Information about CELA 08 is available at www.nrrts.org.

Medtrade's Randall Moves 2009 Spring Show Back to Vegas
In a Q&A with HomeCare Monday last week, Nielsen Business Media’s Joe Randall outlined his plans to keep Medtrade and Medtrade Spring ahead of the HME industry’s challenges. “I am simply frustrated with all the doom and gloom and negativity surrounding our industry,” said Randall, who, in addition to the home health care shows, heads a host of publications and events as senior vice president of Nielsen's Building Design Group.

Times are definitely tough, Randall acknowledged, but “the people who are committed to this industry, who are willing to embrace change and are willing to work hard at it will survive.”

And, he said, so will Medtrade.

Q. What are you doing to build a better Medtrade?
A. The real question is what is the industry doing? There is so much negativity today, yet if you look at your last issue in the “HomeCare Flashback” section, you know that this industry is cyclical. I’ve been involved with Medtrade since 1984 (when it was still National Home Healthcare), so we’ve seen challenges before, we’ll see them again.

I think we need to focus on “how to do business” in the current environment and the education and products at Medtrade will help everyone face this challenge.

Q. Medtrade Spring will be minus several of the industry’s most prominent manufacturers. What effect will this have on the show?
A. Many times over the course of Medtrade (or any show for that matter), manufacturers choose to sit out a show, produce their own events or do other things. We believe that the only place to see as many customers in one place is Medtrade, so typically they return at some point. It is imperative for us as show organizers to work with them to help them achieve the return on investment that they are looking for. Even though some are not participating, we are still in contact, and are hopefully working toward solutions for the future.

The positive note is other manufacturers recognize the opportunity, step up their participation and reap the benefits. For Medtrade Spring, companies like Pride and Graham-Field are partnering with Medtrade and the industry in challenging times. Many of the large respiratory companies such as Respironics, ResMed, Covidien and SeQual have increased their presence at the show, which is an indication of their focus on their customers, both providers and end users. This also details their commitment to the industry they serve.

Many mid-size companies also use the Medtrade community to showcase their mergers and acquisitions and start their public branding identity.

Q. With reimbursements declining, schedules getting busier and travel costs escalating, why should providers take the time/spend the money to attend Medtrade Spring?
A. It is the only place they can to see over 350 manufacturers and attend over 80 conference sessions to help them survive and prosper in this new environment. Where else can you get that value?

Q. Will Medtrade Spring ever return to Las Vegas, which attendees seemed to favor?
A. We return to Las Vegas next year on March 25-26, 2009, with conferences beginning on the 24th. We did not want to leave this year but were forced to because of scheduling conflicts in Las Vegas. Believe it or not, Medtrade Spring is considered a small show for Vegas and we sometimes have difficulty with contracting for appropriate space and dates.

Q. What are future plans for Medtrade Spring? Medtrade? How will the shows answer the changing needs of both providers and manufacturers?
A. By continuing to be the meeting place of the home health care industry; by improving our educational offerings to better serve the changing market; by working with our manufacturers to provide them with a great ROI; and by working with AAHomecare and others to ensure our voice is heard in Washington.

Q. What is the message you would most like providers to hear about Medtrade?
A. Back to your first question, I am simply frustrated with all the doom and gloom and negativity surrounding our industry. What’s worse is we seem to be creating a self-fulfilling prophecy.

I see pockets of realism from providers and manufacturers but the overwhelming message I keep hearing is “the sky is falling.” It is not. Are we in for challenging times? Yes. But by working together, we can provide solutions for everyone. The people who are committed to this industry, who are willing to embrace change and are willing to work hard at it will survive.

Medtrade will be one of those survivors, and we expect to prosper along with our exhibitors, attendees and supporters.

Medtrade Spring is coming up May 7-8 in Long Beach, Calif., with several pre-show conferences on May 6. For more information on Medtrade Spring or Medtrade, visit www.medtrade.com.

Gas Prices Rise, and So Do Providers' Worries
ATLANTA--Competitive bidding and accreditation have dominated the industry's headlines in 2008, but HME's newest concern might be related to pressure at the pump.

Providers are worried about skyrocketing gas prices, and a disturbing new trend that has surfaced with them.

Last week, a report from ABC's Salt Lake City affiliate detailed a robbery at Alpine Home Medical, where the provider was hit for more than 100 gallons of gas.

The thieves wreaked havoc on the fleet at Alpine--owned by Jay Broadbent, vice president of Utah's state HME association--damaging three trucks by drilling into their tanks and slashing fuel lines. The results were delayed deliveries, many of which were made from Alpine staff members' personal vehicles as the company's trucks were no longer drivable, employees told ABC 4.

While the HME robbery remains an isolated incident for this industry, similar cases in which the thieves drilled into vehicle tanks have been reported in a number of the country's major metro areas.

So far, however, the nation's providers seem more concerned about their own fuel pinch.

One provider who has been forced to cut costs is Bob Sherman, president of the Big Sky Association of Medical Equipment Suppliers and a respiratory therapist at Valley Medical Supply in Stevensville, Mont.

Sherman said Valley Medical, which sometimes has to drive up to 100 miles in one direction to provide for its patients, has already had to modify operations because of rising fuel costs.

”We've cut down on unnecessary visits,” Sherman said. “We've made a few changes like that. We've had to move our concentrator checks to every six months, and we used to do them monthly. We might have to [move them] to every year … You can't drive 100 miles one way for one person for $77 a month.”

Predictions that gas prices could top $4 per gallon by summer is more bad news, especially for providers who placed bids in round one, according to Walt Gorski, vice president, government relations, for the American Association for Homecare.

“When this [gas pricing] issue was raised, CMS said any contingent for price increases would have to be included in the CPI,” Gorski said, explaining that round one bidders were expected to factor in gas prices to their bids. But he wondered how a provider was supposed to account for the fluctuation in prices, especially since the CMS contracts last for three years.

“It is virtually impossible for suppliers to have the crystal ball that CMS wants them to have,” he said. Providers who won bids based on gas prices in June 2007 are now facing a very different cost environment.

While his area was not selected as a competitive bidding MSA, Sherman said he would not bid even if it had been.

“We wouldn't bid. Not under the current rules. There is absolutely no way. And a lot of that comes down to gas,” Sherman said. “I'm not going to be able to invest in my business [for accreditation and other operating expenses] when gas might go up to $7 in the next three years and I am locked in at that bid price.”

Sleep Study LCD Is Another False Alarm
ATLANTA--While it confused some in the HME industry and rattled others, a National Government Services' LCD for sleep studies issued last week was not the one that industry stakeholders are awaiting, according to Kelly Riley, director of the National Respiratory Network for Lubbock, Texas-based The MED Group.

“What everyone is seeing is the LCD for the testing component,” Riley explained, adding that she had received several inquiries from concerned providers and others.

She pointed out the NGS document is one of 10 that will be popping up as each of the MACS overseeing testing issues its own LCD. And while those LCDs do not govern HME procedures, Riley said, “We have to pay a lot of attention to them.” For example, she said, if a testing LCD stipulates that “only a pulmonologist who works in a sleep lab can do a test, we're going to have issues.”

The NGS LCD did not contain anything of concern, according to Riley. “To me, it was verbatim from the [national coverage determination],” she said.

Riley noted that while all 10 of the testing LCDs could be different, she expects the HME LCDs on sleep to be the same in all four DME MAC regions.

Robert Hoover, Jr., MD, MPH, FACP, senior medical director for Cigna Government Services DME MAC Jurisdiction C, said a revised CPAP LCD would be released after receiving instructions from CMS for implementation of the decision memo, which was issued on March 13.

“We will have 90 days to implement the NCD,” Hoover said. “The LCD will be retroactive to dates of service on or after March 13, 2008. The release of the policy is dependent upon when CMS releases final instructions to the DME MAC contractors.”

A similar incident shook providers in late February when a Fiscal Intermediary policy update with no bearing for this industry stated that in-home sleep studies were not covered. (See HomeCare Monday, March 3.)

NAIMES Petition Tops 5,000 Signatures
HALIFAX, Va.--In late February, the National Association of Independent Medical Equipment Suppliers introduced an online petition to stop competitive bidding.

Today, the petition has more than 5,100 signatures.

“The response has been great,” cheered NAIMES Chairman Wayne Sale, president of Health First in Richmond, Va., adding the organization will continue to send reports from the petition site to state HME associations.

The group hopes the signatures, gathered from every corner of the country, will show Congress that competitive bidding will result in job losses, higher overall costs and diminished services.

One signer from Florida summed up the problems with competitive bidding this way: “Competitive bidding profoundly affects how patients will receive in-home medical equipment and supplies. The entire process is short-sighted and poorly thought out. No money will be saved in the end, but many, many citizens will suffer and perhaps die as a result of the poor level of services and equipment they will receive.”

Wayne Stanfield, NAIMES president, said many of the petition's signers have expressed similar “heartfelt and powerful” concerns. “We feel that this type of response will be helpful when presented to members of Congress from their own constituents at home,” he said.

Here is a sample of comments from the petition, which has been signed by beneficiaries, providers, therapists and others connected to HME:

“I am in the second round of bidding and am very worried about the future of my company. We are celebrating our fifth year in business and hope that it will not be [the] last. My company is very small (less than a million in gross annual sales), and if I don't win this bid, we won't survive … I have currently incurred a lot of expense with getting our ATS and accredited. I believe that at this point we should see how many companies comply with those requirements first. We know people who cheat the system will always find a way to cheat. People who are hardworking always end up paying for those who cheat. Can't we find a way to save the honest, hardworking companies? I have sacrificed so much just to build my business and now I may not even be able to continue it because of the bidding.”

“I am [a] physical therapist. Competition for the DME business creates quality service, not price-fixing. Medicare consumers should have a choice like anyone else. It's the choice that keeps suppliers doing what's best for the client. My experience has been that the small to medium-size companies provide the best service and equipment. They are local people taking care of people from their own community … Save the local suppliers.”

“This is a terrible waste! If we, as citizens cannot choose our own personal companies, that will be close to our homes to help us … then what good are our machines? I have sleep apnea, my husband is diabetic. If it wasn't for the closeness of our health care providers, we would have to wait days before we got our testing supplies and longer if my [biPAP] machine stopped working … The added bonus is that we talk face to face with the health care professional! Not from a phone or recording!”

“Competitive bidding is anything but competitive. Reducing the number of providers does nothing but make the marketplace less competitive. Medicare beneficiaries will now have fewer suppliers to choose from. Some beneficiaries will be stuck with out-of-town providers. Do you think they will be driving 30 miles with gas above $3 a gallon to help Mrs. Smith with her broken equipment? Not until they have three or four other stops in her area. Competitive bidding is exactly what the government spent millions of dollars fighting Microsoft from having--an unfair advantage in the marketplace. It is okay to set new standards, i.e., accreditation. It is okay to set new allowables. But why not let those qualified to provide DME decide for themselves whether or not they want to provide at the set allowables?”

“Small businesses provide more new jobs than any other, yet this competitive bidding legislation places small businesses at a distinct competitive disadvantage. Small businesses offer personalized, individual care for patients that normally is not available at large department stores whose volume purchasing capability places small businesses at still another competitive bidding disadvantage. This legislation is bad legislation and contrary to the genuine needs of post-mastectomy patients. I urge it be repealed.”

“Most of our customers choose to do business with us. Competitive bidding will take that option away. CMS is only considering the amount of money they spend, not the level of service beneficiaries receive. I have worked hard for 13 years to establish a positive reputation with our local medical community. The stated goal of competitive bidding was to eliminate 35-40 percent of the small HME companies. I have eight employees. Will you come to my place of business and tell them that they no longer have a job?”

“The disabled need choices and help. This takes away both. Shame on you all.”

NAIMES will continue taking signatures indefinitely. The petition is available through www.dmehelp.org.


In My View
Eliminating Competition with Competitive Bidding
by Randy Wolfe

My expectation is that competitive bidding will not go away even though it should. It is a very careless approach toward finding a fair market price for HME and for eliminating a few bad players that should not have ever been allowed in the program.

There are lots of other ways that Congress and CMS could use to find a fair market price and push out bad businesses without carelessly plowing up the entire field of providers and seeing who can survive the heavy, dull plow blade. If they wanted a fair market price, they could have easily gone to their contractors such as BlueCross BlueShield, Aetna, Cigna and others and made them all provide their range of commercial contract prices for HME.

They could have taken this array of customary allowed fees throughout the nation and taken the 50th percentile of those insurance allowables as an average fair market price. This is very much the way they use to do it with our customary charges years ago; however, this time they would be using the buying power of national insurance companies to review their net allowables. If anybody knows what the balance is between saving money and providing quality products and service to customers, it would be the private insurance companies.

Under the present competitive bidding program, it is just as likely that CMS will not know which codes will have prices that are too low or still too high. It was not necessarily practical to do this complicated bureaucratic and costly bidding process all over the country. Competitive bidding should be something you use for driveways, mayonnaise and office supplies--not health care services for sick seniors and those with disabilities living at home.

As far as any long-term savings are concerned, I seriously doubt there will be any in a few years after the initial cut drives away most of the small business providers. Subsequent bids in years three and six will likely show prices going up and quality going down in several areas for all subsequent bids.

Two economic studies released this year have stated that this competitive bidding program is wide open for gaming of the system and that it does not guarantee lower prices. Although some winners might enjoy the limited marketplace, there is nothing competitive about banning new providers from entering the marketplace for three full years at a time. There is something seriously wrong about a program designed to be more competitive that in fact minimizes the amount of competitors that can participate.

The government likes to exaggerate and brag about the potential savings they project, but underneath the gilded surface there are many significant problems. They cannot prove it nets any savings at all.

In March, the round one pricing was announced by CMS indicating a 26 percent overall savings, but that is not true net savings. The numbers were put out just two days after 137 legislators asked CMS to slow the process down and look more closely at some of their concerns with the competitive bidding process. This timely announcement of the savings from the first round deliberately did not account for the actual weighted value of each product group that would bring the number down. The timing of this is typical of the entire rollout of this program and the information that CMS has given back to Congress.

CMS also still has not identified over half the costs it is going to incur in implementing this program. In its projections, CMS does not even have cost estimates for the actual request for bids, cost estimates for the review of the bids that can take over six months to complete, no estimates for education for the community and physicians and no costs estimates for the ongoing management of the program in years two and three.

CMS is also comparing the projected bid prices to old prices, which they are inflating by adding a CPI increase after 2009. It is using a projected inflationary increase that is tagged to the projections they are expecting from all Medicare Part A and B programs. Everyone who knows anything knows that the HME industry does not expect to see a CPI increase for years to come; yet, CMS is using this kind of projected increase for our charges to help crunch numbers to show some type of savings from competitive bidding.

The recklessness of CMS’ handling of this program is already worth congressional review. I can’t imagine how much worse it will get as they go forward.

In the meantime, while our industry goes into frenzy and panic, the hospitals and drug companies will continue to take more and more of the health care pie. Most of this competitive bidding push is nothing but a government-run political public relations program to hide the real problem that they can’t fix--hospital and drug costs.

It’s obvious that HME is not the problem. We represent less than 2 percent of Medicare expenditures and we have been the slowest-growing health care sector in the country for two years in a row. However, Medicare spending has gone up 60 percent in the last four years by $175 billion dollars. Hospital spending has gone up 33 percent by $50 billion.

Somebody has to intervene on behalf of the public and stop that train. Our home care industry is part of the solution for the runaway health care budget, but Congress just seems to be paralyzed when it comes to moving away from the institutional model.

Randy Wolfe is president and CEO of Lambert’s Health Care in Knoxville, Tenn. He is president of the Tennessee Association for Home Care and a member of the American Association for Homecare’s board of directors. A recipient of HomeCare magazine's HomeCaring Award, Wolfe has been involved in the HME industry since 1976.

In Brief
CMS has released the third in its series of MedLearn Matters articles on competitive bidding. The article details “special circumstances and exceptions” of the DMEPOS bidding program for physicians and other treating practitioners, physical and occupational therapists and institutional providers including skilled nursing facilities, hospitals and their discharge planners, home health agencies and pharmacists. To download a PDF of MLN Matters SE0807, click here.

CMS Deputy Administrator Herb Kuhn has been named acting director of CMS' Center for Medicaid and State Operations following the April 11 departure of Dennis Smith, who had held the position for seven years. According to press reports, Smith was criticized for proposing regulations that some states said would reduce Medicaid funding for low-income residents, and for regulations that limit how states can expand coverage under SCHIP.

A physician has been ordered to pay almost $6.6 million in restitution and sentenced to 78 months in prison in a Medicare power wheelchair scheme, U.S. Attorney for the Southern District of Texas Don DeGabrielle announced last week. In addition to jail time, the U.S. District Court for the Southern District of Texas sentenced Charles Frank Skripka Jr. to three years' supervised release after finding him guilty of participating in a scheme in which he and another physician, Jayshree Patel, routinely approved PWCs for as many as 30 to 80 patients a day without performing a physical exam or ordering any medical tests. Skripka and Patel were convicted in October 2006 for providing false CMNs for the equipment. According to prosecutors, DME companies paid the physicians $200 per fraudulent prescription and CMN.

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