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| October 20, 2008 | Volume 14, Number 44 |
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ADVERTISEMENT Think of all the challenges you face in a DME business…Accreditation, identifying profitable inventory, and growing business. For 18 years MedAct has provided DME businesses the best billing and inventory management solutions to manage cash flow, acquire new customers and direct profitability. Now we’ve added the best accreditation partner for your timely compliance. Learn how MedAct is your partner for growth and visit us at Medtrade at Booth 4139. Call 1-800-326-0314 or visit www.dynamicenergy.com  Table of Contents - It's Official: Medicaid Spending Spirals Out of Control - OIG Aims at DME in 2009 Work Plan - Accreditors Warn Stream of Late Applications Could Result in Flash Flood - NAIMES Reiterates Need for Oxygen Cap Info - Home Dialysis Machine to Use HP Inkjet Technology - McCain or Obama? You'll Be the Judge - Medtrade Offers Oktoberfest, and a Deal for HomeCare Monday Readers - AAH Wants Level Field in Mail-Order Diabetic Supplies Bid; CAMPS Fights Medi-Cal Cuts For more industry news, features and highlights from our latest issue, please visit our Web site at www.homecaremag.com. Late-Breaking News It's Official: Medicaid Spending Spirals Out of Control BALTIMORE--The Centers for Medicare and Medicaid Services warned policymakers late Friday that Medicaid spending is projected to grow much faster than the economy over the next 10 years. With expenditures headed toward $5 trillion over the decade, agency officials said, now is the time to rein in costs. While the news about the federal-state health care program isn't exactly unexpected, a new report compiled by the CMS Office of the Actuary--the first such report in Medicaid’s 42-year history--confirms the budget crunch both the U.S. and state governments have been battling and warns it will get worse. According to the report, Medicaid benefits spending will increase 7.3 percent from 2007 to 2008, peaking at $339 billion, and will grow at an annual average rate of 7.9 percent through 2017 to hit a high of $674 billion. That rate is far beyond the general economy’s current annual growth rate of 4.8 percent. Medicaid benefits spending over the next 10 years is projected to total $4.9 trillion, according to the report. “This is an urgent reminder that the current spending path of Medicaid is unsustainable,” said Kerry Weems, CMS acting administrator, during a media conference call. Mike Leavitt, Department of Health and Human Services secretary, presented the report Friday at a 4 p.m. meeting of the National Association of State Budget Officers. “We must act quickly to keep state Medicaid programs fiscally sound,” he said. “If nothing is done to rein in these costs, access to health care for the nation’s most vulnerable citizens could be threatened.” The increased expenditures will be fueled by growing enrollment and other factors, said Rick Foster, CMS chief actuary. “The growth differential reflects a growing number of people covered by Medicaid; it also reflects growth in prices paid in the health care sector, as well as new, more complex [services],” Foster said. The earlier the issues are dealt with, the more options policymakers will have, Foster said. Unlike Medicare and Social Security, Medicaid is not tied to a trust fund, so solvency is not an issue, he noted. Still, if left to spiral higher and higher, Medicaid expenditures could imperil both federal and state budgets. “Medicaid is the largest source of general revenue spending on health services,” Foster said. On average, he said, the federal government pays about 57 percent of a state’s Medicaid bill, while the state pays the other 43 percent. Increasingly, however, Medicaid is taking more and more of a state’s total budget. CMS said the average share is 20 percent, but NASBO said some states, such as Maine, are already allocating as much as 31 percent to Medicaid. NASBO projects that state spending will increase by 4.4 percent from 2008 to 2009. “High and increasing Medicaid spending clearly leaves states less able to fund other state priorities,” Weems said, adding that the report makes it very apparent that great fiscal challenges lie ahead. According to the report, Medicaid also consumed 7 percent of the federal budget in 2007 and is expected to account for 8.4 percent by 2013. The actuarial report also shows that: --Average Medicaid enrollment is projected to increase 1.8 percent to 50 million people in 2008; --Average enrollment is projected to increase at an annual average rate of 1.2 percent, reaching 55.1 million by 2017; --Average total expenditure per Medicaid beneficiary in 2007 was $6,120; however, spending per enrollee for non-disabled children was $2,435 and for adults, $3,586, much lower than for aged ($14,058) and disabled beneficiaries ($14,858); and --Medicaid represented 14.8 percent of all health care spending in the United States in 2006. While this report covers only 10 years, CMS officials said future reports will include longer-range projections and more extensive analysis. To read the full report, click here.
Do you think the current economic crisis will cause additional problems as Congress looks to reform the health care system/Medicare and battles over funding next year? To vote in HomeCare's monthly Web poll, visit www.homecaremag.com. Headline News OIG Aims at DME in 2009 Work Plan WASHINGTON--In its Work Plan for 2009, issued earlier this month, HHS' Office of Inspector General said it will take on a number of DME investigations. Among them, the OIG will focus on payments for CPAP; enteral nutrition provided to patients in nursing homes; blood glucose test strips and lancets; pressure-reducing support surfaces; negative pressure wound therapy pumps; DME items and supplies provided to patients in nursing homes; power wheelchairs; and repair and service of capped rental DME. Citing its reasons for choosing these particular targets, the OIG said: --CPAP: “Previous OIG work revealed cases in which Medicare paid for CPAP devices that were not used by or delivered to beneficiaries. We will determine whether Medicare payments for CPAP devices were supported, billed, and paid in accordance with Medicare requirements.” --Enteral nutrition for nursing home patients: “We will review Part B ENT, commonly called tube feeding, to determine the appropriateness of payments for associated services. This review will specifically assess the medical necessity, adequacy of documentation, and coding accuracy of claims submitted for Medicare beneficiaries during a nursing home stay that is not covered under the Part A SNF benefit.” --Diabetes supplies: “The Local Medical Review Policies (LMRP) or local coverage determinations, whichever are applicable, issued by the four DME MACs require that the physician’s order for each item billed to Medicare include certain elements and be retained by the supplier to support billing for those services. Further, the LMRP require that suppliers add a modifier to identify when the patient is insulin-treated or noninsulin-treated. The amount of supplies allowable for Medicare reimbursement differs depending on the applicable modifier. We will determine the appropriateness of Medicare Part B payments to DME suppliers for home blood glucose test strips and lancet supplies.” --Pressure-reducing support surfaces: “In 2006, Medicare-allowed charges for support surfaces reached $164 million. We will conduct a medical review of claims to determine the appropriateness of payments for support surfaces.” --Negative pressure wound therapy pumps: “A previous OIG review found that 24 percent of pump claims did not meet Medicare coverage criteria. Between 2001 and 2006, Medicare payment for the pump rose 692 percent. We will assess the range of supplier purchase prices for the pump to determine how Medicare reimbursement compares to the median supplier purchase price.” --DME for nursing home patients: “A previous OIG report found that $210 million was potentially inappropriately paid for DME for beneficiaries residing in nursing homes. We will review Medicare claims data to determine the extent of inappropriate Medicare Part B DME payments made on behalf of Medicare beneficiaries during nursing home stays not covered by Medicare Part A.” --Power wheelchairs: “In 2003, Medicare payments for power wheelchairs peaked at $1.2 billion. In 2004, as a result of expanded CMS program integrity initiatives, power wheelchair spending decreased to $850 million. However, Medicare payments for power wheelchairs increased again in 2005 to approximately $920 million. We will determine the appropriateness of Medicare payments for power wheelchairs.” --Service and repair of capped rental DME: “For capped rental DME furnished on or after Jan. 1, 2006, Medicare requires suppliers to transfer the title of DME to the beneficiary after Medicare pays 13 months’ rent under a capped rental arrangement. After that time, Medicare continues to pay for reasonable and necessary repairs to the equipment. Previous OIG work found that Medicare paid substantially more for maintenance on rented equipment than repairs on purchased equipment. We will examine servicing records from suppliers and interview beneficiaries regarding their experiences with capped rental DME to determine if Medicare made proper payments for maintenance and repair services.” For a PDF of the 115-page OIG work plan, which also includes investigative projects involving hospitals, home health agencies, hospice, physicians and other medical professionals, click here. Accreditors Warn Stream of Late Applications Could Result in Flash Flood ATLANTA--Accreditors who geared up for a flood of fall applications from home medical equipment providers are facing the same old same old, they said last week: a steady, but very slow, trickle. That could mean major trouble for some providers later on, according to accrediting organizations. “I had predicted and expected that come mid-October, we would see a serious jump … that would just continue going up,” said Sandra Canally, president of The Compliance Team, Spring House, Pa. “And here we are in October and we are seeing a slow and steady increase, but nowhere near what it needs to be. Nowhere close.” Bob Floro, director of the home care program for The Joint Commission, Oak Brook Terrace, Ill., said his organization is also seeing a dearth of applications. “I think providers really demonstrated their propensity for waiting for the last deadline when we were working on competitive bidding,” he said, noting that when the competitive bidding deadline for accreditation was in force, hundreds of providers applied to his organization only two or three days before the deadline. “My gut reaction is that they will wait again--even with a Jan. 1 deadline.” CMS has laid out a calendar of accreditation dates for HME providers serving Medicare beneficiaries: --Suppliers enrolled with the National Supplier Clearinghouse between Jan. 1, 2008, and Feb. 29, 2008, must submit accreditation documentation to the NSC no later than Jan. 1, 2009; --Active suppliers that enrolled prior to Jan. 1, 2008, must submit accreditation documentation to the NSC by Sept. 30, 2009; and --As of March 1, 2008, suppliers seeking to enroll with the NSC and obtain a supplier number to bill Medicare must be accredited prior to enrollment. In addition, the agency has advised providers that it cannot guarantee accreditation for those businesses that apply after Jan. 31, 2009. The difficulty, accreditors said, is the sheer number of providers across the country that remain unaccredited--and they believe that number is huge. “What is it--20,000, 30,000? We are talking thousands of providers, and there are only 10 accrediting organizations and only six of us who do everything,” said Canally. Mary K. Nicholas, MHA, executive director of Waterloo, Iowa-based Healthcare Quality Association on Accreditation, also likened the current climate to that surrounding competitive bidding deadlines. “It feels all too familiar to the round one deadlines in that folks seem to be waiting once again,” she said. “My fear is that next spring and summer will feel like we’re all going to be trying to push a watermelon through a straw surveying the sheer numbers needing to complete their accreditation process.” Accreditors offered several reasons why providers might be waiting: confusion over the multiple deadlines; an expectation that CMS will delay the Sept. 30, 2009, deadline; a lack of appreciation for the value of accreditation; or fear of an added expense in the current chaotic financial climate. But Canally quashed the idea of a 2009 deadline delay. “It’s the law,” she said bluntly. “There’s no wiggle room. It can’t change.” The Jan. 31 deadline, she said, is a good guideline. “CMS was trying to help providers by saying, ‘Get off the fence, get your application in because it is going to take your company time to meet these standards before the accreditor walks in the door unannounced.’” For those who are considering not getting accredited and bailing out of Medicare altogether, Floro had a newsflash: “There is going to be significant pull-through,” he said. “Those organizations that are going to be dropping [Medicare] are likely going to find that managed care and other organizations are going to follow suit and require accreditation.” Providers also might be banking on the notion that CMS will exempt them as it has several other provider types, including physicians, orthotists, prosthetists, pedorthists, occupational therapists and physical therapists, among a list of “eligible professionals” the agency announced Sept. 3. (See HomeCare Monday, Sept. 8.) But there was a good rationale for those exemptions, said Matt Hughes, accreditation supervisor for the Accreditation Commission for Health Care, Raleigh, N.C. “I believe CMS is spreading out the workload to accommodate the large number of Part B suppliers,” he said. “Plus, the current quality standards are not a good fit for these types of providers. It is possible CMS will modify the quality standards to eventually include physicians, PTs, etc.” Nicholas agreed. “I believe that CMS has been pretty clear that for now, those specific providers are exempt, but that down the line, accreditation will become a mandatory reality for them as well,” she said. CMS has announced it is already drafting quality standards for orthotists and prosthetists that should be proposed in 2009. The other “eligible professionals” will remain exempt unless CMS drafts quality standards specifically geared to those groups. In the end, will there be enough accredited HME providers to service the ever-increasing number of Medicare beneficiaries? If Sept. 30, 2009, were today, the answer would likely be no, these accreditors said. “Today, I do not believe that there are sufficient numbers of providers accredited to serve the population,” said Nicholas, adding that she couldn’t estimate what that number that would be. “It is hard to say how many providers will be needed [for the future],” Hughes said. “Obviously, these coming years will see a significant growth in the Medicare population because of the baby boomers, so probably there are not enough accredited providers to meet the need.” There also could be a dwindling pool of providers, according to the accrediting organizations, but not only because some providers opt out of Medicare. “My prediction is that the first six months of 2009 may see record numbers of mergers and acquisitions,” Nicholas said. “Accredited companies will be looking to acquire non-accredited companies as those that miss deadlines will be unable to continue with an often-time large portion of their current business.” However it shakes out, those who expect to remain in the business need to set about the business of becoming accredited, these accreditors stressed. “We need folks to come forward and we need them to come forward now and not wait until January,” said Canally. While Hughes said ACHC expects a big bump in applications after the holidays, Canally said she is banking on Medtrade at the end of this month in Atlanta. “I am hoping that Medtrade is where it really peaks,” she said. “Maybe a lot of these folks are waiting to come to Medtrade, talk to these individual organizations and walk away with an application to complete and send in.” Perhaps, she suggested, accreditors might have to put people wearing sandwich boards on the Medtrade floor. And what would the sandwich boards say? “Accreditation is not baloney,” said Canally. Last week, CMS issued its revised quality standards--and held a 4 1/2-hour conference to explain them to unaccredited HME providers. In a marathon session that began at 1 p.m. and ended at 5:30 p.m. Tuesday afternoon, the agency's Sandra Bastinelli gave advice and answered questions on meeting the standards. Bastinelli noted the final standards contain only a few changes from the draft revisions proposed in February, and said she expected the standards to be posted on the CMS Web site by the end of last week. Check www.cms.hhs.gov/medicareprovidersupenroll under "DMEPOS Accreditation." To get your accreditation questions answered, visit Accreditation Central at Medtrade, Oct. 28-30 at the Georgia World Congress Center in Atlanta. Sponsored by HomeCare, representatives from many of CMS’ approved accrediting bodies will be on hand to speak with you all three days of the show, and will present individual sessions on their organizations’ specific programs. For more information, visit www.medtrade.com. NAIMES Reiterates Need for Oxygen Cap Info HALIFAX, Va.--In a statement issued Friday, the National Association of Independent Medical Equipment Suppliers said it had written to CMS Acting Administrator Kerry Weems--again--about rule changes related to the 36-month oxygen rental cap. This time, the organization said, its letter asked for an immediate response. "The industry simply cannot wait any longer to get the needed policy revisions, HCPCS codes and fees along with clarification of supplier responsibility after the cap begins on Jan. 1," said Wayne Stanfield, NAIMES president. The association also wrote to key members of the House and Senate. NAIMES said it had received no response to an Aug. 21 letter asking Weems to release the information by Oct. 1 to allow “time for providers to make informed decisions about their future. Suppliers must notify patients no later than Nov. 1, 2008, of their intent and ability to serve them after the cap begins. NAIMES counsel has advised us that failure to notify patients 60 days prior to the cap start date could result in the supplier being obligated to serve those patients for the remaining 24 months, regardless of the payment policy.” The association noted some providers it had contacted said between 25 and 40 percent of their patients would cap on Jan. 1, with a much smaller percent capping each month after. “Several providers indicated they have patients that have been on oxygen therapy service for four to five years already, particularly in large retirement areas,” the NAIMES statement said. Other industry organizations have also voiced concerns about lack of information related to the oxygen cap--mandated by the Deficit Reduction Act--and subsequent changes under the Medicare Improvements for Patients and Providers Act, which repealed the DRA's oxygen equipment transfer to beneficiaries but left the cap intact. With many of its members based in Florida, the Accredited Medical Equipment Providers of America is particularly worried about patient travel issues under the cap when it comes to “snowbirds.” In a recent newsletter, AMEPA explained: “According to the rule, Medicare will stop paying for oxygen service after 36 continuous monthly payments. If a patient began using oxygen on or prior to Jan. 1, 2006, Medicare will make the final payment for the oxygen service on the 36th month: December 2008. If a patient using oxygen since January 2006 intends to change their oxygen provider in October, the new provider may only be paid for oxygen service for the months of November and December and then the equipment will 'cap out.' “If the seasonal patient decides to permanently change their residence, the provider may only receive two months, or approximately 5 percent, of the typical reimbursement, and the patient might be able to keep the oxygen equipment for as long as it is medically necessary.” In a survey of its members who provide oxygen in Florida, AMEPA said all of the non-participating providers said they would not accept assignment for oxygen patients scheduled to cap this season. “Additionally,” the organization said, “patients returning north after the season may find it impossible to find a Medicare provider willing to provide oxygen to the patient after they completely cap out in December." In August, the American Association for Homecare submitted a list of nearly two dozen questions related to the impending cap and revisions under MIPPA, among them whether providers can set up service contracts with beneficiaries after the rental payments cap. (See HomeCare Monday, Aug. 25.) According to NAIMES, this particular issue was discussed in a recent Region C Council meeting, with mixed opinions on the issue. “Carrier and CMS representatives seem to agree that suppliers can charge for services under certain undefined circumstances, and suggested suppliers contact their legal advisors. Unnamed sources indicate that some companies are creating a cafeteria menu of services to offer to patients which they consider outside the services covered by a Medicare payment. Among these are charges for monthly/quarterly visits, 24-call, additional tanks and back-up equipment,” the association said. “CMS has been aware of the cap since November 2005, and yet we are about 75 days away and they are still dodging the issue,” the NAIMES statement read. “Many believe that CMS does not understand the gravity of the situation facing a million-plus Medicare oxygen therapy patients and the providers serving them.” In an Open Door Forum Sept. 17, CMS' Joel Kaiser, deputy director of DMEPOS policy, told listeners the agency was "still in the planning stages" for provisions surrounding the oxygen cap but that additional information would be announced "soon." However, in a Sept. 29 "listening session" on the issues with members of AAHomecare's Regulatory Committee, CMS officials told the group they would not provide a timeline for release of the oxygen program instructions. To read NAIMES' letter to CMS' Weems, visit www.dmehelp.org To view the complete list of questions AAHomecare submitted to CMS, visit www.aahomecare.org. Home Dialysis Machine to Use HP Inkjet Technology PALO ALTO, Calif.--On Thursday, Hewlett Packard announced a licensing agreement that allows Home Dialysis Plus to use applications from HP’s inkjet printers in a new home dialysis device. HD+ plans to use HP's patented technology to develop a portable system that allows patients to get the benefits of nocturnal dialysis in the home. The new machine should be available by the end of 2010, the manufacturer said. The inkjet technology will be used within the dialysis machine's proportioning system to mix the correct amount of water and concentrated dialysate (a salt and electrolyte solution) in real time, and pump the dialysis solution into the dialyzer. The HP technology was originally developed to mix and apply different colored inks. Mixing the solution in real time helps to filter toxins over a longer period, HD+ explained. In addition, HP’s smart memory chip technology will be used to ensure the correct dialysate prescription is being delivered consistently so dialysis can take place while the patient is sleeping. “With an increasing emphasis on home health care as a more cost-effective and efficient alternative, the new home dialysis machine will be a true breakthrough,” said HD+ CEO Michael Baker. “HP technology is critical to creating a unique patient experience that will offer ease of use and improved patient outcomes and life expectancy.” HD+ said its new device will offer a slower and more accurate dialysis treatment, which used overnight, is more in tune with the body’s natural biological processes versus visits to a dialysis center three times a week. It should also “dramatically reduce” a patient’s post-treatment recovery time from hours to minutes. In addition, the technology is expected to offer a smaller and easier-to-use option for portable dialysis at any location with access to a water source, making it easier and cheaper to train patients on how to perform their treatments at home, HD+ said. The company expects the cost of its new system to be lower than the cost of shipping prepackaged dialysate solutions. Based in Portland, Ore., HD+ focuses on home treatment options for patients with end-stage renal disease. McCain or Obama? You'll Be the Judge ATLANTA--Last week various polls shifted up and down daily, but according to most there are still only a few points between presidential candidates Sens. John McCain and Barack Obama. The results of HomeCare's September Web poll--which asked “Which presidential candidate's health plan would be best for the country?--reflect an even tighter race on this issue. After 30 days and more than a thousand votes (1,068, to be exact), results of the poll showed a dead heat, with 48 percent voting in favor of McCain's plan and 48 percent in favor of Obama's. Four percent of those participating said they weren't sure which candidate's health plan would be best. The poll was open Sept. 1-30. While each candidate has outlined general areas of health care reform, “neither Obama nor McCain has articulated any specific or formal position regarding the immediate issues most critical to our industry, such as the competitive bidding program,” according to Cara Bachenheimer, senior vice president of government relations for Invacare, Elyria, Ohio. “These issues are far more detailed than campaigns usually address,” she said. Painting with a broad brush regarding their overall plans, Bachenheimer said, “Obama prefers more government regulation and universal coverage via expanding programs like SCHIP (the State Children's Health Insurance Program) and creating fallbacks, such as a potential Medicare buy-in for all Americans. “McCain supports a limited increase in regulation (insurance market and prescription drug reforms) and the creation of tax incentives to support expanded private coverage without a defined benefit package. The McCain plan also emphasizes the need to rein in health care spending nationally via cost controls and revising federal payment systems.” Check the October issue of HomeCare for Bachenheimer's complete report, which compares portions of the McCain and Obama plans. And, be sure to vote for the candidate of your choice on Nov. 4. Medtrade Offers Oktoberfest, and a Deal for HomeCare Monday Readers ATLANTA--One of the best reasons to attend Medtrade is to network with colleagues, exhibitors and industry consultants. So this year the show, Oct. 28-30 at the Georgia World Congress Center in Atlanta, will enhance the experience with its first Oktoberfest Celebration. The new networking event will take place on the Expo show floor on both Tuesday and Wednesday afternoons from 3:30 p.m. - 5:00 p.m. Free to all attendees and offering complimentary food and beverages, the event will be a great way to connect with peers and talk to exhibitors in their booths. Sponsors of the Oktoberfest Celebration include Infopia, Island Clean Air, Sigvaris, OST Medical and Dynarex. In an exclusive offer for HomeCare Monday readers, Medtrade will take $30 off admission to the annual Expo. When you register, just reference code HOME. For more information about Medtrade, including the conference schedule, a list of exhibitors and pre-show conferences on Oct. 27, visit www.medtrade.com. And while you're at the show, stop by Booth 3314 for your FREE subscription to HomeCare. See you there! In Brief AAH Wants Level Field in Mail-Order Diabetic Supplies Bid; CAMPS Fights Medi-Cal Cuts AAHomecare reported last week it had submitted questions and recommendations to CMS related to the mail-order diabetic category under a revised competitive bidding program. “These recommendations will help make certain that there is a level playing field among the providers who choose to participate in the bidding program and help to ensure that Medicare beneficiaries continue to have access to the full range of diabetic supplies currently available in the marketplace,” the association said. To view the questions, check the “What’s New” section on the AAHomecare Web site at www.aahomecare.org. In reimbursements set by CMS earlier this year after round one of bidding, the average reduction for mail-order diabetic supplies would have been 43 percent. (See HomeCare Monday, March 24.) Following a 10 percent Medi-Cal cut that took effect July 1, the California Association of Medical Product Suppliers has joined the California Hospital Association in a motion for injunctive relief filed in federal court in Los Angeles. The state budget signed in late September would continue the cut until March 1 and then reduce it to 1 percent, but the association board said the budget was “too fragile, and the likelihood of the 10 percent cut being revisited or extended is real based upon the current economy and state budget pressures,” CAMPS reported, adding: “It is also imperative that … policymakers understand that the rate reduction is unacceptable and unrealistic for our industry.” CMS has scheduled its next Home Health, Hospice and DME Open Door Forum Wednesday, Oct. 29, at 2 p.m. ET. To participate by phone, call 800/837-1935 and reference conference ID 58375034. A replay will be available two hours after the session has ended at 800/642-1687 with the same conference ID. The recording expires after three business days. To revisit this news any time during the week, go to www.homecaremonday.com. ADVERTISEMENT |
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