Stopping both bidding proposals is paramount, the update said: "No matter the subject matter, competitive bidding in health care is a bad idea. It destroys patient service, closes the doors of small business and creates high health care cost due to increased hospitalizations."

Get Oxygen Reform to the Hill, Proponents Say
ATLANTA--A Medicare oxygen reform plan has the potential to help the industry, but the time to move forward is now, the former chairman of the American Association for Homecare said last week.

“At the end of the day, I think it is going to be very good for the industry. But we need to move forward and find some champions on Capitol Hill,” said Tom Ryan, president and CEO of Homecare Concepts in Farmingdale, N.Y., and immediate past chairman of AAHomecare.

Crafted by the New Oxygen Coalition, the benefit reform plan would eliminate the 36-month oxygen cap, remove oxygen from competitive bidding and recognize the services home oxygen providers render. But some providers have balked at a provision in the plan that would change status from oxygen “supplier” to “provider” and at its measures on cost reporting. (See “Oxygen Reform Plan Moves Ahead with 'Provider' Change Intact,” April 13.)

Ryan said he knows controversy still swirls around the plan. However, he said, “We are in a level of threat. I don’t think we should be led to believe that we are out of the woods.” He said there is still talk in Washington of cutting the 36-month cap to 18 or 13 months, and noted another potential cut if competitive bidding moves forward under CMS’ interim final rule.

Alyce Crossman of UpState Home Care in Clinton, N.Y., and president of the New York Medical Equipment Providers association, echoed Ryan.

The reform plan "is giving us a chance to get together and find a way to keep the access and service to the patients," she said. "I would rather have a part in shaping the future of our industry than let [legislators and regulatory agencies] do it on their own.”

But, Crossman said, time is of the essence. The plan’s proponents are hopeful oxygen reform can become part of the nation’s overall health care reform package and are working to get draft legislation up to Capitol Hill, she said.

In a letter last week, Senate Finance Committee Chairman Max Baucus, D-Mont., and Senate Health, Education, Labor and Pensions Committee Chairman Ted Kennedy, D-Mass., told President Obama their committees will consider health care reform legislation in early June. Baucus has said he wants reform legislation to clear the Senate by the August congressional recess, and lawmakers in the House have set a similar timetable for action on health reform.

AAHomecare: Consider 13-Point Fraud Prevention Plan--Please!
WASHINGTON--Last week at a Senate subcommittee hearing on Medicare and Medicaid fraud, AAHomecare submitted a statement for the record outlining its 13-point plan to stop fraud.

But during the Wednesday hearing, an association update said, the DMEPOS competitive bidding program “was discussed as if it were an anti-fraud tool and a panacea for Medicare reform.”

A CMS official presented the following testimony at the hearing, which was conducted by the Senate Committee on Homeland Security and Governmental Affairs Subcommittee on Federal Financial Management, Government Information, Federal Services and International Security:

“Until DME competitive bidding is fully operational, CMS is pursuing a ‘stop-gap program’ to focus on Medicare fraud in seven high-risk areas across the country where CMS is increasing our oversight of the highest paid DMEPOS suppliers and the highest billed DMEPOS equipment and supplies.

“The ‘stop-gap program’ increases pre-payment reviews of medical equipment suppliers and will also single out the highest-billed claims--continuous positive airway pressure (CPAP) devices, oxygen equipment, glucose monitors and test strips and power wheelchairs … The plan toughens the background checks on new suppliers and increases scrutiny on the highest ordering physicians and the highest utilizing beneficiaries.”

AAHomecare unveiled its 13-point plan to reduce fraud last fall, but in the midst of the election, “it didn’t resonate the way it should,” President Tyler Wilson said later. So the association held a press briefing and presented the plan to Congress again in February.

Among its provisions, the plan mandates site inspections and requires a six-month trial period for new providers. The anti-fraud plan also calls for stiffer quality standards, increased penalties for fraud and real-time claims analysis to identify skewed billing patterns more quickly. (See “One More Time: AAHomecare Rolls Out Anti-Fraud Plan,” Feb. 11.)

Wilson told reporters the association's action plan “is a proactive solution that will be far more effective than unnecessary Medicare cuts to the home medical equipment sector that only harm patients and seniors.”

In its statement to the subcommittee last week, the association said the plan “is a tangible demonstration of the home medical equipment sector’s commitment to stopping fraud and abuse in the home care sector. More importantly, the plan will ensure that bad actors will no longer manage to enter the system, and those that are unfortunately already in are quickly discovered, removed and harshly punished.”

OIG Scrutinizes S. Florida Inhalation Drug Spending
WASHINGTON--While only 2 percent of Medicare beneficiaries live in South Florida, the area accounted for 17 percent of Medicare's total spending for inhalation drugs in 2007, according to an HHS Office of Inspector General report.

Released Tuesday, the report--“Aberrant Claim Patterns for Inhalation Drugs in South Florida”--said Medicare spent an average of five times more per beneficiary on inhalation drugs in South Florida compared to the rest of the country, with the greatest spending differences attributable to levalbuterol and budesonide.

In addition, the OIG said beneficiaries listed on 62 percent of the area's inhalation drug claims did not have an office visit with the prescribing physicians in the previous three years. Three-quarters of the beneficiaries receiving budesonide also frequently exceeded coverage guidelines set in the local coverage determination for a 90-day period.

Among paid inhalation drug claims, the report said Medicare spent $4,400 per South Florida beneficiary compared with $815 in the rest of the country. In Miami-Dade County in 2007, Medicare paid $143 million for inhalation drugs, 20 times more than the amount paid in Cook County (Chicago), Ill., the county with the next-highest total payments. But the report noted twice as many beneficiaries live in Cook County as Miami-Dade.

In its report, the OIG recommended "CMS ensure that its contractors are enforcing the coverage guidelines for inhalation drugs, eliminate Medicare’s vulnerability to potentially fraudulent or excessive inhalation drug claims in South Florida and review cases where the DME supplier appears to be fraudulently billing Medicare for inhalation drugs."

In a response, CMS Acting Administrator Charlene Frizerra said the agency concurred with the recommendations and noted a "medically unlikely" edit for budesonide implemented in September 2008 had decreased improper payments for the drug by half in Miami-Dade and Broward counties. She also said the DME MAC "is in ithe process of reviewing its experiences with the edit to see whether the edit tolerances can be tightened."

Frizerra described the efforts by CMS' Miami and Los Angeles field offices to identify suppliers whose beneficiaries had no clinical relationship with the physicians listed on DME claims, and to revoke the Medicare billing numbers for suppliers not meeting supplier standards.

Invacare Earnings Up in Q1
ELYRIA, Ohio--Invacare Corp. reported Thursday that first-quarter earnings were up compared with a year ago despite a decline in sales.

Net income for the giant manufacturer rose 8.5 percent for the quarter to $2.4 million, or 8 cents a share, from $2.2 million, or 7 cents a share, in the same period for 2008. Earnings were positively impacted by organic sales growth, cost reductions, lower interest expenses and a lower tax rate.

Net sales decreased 4.4 percent to $398 million versus $416.3 million in 2008, with a negative impact from foreign currency translation.

In the company’s North America/HME division, net sales for the quarter increased 6.2 percent to $186.7 million compared to $175.8 million last year. Rehab product net sales increased by 2.6 percent, and standard product net sales increased 11.1 percent compared to the first quarter of last year, driven by increased volumes in manual wheelchairs, patient aids and beds. Respiratory product net sales spiked 14.3 percent on volume increases in oxygen concentrators and strong purchases by national accounts, according to the company.

Looking ahead, organic sales growth for the year is expected to be 4 to 6 percent, excluding any impact from acquisitions and foreign currency adjustments.

Commenting on the results, Invacare Chairman and CEO Mal Mixon said the economy has not hurt performance. “Health care is probably the most insulated industry from this economic crisis we’re in. Our products are strong,” he said.

Neither has the company seen an effect from the 9.5 percent DME reimbursement cut that took effect in January. “There’s still a lot of profitability in this industry,” Mixon said.

But the outcome of industry struggles with competitive bidding and the 36-month oxygen cap remain to be seen.

“We are optimistic there could be some major changes made to the rules on competitive bidding,” Mixon said. “As to whether the program could be eliminated entirely, that appears less likely.”

As for the oxygen cap, while large public companies had been preparing for the scenario, “a lot of smaller companies didn’t read the fine print and some of them didn’t realize it was going to hit when it hit,” he said, noting those providers may not feel the full impact of the cap or the 9.5 percent cut until the second quarter. “They are still collecting money from rents and sales they made in October, November and December,” Mixon said.

“I think we’re going to see a lot of talk on oxygen reform,” he continued. “The 36 months doesn’t make any sense from a medical point of view … Many patients go five to seven years needing oxygen, so it doesn’t make sense to me that a provider should have to continue providing all this capability at an arbitrary number of payments.”

While there could be more influence from reimbursement changes as the year progresses, Mixon said he expects a strong performance from the NA/HME division for the year. “Our products are very basic. If you have a spinal injury, you need a wheelchair,” he said.

“Revenue sources for our customers are much more dependable and substantial than most industries in general,” Mixon continued. “Our customers don’t have to worry unless we think our government is going to go bankrupt.”

Lincare Hit Hard by Medicare Cuts
CLEARWATER, Fla.--Last week Lincare Holdings reported net revenues for the quarter ended March 31 of $371.7 million, down 10.5 percent from $415.4 million for the first quarter of 2008.

Net income for the quarter was $26 million, or 36 cents a share, compared to net income of $58.2 million, or 76 cents a share, a year earlier.

The results were impacted by “dramatic reductions” in Medicare reimbursements, a company release said, citing the 9.5 percent cut on certain DME and the 36-month cap on oxygen that took effect Jan. 1. The release also noted lower ASP (average sales price) reimbursements for respiratory medicines, primarily albuterol. Drug reimbursements for the 2009 quarter were $22 million less than in the same period last year.

Lincare did not alter its estimate of the full-year impact of the Medicare changes, which it said in February would be $240 to $255 million (see “Lincare Predicts Rough 2009,” Feb. 23). The company serves more than 700,000 customers in 48 states through 1,056 locations.

“The Medicare changes effective as of January 1 of this year have had an enormous impact on our business,” John Byrnes, Lincare CEO, said in the release. “We are confident that we are uniquely positioned to gain market share in our core respiratory business as our competitors struggle to deal with the severe financial consequences of the Medicare cuts.”

MED, ROHO Launch Support Surfaces Referral Network
LUBBOCK, Texas; BELLEVILLE, Ill.--The MED Group and The ROHO Group have partnered on a service that will let clinicians prescribe ROHO’s therapeutic support surfaces and cushions for their patients with orders to be filled through MED’s national HME provider network.

Through centralized dispatch, the ROHO National Referral Fulfillment Network allows a discharge planner, case manager or other health care provider to order the company’s products for patients as they are discharged.

“A discharge planner can work with the local ROHO representative so that she knows exactly what type of products will work best for her patients,” said Rhonda Hines, MED’s director of referral management, in a release. “And, with a dedicated referral network solution in place, she can be assured that the products she has chosen are the products that will be placed by a highly qualified, accredited provider.”

The process will use MED’s Web–enabled GoMEDEdge, which places referrals with providers in the network.

"The winners will ultimately be the end-use clients, who will now have more high quality choices to address their seating and support surfaces needs," said ROHO's Tom Borcherding, executive vice president of global sales.

MED Group has more than 370 providers representing more than 1,200 locations.

Are You Ready for the Red Flags Rule?
ATLANTA--Just when you thought you had all the newest rules and regulations under control, it's time to make sure you're ready for the FTC’s “Red Flags Rule” on identity theft. The full text of the rule, which includes guidelines for developing an identity theft program (beginning on page 63773), is available at www.ftc.gov/os/fedreg/2007/november/071109redflags.pdf. To gain a better understanding of its legal requirements, HomeCare asked health care attorney Jeff Baird, chairman of the Health Care Group at Brown & Fortunato, to explain the Red Flags Rule. His Q&A on the basics of the rule, which has a compliance date of May 1, follows:

Q: What is the Red Flags Rule?
A: The Red Flags Rule is a set of regulatory provisions regarding the prevention and mitigation of identity theft, including medical identity theft. Section 114 of the Fair and Accurate Credit Transactions Act of 2003 amended the Fair Credit Reporting Act of 1970 to require federal bank regulatory agencies, the National Credit Union Administration and the Federal Trade Commission to jointly develop rules and guidelines regarding identity theft. The final Red Flags Rule was published Nov. 9, 2007, and initially required a compliance date of Nov. 1, 2008. The compliance date was subsequently delayed to May 1, 2009. This means that the Red Flags Rule is effective right now.

Q: Is the Red Flags Rule applicable to HME suppliers?
A: Yes, the Red Flags Rule applies to most, if not all, HME suppliers. The Red Flags Rule applies to “financial institutions” and “creditors” that maintain “covered accounts.” The American Medical Association argued that a health care provider is not a “creditor” under the rule. However, the FTC considers a creditor to be any entity that regularly defers payment for goods and services. In other words, a health care provider that bills patients after services are rendered or that bills third-party payers for services rendered to patients is a creditor under the rule. A health care provider that requires payment before or at the time of service is not a creditor.

A “covered account” is a consumer account that allows multiple payments or transactions, or has a reasonably foreseeable risk of identity theft. The FTC takes the position that patient accounts are generally covered accounts under the rule.

Q: What are the basic requirements of the Red Flags Rule?
A: Entities subject to the Red Flags Rule are required to develop a written identity theft prevention program to spot warning signs, or “red flags,” of identity theft. The program must include reasonable policies and procedures that address four basic elements.

First, the program must have policies and procedures to identify red flags during the day-to-day operation of the business. Red flags are suspicious patterns or practices, or specific activities that indicate the possibility of identity theft. For example, if the patient must show some form of identification during intake, then an identification card that looks fake would be a red flag.

Second, the program must have policies and procedures to detect the red flags that have been identified. Continuing the above example, if a fake ID is a red flag, then the program must have policies and procedures in place to detect fake IDs. Third, the program must specify the steps the HME supplier will take when a red flag is detected. The steps should be designed to prevent and mitigate any harm from the detected red flag. In our example, the program would need to specify what actions the HME supplier will take when it determines that a patient has presented fake ID to law enforcement.

Finally, the program must specify how the HME supplier will re-evaluate the program to address new or changing risks of identity theft. For example, the program may specify that it is reviewed and updated annually, and reviewed at any time if the supplier is made aware of a new risk (such as a new method) of identity theft.

The initial program must be approved by the HME supplier’s board of directors (or a committee of the board), or, if the supplier does not have a board, a senior-level employee. Either the board of directors or a designated employee (at the level of senior management) must be involved in the oversight, development, implementation and administration of the program.

The program must provide for training to staff as necessary. If the HME supplier has subcontractors to perform parts of its operation that would be covered by the Red Flags Rule, such as billing, then the program must include policies and procedures for monitoring the subcontractor’s compliance with the program and the Red Flags Rule. The Red Flags Rule includes an appendix that contains guidelines for developing and administering the program.

Q: What are some examples of red flags for HME suppliers?
A: There is no standard list of red flags for health care providers through the guidelines in the Appendix to the Red Flags Rule. However, the FTC has provided the following red flags as potentially relevant to health care providers:

• Suspicious documents. Has a new patient given you identification documents that look altered or forged? Is the photograph or physical description on the ID inconsistent with what the patient looks like? Did the patient give you other documentation inconsistent with what he or she has told you--for example, an inconsistent date of birth or a chronic medical condition not mentioned elsewhere? Under the Red Flags Rule, you may need to ask for additional information from that patient.
• Suspicious personally identifying information. If a patient gives you information that doesn’t match what you’ve learned from other sources, it may be a red flag of identity theft. For example, if the patient gives you a home address, birth date or Social Security number that doesn’t match information on file or from the insurer, fraud could be afoot.
• Suspicious activities. Is mail returned repeatedly as undeliverable, even though the patient still shows up for appointments? Does a patient complain about receiving a bill for a service that he or she didn’t get? Is there an inconsistency between a physical examination or medical history reported by the patient and the treatment records? These questionable activities may be red flags of identity theft.
• Notices from victims of identity theft, law enforcement authorities, insurers, or others suggesting possible identity theft. Have you received word about identity theft from another source? Cooperation is key. Heed warnings from others that identity theft may be ongoing.

Q: How will the Red Flags Rule be enforced?
A: The Federal Trade Commission is generally responsible for enforcing the Red Flags Rule. There are no criminal penalties for failing to comply with the Red Flags Rule. However, the Federal Trade Commission may seek a civil penalty of not more than $2,500 per violation. The statute also allows consumers (i.e., patients) to recover damages and attorneys fees, and the court may also impose punitive damages.

In addition, for HME suppliers enrolled in Medicare, a violation of the Red Flags Rule could also form the basis of a violation of the DMEPOS Supplier Standards, which requires, among other things, that a supplier operates its business and furnishes Medicare-covered items in compliance with all applicable federal and state licensure and regulatory requirements.

Jeffrey S. Baird, Esq., is chairman of the Health Care Group at Brown & Fortunato, P.C., a law firm based in Amarillo, Texas. He represents pharmacies, infusion companies, home medical equipment companies and other health care providers throughout the United States. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization. He can be reached at 806/345-6320 or jbaird@bf-law.com.

In Brief
NAS Looks at K0823 Claims; Military EMR System Will Serve as Model
An update from Noridian Administrative Services said the Jurisdiction D DME MAC may ask for additional documentation for HCPCS code K0823--power wheelchair, group 2 standard, captain's chair, patient weight capacity up to and including 300 pounds. NAS said it is "closely monitoring" the claims due to a high volume of errors found by the CERT (Comprehensive Error Rate Testing) contractor. If you receive a request from NAS for additional documentation on this code, you must submit the information requested within 30 days to avoid a claim denial. The six items that will be requested are: valid written order, obtained prior to delivery; detailed product description; face-to-face examination; home assessment; proof of delivery; and beneficiary authorization. Read the complete update.

Military EMR System to Serve as Health Care Reform Model
President Obama said Thursday the government will create a national electronic medical records system for the military that can be a model for reform of the country's health care administration. The president has emphasized EMRs as part of his health care reform plan. Set up by the Department of Defense and the Department of Veterans Affairs, an electronic record would follow military personnel "from the day they first enlist to the day that they are laid to rest," Obama said.

Third Time the Charm for Sebelius?
Senate leaders say they have struck an agreement for an April 28 vote to confirm Kansas Gov. Kathleen Sebelius as secretary of Health and Human Services. The Senate Finance Committee postponed its vote on her nomination after a hearing April 2, then moved Sebelius forward in a 15-8 vote last Tuesday. But confirmation was delayed again Thursday after Republicans stalled a call for the full floor vote (see ”Sebelius Confirmation Hits Speedbump,” April 23). There could be up to eight hours of debate on the nomination, according to press reports, but Democrats say they are confident they have the 60 votes necessary for confirmation. Sebelius has said that, if confirmed, she will review Medicare’s controversial DMEPOS competitive bidding program before it is implemented.

BOC Suspends Footwear Specialist Certificate
The Board of Certification/Accreditation, International said in a press release Thursday that it would permanently suspend the BOC Footwear Specialist certificate program. According to BOC president Greg Safko, BOC's board of directors weighed several key factors in the decision, "ranging from the mission of the BOC as a 'certification' body to indications of confusion among footwear personnel themselves regarding scope of practice and billing privileges." In the interest of ensuring care to at-risk patients and footwear clientele, Safko continued, BOC encourages all footwear personnel to "pursue the professional path of education, training and certification awarded through the popular BOC Pedorthist program." Read the full release.

NAHC Launches 'Help Us Choose Home'
The National Association for Home Care & Hospice has launched a new home care public relations campaign, "Help Us Choose Home," complete with a new Web site (www.HelpUsChooseHome.com) that went live on March 24. The site features a music video along with various other tools, talking points and resources for those involved with home care and hospice, along with their patients, families and friends, to help get the message out, the association said. The campaign will span four years.

Uplift Kicks Off 2nd Annual Charity Challenge
Uplift Technologies, based in Dartmouth, Nova Scotia, launched its Second Annual Charity Challenge April 20 to provide support for arthritis research and other charitable causes. Throughout the event, which coincides with National Arthritis Month, Uplift will tally sales of its Uplift and Upeasy lift cushions and either make a donation on behalf of qualifying customers to the charity of their choice, or make a direct charitable donation to support arthritis research. The challenge will run through May 31.

According to Uplift President Michael Speraw, “Our products help many people who suffer with arthritis; that’s about one in five American adults. We’re getting older and this makes support for arthritis research more important than ever to deal with a growing problem.” Speraw said last year’s challenge raised more than $10,000.

Nearly 5.6 Million Americans Paralyzed
The results of a new study from the Christopher & Dana Reeve Foundation show there are nearly 1 in 50 Americans living with paralysis, almost 40 percent higher than previous estimates. The study, which surveyed more than 33,000 households, also shows more than five times the number of people living with spinal cord injury than previously thought. For full details, check www.homecaremag.com.

Curb Whistleblower Awards? Not in Fraud Cases, Says Senate
An amendment that would have set a $50 million maximum on the amount a whistleblower can collect through a False Claims Act lawsuit was rejected by the Senate in a 31-61 vote on Thursday. The awards can currently reach 30 percent of the total recovered for the government if a judge approves that much. Sen. Charles Grassley, R-Iowa, who authored the 1986 False Claims Act, said whistleblower suits under the law have since recovered $22 billion. The amendment was proposed as part of the Fraud Enforcement and Recovery Act, which would strengthen the government's ability to combat financial fraud.

Poll: Six in 10 Put Off Health Care
A Kaiser Family Foundation tracking poll found that six in 10 Americans say they or a member of their household have delayed or skipped health care in the past year. The monthly poll found 42 percent of participants used home remedies and over-the-counter drugs instead of visiting the doctor, and 36 percent skipped dental care or checkups. Three in 10 didn't fill a prescription while two in 10 said they either cut their pills in half or skipped doses. The poll shows 59 percent believe health care reform is more important than ever while 37 percent say the country can’t afford health reform because of economic problems.

They’re Baaaaack
According to the Associated Press, bed bugs have made a comeback in what is being called “the biggest outbreak since World War II.” Recently, the small, flat brown bugs have gotten back into the country via international travel. The Environmental Protection Agency held its first National Bed Bug Summit earlier this month to discuss the expanding impact bed bugs are having and figure out how to control the pests. The bugs, which live in the crevices and folds of mattresses, sofas and sheets, feed on blood, and bites can result in itchy welts or swelling.

Coming Up
On the HME Calendar
The Pacific Association for Medical Equipment Services (PAMES) will hold its Annual Meeting May 5-6 in Portland, Wash. For information, call 503/253-9691 or visit www.pames.org.

The South Carolina Medical Equipment Services Association (SCMESA) Annual Meeting is set May 20-22 in Columbia, S.C. For information, visit www.scmesa.com.

The MED Group’s Annual National Rehab Network Summit has been rescheduled for May 9-11 in Denver, Colo. For information, visit www.medgroup.com.

The National Community Pharmacists Association (NCPA) Legislation and Government Affairs Conference will take place in Washington, D.C., May 11-13. For information, call 800/544-7447 or visit www.ncpanet.org.

CMS has scheduled its next Home Health, Hospice and DME Open Door Forum Wednesday, May 13, from 2 p.m. to 3 p.m. ET. To participate by phone, dial 800/837-1935 and use Conference ID 94280596.

The National Association of Rehabilitation Providers and Agencies' (NARA) annual Spring Legislative Conference will be held May 13-15 in Washington, D.C. For information, call 813/855-9168 or visit www.naranet.org.

The American Thoracic Society’s International Conference will take place in San Diego May 15-20. For information, call 212/315-8600 or visit www.thoracic.org.

The Georgia Association of Medical Equipment Services (GAMES) will hold its Spring Quarterly Meeting May 19 in Athens, Ga. For information, visit gameshme.org or call 770/578-3999.

CMS has scheduled a national provider conference call on ICD-10-CM/PCS Implementation and General Equivalence Mappings (crosswalks) May 19 from 1 p.m. - 2:30 p.m. ET. The call will include an overview of the final rule, available planning resources and clarifications. Registration is required.

The Indiana Association for Home and Hospice Care will hold its Annual Conference in Indianapolis May 19-21. For information, call 317/844-6630 or visit www.ind-homecare.org.

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

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