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Headline News
O2 Stakeholders Work toward Common Ground
ATLANTA--Members of a newly formed oxygen coalition sifted through provisions of several plans last week looking for common ground on reform of Medicare’s oxygen benefit and repeal of the 36-month rental cap.

“The big push now is to get a unified voice,” said Mike Calcaterra, Montana state chairman and legislative/DAC chair for the Big Sky Association for Medical Equipment Services, which covers Idaho, Montana and Wyoming. With industry advocates headed to Washington this week for the American Association for Homecare’s lobby day, “we need to make sure we are on message there with something that is giving us immediate relief. We are already seeing providers closing their doors,” Calcaterra said.

AAHomecare convened the New Oxygen Coalition, or NOC, after a number of state HME associations said they could not support the long-term plan unveiled in January by AAHomecare and the Council for Quality Respiratory Care. Some state leaders said the plan lacks specifics and does not immediately address the 36-month cap and the post-cap payment rules, which took effect Jan. 1.

AAHomecare leaders fear, however, that Congress won't budge on the cap before a reform plan is in place.

“While everyone would like to eliminate the 36-month cap or get a better set of payment rules, both are difficult targets to achieve in the current political environment,” said Tyler Wilson, president of AAHomecare. “Many within the oxygen community view the likelihood of more cuts to oxygen as an imminent threat. The big challenge right now is to develop a consensus plan that will address both the immediate issues and the longer-term goal of reform.

“All of us face real peril at the hands of Congress and CMS if the oxygen provider community does not present at least a core of common principles to address the issues.”

Members of the new coalition--which includes some state associations, VGM, The MED Group, the CQRC and AAHomecare--all agree long-term reform is needed and the cap must be repealed, but they are at odds over how those things can be accomplished. State association representatives held a conference call last week to make sure they were “all on the same page,” said one state exec, and participated in calls with AAHomecare to try to hammer out their differences before lobbying in Capitol Hill offices Wednesday.

“There are different versions of what reform might look like,” said Teresa Tatum, executive director of the Georgia Association of Medical Equipment Services. “There is some agreement, but the major disagreement is on the payment methodology.”

In addition to the AAHomecare/CQRC plan, two other reform plans have been proposed by Big Sky AMES and Jason Rogers, president of GAMES.

“We think we have a vehicle that can give us an immediate fix [to the rental cap],” said Calcaterra about the Big Sky plan. “AAHomecare brought their proposal they worked on with CQRC--and a lot of work, a lot of time went into that--but we didn’t see any immediate fixes in it,” Calcaterra said. “It’s big-scale reform, and that’s going to take a while. We are worried about providers being there when the reform takes place. We feel we have the plan for realignment on how they pay for the service that would eliminate both the cap and competitive bidding.”

The AAHomecare/CQRC plan, developed with the help of former CMS acting administrator Leslie Norwalk, repeals the cap, changes the status of oxygen entities from “suppliers” to “providers,” exempts oxygen from competitive bidding and would reimburse providers for patient services, as well as equipment and supplies, in a bundled payment. In addition, the plan is budget-neutral, a plus AAHomecare points out considering the nation’s current economic pressures (see HomeCare Monday, Jan. 12).

But the overhaul plan includes a case-mix adjusted payment system that bases reimbursement on patient ambulation, liter flow and modality--a methodology some providers have said they are wary of.

According to Calcaterra, the Big Sky plan rearranges monies in the benefit to reimburse more appropriately for service and realigns payments so they aren’t “front-loaded.” Dubbed the “oxygen flip plan” by some stakeholders, the plan “flips” priority of payment dollars from stationary to portable.

Rogers said his “blended” plan “is an attempt to unite the several plans put forward.” His plan includes elements from both the AAHomecare and Big Sky plans and addresses other concerns he has heard from providers and groups around the country. It also provides for possible implementation of a prospective payment system.

Even as they grappled with how to move forward, stakeholders were preparing to visit lawmakers Wednesday to urge repeal of the oxygen cap. They will be armed with a sign-on letter generated by Rep. Tom Price, R-Ga., who last year introduced legislation to repeal the cap. While the content of the letter had not been finalized as of Friday, it was believed to assert that the Deficit Reduction Act, which mandated the rental cap, also instructed CMS to establish adequate payments for oxygen.

“That’s where we have the problem,” said Tatum. “After 36 months, there aren’t adequate payments.”

Price was expected to ask his colleagues to contact CMS and appeal to the agency to address the issue administratively. "It appears that everybody [in the oxygen coalition] agrees that those post-cap payment policies should be addressed through the authority that CMS already has,” said Tatum. “I feel like we are all going to come together behind this letter.”

Calcaterra is hopeful that the industry can reach agreement as well on a long-term plan. "We truly want to reform it, but we are also trying to make Congress and CMS understand that there is so much more to what we do than just [deliver] a piece of equipment,” Calcaterra said. “There is absolute disconnect between the requirements to be a provider and the payment modality …

“It is critical to get the industry behind whatever [the reform plan] ends up looking like,” he added. “We’re already seeing problems for beneficiaries being able to travel, relocate.” Calcaterra said he’s heard of one provider wanting to charge as much as $4,000 to take care of a “snowbird” seeking relief in Florida from the cold in his home state. “I haven’t seen proof of that yet,” he said. “But the bottom line is that the beneficiary is caught in the middle of that.”

So are providers. “The cap is still the cap,” lamented Bill Baker, RRT, president of RxO2 in Tucson, Ariz., “and every month [means] thousands of dollars lost. We still have to provide the services at no fee … so the bleeding is still perfuse. The members of this industry are hemorrhaging to death in red ink.”

For information on AAHomecare's "Homecare on Capitol Hill" day, visit www.aahomecare.org.

Daschle Debacle Deals a Blow
ATLANTA--Home care providers reacted with shock at the news that former Senate Majority Leader Tom Daschle, D-S.D., had withdrawn his nomination as secretary of Health and Human Services. “While we are not in any worse shape because he withdrew, it is a blow to what could have been,” said Tim Pederson, CEO of WestMed Rehab, Rapid City, S.D.

As a Capitol Hill veteran of personal meetings with Daschle, Pederson looked forward to the prospect of working with a fellow South Dakotan on various HME issues. Factor in Daschle’s well-publicized meeting last year with Invacare Chief Mal Mixon, and last week’s events leave behind an unmistakable aura of lost opportunity. (See HomeCare Monday, Nov. 24, 2008.)

Although questions about Daschle’s unpaid taxes--more than $128,000--dominated the headlines, Pederson said concerns about past lobbying efforts were also to blame. “What did him in was his perceived cozy relationship with health care providers as a lobbyist,” said Pederson, who chairs AAHomecare’s Rehab and Assistive Technology Council. “You combine the two and it is a volatile mix.”

While acknowledging Daschle’s understanding of HME, AAHomecare officials were quick to point out that had he ascended to the HHS post, there were no guarantees of positive developments for the industry. “Sen. Daschle was familiar with many of our issues, and better policy for home medical patients and providers might have emerged from CMS under his leadership at HHS,” said Michael Reinemer, vice president of communications and policy. “But even with Daschle as secretary, there was no certainty about how our issues would have fared under the Obama administration and new Congress.

"The fact is," he said, "no matter who winds up at the big desk at HHS, we will have our work cut out for us.”

Speculation immediately rippled across Capitol Hill about who might emerge as the next nominee to fill the vacant HHS slot. According to press reports, a slew of Democratic governors are all possible candidates, including Kansas Gov. Kathleen Sebelius, Pennsylvania Gov. Ed Rendell, Michigan Gov. Jennifer Granholm, former Oregon governor John Kitzhaber and former Vermont governor and Democratic National Committee Chairman Howard Dean (a physician).

Jeanne Lambrew, who co-authored a book on health care reform with Daschle, is also in the mix. An additional name is Sen. Debbie Stabenow, D-Mich. “I think she [Stabenow] has a keen sensitivity to our issues,” said Pederson. “She was the prime sponsor of the rehab carve-out legislation that was introduced last spring.” (See HomeCare Monday, May 5, 2008.)

At AAHomecare, advocates are gearing up for Capitol Hill visits this week, and despite the empty spot at HHS, Reinemer said there is no time to waste. “We are not putting anything on hold while the secretary’s job is vacant,” he emphasized. “We have deep concerns about the [competitive] bidding program. There are many problems with the oxygen cap. We need to preserve strong policy for rehab and power wheelchairs. Policy-makers and the media need to appreciate our leadership in trying to stop Medicare fraud, and our specific 13-point proposal is very aggressive.”

The association expects more than 175 providers and others at its Washington fly-in on Wednesday.

Pharmacy Groups Ask CMS to Reconsider Surety Bond
ATLANTA--Following the introduction of a bill Jan. 21 that would exempt pharmacies from accreditation, last week three pharmacy groups asked CMS to reconsider its new $50,000 surety bond rule.

In a Feb. 2 letter to Charlene Frizzera, CMS acting administrator, the groups urged the agency to reconsider the regulation, which they said “creates costly, onerous requirements for community pharmacies and jeopardizes patients’ access to necessary health care products and services ...

“At a time when policymakers are underscoring management of chronic diseases as a cornerstone of health care reform, this regulation will fragment care by depriving patients of the tools necessary in disease management, which will ultimately raise federal health care spending,” the letter continued. “For example, if pharmacies are unable to afford the cost of the surety bonds and participate in the Medicare program, diabetic patients are likely to face difficulties in obtaining their blood glucose testing supplies and pharmacists' counseling to control their disease.”

From the Food Marketing Institute, the National Association of Chain Drug Stores and the National Community Pharmacists Association, the letter said that in issuing the requirement, CMS noted the surety bond would provide some protection to Medicare from fraudulent payments. However, the groups said they thought other anti-fraud measures should be strengthened “instead of forcing the surety bond requirement on legitimate health care providers such as state-licensed pharmacies.”

Under the rule, by Oct. 2 all DMEPOS providers participating in Medicare will need surety bonds for at least $50,000 per NPI number (see HomeCare Monday, Jan. 12). New suppliers must post a bond by May 4.

The groups asked Frizzera to reopen the notice and comment period and seek additional views about the impact of the bond requirement on Medicare beneficiaries and legitimate suppliers.

To read the letter on the NACDS Web site, click here.

RAC Program on the Move
BALTIMORE--CMS said Friday it’s set to get going again with implementation of the national recovery audit contractor program.

The agency awarded contracts to four recovery audit contractors, or RACs, in October, but contract protests put implementation on hold. Those protests were resolved Feb. 6, CMS said, so ramp-up of the program will now continue.

In a three-year demonstration in six states--California, Florida, New York, Massachusetts, South Carolina and Arizona--CMS gave the RACs $317 billion in paid claims data on which more than $900 million in overpayments was collected and $37 million found in underpayments. Those results propelled the agency to implement permanent RACs in areas that match the four DME MAC jurisdictions, and the post-payment review program will roll out to all 50 states by Jan. 1, 2010 (see HomeCare Monday, Nov. 17, 2008).

The national RACs remain those announced in October:

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

As part of the settlement of the protests, the four RACs will contract with subcontractors to supplement their efforts. PRG-Schultz will serve as a subcontractor to HDI, DCS and CGI in Regions A, B and D. Viant Payment Systems will serve as a subcontractor to Connolly Consulting in Region C. CMS said each subcontractor has negotiated different responsibilities in each region, including some claims review.

With regard to next steps, over the next several months, CMS said it will begin contacting associations and providers to discuss provider outreach sessions involving the RACs.

VGM Enters Home Modification Market
WATERLO, Iowa--VGM Group said Friday it has entered the exploding home modifications market with a new company called Accessible Home Improvement of America.

“This is a big opportunity, and I’m very excited about it,” said Jim Andreassen, AHIA president, in a release. “We can help many of our VGM and U.S. Rehab members diversify into home modifications. Diversification into other areas of business such as this may be a key to profitability in today’s world of increasing costs and declining reimbursement.

“This may prove to be a part of the solution for orthotic and prosthetic facilities as well,” Andreassen continued. “The majority of this business is cash, workers’ comp and private trust funds, because Medicare and most insurance companies do not pay for the majority of home modifications. That, of course, means fewer headaches because providers don’t have to deal with Medicare, Medicaid and managed care organizations.”

Andreassen is pursuing contracts with manufacturers of accessible home fixtures and will also develop a network of contractors qualified to perform home modifications. Membership in the new organization will require a credentialed CEAC (Certified Environmental Access Consultant) on staff. CEAC is administered by AHIA, and the program, including the final test, is offered online, according to VGM.

Andreassen has been with VGM since 2001 as president of the Orthotic and Prosthetic Group of America, and has "a great track record when it comes to network development and growth," said Jim Phillips, VGM COO.

Accreditors See Flurry of Applications before CMS' Soft Deadline
ATLANTA--Accreditors reported an influx of DMEPOS providers striving to meet CMS’ soft Jan. 31 application date, but whether there will be enough companies accredited by the Sept. 30 mandatory date to serve Medicare beneficiaries is anyone’s guess.

“I’m not sure what enough would be, but I think the biggest fear is that when it’s all said and done, the Medicare beneficiary has enough options or even some options when it comes to their home medical needs decisions,” said Mary K. Nicholas, MHA, executive director of the Healthcare Quality Association on Accreditation in Waterloo, Iowa.

CMS had advised the Jan. 31 deadline for providers to submit applications for accreditation. After that date, the agency said, accrediting organizations could not guarantee that providers would be able to get through the process in time to meet its mandatory deadline. But even with the recent rise in applications, accreditors said there would not be a problem dealing with them.

“We are currently processing each facility’s application and are confident that we can handle the workload,” said Katie Schaefer, spokesperson for the American Board for Certification in Orthotics, Prosthetics & Pedorthics in Alexandria, Va. “We have been ramping up our infrastructure for several years in anticipation of this demand.”

Her comment was echoed by HQAA and The Joint Commission. HQAA’s Nicholas pointed out, however, that it wasn’t the accreditors being able to meet the deadline that providers should worry about. “The onus of responsibility is largely still upon the provider to ensure that even through the time constraints, they can handle it all,” she said.

The accrediting organizations must have time to process the applications and conduct unannounced site surveys. In addition, providers need time to become “survey-ready” and, after the survey, address any problems.

In order to meet the Sept. 30 deadline, said Debra Zak, Ph.D., RN, L. Ac., executive director of home care accreditation for The Joint Commission in Oakbrook Terrace, Ill., “organizations need to get surveyed in June and July, and then they will need to respond to any requirements for improvement.”

Added Zak, “We are essentially telling organizations that in order to help the process flow more efficiently and cut down on their wait time, they need to clearly and accurately complete their application by the end of February, give us a realistic ready date, set aside documentation they know the surveyor will need to see and be survey-ready and at their offices every morning.”

That latter is particularly important for small providers, many of whom make deliveries and call on patients, Zak pointed out. “If you’re not there to open the door at 8 a.m. [the day the surveyor comes], you will have missed your survey,” she said.

Your Post-Cap O2 Questions Asked and Answered
AMARILLO, Texas--With all the confusion surrounding CMS’ new post-cap oxygen payment rules, HomeCare Monday asked Lisa K. Smith, Esq., an attorney with the Health Care Group at Brown & Fortunato, P.C., a law firm based in Amarillo, Texas, to answer home medical equipment providers’ most common questions about the new rules. This week, however, following recent additional guidance issued by CMS, Smith asked the agency to answer several questions of her own.

The Devil is in the Details: On Jan. 27, CMS issued additional guidance regarding billing for oxygen contents and replacement of oxygen equipment after the expiration of the five-year useful lifetime. This guidance is titled “Medicare Billing Requirements and Policies for Replacement of Oxygen Equipment and Oxygen Contents.” (To read the guidance on the Jurisdiction C Web site, click here.) Since the guidance still left some things unclear, we posed additional questions to CMS, and the following are the responses we received.

Question: CMS states that “a new certificate of medical necessity (CMN) is required in situations where oxygen equipment is replaced because the equipment has been in continuous use by the patient for the equipment’s reasonable useful lifetime or is lost, stolen, or irreparably damaged.” Is the requirement for a new CMN, a new “initial” CMN or a new “recertification” CMN?
Answer: A new initial CMN is required in situations where oxygen equipment is replaced because the equipment has been in continuous use by the patient for the equipment's reasonable useful lifetime or is lost, stolen, or irreparably damaged. New testing and recertifications based on the initial CMN, however, are not required unless it is necessary in order to meet existing medical review guidelines for oxygen and oxygen equipment. The most recent qualifying value and testing date should be entered on the CMN. (The initial date on the CMN should be the date that the equipment was delivered to the beneficiary.)

Question: CMS states that when providing replacement oxygen equipment, the supplier must also have proof-of-delivery documentation that demonstrates that the oxygen equipment being replaced has been in use for at least five years. While this may not be a problem for a supplier who has had its equipment with the patient for the full five years, it could easily be a problem if the patient has changed suppliers during the five-year period. What happens if a supplier cannot obtain a delivery ticket that is kept by a previous supplier? Can the supplier rely on a copy of the initial CMN on file with the DME MAC?
Answer: Regarding proof of delivery from previous suppliers, if the supplier cannot obtain this documentation, then it cannot prove that the item has been used on a continuous basis for more than five years. The supplier will have to go based on when it first began furnishing the equipment--the supplier should have proof-of-delivery documentation for its equipment.

Question: CMS states “if oxygen equipment is replaced because the equipment has been in continuous use by the patient for the equipment’s reasonable useful lifetime or is lost, stolen, or irreparably damaged, the patient may elect to obtain a new piece of equipment” Will breaks in service be considered when calculating the “reasonable useful lifetime” or will it be calculated as a straight five years from the initial delivery date?
Answer: We do not count the days of a break-in-billing without a break-in-need toward the reasonable useful lifetime. For example, if there is a break-in-billing of 50 days, then the reasonable useful lifetime will effectively be five years and 50 days from the date of delivery. As another example, if there is a break-in-billing of 120 days without a break-in-need, the reasonable useful lifetime will effectively be five years and 120 days from the date of delivery. In 42 CFR 414.210(f) the concept of “continuous use” is tied to “reasonable useful lifetime.”

The case where the break-in-billing has a break-in-need for over 60 days plus the days remaining in the last paid rental month starts a new reasonable useful lifetime.

Based on CMS' Jan. 27 guidance, the following is Smith's updated answer to a previously published question:

Question: Does a portable unit take on the exact start date of the stationary system or can the two be unique? The situation is the physician may initially order a stationary system and a few months later the portable is added. Does the portable unit have a unique oxygen cap start/end date (36-month period), or do I start billing for portable contents once the stationary system caps?
Updated Answer: The 36-month cap period for the portable unit will be different from the 36-month cap period for the stationary system if the portable equipment is added at a later date. The supplier will continue to bill the portable unit as a rental until it reaches the 36-month cap. However, the supplier can start billing for portable contents after the stationary system caps, and need not wait for the portable unit to cap.

This means that the supplier is able to bill for both the portable rental and portable contents for that period after the stationary system caps and before the portable system caps. Once the portable system caps, the supplier can continue to bill for portable contents.

In other words, stationary and/or portable contents can be billed after the stationary system has reached the 36-month cap. Stationary and/or portable contents cannot be billed during the 36-month rental period for the stationary system. This means that when a supplier replaces the stationary oxygen equipment at the end of the five-year useful life and starts a new 36-month rental, it cannot continue to submit claims for portable contents.

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.

Catch Up with the DME MACs at Medtrade Spring
Having trouble keeping up with new policies, new rules, new payments? Then catch up with the DME MACs at Medtrade Spring. Staff from each of the four Medicare contractors, in addition to the National Supplier Clearinghouse (NSC), Common Electronic Data Interchange (CEDI) contractor and the Competitive Bidding Implementation Contractor (CBIC) will be on hand in Booth 932 to answer questions. The DME MACs will also give a one‐hour "Medicare Updates" presentation on March 26 at 9:45 am. For information on other sessions and events at Medtrade Spring, March 24-26 at the Las Vegas Convention Center, visit www.medtrade.com. When you register, ask for the special $99 conference rate, good until Feb. 25.

Coming Up
Lobby Days, Learning Teleconferences
"Homecare on Capitol Hill Day," sponsored by AAHomecare, is set for Wednesday this week (Feb. 11), in Washington. The one-day fly-in--which will focus on the 36-month oxygen cap and post-cap payment issues, competitive bidding and recovery of the 9.5 percent cut to rehab--will begin with issue briefings at 8 a.m., followed by congressional meetings. For information, visit www.aahomecare.org.

The Jurisdiction C DME MAC has scheduled a webinar on "Reopenings and Appeals" to be offered Feb. 16 and Feb. 20. For information, visit www.cignagovernmentservices.com/jc/pubs/news/2009/0109/cope9249.html.

In a teleconference sponsored by Dynamic Seminars & Consulting, health care attorney Lisa Smith of Brown & Fortunato will present "All You Need to Know about the New Oxygen Rules" Tuesday, Feb. 24. An additional seminar on "Making the Sales Call Profitable" will be presented Feb. 26 by industry consultant Louis Feuer. For information, call 954/435-8182 or visit www.dynamicseminars.com.

DME MAC Jurisdiction D has scheduled Web-based workshops on "Advance Beneficiary Notice of Noncoverage" Feb. 24 and "Positive Airway Pressure Device" Feb. 26. For information and a full schedule of workshop events, visit www.noridianmedicare.com/dme.

Teleconferences called "Zero Tolerance for Fraud," presented by consultant Jeanie Lane on Feb. 26, and "Navigating the Revised Competitive Bidding Rules" on March 3 have been scheduled by AAHomecare. For information, visit www.aahomecare.org.

The National Home Infusion Association has scheduled "NHIA Legislative Hill Day" in Washington March 5 in conjunction with its 2009 Annual Conference. For information, call 703/549-3740 or visit www.nhia.org.

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