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November 10, 2008 Volume 14, Number 47

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Table of Contents
- Impact of Obama, New Congress a Question Mark for HME
- Outcry Grows Over New O2 Regs
- To Comment on the Oxygen Rule ...
- RAC Outreach Halted as GAO Probes Contract Protests
- CBIC Rep Skewered at Medtrade Session
- Apria's Higby Retires as Blackstone Deal Concludes
- CHAD Suspends Operations, Inovo Not Affected
- Medline Buys Guardian Business from Sunrise
- Philips’ Miclot Moves to CCS, Spence Takes Over ‘Big Shoes’
- AAHomecare Asks for PAP Face-to-Face Delay; MACs Write Physicians on PMDs

For more industry news, features and highlights from our latest issue, please visit our Web site at www.homecaremag.com.

Headline News
Impact of Obama, New Congress a Question Mark for HME
ATLANTA--Last week’s election of Sen. Barack Obama as the next president of the United States and a stream of new Democrats in both the House of Representatives and the Senate could bode well for the home medical equipment industry--or not.

With the 9.5 percent reimbursement reduction set to strike 10 product categories Jan. 1 and implementation of the 36-month rental cap on oxygen the same day--not to mention the continuing threat of competitive bidding--the lives of many HME businesses and the fate of thousands of beneficiaries hang in the balance, advocates said.

Who Obama names to head up the Department of Health and Human Services and the Centers for Medicare and Medicaid Services, and how he and the new Congress deal with the issue of health care and perceive the industry will determine which way the balance beam swings.

“Many feel we dodged a bullet,” said John Gallagher, vice president of government relations for Waterloo, Iowa-based VGM during the member services group’s Lunch Bucket legislative update on Friday. “There wasn’t the full sweep [of Democrats] that was projected … In our industry, a divided government is always best.”

Democrats had hoped to amass a filibuster-proof presence in the Senate of 60 or more. As of press time, three seats in that chamber were still in question, but few, if any, political pundits expected the number to hit the magic 60. “We’ll need that filibuster [ability],” Gallagher said, looking ahead to numerous HME issues that are expected to surface in the legislature next year. With retention of the ability to filibuster, it is less likely, he said, that something could be “ramrodded through” that would be onerous for the industry.

Still, having a Democratic majority could be helpful to HME, according to some.

“With more Democrats, hopefully we build more support for elimination of the ‘in-the-home’ restriction, more support to get rid of the [competitive] bidding program, etc.,” said Cara Bachenheimer, senior vice president of government relations for Invacare Corp. in Elyria, Ohio. “[The] key is to work closely with consumer groups as their voices are most credible with Democrats.”

Bren Sullivan, owner of Sullivan Respiratory in Meeker, Colo., and past president of the Colorado Association for Medical Equipment Services, said he is choosing to be optimistic about the new year, the new administration and the new legislators.

“I think Democrats are more health care-friendly,” said Sullivan, who added that he hoped among other things the 36-month cap on oxygen rental would be overturned. “The last four years have been pretty tough, and the 36-month cap has got to be turned around or there’s going to be a lot of small businesses going under--mine included,” he said.

John Cassar, owner of SuperCare in the City of Industry in California, was not so optimistic. He does not believe Obama’s plan to bump up corporate taxes and levy an additional tax to help pay for his universal health care plan is going to help already overburdened employers, many of whom, like himself, already pay for their employees’ health care.

“I am just praying that universal health care does not come in,” Cassar said. “It would obviously force, I believe, a national bidding process.”

With universal health care in place, he said, he could foresee a single type of health plan payer and a single type of payment system, chosen most likely by national competitive bidding. That, he said, would not be beneficial to any part of the HME industry.

While some like Cassar are deeply concerned about the possibility of universal health care, believing it goes too far, the 15,000-member Physicians for a National Health Program doesn’t believe it goes far enough. The organization urged Obama and the new Congress to “do the right thing and enact a single-payer national health insurance plan.”

Obama’s stated plan, the group said, is a “hybrid of private health insurance plans and government subsidies,” and it will fail to address the problems of “our dangerously dysfunctional system.”

Bachenheimer said Obama intends to “broaden coverage for some portion of the 47 million uninsured by providing affordable, comprehensive, portable health coverage for every American via a new public insurance program and the creation of a National Health Insurance Exchange to help Americans and businesses that want to purchase private health insurance directly.”

The new president would, she added, “mandate that all employers provide coverage except for start-ups and very small businesses, that all children obtain coverage, and [the plan would] reimburse a portion of premium cost to employers when reimbursement is used to lower premiums for employees.”

The president-elect’s health care plan is not necessarily a done deal, but the new administration and Congress are expected to begin addressing system reform, the uninsured and Medicare legislation early in 2009.

Sen. Max Baucus, D-Mont., chair of the powerful Senate Finance Committee, said he will outline his own proposals for health care reform this week. While they will likely “dovetail” with Obama’s plan, he said, “in the places where our opinions and policy plans diverge, I am eager to work with you to achieve consensus.”

As to the president-elect’s stance on HME, it’s currently unknown, Bachenheimer said. So far, she said, “Obama's campaign has not delved into the level of ‘HME weeds’--there is nothing in his campaign issue papers that speaks directly to Medicare and how it pays for oxygen and HME.

“All we know about Obama’s health care proposal is what he has as part of his campaign,” she said. “He has announced however, that he plans to unveil more details [this] week.”

Bachenheimer noted that Obama’s staff supported the delay of competitive bidding once they understood the issues and believes that is a good sign.

“[It’s] always a good thing that the staff listens and learns. Open-door communication is obviously key,” she said.

She added that she hasn’t a clue as to whom Obama will appoint as the HHS secretary or the administrator of CMS, although various media outlets have speculated on former Senate Majority Leader Tom Daschle, D-S.D.; former National Institutes of Health Director Harold Varmus; and Democratic National Committee Chair Howard Dean, a physician, as possible candidates for the top job at HHS, and, among others, Elizabeth Fowler, chief health counsel for Baucus, as a possible new CMS head.

While much remains unknown about the impact of the new players in Washington, one thing is certain, stakeholders said: Providers and other industry insiders must be proactive in getting their message across to those in power.

“We must help the new and expanded Democratic majority understand who we are, what we do and how good we are,” said Wayne Stanfield, president and CEO of the National Association of Independent Medical Equipment Suppliers. “As the new administration appoints the leaders of HHS and CMS, we have new opportunities to advance the agenda of DME.”

VGM’s Gallagher ticked off repeal of the oxygen cap, fraud eradication, "competitive bidding--defeat of" and a positive PR campaign for DME as the industry's four main priorities, and he called for “each and every provider” to schedule meetings with their legislators to discuss the issues. “Sit down with them and say, ‘Here are our concerns,’” he urged.

Sullivan agreed. His state of Colorado now has two Democratic senators, he said, and he plans to “darn sure” be talking with them about the HME industry and the challenges it faces. “I believe that’s the only way to get it done--organize at the grass roots,” he said, adding that these weeks before the changes take place allow the industry to get organized and present its case.

“With the success of the [Medicare Improvement for Patients and Providers Act that delayed competitive bidding], at least we know if we get organized, we can make progress,” he said. “Hopefully, we can just get that success rolling and overturn some of those big defeats that have happened over the last four years.”


What is your biggest concern with CMS' new oxygen regulations? To vote in HomeCare's monthly Web poll, visit www.homecaremag.com.


Outcry Grows Over New O2 Regs
ATLANTA--Following CMS’ Oct. 30 release of regulations involving changes to Medicare home oxygen policy and payment, some stakeholders involved in the sector said they believe the new rules are punitive.

While in July the Medicare Improvements for Patients and Providers Act reversed the oxygen equipment transfer to beneficiaries called for under 2005’s Deficit Reduction Act, it left the DRA’s 36-month oxygen rental cap in place.

According to the new regs, which implement changes in both laws, post-36 months providers must continue to provide oxygen contents to the patient for the remainder of the five-year useful life of the equipment, for which they can charge. But they must also service and maintain the equipment over its useful life (based on when the equipment is first delivered, not the age of the equipment) for which they can't charge. There will be a minimal service reimbursement in 2009 only.

Should a beneficiary move out of the provider’s service area, that provider is also required to make arrangements with another for the patient’s oxygen service.

“Many see this as a last swing from [CMS Acting Administrator] Kerry Weems and [HHS] Secretary Leavitt, more so at Congress than our industry” because lawmakers decided to delay competitive bidding, VGM Group’s John Gallagher, vice president of government relations, said during a legislative update Friday.

Added Mark Higley, VGM’s vice president of development, “To me as a regulatory analyst, it is perhaps the worst piece of rulemaking that I have ever read, and let me tell you why: You in the provider community have effectively no choice but to continue serving your patients that you are currently serving. You will continue to maintain and repair--at virtually no reimbursement whatsoever--this equipment through five years.”

Gallagher said by the end of this week, VGM will prepare letters for its members to explain the situation to their Medicare patients, in addition to letters those beneficiaries can send to their congressmen.

The American Association for Homecare also said it will be talking about oxygen problems with members of Congress “to illustrate the flaws” in the policy, and is encouraging providers, their referral sources and patients to call federal legislators with their concerns about the changes.

On a conference call last week, AAHomecare’s Regulatory Committee began sorting through the regulations and “will be responding to CMS, asking them for specific guidance as well as trying to make our case on several of the issues,” said the association’s Walt Gorski, vice president of government relations. “There are many twists and turns to this policy. We are working to develop a list of questions for CMS and show the real-life implications that these rules create.”

Real-Life Bind
In the meantime, providers said their real-life situation leaves them in a bind. Some said they won’t be able to comply if the oxygen rules stand as currently written; others said they simply won’t be able to stand at all.

“If the rules remain as they are, we nor any company can afford to provide the service,” said David Petsch, president of Petsch Respiratory Services in Martinez, Ga. “We would simply not be able to survive.

“The area that I most hate to see is that providers will have no options and be forced to violate regulations,” Petsch continued. “That, again, can and will be used against the industry for CMS. I know the patient is the victim, but so, too, are small businesses like my own. [This] will make Medicare unprofitable, and the quality of care will so severely drop that it will cost shift the financial burden to Part A … I truly believe we are at the end of the profitable road and have nothing but horrible options.”

“This is a recipe for bankruptcy,” commented a provider on VGM’s conference call, referencing “the notion that you can make Americans work for free … We’re prisoners.”

“I think this is making providers consider whether or not they will even provide oxygen,” said Joan Cross, co-owner of C&C Homecare in Bradenton, Fla. “I can’t even put gas in my car for what they are going to pay for maintenance. It’s ridiculous. I can’t afford it.”

Cross is even more concerned about her patients, she said. “They are going to be very confused as to why I can’t come out there and make sure their machines are OK for the 15th time. I have patients who are so nervous they want you out there, or their family does, and sometimes we’re the only people they see,” she explained. “But no more of that. We can’t afford to send someone out and not receive anything back in with which to pay that person.

“As far as snowbirds,” Cross continued, “we’ve already turned three or four away. We have a rash of people who come down right before Thanksgiving and we have our second run right before Christmas. If they come down now, chances are their [oxygen] company has already been paid for November, so I’ll get the payment for December and if that’s the 36th month, guess what happens then? I’ll have to give them their supplies for the next two years. And if I do take them, then nobody’s going to take them when they go back up north …

“I honestly don’t know what the patients are going to do.”

Cross said she is “very, very angry” at the scenario. “This [rule] that CMS put out is nothing but punitive,” she said. “They are punishing us. And it makes me mad because the people that are out there committing fraud and abuse aren’t going to be affected--they are not putting out the equipment! Don’t tell me you are doing all this oxygen [stuff] to get rid of fraudulent people. All that’s going to do is get rid of me.”

No Easy Answers
Industry consultants agree both providers and Medicare oxygen patients are in a tough spot.

“To anybody that’s trying to go to Florida now, good luck trying to find a provider,” said Miriam Lieber of Lieber Consulting, Sherman Oaks, Calif. “Small providers just can’t service the patients that are coming and going with two months left in a cap … No one’s going to be able to service the patient anymore, so the patients are basically going to be accessing their ER even more than before.

“Nobody‘s going to take an existing patient, period,” she continued. “The can of worms opens now. It doesn’t open in two months, it opens now. There are too many questions and no definitive answers.”

Lieber said she thinks the industry could see a 5 to 10 percent attrition among very small providers due to the oxygen cap and related issues on top of the across-the-board 9.5 reimbursement cut that takes effect Jan. 1.

“They will look for other things to do because I don’t think they can make it anymore. This is really it. Their time is up,” she said. “There’s so much confusion and there’s so much that’s up in the air, even more so with the way the economy is, it’s too scary to continue in this kind of a venture when you’re not sure what’s going to happen.”

According to Wallace Weeks of Weeks Group, Melbourne, Fla., “It looks like the provider gets into the warranty business no matter where that concentrator came from … It’s a pretty crummy situation and there is a great deal of uncertainty in it with respect to the service requirements that providers have.

“Nobody has really compiled and analyzed what those service requirements might be,” Weeks pointed out. “How much is it really going to take to service that equipment for those last two years after the cap? There’s a giant unknown there, and there’s no data that I know of to give us a clue as to how much we’re really going to have to spend.”

Don Clayback, vice president, government relations, for The MED Group, Lubbock, Texas, summed up providers’ plight:

“The released regulations are extremely disappointing,” he said. “How does CMS expect a provider to continue to provide 24/7 support for oxygen dependent beneficiaries with no payment? How does a provider perform two in-home maintenance calls on an annual basis for a total payment of $60? How is a provider in Pittsburgh responsible to provide equipment to a beneficiary who moves to San Diego and not receive any reimbursement? How can a provider supply a product that is used 24 hours a day and get no payment for required repairs over a five-year period?”

What’s more, he said of the 60-day comment period on the new regs--which ends Dec. 29--“how does CMS publish rules with a comment period that ends two days before the regulations go into effect? What kind of input is that?

“Unfortunately, the provisions show a real lack of understanding as to the services a provider gives to a Medicare beneficiary. They also show a lack of an even basic regard that businesses cannot provide services with no reimbursement,” Clayback concluded.

“The industry will have to work through both CMS and Congress to get these ridiculous issues fixed so that there are not major problems for oxygen patients in January. This has been an ongoing battle with CMS, and we are now entering into another round.”

To view the entire oxygen rule, included as a section of CMS' 1,459-page 2009 Physician Fee Schedule, click here.

For an excerpt of the rule provided by AAHomecare, click here.

For a summary of the rule's provisions from AAHomecare, click here.

For highlights and a Q&A on the rule from VGM, visit www.vgm.com.

To Comment on the Oxygen Rule ...
BALTIMORE--CMS is accepting comments on the oxygen regulations until 5 p.m. EST Dec. 29. In commenting, refer to file code CMS-1403-FC. Comments can be submitted in one of four ways:

--1. Electronically. You may submit electronic comments on this regulation to www.regulations.gov. Enter the file code in the search bar, then click "Send a comment or submission," fill in the information required and include the file code in your comments.

--2. By regular mail. You may mail written comments to the following address ONLY:

CMS-1403-FC 3
Centers for Medicare & Medicaid Services
Department of Health and Human Services
Attention: CMS-1403-FC
P.O. Box 8013
Baltimore, MD 21244-8013

Allow sufficient time for mailed comments to be received before the close of the comment period.

--3. By express or overnight mail. You may send written comments to the following address ONLY:

Centers for Medicare & Medicaid Services
Department of Health and Human Services
Attention: CMS-1403-FC
Mail Stop C4-26-05
7500 Security Boulevard
Baltimore, MD 21244-1850

--4. By hand or courier. If you prefer, you may deliver (by hand or courier) your written comments (one original and two copies) before the close of the comment period to either of the following addresses: 7500 Security Boulevard, Baltimore, MD 21244-1850; or Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW., Washington, DC 20201.

RAC Outreach Halted as GAO Probes Contract Protests
BALTIMORE--The four recently named recovery audit contractors poised to begin provider education this month were told last week to halt all work pending a review of protests filed by two companies that failed to win RAC contracts, CMS said.

The new RACS, which were tabbed in October to ferret out Medicare overpayments and underpayments, were scheduled to introduce the program via what CMS called “town hall-type meetings” this month, but protests to the Government Accountability Office by Viant and PRG-Schultz, which lost out in the contracting process, derailed those plans. The GAO has 100 days to review the complaints and issue a decision.

CMS said, however, it will hold a previously announced Special Open Door Forum on the RACs this Wednesday.

“CMS staff will continue informing the provider community,” said Connie Leonard, director of the division of recovery audit operations for CMS. According to a notice from the agency, the purpose of the forum is "to introduce providers to the new contractors and provide more information about the RAC program."

The RAC program was mandated by the Tax Relief and Health Care Act of 2006 as a way for CMS to identify Medicare overpayments and underpayments for both Part A and Part B (which includes home medical equipment providers). In a three-year demonstration project involving six states--California, Florida, New York, Massachusetts, South Carolina and Arizona--more than $900 million in overpayments was collected and $38 million found in underpayments, according to CMS. (See HomeCare Monday, Oct. 13.)

Those results propelled CMS to implement plans for permanent RACs. After calling for bids, CMS in October awarded four contracts--mirroring the DME MAC jurisdictions--and charged the contract winners with establishing the program of post-payment reviews, which will eventually roll out to all 50 states by 2010. The companies awarded the contracts included:

--Region A: Diversified Collection Services of Livermore, Calif., initially working in Maine, New Hampshire, Vermont, Massachusetts, Rhode Island and New York;
--Region B: CGI Technologies and Solutions of Fairfax, Va., initially working in Michigan, Indiana and Minnesota;
--Region C: Connolly Consulting Assoc. of Wilton, Conn., initially working in South Carolina, Florida, Colorado and New Mexico; and
--Region D: HealthDataInsights of Las Vegas, initially working in Montana, Wyoming, North Dakota, South Dakota, Utah and Arizona.

Leonard said CMS did not know when the RACS would be able to begin their outreach education.

“CMS will not be able to answer those questions until after the GAO makes a determination concerning the protests,” she said.

To access Wednesday’s CMS Open Door conference, which is scheduled from 2 to 3:30 p.m. EST, call 800/837-1935 and reference conference ID 60227754.

For more information on the RAC program, click here.

CBIC Rep Skewered at Medtrade Session
ATLANTA--At an update on competitive bidding during Medtrade Oct. 28, Palmetto GBA Content and Policy Lead Cindy Dreher spoke to an audience of HME providers who slammed her with questions regarding changes to Round 1.2 and when it will happen. And though they left the session with Dreher's assurances of a “successful” process, they got no new information.

“We’re starting all over,” Dreher said of the upcoming round of bidding, which will again be handled by Palmetto as CMS' Competitive Bidding Implementation Contractor. “All I can tell you today is that we will be conducting another competition for Round One rebid in 2009. I can’t tell you if it will be in January or December, because I don’t know.”

When many at the session wondered aloud if the bid process would be different this time around, Dreher responded, “We do understand the issues from last time, and we are working very hard to make this a much more successful process for everybody.”

She urged providers to contact the CBIC with comments and suggestions through its Web site at www.dmecompetitivebid.com or to e-mail the CBIC directly at cbic.admin@palmettogba.com.

But while Dreher offered an explanation of the rules that govern the bidding program, she was mum when it came to specific questions about the problems with Round One bids--and frustrated audience members clamoring for answers had plenty of them.

One heated round of questioning resulted when several attendees asked why companies in Round One had won bids for products they had no experience in providing. “Will that be looked at?” one audience member questioned.

Dreher noted the CBIC would verify company information and make sure of bidders’ accreditation.

Another session attendee brought up a company that won an oxygen bid. “I’m sure this provider is accredited, but they’re not an oxygen supplier. Or if a company provides one power chair in the last five years but they don’t sell power chairs, and they win a bid for it … is that even going to be looked at?”

“We do verify that. We look at the financial information and, again, according to the final rule, we have to make sure the provider is accredited and that they’re licensed and that all the standards have been met,” Dreher said. “If you have any ideas on how to do that better, we are all ears.”

“If you did all that in the first round, how did that happen?” shot back a third attendee.

The tense exchange grew as yet another pointed out: “Even when you are accredited, you are accredited for durable medical equipment. You don’t get specific. If you actually verify the billing history, you will know when not to award a company a bid for something they’ve only sold one of in the last five years.”

Dreher: “If you have questions regarding accreditation, I encourage you to contact CMS.”

Attendee: “See, the confusion seems to stem from the very top of CMS. When Kerry Weems testified before the health subcommittee, he was asked, ‘Why did you hand contracts to those with no experience?’ to which Weems answered, ‘Well, they are accredited.’

“If you are a diabetic supplier, it doesn’t mean you know anything about oxygen. Even if you are accredited, if you’re an oxygen supplier it doesn’t mean you know anything about supplying a commode. So the accreditation did a perfectly useless job in educating CMS and the CBIC in terms of what [companies’] experience was … “You’ve got all sorts of people all over the country throwing out bids in areas they have no experience in. You are going to have a complete train wreck again if you don’t succeed in assuring that people that are bidding in a certain category have experience in that certain category.”

Dreher: “I can assure you that CMS will look at all issues from Round One. We encourage, if you have specific suggestions, please e-mail us and we will share those with CMS.”

Another attendee: “We ask questions but they are never answered. People asked questions all the time and all we heard was, ‘Oh, we’ll get back to you.’”

Dreher: “Submit your questions. We want to hear your suggestions and we want this to be successful.”

Attendee: “Nobody listens to us. Why did we do the right job, get accredited long before now, take care of business … and then you want to pass us off or let a big company take over a small company business in a rural area?”

Dreher: “You can send me some information on that. We want you to share some information on that and we will pass it along.”

Attendee: “But we have no more information today …”

Concluded Dreher: “Please, send me your questions.”

HME Company Newswire
Apria's Higby Retires as Blackstone Deal Concludes
LAKE FOREST, Calif--Apria Healthcare Group announced Oct. 28 that The Blackstone Group has completed its acquisition of the giant provider for approximately $1.7 billion. Under terms of the agreement, Apria stockholders will receive $21 in cash for each share of common stock they own.

In the same announcement, Apria said after almost 11 years Lawrence M. Higby has elected to retire from his position as CEO but will continue to work as vice chairman and advisor to ensure a smooth transition during the search for a successor. In the interim, Dr. Norman C. Payson, an Apria board member for the past two years and a former managed care executive, will serve as executive chairman and interim CEO.

Commented Payson, "Larry Higby and his team have done an outstanding job in growing Apria from $940 million in revenues in 1999, as a provider of primarily home respiratory and medical equipment services, to $2.1 billion in revenues as a highly diversified and high quality provider of a broad range of home care services ... In addition, Larry's personal leadership of numerous industry-wide initiatives has been critical to the company's success."

"Our alliance with Blackstone will enable Apria to continue to expand and enhance the home care services we provide to millions of patients and thousands of customers each year," Higby said. "Blackstone brings an experienced group of long-term health care investors who are committed to reinforcing our company's mission of being our patients' and customers' first choice for home care services in the United States."

Apria provides home respiratory therapy, home infusion and HME through approximately 550 locations in all 50 states.

CHAD Suspends Operations, Inovo Not Affected
CHATSWORTH, Calif., and NAPLES, Fla.--CHAD Therapeutics announced Oct. 29 that that it has suspended operations due to the inability to raise additional capital. Following the sale of its oxygen business to Inovo in February, the company had been looking for capital to market products it was developing for the sleep disorder market, including its proprietary FloCHANNEL Diagnostic System, which received FDA clearance in July.

But in a statement, the company said current prospects aren't promising and that it may be unable to restart operations. CHAD's board is considering other options, including declaring bankruptcy.

The company said it had recently reached an agreement for a $2 million investment by a private equity group, but among terms of the proposed deal, the investor required that all back salary and severance obligations to officers and former officers be settled for no more than $250,000 in cash plus stock in the company.

Earl Yager, CHAD's CEO, and Thomas Jones, CHAD's chairman, who together are owed $293,750 in back salary, had agreed to settle the obligation, as well as their severance contracts, for stock, and the independent members of the company's board of directors had agreed to defer director fees. Three of the four other officers and former officers agreed to receive pro-rata shares of the $250,000 in cash plus stock, but one former officer would not agree. As a result, the private equity group said it was unwilling to proceed.

Immediately following the announcement, Naples, Fla.-based Inovo, which purchased CHAD’s oxygen conserving assets along with the right to maket under the name “CHAD Therapeutics,” issued its own statement to clarify that the company “is in no way affiliated with CHAD Therapeutics.”

Inovo successfully moved the production of CHAD’s oxygen conserving devices to its Naples facility in June of this year.

“We continue to emphasize our commitment ot both the delivery of high-quality, clinically effective oxygen conservers and the growth of our business for many years to come,” said George Harris, Inovo CEO.

Medline Buys Guardian Business from Sunrise
MUNDELEIN, Ill.--Medline Industries said Nov. 6 it had acquired the Guardian North and South American walking aids and bath safety business from Sunrise Medical.

“The acquisition of the Guardian line marks a significant step forward in the growth and value-added development of our Durable Medical Equipment division,” said Dave Jacobs, president of the Medline division. In addition to bolstering Medline’s competitive position in the marketplace, Jacobs said, the acquisition broadens Medline’s portfolio of mobility products, which currently includes crutches, walkers, wheelchairs, bedside commodes and bath safety products.

Already one of the largest providers of DME to the hospital, home care and long-term care industries, Medline has also made three other strategic acquisitions over the last few months, including:

--The Carrington wound care division from DelSite to build its wound care portfolio;
--Chester Labs, a manufacturer of liquid products for personal care, infection control and diagnostic use in medical facilities, to broaden its personal care product lines; and
--M.L. products (Morris Latex Products), which gives the company a bigger share of the disposable natural market and synthetic anesthesia breathing bag market.

According to a company spokesman, “We are able to pursue a growth strategy in today’s marketplace because as a family-run company we manage for the long-term and we hold no long-term debt. Since we do not have to manage to the short-term expectations of the investor community or a stockholder, we have the freedom to make investments that we know will pay out three to five years from now.”

Philips’ Miclot Moves to CCS, Spence Takes Over ‘Big Shoes’
MURRYSVILLE, Pa.--During Medtrade last month, Philips Home Healthcare Solutions CEO John L. Miclot announced he had resigned from Philips Respironics to take the top spot at CCS Medical.

Based in Clearwater, Fla., CCS is one of the nation’s largest providers of respiratory medications and diabetes testing supplies to Medicare beneficiaries, offering mail-order delivery of HME including blood glucose meters, catheters, insulin pumps, nebulizers and ostomy, urological and wound care supplies.

Formed by the merger of Chronic Care Solutions and MP TotalCare, CCS is majority-owned by private equity investor Warburg Pincus. Ranked No. 56 on Inc.’s 2007 list of Top 100 companies by dollars of growth and No. 64 in revenues, the company had 2006 sales of $432 million and currently operates offices in seven states with 1,600 employees.

After joining Respironics in 1998 as group vice president, sleep disorders, Miclot was tapped to lead the company in late 2003. He was named CEO of Philips Home Healthcare Solutions following Respironics’ acquisition by Philips in a $5.1 billion deal earlier this year.

Currently serving as president of sleep and home respiratory for Philips Respironics, Donald J. Spence will succeed Miclot. At a press event during the Atlanta trade show, Spence noted he had big shoes to fill and joked that, with CCS as a potential customer, “I don’t look forward to the negotiating sessions.”

In Brief
AAHomecare Asks for PAP Face-to-Face Delay; MACs Write Physicians on PMDs
The American Association for Homecare reported last week it has requested a delay in implementation of the initial face-to-face clinical evaluation requirement under the revised LCD for PAP devices, released Sept. 18. In comments to CMS, AAHomecare said the policy “applies compliance criteria that are inconsistent and unreasonable because they would impose retroactive policy to HME providers.” Because of multiple changes in the LCD requirements, the association said delay of the face-to-face exam requirement would help “ensure that physicians and providers are educated on the new policies and have sufficient time to achieve compliance for the benefit of their patients.”

MAC Medical Directors Write Physicians on PMD Requirements
On Oct. 31, the four DME MAC medical directors sent letters to physicians in their respective jurisdictions asking them to document visits and exams for power mobility devices. “You should record the visit and examination in your usual medical record-keeping format,” the letter states. “Many suppliers provide forms for you to complete. Suppliers often try to create the impression that these documents are a sufficient record of the in-person visit and medical evaluation. Based upon our auditing experience, most of them are not. This is usually because these documents do not record a complete medical examination and thus do not provide enough detailed information to adequately describe the medical necessity for the power mobility device in the patient’s home.” The medical directors noted that some individual suppliers, equipment manufacturers and medical groups have devised their own forms to help with the requirement. “While there is no specific prohibition against the use of a form to facilitate record-keeping, any instrument you choose must be a complete and comprehensive record of your in-person visit and the examination that was performed,” their letter said. To read the letter--or just in case your physician did not receive it--you can view a PDF on the Jurisdiction C (Cigna) Web site by clicking here.

‘Least Costly Alternative’ for DuoNeb Withdrawn from Nebulizer LCD
Late last month, the DME MACs advised providers the least costly alternative for DuoNeb--which would pay for the brand medication at the same rate as generic ipratropium and albuterol--has been withdrawn from the nebulizer LCD. “The provision related to the application of the least costly alternative to the combination drug albuterol/ipratropium (e.g., DuoNeb) that was scheduled to be implemented on Nov. 1, 2008, is being withdrawn. Other provisions of the policy remain in effect. This change will be included in an upcoming revision of the LCD for nebulizers,” according to a MAC notice.

Home Sleep Testing Criteria Revised
CMS has revised its NCD for CPAP therapy. The policy now states: “An initial 12-week period of CPAP is covered for adult patients with OSA if the patient meets either of the following criterion using the AHI (Apnea-Hypopnea Index) or RDI (Respiratory Disturbance Index) are met: a) AHI or RDI greater than or equal to 15 events per hour; or b) AHI or RDI greater than or equal to 5 events, and less than or equal to 14 events per hour with documented symptoms of excessive daytime sleepiness, impaired cognition, mood disorders or insomnia, or documented hypertension, ischemic heart disease or history of stroke. The AHI or RDI is calculated on the average number of events per hour. If the AHI or RDI is calculated based on less than two hours of continuous recorded sleep, the total number of recorded events to calculate the AHI or RDI during sleep testing must be at a minimum the number of events that would have been required in a two-hour period.” To view the revised NCD, click here.

CEDI Catching Up on Enrollment Requests
As of Nov. 6, National Government Services CEDI said it s processing enrollment paperwork received on Oct. 21. Most requests are being processed within 11 days of receipt, NGS said, and CEDI “is making every effort to reach our goal to be current in processing enrollment requests under 10 days of receipt of the request.” To prevent a delay, CEDI offered the most common errors it sees on enrollment requests, including: signature missing on the enrollment request; invalid PTAN and/or NPI number; NPI number submitted on the request is not on the NPPES crosswalk; billing service or clearinghouse submits only one supplier authorization form for all of their customers; and trading partners are not completing the appropriate form. For questions, contact the CEDI Enrollment team via at ngs.cedienrollment@wellpoint.com.

Principle Pharmacy Acquires Omni Healthcare
Knoxville, Tenn.-based Omni Healthcare, which provides home infusion pharmacy products, DME and respiratory therapy, has been acquired by Birmingham, Ala.-based Principle Pharmacy Group. With eight staff members, Omni’s Memphis Specialty Clinic provides home infusion services and specialty compounded preparations to hospitals and home patients, and plans to expand operations to long-term care facilities. The acquisition will extend Principle Pharmacy’s management and consulting services directly into the home health industry, according to a news report. Terms of the deal were not disclosed.

Lankford Loses Congressional Bid
In Tennessee’s 4th District congressional race, incumbent Democrat Lincoln Davis racked up 12,028 votes to Republican Monty Lankford's 10,364 to retain the seat. Lankford, the owner of TLC Medical in Franklin, had been supported by industry organizations including VGM and the Accredited Medical Equipment Providers of America.


As we remember the sacrifices of America's 25 million veterans on Veterans Day Nov. 11, HomeCare joins in expressing appreciation for their service.


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