effort by CMS to bring everything "in house" for the supplier. Specifically, CMS contends that any state licenses required in order for a supplier to supply certain services must belong to the supplier itself or to its employees. In other words, suppliers will not be allowed to have a contract relationship with an individual or entity for licensed services but must hire the licensed individual as a W-2 employee.

In explaining the rationale for this change, CMS said: "We believe that we are enrolling DMEPOS suppliers, not third-party agents that subcontract their operations ... therefore to ensure that only qualified suppliers are enrolled ... we maintain that a DMEPOS supplier ... cannot contract with an individual or entity to provide the licensed service(s)."

This change would require significant staffing changes for many suppliers who currently contract on an independent basis with respiratory therapists, nurses and other individuals subject to state licensure and other related requirements.

In my opinion, CMS is imposing an unnecessary hardship on suppliers with this rule because they must already be responsible for their personnel's performance, regardless of employment status. There are many less disruptive ways for CMS to gain compliance assurances: Subcontractors can be identified and listed; performance and supervision requirements could be monitored.

Further, W-2 employment status does not, in itself, create a mechanism or an obligation for the supplier to ensure that the employee is performing consistent with licensure requirements. Regardless, if this change takes effect, that supplier's relationships with agencies or independent professional groups will change dramatically.

To view all proposed standards and revisions, click here.

HME Company Newswire
ActiveCare Completes First Year, Adds Two Warehouses
Columbia, S.C.--Marking its first year in business last month, ActiveCare Medical has opened new warehouse facilities in Brea, Calif., and Fort Mill, S.C.

President and CEO Steve Neese cited the company's first year success as the stimulus for the expansion. "Improved distribution on both coasts allows us to extend our reach and work toward our goal of providing the best products and service in the industry to providers across the country," he said. The company manufacturers and distributes competitively priced HME products, specializing in power mobility.

The 30,-000-sq. ft. Brea warehouse, located in the Los Angeles metropolitan area, is the company's first in the western U.S. The 60,000-sq. ft. Fort Mill warehouse is located near Charlotte, N.C., and is the company's new distribution hub for the East. Both facilities feature a computerized inventory system, streamlining the shipping process, Neese said.

"We had a very good first year," said Neese, noting that ActiveCare will introduce a number of new products this year including its first mid-wheel drive chair. "We exceeded my expectations. But 2008 is going to be the year that really puts us on the map."

Bunch Leaves CareCentric
ATLANTA--Technology and software developer CareCentric announced last week that industry consultant Jane Bunch is leaving the company to pursue an independent speaking and consulting business.

Bunch joined the company in 2005 with the acquisition of her business, Jane's Billing & Consulting Services, which provided billing and claims management for HMEs and pharmacies throughout the U.S. and Puerto Rico. The purchase, combined with CareCentric's 2006 acquisition of Alternative Billing Solutions, built one of the industry's largest outsourced billing services business, including billing centers in Minneapolis; Atlanta; Pittsburgh; Dayton, Ohio; and Jamestown, N.D.

During her two years with CareCentric, Bunch continued to consult with providers on billing and reimbursement issues and was a frequent speaker at industry events.

"I have been in this industry all of my life and have always thrived on being an advocate and consultant for the independent provider," Bunch said. "I learned a lot working with CareCentric and enjoyed my time with them, but ... I decided to go back out on my own to continue fighting for providers."

Bunch's new company, Jane's Healthcare Consulting, will be based in the Atlanta suburb of Marietta.

Chad Shareholders Approve Inovo Deal
CHATSWORTH, Calif.--Chad Therapeutics said last week its shareholders have approved the proposed sale of its oxygen business to Inovo, a privately held manufacturer of oxygen regulators and conservers based in Naples, Fla. The $5.25 million cash transaction is expected to close Feb. 15.

In announcing the deal, Chad President and CEO Earl Yager said the company will focus future efforts on the sleep disorder market.

Computers Unlimited Celebrates 30 Years
BILLINGS, Mont.--Computers Unlimited, which supplies software for HME, closed pharmacy and home infusion providers, is celebrating its 30th anniversary this year.

In addition to its three decades of service, the company is also celebrating its recent designation as a Gold Certified Partner with Microsoft.

Achieving the status in the Microsoft Partner Program enables CU "to promote our long-standing and growing expertise and relationship with Microsoft to our customers," said David Schaer, director of product management and marketing. He added that more than half of the company's customer base has made the switch to its flagship product, TIMS for Windows.

Fastrack Forms New MSO
PLAINVIEW, N.Y.--Fastrack Healthcare Systems announced last month it has formed a new member services organization for HME, respiratory, infusion pharmacies and home health care agencies.

"Membership is absolutely free and open to all providers. It is not necessary to be a software client to participate," said Fastrack President Spencer Kay.

According to the company, the new MSO is managed by professionals with industry experience who can help with challenges including nabbing the best prices, locating special products, resolving problems with vendors and getting equipment serviced in a timely manner.

The new MSO will work with manufacturers and distributors throughout North America "to negotiate the best prices and terms," Kay said, adding that "members can continue to receive all the benefits of dealing directly with the vendor's sales and customer service staff."

Through the MSO, members will be able to access a Web portal to handle ordering transactions with manufacturers. A copy of vendors' catalogs and price lists will also be available online, the company said. Among other things, members of the new MSO will receive special promotions and purchasing incentives, discounts on credit card processing fees and have access to an Internet bulletin board with a buy/sell exchange to help sell overstocked products.

A concierge service will assist in locating hard-to-find products and services as well as resolving disputes with vendors, the company said.

Graham-Field Completes Acquisition of Lumiscope
ATLANTA--GF Health Products has completed its purchase of Lumiscope, a manufacturer and distributor of diagnostic devices as well as respiratory, orthopedic supports, electrotherapy and thermometry products since the 1970s.

"The completion of this acquisition represents a significant step for Graham-Field in our strategy to accelerate growth within several of our core product categories," said Beatrice Scherer, president and CEO. "This transaction has created for us opportunities to increase top-line growth as well as achieving cost synergies in general and administrative expenses."

Lumiscope, based in Piscataway, N.J., will transition its customer service, quality assurance, engineering, technical support and repair departments, warehousing and manufacturing to GF's existing East Rutherford, N.J., complex.

Marc Bernstein, Lumiscope's former president, will continue to manage its products and customers. The new branch will be the responsibility of Ken Spett, GF's senior vice president, Medical-Surgical Division.

In other company news, Graham-Field said Friday it would team with Franklin, Tenn.-based National Seating and Mobility to offer its products to the rehab provider's clients.

Quantum Rehab Raises the Bar on Business Standards
EXETER, Pa.--Quantum Rehab, a division of Pride Mobility Products Corp., said last week it has strengthened provider standards "to further ensure that only providers who possess the utmost rehab expertise will qualify to deliver their products and services."

According to the company, the enhanced standards "are an extension of Quantum Rehab's dedication to safeguarding clients who use advanced rehab products by ensuring that their unique needs are best met by authorized Quantum providers."

Compliance with the standards will also help providers stay compliant with current and future Medicare regulations, the company said.

Key points of the new Quantum provider standards include the requirement of every provider to employ a RESNA-certified Assistive Technology Supplier (ATS) or Assistive Technology Practitioner (ATP) and directly involve them in product selection for their clients. Providers must also employ at least one trained rehab technician per service area and must service all Quantum products they sell.

All Quantum providers must complete an application and sign an attestation that verifies all the standards are being met. The company said compliance with its standards will be evaluated annually, and Quantum will reserve the right to decline new applications to prevent marketplace oversaturation if it is determined that a specific region has adequate coverage.

Products governed by the Quantum standards are Medicare Group 2 single-power options and above (K0835-K0886), all power positioning systems and alternate drive devices.

RemitDATA Secures $5 Million Equity Investment
MEMPHIS, Tenn.--RemitDATA Inc. said last month it has received a $5 million minority equity investment from Noro-Moseley Partners and SSM Partners to continue the company's expansion.

Founded in 2000, the company has experienced strong growth in the physician IT market and now serves over 7,000 health care providers throughout the U.S with a suite of Web-based productivity products. Reimbursement Pro, its flagship product, helps companies control the reimbursement process, including finding flaws, identifying denials and other issues "that are common problems that plague the medical industry," the company said.

To date, the company has been funded by its principals, CEO Bently Goodwin and President Michael Sanderson, and internal cash flow. The investment provides additional growth capital that will enable more rapid entry into new markets and further leverage the value embedded in its massive claims database, the company said. Due to the nature of its tools, RemitDATA is an aggregator of specialty-specific claims data exceeding $15 billion annually in Medicare volume alone.

"Until now, RemitDATA has been one of the best-kept-secrets in health care," said Goodwin, who noted the company currently serves about 3,500 DME provider locations. "This investment ensures that we build on our eight-year track record as we further accelerate our growth." For the DME sector, he added, "this means our products will stay on the cutting edge of technology and [we will] possibly offer new products in the future."

In conjunction with the financing, which was led by Noro-Moseley, Allen Moseley of Noro-Moseley and Casey West of SSM have joined the RemitDATA board of directors.

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

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