SBA Backs O2 Providers on Cap Complaints
WASHINGTON--On Wednesday, the Small Business Administration’s Office of Advocacy filed comments with CMS asking that the agency do a better job analyzing the economic impacts of the 36-month O2 cap on small oxygen providers.

Complaints filed with the SBA by members of the Accredited Medical Equipment Providers of America asserted the cap, set to go into effect Jan. 1, violates the Regulatory Flexibility Act of 1980--known as the Reg/Flex Act--which requires a full analysis of the benefit or harm of government decisions on small business. (See HomeCare Monday, Dec. 8.)

According to AMEPA, CMS did not perform such an analysis before announcing its new oxygen payment rules, and the organization’s members provided the SBA with 52 pages of text and documents to support their contention.

The SBA agreed.

In an eight-page letter addressed to CMS Acting Administrator Kerry Weems, the SBA said:

“Advocacy submits that the analysis provided on the rule’s likely impacts on oxygen suppliers does not rise to the level required by the RFA [regulatory flexibility analysis]. CMS’ inability to estimate the impact of this rule on oxygen suppliers merely highlights the need for a FRFA [final regulatory flexibility analysis] as required under the RFA. CMS does not adequately analyze and balance the potential benefit of retaining ownership of the oxygen equipment with the other provisions of the rule that serve to reduce payment to the industry for providing oxygen and oxygen suppliers to Medicare beneficiaries.”

Armed with the SBA findings, AMEPA is looking to file an injunction to stop implementation of the cap, according to Rob Brant, general manager of City Medical Services in North Miami Beach, Fla., and the group’s president.

“Our hope is that a case can be filed in January which will delay implementation of the cap retroactively, similar to the delay in competitive bidding. Minimally we should be fairly compensated for our service visits and supplies,” said Brant. “Additionally, oxygen providers should not be financially responsible when a patient relocates out of the area.”

To read the SBA’s comment letter to CMS, click here.

New Study: Oxygen Providers to Lose $850M in 2009
WASHINGTON--Oxygen providers who bill Medicare will be about $850 million short in reimbursement in 2009, according to a new study on Medicare payment policy and home oxygen therapy.

Commissioned by the Council for Quality Respiratory Care, the study by Washington-based Avalere Health, titled “Home Oxygen Therapy: An Analysis of Recent Medicare Payment Policy,” looks at the cumulative effects of the 36-month oxygen rental cap and the 9.5 percent Medicare reimbursement cut, both of which are set to take effect Jan. 1.

“We estimate that Medicare spending on home oxygen therapy will actually decrease by approximately 27 percent in 2009 as a result of the impact of the 36-month capped rental period and the 9.5 percent [Medicare Improvements for Patients and Providers Act of 2008]-stipulated payment reduction,” the study said.

According to Avalere, there are more than 1.5 million Medicare beneficiaries on oxygen therapy, 26 percent of whom are expected to continue use of oxygen past 36 months. Avalere believes these patients are distributed across the country in the same proportion as the total Medicare oxygen user population. That means the cap could affect 34,500 beneficiaries in Florida, 29,800 in Texas and 24,000 in California alone.

“We estimate that the 36-month capped rental policy will reduce Medicare expenditures for home oxygen by approximately $550 million beginning in 2009,” the study said.

In addition, providers will feel the effects of the 9.5 percent cut to oxygen reimbursement specified under MIPPA. The law, which passed in July and delayed competitive bidding for 18 months, stipulated the cut to all product categories included in Round 1 to “pay for” the bid delay. One of those categories was oxygen.

“We estimate that this provision will reduce Medicare spending on home oxygen therapy by almost $300 million in 2009,” Avalere said.

Wayne Stanfield, president and CEO of the National Association of Independent Medical Equipment Suppliers, said in a press release he believes providers will take an even greater hit. Included in the final rule for oxygen, he said, is another 2.53 percent cut that is listed as a “budget neutrality reduction” required by the Social Security Act. Also, he noted, oxygen is exempt from the 5 percent CPI increase.

“NAIMES feels strongly that CMS abused their authority by applying the 2.53 percent reduction based on the 2006 rule, knowing that an additional 9.5 percent reduction would exceed budget neutrality requirements set by the DRA 2005. It is again a case of CMS using the authority given by Congress to penalize suppliers,” Stanfield said.

Still Time to Comment on Oxygen Rules
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 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.

Your Post-Cap O2 Questions Asked and Answered
AMARILLO, Texas--With all the confusion surrounding CMS’ new post-cap oxygen payment rules, it’s time for some answers. In a special series for HomeCare Monday, Lisa K. Smith, Esq., an attorney with the Health Care Group at Brown & Fortunato, P.C., a law firm based in Amarillo, Texas, responds to several of home medical equipment providers’ most common questions about the new rules.

Question: We are becoming a non-participating provider effective 01/01/09. We have operated under an assigned status for many years. Are we required to honor our assignment status to any existing patients on our service prior to 2009?
Answer: As a participating provider, you are required to accept assignment on all Medicare claims. As a non-participating provider, you can choose whether or not to accept assignment on a claim-by-claim basis. You are not obligated to continue accepting assignment on claims for all your existing Medicare patients. We believe the supplier should give the Medicare beneficiary at least 30 days prior written notice that it will no longer accept assignment on the beneficiary’s claims for the specified items or services, in order to allow the beneficiary the opportunity to find another supplier that will accept assignment.

Question: Is there any limit to what a supplier can charge for Medicare-covered items on a non-assigned basis?
Answer: No. The “limiting charge” provisions that prohibit charges in excess of 115% of the Medicare fee schedule do not apply to DMEPOS items provided by a supplier.

Question: After the 36-month cap, can we supply some oxygen contents assigned and some non-assigned during the same month?
Answer: A supplier can choose to accept assignment on oxygen contents for some beneficiaries and not accept assignment for contents on other beneficiaries during the same month. However, if the supplier accepts assignment on oxygen contents for a beneficiary, we believe it is prohibited from billing the patient non-assigned for additional oxygen contents provided during that same month. In other words, if you have accepted assignment for contents for a patient, you have agreed to provide all oxygen contents needed by that patient for the Medicare allowable amount.

Lisa K. Smith, who is Board Certified in Health Law by the Texas Board of Legal Specialization, represents HME companies, pharmacies, hospitals and other health care providers throughout the United States. She can be contacted at lsmith@bf-law.com.

Industry Holds Town Hall Meetings on Health Reform
ATLANTA--After a call from the Obama administration for public input on health care reform (see HomeCare Monday, Dec. 15), several industry organizations scheduled community meetings to raise HME's issues.

Nielsen Business Media, producer of Medtrade and Medtrade Spring, will host a community discussion today at 1 p.m. at its headquarters in Alpharetta, Ga. HME providers and manufacturers are invited to attend the meeting, which will address topics such as the impact of competitive bidding and the effect of reimbursement cuts on patient care.

The National Association of Independent Medical Equipment Suppliers also will host a town hall meeting today at 1 p.m. in South Boston, Va., to discuss health care reform and "specifically focus on home care and DME as a key component of solving the high cost of health care," the group said.

Member services organization VGM Group had set a town hall meeting last week, but postponed the Friday morning event after more than 8.5 inches of snow fell in its hometown of Waterloo, Iowa. The group said it will likely reschedule the meeting.

According to President-elect Obama’s transition Web site (www.change.gov), health care will be a “top priority,” and he's asking for Americans' help in “reforming the system to provide quality, affordable health care” by holding community discussions.

Their hosts said results of the meetings would be sent to Sen. Tom Daschle, newly appointed HHS head, as recommendations for the health care reform debate that Congress is expected to take up at some point next year. Exactly when, however, now seems up for grabs.

While Obama has made it clear he wants to tackle health reform in his first 100 days in office, last week House Ways and Means Health Subcommittee Chairman Fortney "Pete" Stark, D-Calif., said work on the economy and other priorities could delay reform legislation until early 2010.

"I don't think we'll do it in the first 100 days," Stark told reporters Wednesday. Quoted in popular Washington newspaper The Hill, he also said several smaller health care issues, including reauthorization of the State Children's Health Insurance Program, delaying a Medicare reimbursement cut for physicians and health information technology legislation--issues he labeled "deferred maintenance"--could push back a larger reform measure.

In addition, Stark noted the need to build toward health reform in an orderly process, one in which stakeholder groups including providers, insurers and drugmakers have time to state their cases. "I think you have to give everybody a chance to have a hearing," Stark said.

For information about today’s community meeting in Atlanta, contact Medtrade at 770/291-5457 or visit www.medtrade.com.

For information about today's community meeting in South Boston, Va., contact NAIMES at 434/572-9457 or visit www.dmehelp.org.

Newsmakers
DeVilbiss Taps Panzer; ASM Adds O’Neill
SOMERSET, Pa.--DeVilbiss Healthcare has appointed Alan Panzer as president and CEO. Panzer most recently served as president of United States Surgical/Valleylab Co. for Covidien, and prior to that, as president of Tyco Healthcare Vascular Therapy. His earlier experience includes sales leadership positions at The Kendall Healthcare Co. and Pfizer. “I am excited to join DeVilbiss. As its new CEO, I am committed to accelerate new product launches as well as enhance service to provide compelling solutions for dealers, providers and patients," Panzer said in a press release. "Important in our goals are to lead the industry in driving clinical effectiveness, enhanced comfort and therapy compliance.” DeVilbiss said it is "at an important time" in the company's growth with the creation of a new dedicated sales force, the launch of its IntelliPAP sleep therapy product line and upcoming introductions of new ambulatory oxygen lines. Bryan Carey, who has been serving as interim president and CEO, will serve as a senior advisor to Panzer during the transition, the company said.

PHILADELPHIA--Alliance Seating & Mobility, a division of The Scooter Store, has hired Ted O’Neill, a complex rehab specialist with 35 years of experience, as Assistive Technology Supplier (ATS) in Pennsylvania. O’Neill has been a RESNA-certified ATS for 12 years and has served on the board of directors of the National Registry of Rehab Technology Suppliers (NRRTS) for three years. Previously, he worked as an RTS for Associated Medical Specialties in Philadelphia and the Chesapeake Rehab Equipment in Collingdale, Pa. In 1992, he started Teamworks, a branch of Reliant Care, which Chesapeake purchased in 2005. O’Neill was also president of Mid-Atlantic Health Associates, a Newton Square-based organization specializing in rehab equipment sales, and a manager at Accurate Medical Service and Mark One Hospital Products. Created in 2007 to provide complex rehab, ASM has grown from three locations to more than 20.

TUSCON, Ariz.--The board of directors of the Commission on Accreditation of Rehabilitation Facilities (CARF) has elected Cathy Ellis, PT, to serve a one-year term as board chair beginning Jan. 1. Ellis, director of physical rehabilitation and the clinical director of the spinal cord program at the National Rehabilitation Hospital, Washington, D.C., was seated on the CARF board in 2006 and previously served on the organization's board of trustees from 2000 to 2005. "In the coming year, CARF will continue to expand our work to improve the lives of persons served in the human services fields," she said.

In Brief
Medical Directors Post Update to PAP LCD; Medtrade Spring Offers Education Special
The DME MAC medical directors have posted an update to the PAP LCD with major requirements for coverage of a PAP device for OSA that pertain to the ordering physician. To read the complete update on the Jurisdiction C (Cigna) Web site, along with FAQs from physicians and providers, click here.

Registration has opened for Medtrade Spring, and producer Nielsen Business Media is offering a special $99 rate for the mid-year show's educational conference. With more than 70 sessions, the comprehensive conference, which is coordinated through the American Association for Homecare and the Medtrade Educational Advisory Board, will run March 24-26, 2009, at the Las Vegas Convention Center. For more information, visit www.medtrade.com.

Spearheaded by the National Spinal Cord Injury Association and Elyria, Ohio-based Invacare, a coalition of consumer and provider groups is working to develop a consumer-driven survey that will demonstrate the medical need for high-end complex rehab to Washington legislators and regulators. In addition to HME organizations AAHomecare, The Roho Group and Sunrise Medical, other participating groups include the United Spinal Association, National Multiple Sclerosis Society, United Cerebral Palsy, the National Coalition on Disability Rights and the Paralyzed Veterans of America. AAHomecare reported last week the coalition is finalizing a 15-question survey to collect data in support of efforts to improve consumer access to complex rehab. Further information will be available soon, the association said.

National Government Services Common Electronic Data Interchange has updated the Approved Vendor List and a list of FAQs on the CEDI Web site, available on the Resource Materials page at ngscedi.com/outreach_materials/outreachindex.htm.

Have you checked your mail? As part of CMS’ fourth annual contractor satisfaction survey, 30,000 randomly selected providers received the 2009 Medicare Contractor Provider Satisfaction Survey (MCPSS) on which they can offer opinions on their Medicare Administrative Contractors. The MACs will be measured against performance targets as part of their contract requirements, CMS said. To meet the performance standard, the contractor's score for the 2009 MCPSS must fall within a specified range of the 2008 national mean score. 2008’s survey results for all contractors, including the DME MACs, was 4.51 on a scale of 1-6.

Brightree, the Duluth, Ga.-based software provider, announced last week it has acquired C&S Billing Center, an HME billing service in Antioch, Ill. The acquisition pairs Brightree's Internet-hosted SaaS (Software as a Service) business management application with integrated billing services from C&S. "This new bundled offering will make the old billing services model obsolete," said Dave Cormack, Brightree president and CEO, in a press release. "No longer will providers need to fax tons of paper, re-key the same data into multiple systems or be kept in the dark regarding what has been billed, rejected or paid." In addition to the technology/service offering, Brightree plans to utilize the C&S billing expertise to offer "best practices" consulting services to customers.

Philips has expanded its Home Healthcare Solutions business with acquisition of the aerosol therapy business of Medel SpA, an Italian distributor of nebulizer compressor systems and other home health products. In a related transaction, the company also acquired a manufacturing facility in Guandong, China, for nebulizer compressor systems and operations in Hong Kong. The businesses have become part of the Respiratory Drug Delivery, or RDD, business unit within Philips Home Healthcare Solutions, now headquartered in Murrysville, Pa. “When Philips acquired Respironics, the company also had a leading respiratory drug delivery business,” CEO Don Spence said in a release. “Building upon that strength and fulfilling on our ambition to expand our high-growth compressor nebulizer systems franchise, we decided to acquire the aerosol therapy business of Medel which allows us to better serve the needs of our customers and their patients who suffer from asthma, chronic obstructive pulmonary disease (COPD), cystic fibrosis and other respiratory disorders.” Financial details of the acquisitions were not disclosed.

To replace the standard telephone tree,VGM Forbin, Waterloo, Iowa, announced last week it has partnered with CareFlash (www.careflash.com) on a social networking program for people with disabilities and chronic medical conditions. Through the contemporary phenomenon, the partnership offers HME providers another avenue to reach out to their customers, the member services group said. “Online social networking has come to people with chronic medical conditions and disabilities. This will be one of the mega-trends in our country over the next two years,” said Mike Mallaro, CFO and CIO for The VGM Group. “As millions of people with disabilities and chronic conditions gather in a single place, in this case in the virtual world of social networking, there can’t help but be opportunities for HME providers. Online social networking creates an intricate web of possibilities for health care providers. The strategic partnership with CareFlash is one way VGM can help our members capitalize on this trend.”

The CEOs of two San Bernardino County, Calif., medical companies were charged in a seven-count indictment unsealed Tuesday for their alleged roles in a Medicare fraud scheme involving unnecessary DME, the U.S. Department of Justice said. Adekunle Rafiu Shittu, a/k/a Cooley, 54, and Kim Jeanette Shittu, 45, were charged with billing more than $3.5 million to Medicare between September 2005 and October 2008 for equipment including power wheelchairs and hospital beds that was not provided to patients or that they knew patients did not need. Working through Kimco Medical Supply in San Bernardino and K&K Medical Supply in Fontana, the defendants received more than $2 million in Medicare payments for the equipment. Each defendant faces a maximum of 55 years in prison and mandatory restitution if found guilty on all counts.

Coming Up
On the HME Calendar
The Alabama Durable Medical Equipment Association (ADMEA) will hold its Annual Meeting in Montgomery, Ala., Jan. 7. For information, call 205/824-6202 or visit www.admea.net.

The Big Sky Association of Medical Equipment Services will hold its Quarterly Meeting in Butte, Mont., Jan. 9. For information, call 406/777-7301 or visit www.bigskyames.org.

Dynamic Seminars & Consulting will hold a "Customer Service Strategies" teleconference, presented by Louis Feuer, MA, MSW, on Jan. 12 from 11:30-12:30 p.m. ET. Register at www.DynamicSeminars.com or call 954/435-8182.

AAHomecare has set a"Zero Tolerance for Fraud" teleconference Jan. 14 from 2-3:30 p.m. ET. For information, visit www.aahomecare.org.

The Georgia Association of Medical Equipment Services will hold a "Survivor Series" conference Jan. 21 in Atlanta focused on improving productivity, reducing operational costs and growing revenue. For information, call 770/578-3999 or visit www.gameshme.org.

CMS has scheduled its next Home Health, Hospice & DME Open Door Forum Jan. 22 at 2 p.m. ET. To participate by phone, call 800/837-1935 and reference conference ID 70014356.

The North Carolina Association for Medical Equipment Services (NCAMES) will hold its Winter Meeting in Raleigh, N.C., Jan. 28-29. For information, call 919/387-1221 or visit www.ncames.org.

The Assistive Technology Industry Association (ATIA) will hold its Annual Conference in Orlando, Fla., Jan. 28-31. For information, call 877/687-2842 or visit www.atia.org.

AAHomecare will host a teleconference called "Hot Button Issues in the Diabetic Arena" Jan. 29 from 2-3:30 p.m. ET. For information, visit www.aahomecare.org.