Although CMS has developed procedural guidelines for hearings, it has not provided hearing officers with criteria about the types of evidence revoked suppliers must submit to have their billing privileges reinstated. So, the hearing officers gave back billing privileges to the revoked companies based on evidence such as photographs, licenses and permits, employee affidavits, vendor invoices, utility bills and leases.

“According to CMS, hearing officers generally accept all documentation submitted by suppliers as legitimate, unless they have reason to believe otherwise,” Inspector General Daniel R. Levinson wrote in the report. He suggested that CMS strengthen its appeals process and that “a more critical review of the types of evidence submitted by suppliers is warranted to ensure that fraudulent suppliers are not reinstated.”

In a letter responding to the report, CMS Acting Administrator Kerry Weems pointed out that all suppliers will need to become accredited by Oct. 1, 2009, “which will allow CMS to ensure that only legitimate suppliers serve Medicare beneficiaries.” But he also agreed that CMS should consider establishing guidelines for the evaluation of evidence that a hearing officer will review.

For a PDF of the complete OIG report, click here.

Industry Leaders: Get Ready for a Stormy Year
ATLANTA--Storm clouds heavy with further cuts for HME are gathering overhead, five of the industry’s top thought leaders warned providers at last week’s Medtrade, but there is a ray of hope for the future.

It depends, though, on providers taking a stand.

This year, Medtrade kicked off its annual fall expo and conference with a keynote address featuring five industry veterans: Cara Bachenheimer, senior vice president of Elyria, Ohio-based Invacare; Georgetta Blackburn, head of government relations for Blackburn’s Pharmacy in Tarantum, Pa.; Alan Landauer, owner of Landauer Metropolitan, Mount Vernon, N.Y.; Scott Meuser, chairman and CEO of Pride Mobility Products; Exeter, Pa.; and John Miclot, CEO of Philips Home Healthcare Solutions, Murrysville, Pa.

The panel was moderated by Tyler J. Wilson, president and CEO of the American Association for Homecare.

Speaking to more than 1,500 HME providers and other show attendees crammed into the Sidney Marcus Auditorium of the Georgia World Congress Center, the panelists provided a state-of-the-industry overview that briefly revisited the successful effort to delay competitive bidding, the upcoming 9.5 percent reimbursement cut on round one products, the impending 36-month oxygen reimbursement cap and HME’s dismal image.

But the bulk of their comments went beyond those issues to what providers could expect in 2009. With the tanking economy, health care in general is likely to take a big hit next year, no matter who becomes the new president, the panelists said. And the HME segment in particular, plagued with the growing incidence of fraud and abuse, could be in for more than its fair share of cuts, the speakers agreed.

“Our industry is low-hanging fruit,” said Landauer.

“Cuts to health care are going to be huge,” predicted Bachenheimer. “We need to take a much more aggressive, more constructive stand.”

Historically, Bachenheimer said, the HME industry has always assumed a defensive position. The exception was the competitive bidding battle, when providers, outraged at the flawed project that threatened to decimate their businesses and curtail beneficiary access to appropriate products, took the issue to legislators.

While competitive bidding is not dead, neither presidential candidate nor most legislators think it is a good idea, she said. Still, the perception persists that the industry is overpaid, and “we have to tackle that head on,” Bachenheimer said.

Already, AAHomecare has issued a 13-point plan to fight fraud and abuse (see HomeCare Monday, Oct. 27). Landauer said rulemakers are looking to the industry not only for solutions to contain fraud but also some way to curtail skyrocketing Medicare costs.

The industry has those answers, Bachenheimer said.

“We have better ideas than the people on Capitol Hill,” she said, adding that those in the industry know what works and what doesn’t. “We have to step up to the plate [with those ideas].”

Some of the ideas for cutting costs could revolve around the increasingly sophisticated product technology that is surfacing. Philips’ Miclot said he sees the move to change the health care system as potentially positive.

“Health care reform can be an opportunity,” he said, noting that the HME industry has the technology to allow people to be well cared for in the home and thus save health care dollars.

Miclot himself is banking on the success of providers in the ever-changing environment. He announced during the panel discussion that he will be leaving Philips this month to become CEO of Clearwater, Fla.-based CCS Medical, a nationwide provider of diabetes, ostomy, wound care, nebulizer and incontinence supplies.

For his part, Pride’s Meuser said it is critical that the industry find a way to impress on regulators and legislators alike the importance of the HME industry’s services to beneficiaries. “Our service component isn’t recognized or appreciated,” he said, suggesting that AAHomecare sponsor a study on the service aspect of the industry.

Verifiable data is what helped win the competitive bidding delay, said Blackburn, noting in that effort, providers went to their legislators with concrete statistics, not simply emotion.

“We need to change our designation from ‘supplier’ to ‘provider,’” she said.

The service component is an issue in fighting any further effort on the part of CMS to implement competitive bidding, as well as the 36-month cap on oxygen reimbursement.

“We have to have a different way of paying for services that pays appropriately for home care,” Bachenheimer said, adding that the value of home care must become central in every message to legislators and regulators.

“It’s economical, physician-preferred, patient-preferred,” she said. “We have every kind of positive story to tell. We’ve got to get out there and tell them. We’ve got an opportunity out there with a new administration, a new Congress.”

Blackburn challenged listeners to educate CMS.

“Empower someone in your business to speak out,” she said. “Let’s find our voice and use it collectively. Let’s do it together.”

HME Winds Shift Toward McCain
ATLANTA--While the election countdown is now just hours away, the National Association of Independent Medical Equipment Suppliers conducted a straw poll at Medtrade last week to see how the presidential wind was blowing.

According to 183 show attendees, it was shifting toward Sen. John McCain. With the poll concluded at 2 p.m. on Thursday, 64 percent of participating voters cast ballots for Republican McCain, with 30 percent favoring Democratic candidate Sen. Barack Obama and 6 percent still undecided.

“But look at this,” said Wayne Stanfield, NAIMES president. “Even though 64 percent voted for McCain to be president, 69 percent said the Democrats will win the White House ... The main thing is, we’ve got to educate Congress on our issues no matter who wins.”

Here is how voters answered NAIMES’ questions on political parties and other issues affecting the industry:

1. Do you think the DME industry will fare better under a Democratic administration?
Yes 44%     No 56%

2. Do you think having a Republican administration and a Democratic Congress is better for the DME industry?
Yes 50%     No 50%

3. Do you feel the Republicans have a tarnished image after the last eight years?
Yes 80%     No 20%

4. Do you feel that the next Congress will repeal competitive bidding?
Yes 47%     No 53%

5. Do you feel that the oxygen cap should be repealed in light of recent cuts?
Yes 60%     No 40%

6. Despite your political position, do you feel that the Democrats will win the White House?
Yes 69%     No 31%

7. Does your representative know you by name and face?
Yes 53%     No 47%

Medtrade Showcases New Look, Focus on Information
ATLANTA--Propelled by the hope of gaining tools to build a firmer foundation in the ever-shifting sands of the home medical equipment industry, thousands of providers converged on the Georgia World Congress Center in Atlanta last week for the 29th annual Medtrade.

The venerable expo and conference boasted some 600 exhibitors and 170 educational sessions on everything from outsourcing oxygen to retail and rehab.

It also held some surprises for both exhibitors and attendees, who said they had expected a somber mood because of the overwhelming challenges facing the industry.

The HME segment of health care has been beleaguered with such issues as competitive bidding, currently expected to be reintroduced sometime next year; an impending 9.5 percent reimbursement cut and a 36-month cap on oxygen rental, both effective Jan. 1; and escalating reports of fraud and abuse, not to mention the country’s devastating financial reversals.

“We didn’t know going in what [to expect] with everything going on. It’s a pleasant surprise,” said Ryan Walker, corporate accounts manager for Graham-Field Health Products, Atlanta. “We’ve had an excellent show, a great turnout.”

Chris Hutchinson, global general manager for sleep for Mansfield, Mass.-based Covidien, agreed.

“We’ve been really happy. We’ve had good foot traffic,” he said, even as attendees filled comfy chairs to participate in the company’s blind test that allowed them to compare different CPAPs.

This year’s expo was enhanced by such activities as an Oktoberfest networking event complete with food, beer and a band hosted by Medtrade on Tuesday and Wednesday afternoons. In addition, the new Center Stage allowed companies to spotlight their products in a theater setting on the show floor, and at Accreditation Central, many of CMS' deemed accrediting organizations presented a continuous flow of information. As well, numerous companies hosted special events at their booths, everything from magic shows at Roscoe Medical to foot massages courtesy Happy Feet.

Also for the first time this year, state associations had an area of their own. “We’re thrilled to be here,” said Judy Bunn, executive director of both the Kentucky Medical Equipment Suppliers Association and the Association of Indiana Home Medical Equipment Services, who added that she hopes for an even stronger showing of state groups next year.

Those attending also got a glimpse of what Kevin Gaffney, Medtrade director, called the show’s “new look”--a modernized logo in orange and green with the slogan “Connecting the HME Industry.” That enhanced identity will evolve further for next year’s 30th show anniversary, Gaffney said.

For many attendees, though, the focus was on education and information.

It was Suzanne Ludwig’s first visit to Medtrade, and she found it so valuable that next year, she will bring another employee with her so they can cover more ground, she said.

“The one thing I don’t like is that there are a lot of different sessions at one time and I can’t go to all the ones [I am interested in],” said Ludwig, patient financial services manager for Spectrum Health in Kentwood, Mich.

Wayne Lewis with Milner Rushing Discount Drugs in Florence, Ala., said he, too, was on the hunt for information, specifically about software, and had had some luck.

He also wanted to learn more about the issues facing the industry so his company could be better prepared for whatever the future holds. “I’m trying to learn as much as I can,” he said.

“We just don’t know as an industry what is going on,” he said. “People are worried. We’re all anxious. We don’t know what to expect. I think there is so much uncertainty in this business that no one knows what to do.”

Medtrade Spring will be held March 25-26, 2009, at the Las Vegas Convention Center. For information, visit www.medtrade.com.

Heard at Medtrade
Providers Say Worry Meter Is Off the Charts, but They're Forging Ahead
ATLANTA--At Medtrade, held Oct. 27-30 at the Georgia World Congress Center, providers and others working in HME got an eyeful of new technologies and services. But according to many, it could take more than product breakthroughs to prosper in the next several years.

Following are some show attendees' thoughts on the industry's coming challenges.

On preparing for the 9.5 percent cut:
“We cut all expenses that we could as far as telephone, that kind of thing. And right now I’m looking at the possibility of alternating an extra day off for two of my employees so they work four days a week instead of five.”
--David Hicks, Medical Supplies of Central Ga., Cochran, Ga.

“I’m here for one thing: trying to find ways to cut costs through products and through ways of marketing--just general good business practices.”
--Dr. Gene Livingston, MedAssure, Phoenix, Ariz.

“We are cutting to the bone. With the cuts that are coming in January we are going to be impacted tremendously; we are going to lose about 500 oxygen patients in January, which is a lot. But we have to be ready for that. We have streamlined our business model and we have taken our time to implement IT and a new software system ... to make sure we are on the right page. It’s going to be a challenge for everybody, but I think there are still some opportunities for people on down the road so it’s going to be an exciting time.”
--Mike Marnhout, Bluegrass Oxygen, Lexington, Ky.

“Providers need to make sure they are getting paid for everything they are doing, doing everything as efficiently as possible, automating where they can. But the big thing is even if you automate, you have to make sure you are getting paid for everything you are providing ... There’s literally tens of thousands of dollars out there where people are consistently getting underpaid."
--Bently Goodwin, RemitDATA, Memphis, Tenn.

“I think that we are done with thinking about change vis a vis a Medicare reimbursement cut. We need to look way beyond that to change in a much more creative and innovative fashion … We are really talking about potentially changing the entire scope of what we do to make it completely diversified so we won't keep getting stabbed by these endless cuts.”
--Miriam Lieber, Lieber Consulting, Sherman Oaks, Calif.

On who would make the best president from an HME standpoint:
“I don’t care who wins the presidency, I believe CMS, when asked, ‘What can you do to save money?’ will say: ‘We’ve got the plan right here. It’s competitive bidding.’”
--Wayne Lewis, Milner Rushing Discount Drugstore, Florence, Ala.

On a scale of 1-10, how worried are you?
“10. I’m worried about the future, when the government will control who can sell what products and to whom.”
--Dr. Gene Livingston, MedAssure, Phoenix, Ariz.

“10. [Competitive bidding] is going to affect who gets business, how much businesses will make and what kind of business we run.”
--Debbie Duncan, Medi Home Care, Walhalla, S.C.

On attending Medtrade:
“In our day-to-day business, sometimes you get so busy. Sometimes, you have to stop. This is a good place to stop and focus [on how you do your business]."
--Suzanne M. Ludwig, Spectrum Health, Kentwood, Mich.

On the road ahead:
“Be aware [that] if you are a major Medicare provider, the next six months will be the hardest we’ve ever lived through.”
--Alan Landauer, Landauer Metropolitan, Mount Vernon, N.Y.

"If providers haven't moved by now and started the processes they need to do in the face of shoring up operations, now trying to get accredited, now trying to meet other regulatory demands, they could be out of time.”
--Mary Ellen Conway, Capital Healthcare Group, Bethesda, Md.

“The resilient people will stay. The creative people who redesign their business--they’ll still be there.”
--Tammy Johnson, AbleCare, Lexington, Ky.

“We’ve had an era of mutual mistrust [with CMS]. How do we end the war? How do we create an era of trust? We can’t just continue to dodge bullets.”
--Scott Meuser, Pride Mobility Products, Exeter, Pa.

On fraud and abuse:
“I don’t think there’s an option now but to make the effort to do things right and change the image of the industry.”
--Wayne H. van Halem, WVH Consulting, Atlanta

On what concerns you the most:
“I think the thing providers today are most concerned about is being able to build a good stream of revenues to make up for the loss that is going to be facing us ... It's not only looking at revenue but it is an entire mindset change. We have typically been able to go and provide for the patient and take our time and meet their needs, but because it is really becoming about the bottom line, that's a really scary place to be. Are we going to be compromising patient care for the sake of [the finances] we have to have to run our companies?”
--BJ Bowser, Davis HomePlus, Elkins, W. Va.

“The mood I see is apprehension and frustration ... Especially as far as oxygen, there is still a lot of confusion. We have information that oxygen patients are calling CMS and they are still being told they will own their equipment in January. When CMS is continuing to have confusion reigning in their own team, how can they expect providers, as well as the physician community as well as the entire health care community, to be up to speed on what is going on?”
--Kelly Riley, The MED Group, Lubbock, Texas

On moving forward:
“The first thing that everyone needs to consider is that the patients we serve today are still going to need our services no matter what changes we face. If we lose sight of our patients, if we lose sight of the people we serve, then we’re in a downward spiral that leads to negativity. There are tremendous opportunities out there ... We just need to change the way we do business. Will HME look the same in five years? No. Will we still be here? Yes. Those of us who survived the Six-Point Plan thought we wouldn’t be here after that; we just have to learn to change with the times.”
--Velma Goertzen, A Step Ahead, Inman, Kan.

“I think the prospects are encouraging in the sense that we’re in the diabetic space, and it’s growing unbelievably fast in this country. If we can do a good job, we can get our fair share of that market, so we’re not running away from the business ... we’re expanding. But we know there’s a cut coming, so one of the primary things we’re doing here at Medtrade is meeting with our vendors and getting some better prices.”
--Tim Binkley, Valentines Diabetic Supply, Roswell, Ga.

“Looking at it from a big picture standpoint, providers are facing incredible demands unlike before ... but they are not in this alone. It is a responsibility of manufacturers, distributors and every support service, including their bankers, to assist them in creating new business directions and new support programs to put strong providers in place for the future. I don't think it's justifiable for providers to think they cannot survive this with the intelligence of all those around them.”
--Colette Weil, Summit Marketing, Mill Valley, Calif.

Coming Up
On the HME Calendar
The Ohio Association of Medical Equipment Services (OAMES) will hold its 28th Annual Meeting in Columbus, Ohio, Nov. 5-6. For information, call 614/876-2424 or visit www.oames.org.

The New England Medical Equipment Dealers Association (NEMED) will hold its Fall Membership Meeting in Boxborough, Mass., Nov. 13. For information, call 508/993-0700 or visit www.nemed.org.

The Nevada Association of Medical Products Suppliers (NAMPS) will hold its Annual Meeting in Las Vegas, Nov. 19. For information, call 702/294-6680 or visit www.namps.org.

The Kentucky Medical Equipment Suppliers Association (KMESA) will hold its Annual Fall Conference in Lexington, Ky., Nov. 19-20. For information, call 866/817-2964 or visit www.kymesa.org.

The American Association for Respiratory Care (AARC) will hold its 54th International Respiratory Congress in Anaheim, Calif., Dec. 13-16. For information, call 972/243-2272 or visit www.aarc.org.

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

Visit this week's sponsor at www.carf.org/dmepos