AMEPA Rallies Providers to File O2 Complaints with SBA
MIAMI--In a near-11th hour attempt to derail the 36-month oxygen rental cap that goes into effect Jan. 1, the Accredited Medical Equipment Providers of America is asking providers to file complaints with the Small Business Administration this week.

Rob Brant, president of AMEPA, said the organization believes the oxygen cap violates the Regulatory Flexibility Act of 1980. Among other things, the law is designed to prevent regulations governing health, economics and safety from placing unnecessary burdens on businesses.

CMS, however, maintains that the cap is positive because providers may regain ownership of their equipment when the patient is finished using it, Brant said.

“Most likely, though, it will be returned after Medicare’s five-year useful life,” he said. “The only time we would be likely to get it back before then would be if the patient expires or moves to another program like hospice, so the equipment would have little, if any, value.”

In addition, Brant said, the regulation places costly burdens on small business because, for a bi-annual reimbursement of $15 to $30 for one 30-minute service call, it requires suppliers to provide services for the next 24 months past the cap, such as maintenance and repair, replacement of cannulas, masks, humidifier bottles and, with no additional reimbursement, tubing and oxygen equipment and service to patients who travel or relocate.

The latter “is our strongest argument that the new rule is not a positive for providers,” Brant said. “But the SBA has said to us that it’s not enough to say that the cost outweighs the advantages. We need to show some proof. We have to give a detailed accounting.”

An SBA official has confirmed to AMEPA that it is reviewing the oxygen rule with regard to what is known as the “Reg/Flex Act” and has requested information from the group, Brant said. AMEPA is asking its members and other providers as well to send comments to the SBA that include the following information:

--Cost of providing oxygen service year by year to patients before and after 36 months;
--How much they spend to refurbish concentrators and oxygen equipment for reuse;
--How often concentrators and oxygen equipment require overhauling;.
--The cost of overhauling equipment compared to its value; and
--The value of used equipment versus new equipment.

Once the SBA has reviewed the comments, its Office of Advocacy will issue a letter to CMS either supporting or rejecting the regulation. “We want to get the letters in within the next seven days because that is when the Office of Advocacy plans to send a letter to CMS with their opinion,” Brant said on Friday.

CMS has allowed until Dec. 29 for comments to the agency on its new oxygen regulations.

While the Office of Advocacy opinion carries some weight, it is not enough by itself to stop the regulation from being implemented.

“To enforce the letter, you would need either an act of Congress or [a court injunction],” Brant said.

He noted that he has spoken with his congressional representatives and so have other AMEPA members, and “everyone is saying the same thing: that nothing is going to happen until the new administration, and even then it could take months.”

By then, Brant said, the damage will have been done. Still, he believes there is hope, particularly if enough providers let their voices be heard.

Last year, he pointed out, the Department of Homeland Security attempted to implement a “no-match rule” that would have forced employers to fire employees whose Social Security numbers and names did not match government records. The Office of Advocacy warned that DHS’ new rule violated the Reg/Flex Act, and a subsequent lawsuit filed by the AFL-CIO and U.S. Chamber of Commerce resulted in an injunction halting implementation of the rule.

For a complaint form for the SBA, go to: www.sba.gov/idc/groups/public/documents/sba_program_office/ombud_sba1993.pdf.

OIG Opens the Door on DME-Hospital Closet Deals
WASHINGTON--The Department of Health and Human Services’ Office of Inspector General, in an advisory opinion issued Nov. 19, gave the go to two HME providers to place equipment in hospital supply closets and have licensed personnel either on site or on call to train patients in the use of respiratory equipment.

While the OIG has said previously that consigning equipment can create the risk of fraud and abuse, it said in this case--in which the consignment closets will be provided at no cost, as will the use of phones and a desk-- because “no remuneration will flow” between the suppliers and the hospitals, the two providers would not risk violating anti-kickback statutes present in the Social Security Act.

As with all advisory opinions, this one was issued only to the two providers seeking the opinion (their names were redacted) and has no application to other individuals or entities, the OIG said.

However, providers can draw some guidance from the opinion.

“To a large extent, this opinion confirms what most health lawyers believe to be required by existing law,” said Neil Caesar of the Health Law Center in Greenville, S.C. “But we have some clear guidance as to the type of relationship that works, and anyone who varies from that is taking a big chance.”

Caesar noted that there are some nuances that differ from previous OIG opinions. This opinion focuses on hospital supply closets, while previous opinions centered on supply closets in physician offices. The new opinion also deals with the issue of having on-site or on-call personnel to train or educate patients requiring respiratory equipment.

Both are permissible under the new advisory opinion, Caesar said, but with a caveat: “You cannot have any role to play before the choice [of a provider] is made,” he said.

That means that the provider’s on-site licensed personnel, such as a respiratory therapist, cannot have any contact with a patient prior to the patient selecting his or her provider.

As well, the provider’s employees may not provide any services to patients who have selected another supplier.

The chosen suppliers would directly bill payers, including Medicare and Medicaid, for the equipment.

Providers may not pay any remuneration to hospitals or anyone affiliated with the hospitals for the use of consignment closets nor may hospitals charge the providers for use of a hospital desk and phone connected to the hospital’s internal telephone system, the opinion said.

While all this is positive, there is a caution, according to Caesar.

“Generally, the OIG doesn’t go out of its way [to issue opinions] on things it doesn’t care about. This suggests that there has been, and will continue to be, scrutiny of these types of relationships,” he said. “It’s a flag that says you can do things, but it’s also a flag that says, ‘We’re watching.’”

To read OIG advisory opinion No. 08-20, click here.

Payson Takes Over as Apria CEO
LAKE FOREST, Calif.--Apria Healthcare Group has appointed Norman C. Payson, MD, as CEO of the giant provider.

A graduate of the Massachusetts Institute of Technology, Payson received his Doctor of Medicine degree at Dartmouth Medical School, after which he practiced as a primary care physician including service at a Native American reservation in the public health service.

Payson subsequently became medical director and CEO of a large multi-specialty medical group, then co-founded and served as CEO of Healthsource, a physician sponsored health plan reaching 15 states with three million members. After the sale of Healthsource to Cigna, Payson led a turnaround of Oxford Health Plans, New York City’s largest health plan, and has also transformed other large health care companies, including private equity sponsored enterprises, according to an Apria press release.

Payson, who has been on Apria's board of directors for two years, has served as its executive chairman and interim CEO since The Blackstone Group’s $1.7 billion purchase of the company. He replaces Lawrence Higby, who left the CEO position in late October after conclusion of the Blackstone deal.

Weeks: Come Out on Right Side of Profit Line
MELBOURNE, Fla.--According to HME consultant Wallace Weeks of Weeks Group, it’s now an unwelcome fact of life for the industry’s providers: The only way to absorb the impending 9.5 percent reimbursement cut without having profit decline is to create excess profit.

But how can providers do that?

“There is no law that says the revenue of a home care company may only be derived from rental and sale of medical equipment and supplies to persons outside of acute care facilities,” Weeks noted in a recent business report. “Every provider in this country has the ability to derive revenue from other sources.”

The value of alternative revenue has never been more important, Weeks said. Here are a few of the alternatives he offered:

--Rent fitness equipment. “Many seniors are advised to continue a rehab program in a local gym. For some, going to the gym adds a level of complexity and expense that compromises the rehab or wellness program. DME providers should be able to get referrals for the rental of fitness equipment and deliver it to a customer in the same way a referral for a hospital bed works. The rentals will largely be non-covered items, thereby releasing the provider from the hassles of third-party payers.”

--Repair equipment. “There are a couple of approaches here. One is to become a manufacturer-certified repair facility for such items as concentrators, CPAP and so on. Another is to contract with facilities for the repair of their equipment. In either case, the relationships could also lead to the sale of equipment, again without the hassles of third-party payers.”

--Contract delivery services. “DME providers are good at delivery … There are other industries that need delivery, and could contract with a DME company to provide the service. Some providers even have excess warehouse space that could hold the inventory of the customer and produce even more revenue.” And if you've got extra warehouse space, how about housing the customer's inventory, Weeks suggested. And, he added, "One provider could also contract with other providers to deliver their equipment."

--Billing service. “Just as one provider could deliver for another, one can bill for another. There are obvious strategic considerations that must be made, but that doesn’t mean there is no opportunity. Certainly some providers have more efficient operations than others and can, thereby, produce economic advantage to both parties.”

The challenge for providers, Weeks said, will be to keep year-over-year profit levels intact.

In less than a month, he reminded, “our industry will begin to bill and collect less from the product lines that were to be covered under competitively bid contracts. Additionally, the 36-month cap on oxygen services will reduce revenue for some providers. In any case, the revenue per unit of sales will decline. If the number of customers does not grow sufficiently, total revenue for the business will decline in 2009.”

For more ideas from Weeks, click here, and look for his “Better Business” column monthly in HomeCare.

Diabetes Adds $4,100+ to Annual Medical Bills
ALEXANDRIA, Va.--People with diabetes spend an average $4,174 more every year on medical costs than those who don’t have the disease, a gap that increases substantially each year following initial diagnosis, according to a study in the American Diabetes Association journal Diabetes Care.

The study, by researchers at RTI International, also found that medical costs go up an additional $158 per year after diagnosis over and above the amount they would rise due to aging-related increases.

Diabetes-related complications such as heart and kidney disease are a main source for the increase in costs, the study said. But once the complications were controlled, researchers found the remaining cost increase was $75 each year, the bulk of which could be attributed to the increasing need for diabetes medications the longer a person lives with the disease.

"The good news is that many of these costs could be contained through proper diabetes management and lifestyle changes," said lead researcher Justin Trogdon. “Numerous studies show that losing weight and increasing physical activity, along with maintaining proper blood glucose levels, can substantially delay or reduce the risk for diabetes-related complications. What our study does is to point out that there is also a cumulative, financial impact to the progression of this disease.”

Preventing the onset of diabetes would also help to reduce cumulative costs, since medical expenditures grow along with the duration of the disease, the researchers said.

In Brief
OIG Looks at Family Ties in Texas; MACs Review Problems with Budesonide Claims
In an early alert memorandum released Nov. 26, HHS’ Office of Inspector General notified CMS that some DMEPOS suppliers with outstanding Medicare debt may still be receiving payments by operating companies that are publicly fronted by business associates, family members or other individuals posing as owners. In a random sample of 10 DMEPOS suppliers in Texas that collectively had Medicare debt of $8.5 million during 2005-2006, the OIG found six of the 10 were associated with 15 other suppliers or HHAs that received Medicare payments totaling $58 million during 2002 to 2007. Billing numbers for eight of the 10 were revoked in either 2003 or 2004, and the remaining two went into inactive billing status in 2000 or 2001. To read the OIG report, click here.

A recent review of claims for budesonide has identified problems with the coding and coverage of the inhalation drug, according to the DME MACs. To read the notice on the Noridian Web site, click here.

In a recent clarification on accreditation reported by AAHomecare last week, Palmetto GBA said providers of drugs and pharmaceuticals who also bill for DMEPOS outside of pharmaceuticals must be accredited to obtain or maintain Medicare billing privileges. Pharmacy providers must update their file with the National Supplier Clearinghouse using the CMS-855S enrollment form. If a pharmacy seeks the accreditation exemption, all other products/services must be removed.

Last week CMS released its ICD-10-Clinical Modification/Procedure Coding System Fact Sheet, which gives general information about the International Classification of Diseases, including benefits of adopting the new coding system, structural differences between ICD-9 and ICD-10 and implementation planning recommendations. To order the new fact sheet, go to www.cms.hhs.gov/MLNProducts/01_Overview.asp, scroll to "Related Links Inside CMS" and select "MLN Product Ordering Page."

Noridian Administrative Services, the DME MAC for Jurisdiction D, now offers a lookup tool for fees, including DMEPOS, drug, dispensing and pharmacy supply fees, and parenteral and enteral nutrition fees. The tool is located on the Noridian Web site under the “fees tab.”

Coming Up
Educational Teleconferences Galore This Week and Next
Cigna Government Services, the Jurisdiction C DME MAC, will hold an Ask the Contractor Teleconference this afternoon (Dec. 8) on "Changes in Medicare Payment for Oxygen and Oxygen Equipment" from 2 to 3:30 p.m. ET. To participate, call 800/214-0694 and enter passcode 672457.

CMS will hold its regularly scheduled Home Health, Hospice & DME Open Door Forum tomorrow (Dec. 9) at 2 p.m. ET. Call 800/837-1935 and reference conference ID 58378451. For a replay, call 800/642-1687 and enter the conference ID beginning two hours after the call has ended. The recording expires after three business days.

Noridian Administrtive Services will hold an Ask the Contractor Teleconference Wednesday, Dec. 10, at 3 p.m. CT. To participate, call 800/700-7414 and reference the DME MAC Jurisdiction D Ask the Contractor Teleconference.

National Government Services Common Electronic Data Interchange will hold a teleconference Thursday, Dec. 11, on completing CEDI enrollment forms and will offer tips on submitting Medicare Secondary Payer (MSP) claims electronically. To listen in to the conference, which begins at 1 p.m. ET, call 866/497-2655 and reference ID 75900021. For more information on CEDI, visit www.ngscedi.com.

AAHomecare’s “Post-Cap Oxygen Payment Rules: Understanding the New Rules and Preparing a Business Plan Are the Keys to Survival” teleconference will take place Thursday, Dec. 11, from 2 to 3:30 p.m. ET. The teleconference is free for AAHomecare members; non-members can participate at a fee of $129. For information, go to www.aahomecare.org.

NHIC, the Jurisdiction A DME MAC, will hold its quarterly Ask-the-Contractor Teleconference calls on Tuesday, Dec. 16, at 10 a.m. and 2 p.m. ET. The hour-long calls will focus on general updates, oxygen updates and other hot topics. CMS representation will be available to assist with oxygen-related questions. No registration is needed but the number of lines will be limited. For dial-in information and details, go to www.medicarenhic.com/dme/dme_act.shtml#upcoming.

National Government Services, the Jurisdiction B DME MAC, will conduct an Ask-the-Contractor Teleconference on Wednesday, Dec. 17, at 2 p.m. ET on "Payment and Billing Changes for Oxygen and Oxygen Equipment." Registration must be completed online only at: www.ngsmedicare.com/NGSMedicare/ADC/EventList.aspx?fromdate=12/1/2008&todate=12/31/2008&display=Month&view=DateTime.

NGS will also host a webinar on Dec. 18 at 2 p.m. ET to review electronic reports and top rejections specific to Jurisdiction B. CEDI electronic report changes that will occur in January 2009 will also be discussed. The webinar is free, but you must register online at: www.ngsmedicare.com/NGSMedicare/DMEMAC/EducationandSupport/CalendarofEvents/RegistrationDMEMAC_Index.aspx.

Cigna Government Services, the Jurisdiction C DME MAC, will conduct webinars on Medicare 102 on Dec. 15 and Medicare 101 on Dec. 15 and 17. Topics for the Medicare 102 session will include the CMS-1500, remit overview, recommended forms, resources, tools and events. The Medicare 101 sessions will cover the Jurisdiction C Supplier Manual, Medicare documentation requirements, CMS 1500 form, the NPI, NCDs, LCDs and more. To register, go to: www.cignagovernmentservices.com/jc/education/webinars.html.

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

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