For information, visit www.medtrade.com.

AAHomecare Offers 13-Point Plan to Stop Medicare Fraud
ARLINGTON, Va.--The American Association for Homecare is hoping 13 will be HME's lucky number, at least when it comes to healing the industry's black eye from fraud and abuse.

On Friday, the association unveiled a 13-point plan it believes could eliminate most of the Medicare fraud attributed to the HME sector.

“The home care sector has zero tolerance for illegal activity, and we are frustrated that the problem seems to be growing rather than shrinking,” said Tyler J. Wilson, AAHomecare president and CEO. “Taxpayer dollars lost to fraud represent theft of resources needed by seniors and people with disabilities. So, we are sharing these aggressive new recommendations with Medicare and its contractors, Congress, the Department of Justice, and the FBI in the hope that we can keep criminals away from the Medicare program.”

AAHomecare's 13 specific recommendations include:

--Mandating site inspections for all new HME providers. A July 2008 GAO report underscored the need for CMS to ensure that its contractors are conducting effective site inspections for all new applicants for a Medicare supplier number.

--Requiring site inspections for all HME provider renewals. All renewal applications should require an in-person visit by the National Supplier Clearinghouse, the contractor CMS uses to ensure integrity in the Medicare program.

--Improving validation of new home care providers. Additional validation of new providers should be included in a comprehensive and effective application process for obtaining a Medicare supplier number.

--Requiring two additional random, unannounced site visits for all new providers. Two unannounced site visits should be conducted by NSC during the first year of operation for new HME providers.

--Requiring a six-month trial period for new providers. The NSC should issue a provisional, non-permanent supplier number to new suppliers for a six-month trial period. After six months of demonstrated compliance, the provider would receive a “regular” supplier number.

--Establishing an anti-fraud office at Medicare. CMS should establish an office with the sole mandate of coordinating detection and deterrence of fraud and improper payments across the Medicare and Medicaid programs.

--Ensuring proper federal funding for fraud prevention. Increase federal funding to ensure that NSC completes site inspection and other anti-fraud measures.

--Requiring post-payment audit reviews for all new providers. Medicare's program safeguard contractors should conduct post-payment sample reviews for six months worth of claims submitted to Medicare by new providers.

--Conducting real-time claims analysis and a refocus on audit resources. Medicare must analyze billings of new and existing providers in real time to identify aberrant billing patterns more quickly.

--Ensuring all providers are qualified to offer the services they bill. A cross-check system within Medicare databases should ensure that homecare providers are qualified and accredited for the specific equipment and services for which they are billing.

--Establishing due process procedures for suppliers. CMS should develop written due process procedures for the Medicare supplier number process, including issuance, denial and revocation of the Medicare supplier number. The procedures must include, for example, an administrative appeals process and timelines.

--Increasing penalties and fines for fraud. Congress should establish more severe penalties for instances of buying or stealing beneficiaries' Medicare numbers or physicians' provider numbers that may be used to defraud the government.

--Establishing more rigorous quality standards. Ensure that all accrediting bodies are applying the same set of rigorous standards and degree of inspection to their clients.

Several anti-fraud measures the association suggested were incorporated into the Seniors and Taxpayers Obligation Protection (STOP) Act (S. 3164), a bill to reduce Medicare fraud that was introduced earlier this year. (See HomeCare Monday, Aug. 4.)

In July, the Medicare Improvements for Patients and Providers Act--the same law that delayed competitive bidding--closed a loophole that would have allowed non-accredited providers to serve beneficiaries, and CMS has mandated a Sept. 30, 2009, accreditation deadline for HME providers nationwide.

CMS Posts Final Quality Standards
BALTIMORE--Following a 4 1/2-hour conference Oct. 14 to advise providers on meeting its quality standards for mandatory accreditation, CMS posted the revised standards on its Web site last Tuesday.

The final standards are similar to the draft standards proposed in February, according to the agency’s Sandra Bastinelli, who conducted the explanatory conference. However, the changes do include:

--A requirement that the RTS (Rehab Technology Supplier) be a W-2 employee. The final standards also recognize RESNA’s new ATP (Assistive Technology Professional) credential that is effective Jan. 1.

--A new section on therapeutic shoes and inserts.

CMS has set Sept. 30, 2009, as the deadline by which all DMEPOS suppliers must be accredited in order to continue Medicare billing privileges. During the conference, Bastinelli also urged providers to get their accreditation applications in by Jan. 31, 2009, in order to make sure they have time to meet the September deadline. CMS has said it cannot guarantee accreditation for providers who do not apply to one of its approved accrediting bodies by Jan. 31.

For a PDF of the final quality standards document (with changes highlighted in yellow), click here.

CMN and DIF Denials Cost Suppliers, Jurisdiction D Says
FARGO, N.D.--Recent analysis of claim denials show a high number of claims denied for Certification of Medical Necessity (CMN) or DME Information Form (DIF) issues, Noridian Administrative Services, the Jurisdiction D DME MAC, notified providers last week.

The percentage of claims being appealed for these denials is estimated at 35 percent of the appeals workload, or 18,233 appeals. The average cost of these denials for one year is approximately $1.4 million, NAS said.

The denials are for services including parenteral and enteral nutrition, infusion pumps and oxygen equipment. A CMN or a DIF is required for these services for the initial claim and for revision and recertification situations, the DME MAC reminded.

Noridian suggests the following tips to ensure claims will not deny for CMN or DIF issues:

• Always check beneficiary history to see if another supplier already has a CMN or a DIF on file by asking the beneficiary if another supplier has previously provided the services in question or by calling the Interactive Voice Recognition (IVR) system to research this information.
• Always submit the CMN or DIF with the initial claim.
• Verify the initial claim is correctly processed before submitting subsequent claims.
• Make sure all necessary information is present on the CMN or DIF.
• Make sure the ordering physician or medical professional has signed and dated the CMN.
• Submit claims in chronological order.
• Failure to follow these tips may result in a CMN or DIF related denial. When a CMN/DIF is not filed with the initial claim, it will cause denials for subsequent claims.

Not only do the claims deny, Noridian said, but suppliers spend a great amount of money requesting appeals. NAS estimates that it costs suppliers an average $36.74 for an appeal, including preparation and pulling supporting documentation, mailing/faxing costs and the employee wages to request and track appeals.

For the full notice, click here.


Ready for Personal Health ID Numbers?
SANTA MONICA, Calif.--Creating an exclusive health identification number for every American would reduce medical errors, speed the use of electronic medical records, increase overall efficiency and help protect patient privacy, according to a new RAND Corp. study.

The study, released Oct. 20, says setting up such a system carries an $11 billion price tag but would result in savings up to $77 billion, reaped by easing health care processes and reducing repetitive and unneeded care.

“Establishing a system of unique patient identification numbers would help the nation to enjoy the full benefits of electronic medical records and improve the quality of medical care,” said Richard Hillestad, the study’s lead author and senior principal researcher at RAND, a nonprofit research organization. “The alternative is to rely on a system that produces too many errors and puts patients’ privacy at risk.”

The study was backed by powerhouse health IT companies including Intel, IBM, Microsoft, MYSYS, Oracle and Siemens.

Most health systems currently use statistical matching to things like a patient’s Social Security number, name, birth date, address, gender or a medical record number created by the provider. But the researchers found statistical matching returns incomplete medical records about 8 percent of the time and risks patient privacy because a large amount of personal information is exposed to computer systems during the search.

More than 10 years ago, HIPAA called for HHS to develop a health ID system, but efforts have been stalled by privacy and security concerns, and Congress has yet to provide funding. The same fears have slowed the government’s efforts to move to a nationwide system of electronic health records--which President Bush has called for by 2014--that would be shared by all providers.

To overcome these concerns, the RAND study calls for creation of laws “that severely punish those who misuse information retrieved with a health ID number,” and also suggests the ID system could start as a voluntary program.

In the meantime, Microsoft announced last week it is teaming with Aetna to provide the insurer’s members with portable personal health records (PHRs). Aetna members will soon be able to transfer the information in their records directly to Microsoft’s HealthVault, a security-enhanced, Web-based consumer health platform that can be accessed even if they change jobs or health plans.

To read the entire RAND study, click here.

VGM Preps for NCB Round 1.2
WATERLOO, Iowa--The VGM Group is cranking up a series of educational conferences on national competititive bidding for 2009.

"Based on guidelines set forth by MIPPA and recent comments made by Kerry Weems, providers in the areas affected by Round 1.2 should be fully prepared to go through the bidding process in 2009," said VGM & Assoc. President Ron Bendell. "We'll continue to fight, but CMS appears to be intent on releasing the request for bids in early 2009 and quickly moving forward from there."

The members services group will offer “Competitive Bidding Round 1.2: The Rules Have Changed.” Presenters will be Mark Higley, VGM vice president-development, and John Gallagher, VGM vice president-government relations. Topics to be discussed will include an evaluation of Round One, including lessons learned, rules and regulations, disqualified providers, bidding options, bid preparation, hard-copy documentation and the legislative battle against the bidding program.

For more information, dates and locations, check the VGM Web site at www.vgm.com.

Invacare Records Strong Q3
ELYRIA, Ohio--Invacare has posted strong third-quarter financial results, with a 9.3 percent increase in organic sales and a 40 percent improvement in adjusted earnings before taxes, the company reported Thursday.

Adjusted earnings per share were $0.42 for the third quarter of 2008 compared to adjusted earnings per share for the same period last year of $0.34. Adjusted net earnings for the quarter were $13.4 million versus $10.8 million last year. Adjusted earnings before taxes for the quarter were $17.5 million compared to $12.4 million for the third quarter last year. The improvement resulted primarily from organic sales growth from both volume and selective price increases, cost reduction activities and reduced net interest expense, which were partially offset by increases in commodity costs, according to a statement from the company.

Net sales for the quarter increased 13.4 percent to $461.8 million versus $407.3 million last year. Organic net sales for the quarter grew 9.3 percent over the same period last year, driven by improved performance in all segments, officials said. A. Malachi Mixon, III, Invacare chairman and CEO, pointed to a particularly strong quarter for North American HME, which had its fourth consecutive quarter-over-quarter increase.

North American HME net sales increased 13.9 percent to $191.2 million compared to $167.9 million in the same period last year, driven primarily by sales increases in all principal product lines, Mixon said.

Rehab product line net sales increased 2.2 percent compared to the third quarter last year, despite volume declines in the consumer power product line caused by the company’s previous decision to terminate sales to a large national account. Excluding consumer power products, rehab product line net sales increased 7.6 percent compared to the third quarter last year, driven by volume increases in custom power and custom manual wheelchairs. Standard product line net sales for the third quarter increased 21.7 percent compared to the third quarter of last year, driven by manual wheelchairs and patient aids. Respiratory product line net sales increased 20.6 percent on increases in oxygen concentrators and HomeFill, with strong purchases by national providers.

“The company’s operating performance was solid all the way from strong organic sales growth for the quarter to the 40 percent improvement in adjusted earnings before income taxes,” Mixon said. “The company realized benefits from cost reduction initiatives as well as selective price increases implemented during the quarter, which helped to offset increased commodity costs. Equally important, third quarter free cash flow strengthened as a result of increased earnings to a positive $16 million for the quarter, a significant improvement over the first half of the year. With continued increase in profitability and improved working capital management in the fourth quarter, free cash flow is still projected to be strong for the year.”

While Mixon said the global financial crisis “will impact all businesses, including Invacare’s, demand for home medical products and services should remain strong … Looking at risks over the medium term, the company will remain judicious in its extension of credit to customers, since it is uncertain what potential impact the credit crisis will have on Invacare’s customers’ funding sources.”

Further addressing financial conditions during a press call, Mixon said, “I don’t think any of us are old enough to have ever gone through anything like what we are going through. And some of the old timers here at the company tell me that Invacare actually did better in bad economic times than the good ones, because people aren’t working. They have health problems. They go see their doctor.” At least for now, he continued, “If I weren’t reading the paper, I wouldn’t see any impact on our business … I really think we are about as good a business as you can have to be insulated from the general economy.”

But Mixon also pointed to Medicare’s coming 9.5 percent reimbursement cut, effective in January, and said the industry “may be cautious in its buying patterns with such changes.”

Customers could “migrate down to a less configured product, a more basic product,” Mixon said, as Medicare or Medicaid cut reimbursements. For example, he explained, “we make a full electric bed, where you can lift the patient up and change the head and foot of the bed. We make a semi-electric bed, and we make a manually operated bed. Well, if you can crank with your hand, it will still get the bed up, so it may be that you will see some migration into a ‘less-featured’ category.”

Recently, Invacare expanded its iPartner Solutions services division with the addition of Bargmann Management (renamed Invacare HCS), which specializes in collecting co-pays. "Many of our customers don't have a credit department big enough to really do that," Mixon said. "So here is a service I can go to you and say, 'Look, I will help you collect your co-pay' ... We are continuing to hold the hand and develop relationships that go beyond just the products," he said.

As for how the coming election might affect the industry? “Well, it is a very important issue, and as you listen to McCain and Obama … they are dealing with a global issue of health care, and home care only represents about 2 percent of the whole Medicare budget,” Mixon said.

“I don’t have a clear understanding yet of McCain and Obama’s position on our little industry, but I am trying to find out ... We are advocates for home health care, and we certainly have supporters on both sides of the aisle. As an example of that was tremendous congressional support we had in overriding the [president's veto] of the ‘doc fix’ bill when we were able to get the long delay in competitive bidding. And we are very hopeful the industry can work with CMS to change that program to an alternative.”

HME Company Newswire
ResMed Introduces Mask for Women Only; Other HME Company News
POWAY, Calif.--ResMed will debut its new Swift LT for Her, a mask specially designed for women, at Medtrade this week.

Based on an independent poll of CPAP users conducted on consumer Web site TalkAboutSleep.com, 90 percent of women believe manufacturers should be more considerate of women’s needs in mask development. Eighty-five percent of female respondents said they had special needs in mask choice and fit, and more than 70 percent said they had mask fit problems. Additionally, 30 percent of poll respondents said their mask headgear pulled their hair or interfered with their hairstyle.

The new mask incorporates ResMed’s nasal pillows technology with personalized features for women's unique preferences, the company said. With no forehead support and weighing 2.3 ounces, the mask features a soft but secure seal to ensure comfortable sleep, and has an adjustable backstrap that can be worn over or under the hair.

According to the TalkAboutSleep poll, more than 25 percent of respondents said their mask was too large, so the Swift LT for Her has an extra small pillow to extend the fit range for more petite noses. The mask frame width is 50 percent smaller, suitable for side sleeping, and the rotating barrel allows women to customize for the best fit. With its quiet nasal pillows system, the company said, the mask "offers a minimal, unobtrusive nasal pillows system that lets a female patient feel more tlike herself."

“By investing in developing new features that are important to women, ResMed is providing support to patients and clinicians who are committed to patient compliance,” said Tracy Nasca, TalkABoutSleep.com's founder and senior vice president.

In other HME company news ...

Apria Stockholders Approve Merger
LAKE FOREST, Calif.--Stockholders of Apria Healthcare Group voted to approve the giant provider's merger with Sky Acquisition, a wholly-owned subsidiary of an affiliate of The Blackstone Group, in a special meeting earlier this month. The deal is expected to be completed before year-end.

Cardinal Spins Off Tech Business
DUBLIN, Ohio--Cardinal Health has announced it will spin off its clinical and medical products businesses as a separate company based in San Diego. The spin-off, which has not been named, is expected to be completed by mid-2009 with offerings for infusion, medication and supply dispensing, respiratory care, infection prevention, medical diagnostics and surgical procedures. Products will include the Alaris IV infusion and Pyxis dispensing systems as well as AVEA and LTV series ventilators. The new company will be led by current vice chairman and med-tech industry veteran David Schlotterbeck. The company also announced that Chairman and CEO Kerry Clark will continue to lead Cardnial Health through the spin-off and then will retire. Clark will be succeeded by George S. Barrett, who has served as vice chairman and CEO of Healthcare Supply Chair Services since joining the company in January.

Computers Unlimited Strengthens with Three New Partnerships
BILLINGS, Mont.--In news from Computers Unlimited, the company recently announced it has partnered with ARTSCO, Element Payment Services and A/R Allegiance Group. The new CU interface with ARTSCO’s Rehab Anywhere will allow rehab companies to reduce processing time from client intake to billing. An enhancement from Element Payment Services allows users to accept, process and transmit payment card transactions through CU’s TIMS software utilizing Element’s Express processing platform, which handles one-time and recurring payment transactions and supports innovative security features such as offsite data storage and secure encryption hardware. A/R Allegiance Group will also develop enhanced integration between TIMS and its CollectPlus, which will manage billing communication with the patient for each account and automatically send updates back to TIMS.

Covidien Launches Compliance Alliance
BOULDER, Colo.--Covidien has launched the Sandman Alliance, a new patient compliance program that provides education, support and encouragement to OSA patients through personal coaching. The program links a sleep counselor with each patient to document progress and track the patient’s therapy using a Web interface, which also allows the patient’s sleep physician to log in and monitor the patient’s performance. To support the offering, Covidien has partnered with Indianapolis-based Assist Management. According to a Covidien release, less than 50 percent of OSA patients continue their treatment beyond the first week. “One of the biggest problems with sleep therapy is getting patients to comply with their treatment plans,” said Kevin Mongonia, president of Assist Management. According to the company's data, patients enrolled in the Sandman Alliance program comply 82 percent of the time. Earlier this year, Covidien launched a trio of CPAP devices including the Sandman Intro, the Sandman Info and the Sandman Auto.

Hill-Rom Adds Liko
BATESVILLE, Ind.--Hill-Rom has announced its acquisition of Swedish lift manufacturer Liko for $183 million. “Hill-Rom has previously stated its desire to add complementary technologies to its portfolio that leverage our global business footprint and presence across the continuum of care,” said Peter H. Soderberg, president and CEO of Hill-Rom. "This acquisition is an important step in this direction as nearly 75 percent of Liko's revenue is derived outside of North America and the company has a well balanced focus on the acute, extended care and home care segments--all care settings where lifts are widely deployed and where Hill-Rom is intensely focused." Liko products will continue to be marketed under the Liko name with the addition of Hill-Rom branding. The primary Liko business operations now carried out in Liko's headquarters in Lulea, Sweden, and at its other locations (notably Franklin, Mass., in the United States and locations in the United Kingdom and in Germany) will continue with only minor adjustments.

Linde Acquires Respiratory Support Services
ATLANTA--Linde North America has acquired Respiratory Support Services, Livingston, Tenn., which delivers post-acute respiratory care in a variety of setings, including patient homes. "Adding RSS' advanced patient care capabilities enables Linde to offer a more complete product and service line in the U.S.," said Mike Walsh, president of LifeGas, the medical division of Linde North America. Under terms of the acquisition, RSS management staff and employees will join LifeGas, but the company will operate as Linde RSS LLC. The deal enables Linde to introduce its global REMEO program for care of ventilated patients to the U.S. market. Latin for "I return home," the REMEO program attempts to bridge the gap between the hospital intensive care unit and the patient’s home to provide ventilation patients with "an unprecedented continuum of care," the company said.

Wear Drug Buys Sherrick Drug & Medical
CARTHAGE, Ill.--Sherrick Drug & Medical has announced the sale of its pharmacy and durable medical equipment to Wear Drug. After the deal is finalized in early November, Wear will merge the two pharmacies to create a larger pharmacy in its County Market store, Wear's location since 2006. The DME portion of the Sherrick business will stay in its present location but will be renamed MORE (Mobility Oxygen & Rehabilitation Equipment) Medical. Sherrick Home Health Agency is not a component of the sale.



Newsmakers
New COOs at Graham-Field, SeQual
GF Health Products, Atlanta, has appointed James Hourigan as its new COO. Hourigan, who was most recently the COO for Inviro Medical, a manufacturer of medical safety devices, will be responsible for the company’s day-to-day operations. According to Graham-Field CEO Bea Scherer, “Jim brings to Graham-Field a tremendous amount of executive experience in global logistics, manufacturing, group purchasing and customer focused marketing ... I know Jim’s experience will allow Graham-Field to improve our efficiencies company-wide, which will result in improved customer service and profitability.”

Bob Hoffman, RRT, has been appointed director of Nationwide Respiratory, Waterloo, Iowa-based VGM Group’s alliance for respiratory providers. Hoffman comes from Allen Memorial Hospital’s (Waterloo) Medical Equipment Services, where he was founder and manager. He also developed an HME company for Waterloo’s Covenant Medical Center, owned his own HME company and has been a hospital staff RT.

Sarnova, a distributor of health care products in the emergency medical services, respiratory and surgical markets, has named Craig T. Davenport CEO. A 35-year veteran of the health care industry, Davenport most recently served as chairman, CEO and president of Endocare. His appointment follows the creation of Sarnova earlier this year through the merger of specialty health care products distributors Tri-anim Health Services and Bound Tree Medical.

San Diego-based SeQual Technologies has named Randy Steward as COO. Steward was most recently executive vice president and CFO for $2.5 billion consumer products company Spectrum Brands, which has operations in over 100 countries and distribution in more than a million stores. Brand names include Rayovac, Varta, Remington, Tetra and Cutter. “As corporate operations became more complex due to increased market share with the Eclipse 2 and a more diversified respiratory portfolio, SeQual recognized the value of adding a key executive management position,” said Ron Richard, SeQual CEO. “We are pleased to have someone of Randy’s experience and expertise come aboard.” Steward has also served as president and general manager of the Thermoscan division of Braun, a Gillette subsidiary that developed a line of technology applied to human body temperature measurement.

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

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

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

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

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

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

CMS APPROVED ACCREDITATION FOR ALL DMEPOS
The Compliance Team, Inc.
USA 1-215-654-9110
www.exemplaryprovider.com