The investigation has been handled by the DOJ’s Civil Division, the U.S. Attorney’s Office for the Northern District of Mississippi and HHS’ Office of the Inspector General.

U.S. Supreme Court Sides with CMS in Maximum Comfort Case
REDDING, Calif.--The U.S. Supreme Court refused last week to review an appeals court decision that further documentation beyond a CMN could be required for Medicare to pay a claim for a power wheelchair. But petitioner Tom Lambert said he'll continue the fight and will likely pursue another appeal.

Lambert, the owner of Redding, Calif.-based Maximum Comfort, said he was not surprised by the Oct. 6 decision.

“I didn't think they would bother with it. I figured our chances were slim to none, and slim already left town,” Lambert said. “We'll appeal … we'll go back to where it was started, federal court, is my understanding.”

Lambert said there were some issues that had not even been considered in the earlier court decision, including the means--called extrapolation--by which CMS determined how much his company owed Medicare in repayment for the wheelchairs in question. It is probable that his next appeal will focus on that and perhaps other issues included in the original complaint, he said.

“We've already paid them $400,000 or $500,000,” said Lambert, whose company was originally told it owed $785,000. “We don't even know who owes who what. Based on the original numbers, there would still be money owed [CMS].”

But if the extrapolation does not stand under a future appeal, “then they owe us money,” Lambert said.

Lambert started his fight in 1999 after a post-payment audit by the-then Region D DMERC determined Maximum Comfort had failed to submit documentation in addition to the CMN that would prove medical necessity for K0011 chairs sold from 1998 to June 1999.

After the company appealed, two administrative law judges ruled in Lambert's favor, saying that, for the supplier, the CMN was indeed the only medical record necessary. But the Medicare Appeals Council subsequently reversed those decisions.

Lambert then filed suit against the Department of Health and Human Services, and the case ended up in U.S. District Court for the Eastern District of California, where he again won the decision. The court said Medicare could not require suppliers to obtain beneficiaries' medical records or to make judgments about whether equipment was medically necessary. The U.S. Court of Appeals for the Ninth Circuit subsequently overturned that decision.

Lambert then petitioned the U.S. Supreme Court for a review, claiming that a provider has no way of compelling a physician to release a beneficiary's medical records to support the equipment prescription.

“We're not medical professionals, we don't claim to be and we never were,” Lambert said. “Don't make us make the decision as to whether or not the equipment is medically necessary.”

However, in its Oct. 6 decision to deny, the Supreme Court upholds the Dec. 21, 2007, ruling issued by the Ninth Circuit Court, which maintains that other documentation beyond a CMN may be required by Medicare in order for a provider to be reimbursed.

Ironically, the issue itself is moot because CMS no longer requires a CMN for reimbursement of power wheelchairs. Still, Lambert believes his is a battle worth fighting.

“The problem with Medicare is that they won't give you a good enough definition of what they want to see in your files in a post-payment audit, so what you have might not be good enough,” he said.

Also, by the time the post-payment audit occurs, which can be two years out from the time the equipment was provided, it might be impossible to get the information CMS is suddenly requiring. “When the patient's dead or the doctor's dead, you're out of business,” Lambert said.

No matter what might happen with a future appeal, Lambert is basically out of the Medicare business. In the past nine years, he has lost his home, reduced his business and filed for bankruptcy as he's fought with CMS over the CMN issue. He now does mainly Medi-Cal, and he's happy with that.

“Before we buy the equipment, we have a prior authorization, so they've seen the reports from the physical therapists and the physicians in the pre-payment audit. If they don't approve it, we don't deliver it. It's simple,” he said.

“We thought we were doing everything by the book with our CMNs,” he added. You have to be nuts to do Medicare.”

To read how it all started, see HomeCare, August 2004.

Teijin Buys Third U.S. HME Firm
TOKYO--Japanese firm Teijin Ltd. has chalked up its third U.S. purchase this year, announcing its acquisition of Clifton, N.Y.-based Home Therapy Equipment on Thursday.

Associated Healthcare Systems, the company’s U.S. consolidated subsidiary, has bought all outstanding shares of Home Therapy Equipment. CEO Donald White of Associated Healthcare, Amherst, N.Y., which itself was bought by Teijin in January, will double as CEO of the newly acquired firm.

Teijin said it expects synergies from the transaction because Home Therapy Equipment operates in the eastern part of New York where Associated Healthcare, which has 11 locations in the state, does not.

In mid-June, Teijin completed its purchase of Bakersfield, Calif.-based Braden Partners, which does business as Pacific Pulmonary Services. With revenues of $133 million in 2007, the giant respiratory firm has 100 locations with 1,000 employees throughout the western United States.

Going forward, Teijin said, it will expand the U.S. market by adapting business models from Japan and developing additional synergies between AHS and Braden Partners. It is also eying acquisitions in other regional markets where neither AHS nor Braden Partners operates.

Teijin subsidiary Teijin Pharma Ltd. controls roughly 60 per cent of the Japanese market for home respiratory equipment, including oxygen concentrators and CPAP equipment.

Teijin is on a buying spree in the U.S. as it seeks to build a foothold here, where the company estimates the market at $8 billion to $10 billion dollars--about 10 times the size of Japan's.

ResMed to Study Effects of CSA Treatment on Heart Failure Patients
POWAY, Calif.--ResMed said last week it has launched an international study to investigate the impact of central sleep apnea treatment on patients with heart failure.

Announced at the 18th European Respiratory Society’s annual congress in Berlin, the SERVE-HF study is the largest of its kind, the company said. During the four-year study, physicians will examine the long-term benefits and cost-effectiveness of the breathing support provided by ResMed’s AutoSet CSTM2 for the treatment of patients with chronic heart failure.

Up to 76 percent of patients with heart failure also suffer from sleep-disordered breathing, and about two-thirds of those patients have CSA, according to a ResMed release. CSA is characterized by periods of shallower breathing, known as hypopnea, as well as periods when breathing is halted altogether, known as apnea. The respiratory changes are caused by a disorder of respiratory control mechanisms, different from obstructive sleep apnea, where the respiratory events are caused by an increased collapsibility of the upper airway, the company explained.

ResMed’s AutoSet CSTM2 is a ventilator that monitors breathing and, in a process known as adaptive servo-ventilation, takes into consideration breathing rate and the amount of air inhaled and exhaled. When the device detects any changes in either of these factors, it helps maintain normal breathing.

“The SERVE-HF study is designed to give clinicians the important information they need to better manage the significant number of heart failure patients who experience sleep-disordered breathing," said Professor Helmut Teschler, medical director at the Department of Pneumology, Ruhrland Clinic, Essen, Germany. "The contribution of the AutoSet CS 2 device in the management of such disorders will also become much clearer."

The researchers plan to recruit 1,260 heart failure patients at 80 clinics across Germany, France, the United Kingdom, Norway, Sweden, Denmark and the United States.

Sleep-related breathing disorders affect approximately 5 percent of women and 10 percent of men between the ages of 20 and 60, ResMed said. However, up to 95 percent of those with sleep apnea have not been diagnosed and treated for their condition.

The study will also provide researchers with information on the effect of heart failure on key factors such as hospitalization, quality of life and the ability to exercise, according to the release.

CMS Reveals Edits Used to ID Part B Claims Errors
BALTIMORE--On Oct. 1, CMS began publishing on its Web site the system edits it uses to detect certain billing errors.

Begun in January last year to reduce overpayments for Part B claims, the Medically Unlikely Edit program tests claims for the same beneficiary, billing code, date of service and provider against a number of units of service. An MUE for a HCPCS/CPT code is the maximum units of service that a provider would report under most circumstances for a single beneficiary on a single date of service.

Originally called Medically Unbelievable Edits, the program was designed to block improbable claims, such as services billed for a test that exceeds Medicare frequency limits (Medicare pays for only one diagnostic mammogram per year, for example) or procedures that could not have been performed on a particular patient (such as a hysterectomy on a man).

The MUE program has grown from edits for about 2,600 HCPCS/CPT codes to edits for about 9,700, although CMS has not yet determined if there have been any savings since the program was implemented, according to an agency release. And because the MUE program also sorts questionable payments that could be linked to fraud and abuse, some of the edits will remain confidential, according to Kimberly Brandt, director of CMS’ Program Integrity Group.

For the edits and more information about the MUE program, click here.

Call for New PAOC Puzzles Current Members
BALTIMORE--The Centers for Medicare and Medicaid Services' move to scrap its current Program Advisory and Oversight Committee, set up to advise the agency on competitive bidding, raises a slew of unanswered questions, some current members said last week.

On Oct. 1, CMS issued a call for nominees for a new PAOC, one day after sending current members a letter via FedEx notifying them of the change, according to Seth Johnson, vice president for government affairs for Pride Mobility Products in Exeter, Pa., and a current PAOC member. (See HomeCare Monday Special Alert, Oct. 1.)

Johnson said it was unclear why CMS would make such a change, particularly when a new administration, a new secretary of the Department of Health and Human Services and a new CMS administrator are on the horizon.

“The Medicare Improvements for Patients and Providers Act had language in it that extended the term of the PAOC two years,” Johnson said, referring to the legislation passed in July that delayed the competitive bidding project for 18 months. “But there was nothing in MIPPA that required or suggested that they terminate the PAOC and appoint new members.”

“Nobody knows why they did it. It's a mystery,” said Cara Bachenheimer, senior vice president of government relations for Elyria, Ohio-based Invacare, who has been a member since the committee's inception in 2004. She speculated that CMS might have made the move “so they can show they are actually doing something on the bidding program.”

As well, she said, “They seemed to imply they were going to give [us] a break.”

A provision in MIPPA extends the PAOC term from 2009 to Dec. 31, 2011, she said.

Whatever the rationale, she said, “I think it's a shame because the PAOC members spent a lot of time being up to speed on the most minute of details, and [CMS is] just throwing it away. I just don't understand what they want to accomplish.”

The PAOC was initially established in 2004 under the Medicare Modernization Act of 2003 to advise CMS on the design and implementation of the DMEPOS competitive bidding program. That board included home medical equipment providers, consultants, health care attorneys, manufacturers, supplier organizations and others.

Both Bachenheimer and Johnson pointed out that the CMS solicitation notice said the new PAOC would have 10 or 12 members, down from the current 21.

“They are reducing the size of the committee,” Johnson said, noting that just how those 10 or 12 spots will be allocated among beneficiaries, physicians, HME suppliers, professional standards organizations, financial standards specialists and association representatives is another unanswered question.

While Bachenheimer said she would likely apply for the new PAOC, Johnson said he would not. “It's my understanding they are looking for new individuals,” he said.

He added that he hoped the new PAOC would include representatives from the HME community who participated in round one of competitive bidding.

“I really hope that [CMS] receives a significant amount of nominations, especially from the provider community that participated in round one of competitive bidding, and especially those who were disqualified,” Johnson said. “Also from providers who went through the process and ultimately were not selected to participate in the program. They are the best ones to speak to what needs to happen to improve the overall process and the framework if it is to go forward.”

But the committee's makeup, he speculated, will likely depend “on what CMS feels it needs as far as advice to move forward with a modified form of competitive bidding.”

Whether the new PAOC will pack any punch is also up in the air. The current PAOC board members have been vocal in their criticism of CMS, saying that while the committee's name indicates they have oversight powers, they do not, and while they were to function as well in an advisory capacity, CMS seldom took their advice.

“I would certainly hope they would pay more attention to the PAOC,” Johnson said, adding that would be up to the new officials running the program.

Nominations for new PAOC members are due to CMS Nov. 3. For information, see the CMS Web site at www.cms.hhs.gov/center/dme.asp.

Complex Rehab Stakeholders Worried about 'Magnitude of Pain'
ATLANTA--With just a small window of time before the Jan. 1, 2009, implementation of a 9.5 percent reimbursement cut, complex rehab stakeholders are uniting to build a case for exemption from the reduction.

On Wednesday, the Rehabilitation Engineering and Assistive Technology Society of North America sent a letter to members of the U.S. Senate pleading for exclusion from the pay cut mandated by the Medicare Improvements for Patients and Providers Act, which also delayed competitive bidding.

The RESNA correspondence follows a Sept. 19 letter sent by the American Association of People with Disabilities to Sen. Max Baucus, D-Mont., chairman of the powerful Senate Finance Committee, expressing concern about the impending cut.

“Consumer groups have weighed in and now we have disability groups that have weighed in,” said Seth Johnson, vice president for government affairs for Pride Mobility Products in Exeter, Pa. “The clinicians and the physicians that make up the RESNA membership … are talking specifically about the impacts they know this is going to have on beneficiaries who need these complex rehab power wheelchairs and the services that go along with those products.”

While Congress elected to exempt complex rehab from any future competitive bidding program, it did not exclude the segment from the 9.5 percent fee schedule reduction that will be applied Jan. 1 to the products included in round one of competitive bidding.

Stakeholders have said that complex rehab providers operate on slim margins--of as little as 2 percent--and cannot absorb a 9.5 percent fee reduction without deep cuts to service and quality of products.

“We are concerned that with the impending 9.5 percent payment reduction, complex rehab suppliers will be forced to make significant adjustments to their business practices that will directly impact the services they provide,” RESNA’s letter said.

Some of those impacts could include decreased beneficiary access, decreased access to demo/trial and simulation equipment, substitution of recommended products, less robust products and a decrease in essential services, according to the organization.

“[The fee reduction] will jeopardize many beneficiaries’ access to the full range of products and services necessary to meet the unique and individual physical and medical needs of many people with disabilities,” AAPD said it its letter. “People with severe physical disabilities often need a power wheelchair that is specifically designed so they can maintain independence. With the current provision, many power wheelchair users will not be able to receive adjustments, repairs, replacement parts and access to the full range of products available to make modifications to their current power wheelchairs.”

The probable impact on quality and accessibility was borne out by a recent survey sponsored by the National Coalition for Assistive and Rehab Technology. According to the 184 complex rehab companies that responded to the survey in September, “the impact on revenue and profitability will be reflected in both the services provided by complex rehab companies and product choice available to people with disabilities,” NCART officials said.

According to the survey:

--77 percent of the companies reported that the reimbursement cut would affect 20 percent or more of their revenue;
--51 percent said it would affect 40 or more percent of their revenue;
--66 percent said profitability would decrease by up to 20 percent;
--87 percent said the reduction would either reduce or eliminate altogether their off-site assessments and evaluations;
--88 percent would reduce or eliminate providing demonstration and trial equipment;
--95 percent would have to reduce or eliminate product choices; and
--91 percent said their ability to perform repairs and servicing at the customer’s home would be affected.

Sharon Hildebrandt, executive director of NCART, said she was prepared for providers to say they would be adversely affected by the fee reduction, but the “magnitude of pain” was a surprise.

“I think I expected that half of the companies would show an impact, when in fact it was [far greater],” she said. “The margins are really quite small so there is not really a whole lot of wiggle room in there to digest 9.5 percent cuts. Their options are really just to change the product or cut services.”

Already, she said, providers are steeling themselves against the looming cut by establishing formularies. For example, Hildebrandt said, “They are not including all the bases that they have in the past for power wheelchairs.”

As well, she said, some providers have said the cut will force them out of business. “I think we’ll see more consolidation, bigger [companies] coming in and buying up the smaller ones,” Hildebrandt said.

In spite of what could be a devastating effect on both beneficiaries and providers, both she and Johnson believe the chances are slim that the cut will be either stalled or canceled.

“I don’t see an opportunity to do anything for this year. We’ll have to do it next year with the next Congress,” said Hildebrandt.

“It is going to be extremely difficult to get anything done before the implementation date,” said Johnson, noting that Congress has adjourned because of the Nov. 4 election.

However, he said, “We hear that Congress is going to come back for some kind of lame duck session.” The RESNA and AADP letters could help jumpstart support in Congress and that would improve the chances for an exemption, he said, adding: “But there is clearly not a vehicle to attach this to at this time.”

The chances are relatively good, both Johnson and Hildebrandt said, that, like competitive bidding, the fee reduction will be implemented, then possibly pulled back.

“Unfortunately, it looks like that might have to happen,” Hildebrandt said.

She is already considering a second survey. “I sort of envision us doing a comparable survey once we get into 2009,” she said. “This one was in anticipation of the cuts. Once we get to 2009, I’d like to see us do another survey to see what the impacts of the cuts [really are].”

It’s those results, she believes, that might speak most strongly to Congress. “Anecdotal evidence doesn’t do it. It isn’t that helpful. They want to see the actual numbers,” she said. “They want to know in actuality what is happening, and we owe them that. If we say this is going to happen, we have to put our money where our mouth is and not just cry wolf.

“If it doesn’t happen,” she continued, “then we have no basis for seeking an exemption for the 9.5 percent reduction.”

Like other complex rehab stakeholders, however, Hildebrandt doesn’t doubt that there will be damage to both providers and beneficiaries, but especially to the latter.

“Ultimately, it’s the consumer that will suffer. Providers will cut back as much as they can, but it’s the consumer who will be affected,” she said.

Southeast Gas Shortage Proved Dicey for Area Providers
ATLANTA--Both supply and prices eased last week, but a gasoline shortage after Hurricane Ike took providers in some areas of the Southeast by surprise.

Metropolitan Atlanta, where purveyors are required to sell clean-burning fuel, was hard-hit after Hurricane Gustav closed oil refineries along the Gulf Coast Sept. 1. Those operations were just getting back online when some 25 Houston-area refineries that make the city’s special blend were shut down again Sept. 13 by Hurricane Ike.

As their pumps ran dry, gas stations around the city put plastic bags over nozzles and replaced price signs with blanks to signal they were out. For the next three weeks, two-hour lines were common as commuters scrounged for fuel.

Prices skyrocketed along with the shortage, with some stations charging $5 or more for regular (when it could be found). No other grades, including premium, were available at all.

Other pockets around the Southeast were affected as well, including Charlotte, Asheville and additional areas of North Carolina and South Carolina; Nashville, Tenn.; and Anniston, Ala.

According to Joe Ellington, director of patient services for Marietta, Ga.-based Access HomeCare Services, the company’s technicians “who use their own cars to do set-ups and repairs had a few problems. They would call and say, ‘If I don’t find gas, I may not be back.’ ”

Ellington said he had worked for FedEx when Atlanta faced a previous gas shortage in 1983. “At that time, we had to cut routes and cut part-timers. But in this industry, our patients are in worse shape than we are,” he said.

So with one delivery van, a commercial credit card to the QuikTrip convenience store chain and a delivery route with a 70-mile radius, the company set up a four-quadrant system to cut down on mileage. Access Homecare’s deliveries, which extend both north and east toward the Tennessee and Alabama state lines, were curtailed to one quadrant per day.

Working within that system, Ellington said last week, “Our delivery boy stays busy and hasn’t had to skip or bypass any [deliveries].”

Another provider with even more ground to cover, Atlanta-based Cornerstone Medical, which has 10 branches in Georgia, Florida and Alabama, also kept a tight rein on service calls and deliveries. With more than 20 vans and box trucks to fill up, Andrew Simmons Jr., vice president of field operations, said the company asked patients to understand that oxygen deliveries take precedence over others.

“Our patients understand with the shortage, our delivery is not on-demand. So far, they have been considerate of our delivery processing, and some have offered to pick up their supplies,” Simmons said.

He noted Cornerstone has faced gas issues before--namely the drastic rise in price after Hurricane Katrina in 2005. But Simmons added that was short-lived compared to the post-Ike spike.

To protect its bottom line, Simmons said, “We looked into using more gas-efficient vehicles. We decided not to in the end, but with the Medicare reimbursement cuts, we did opt [to better the efficiency ] of our routes.”

Cornerstone has also started giving additional training to the patients with the first delivery, staying more time than normal in homes to eliminate service calls later.

“It’s all about education,” Simmons said, pointing out that the extended sessions also allow employees to “bring a higher level of awareness to patients about gas and reimbursements.”

Last week, Cornerstone employees were still using the first hour of the workday to search the Internet for gas, coordinate and re-prioritize routes around where gas was available and fill up vans where they could.

Both of the Atlanta companies are accredited by The Joint Commission, and say their required emergency/disaster plans didn’t originally include a “disaster” of this nature. But according to Simmons, anything out of the norm that causes a change to routines or processes is considered a disaster, and the gas shortage--which officials estimate could continue in some areas for another week--called for unique measures.

Ellington said he had considered offering portable concentrators to patients in outlying areas, and requiring patients within 20 miles of the office to pick up their supplies.

“There has to be give and take somewhere,” he said.

Get Questions Answered at Medtrade's Accreditation Central
ATLANTA--There's less than a year left. If you want to do business with Medicare, you must become accredited by Sept. 30, 2009.

Which accrediting organization is best for your company? How do you begin the process? How much does it cost? Find the answers to all your questions at Accreditation Central, Oct. 28-30 during Medtrade at the Georgia World Congress Center in Atlanta.

Sponsored by HomeCare, Accreditation Central will feature a number of CMS-approved accreditors whose representatives will be on hand to talk with you all three days of the show. Along with one-on-one face time, the accrediting bodies also will present sessions detailing their individual programs.

In an exclusive offer for HomeCare Monday readers, Medtrade will take $30 off admission to the annual Expo, set Oct. 28-30 at the Georgia World Congress Center in Atlanta. When you register, just reference code HOME.

Don't miss this opportunity to find the accreditor that's right for you!

For more information on Accreditation Central and a schedule of presentations, visit www.medtrade.com.

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

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