The session will take place at 2 pm in Room N261 at the Las Vegas Convention Center.

OIG Recommends Reimbursement Reduction for NPWT
WASHINGTON--HHS’ Office of Inspector General isn’t happy with what Medicare pays for negative pressure wound therapy pumps. In a report issued Thursday, the OIG said providers pay an average of $3,604 for new pumps compared to Medicare’s purchase price of $17,165--“more than four times the average price” paid by providers.

Medicare reimburses $1,716 monthly for the pumps for the first three months. At that rate, the OIG said, providers “recouped the average cost of a new pump model in about two months. Moreover, if a beneficiary were to rent the pump for all of the 13 months allowed by Medicare, the beneficiary’s coinsurance alone ($3,599) would cover almost the entire average cost of a new pump model.”

Medicare began paying for the pumps in 2001 when there was only one manufacturer--KCI--in the market. Since then, the OIG said a number of manufacturers have introduced new pump models and are charging "substantially less" for them. Aside from its pricing analysis, the OIG noted that all of the winning bids for the pumps in the first round of competitive bidding, averaging about $1,446 a month, were lower than Medicare’s current reimbursement.

The review also found that providers were not communicating as required with almost a quarter of beneficiaries’ clinicians, and without that input, the OIG said, providers “cannot determine whether there is a continued medical need for a pump.”

The OIG included NPWT in its workplan for 2009 after a review in 2007 found that 24 percent of claims did not meet Medicare coverage criteria.

In addition, utilization rates put the category on the OIG radar. Between 2001 and 2007, Medicare payments for the pumps increased 583 percent, from $24 million to $164 million. The industry has argued, however, that use is going up because the therapy is effective.

Based on its findings, the OIG recommended that CMS should use its inherent reasonableness authority to reduce the reimbursement amount for pumps and should also include the pumps in the second round of competitive bidding.

Earlier this year, CMS said it would review all of the devices and codes in the NPWT category.

Read the full OIG report here.

Surety Bond Deadlines Firm, but Questions Remain
BALTIMORE--CMS said last week the deadlines for DMEPOS providers’ surety bonds would be enforced as set out in its final rule on the new requirement--even though the agency has yet to pass on full details about its bond requirements to the surety industry or to those who must purchase the bonds.

During a Special Open Door Forum Tuesday, the agency’s Frank Whelan went over provisions of the final rule, published in the Jan. 2 Federal Register. The rule requires providers applying for Medicare enrollment and those changing ownership or opening a new location to have a bond in place by May 4. And by Oct. 2, all HME providers participating in Medicare will need surety bonds for at least $50,000 per NPI number. (For more, see "AAHomecare, VGM to Offer Surety Bonds,” Jan. 12.)

Whelan said the National Supplier Clearinghouse will reject a pending provider’s enrollment application if a bond has not been submitted by May 4. For any application submitted on or after May 4, the NSC will reject the application if the provider does not furnish a valid surety bond at the time it submits an application.

For enrolled providers, Whelan said, failure to submit a bond by Oct. 2 “will result in revocation of the supplier’s billing privileges.”

According to providers and surety company representatives calling in to the teleconference, however, CMS has not yet released the exact language required for a bond to surety bond issuers. “The bottom line is there is no standard, one-size-fits-all federal government-approved bond form that has been created,” Whelan said, although he noted there are specific items that a bond must cover and certain terms that must be included in a bond, and those are given in the final rule.

Whelan also said CMS plans to issue an MLN Matters article on the bond requirement and would post surety bond FAQs for providers and bond companies on its Web site.

But several teleconference listeners emphasized the late date.

“The May 4 deadline is rapidly approaching and there has been a tremendous amount of questions from the provider community as well as those that have to provide the bond itself, so we’d like to get some sense of when we might expect specific answers on some of these questions,” one caller commented.

“The FAQs will be posted any day now,” Whelan responded. “This will be the first batch of FAQs, and they will be updated on a regular basis. While I do understand your concern about this, we also believe it's important that we provide consistent answers to the supplier community. We’ll try to do so as rapidly as we can, but we want to make sure that everybody is on the same page.”

Another caller from Michigan said her company had been trying “to find someone to do a surety bond and are unable to do that. [What happens] if we can’t find anyone to do a surety bond for us?” she asked.

She and others whose questions went hanging were asked to send an email to Whelan (frank.whelan@cms.hhs.gov) or told their questions would be addressed in the forthcoming FAQs. In the interim, Whelan said he would take email questions from all providers.

Among items that were clarified during the call:

--The surety bond is predicated on an NPI number, not on a tax ID number. If a provider has two separately enrolled DMEPOS locations, each with its own NPI, a $50,000 bond must be obtained for each site.
--Companies with more than one NPI can obtain a single bond that encompasses multiple NPIs and locations. For example, a provider with 10 locations can obtain a $500,000 bond that covers all 10. The bond must, however, specify all the locations it covers.
--If a company is enrolling a new location, it can submit an amendment to the existing bond rather than obtaining a new, separate bond.
--For providers who are adding a new location, “you would be subject to the May 4 deadline for the new location,” Whelan said.
--A higher bond amount may be required for each final “adverse action” imposed against an NPI, including: a Medicare-imposed revocation of billing privileges; suspension of a license to provide health care by any state licensing authority; revocation or suspension by an accreditation organization; a conviction of a federal or state felony offense within the last 10 years proceeding enrollment, revalidation, or re-enrollment; or an exclusion or debarment from participation in a federal or state health care program. The NSC defines an "elevated bond amount" of $50,000 per occurrence in addition to the base surety bond amount of $50,000 for each adverse action.
--A list of certified sureties approved by the Treasury Department from which bonds can be secured can be found at www.fms.treas.gov/c570/index.html. “For purposes of the surety bond requirement, these sureties are considered authorized and are the only sureties from which a supplier may obtain a bond,” Whelan said.
--“If a surety determines that a provider poses a higher risk of loss, some sureties may choose not to offer a bond or may offer a bond but at elevated cost,” Whelan said.
--To prove it has obtained a bond, an HME company should submit a copy of the bond agreement as well as any certificates of proof to the NSC. If the NSC requires additional documentation, the provider will be contacted. A specific address to send the bond information to at the NSC will be given soon, Whelan said.
--A revised CMS enrollment form 855S will be released shortly with a place to list the surety bond.

An audio recording and transcript of the March 17 teleconference will be posted to the Special Open Door Forum Web site and will be accessible beginning March 25.

FAMES Regroups: Joan Cross Is New Executive Director
BRADENTON, Fla.--With the intent of restructuring the Florida Association of Medical Equipment Service, Joan Cross, a veteran home medical equipment provider and former president of FAMES, has been named executive director of the organization.

“With 23 years in the industry, 17 years on the board of FAMES and seven years as president or vice president, Ms. Cross brings a high level of experience and competency to FAMES,” said Greg Sims of Gator Custom Mobility in Gainesville, the association’s president.

One of the oldest--and once one of the largest--state associations, FAMES quietly closed its doors earlier this year, apparently because of financial difficulties. But long-time members, believing the number of looming issues affecting the industry demand a strong state association, have regrouped. The new board of directors includes Sims; Raul Lopez of Bayshore Dura Medical in Miami Lakes, immediate past president; Jamie Loper of Gator Custom Mobility, vice president; John Stelzner of Respironics, Murrysville, Pa., vice president; and Rene Gaspar from Alma Respiratory, St. Petersburg, vice president.

“We have just been trying to recoup a little bit and move offices to Bradenton where I am,” said Cross, who, with her husband Alan, owns C&C Homecare in Bradenton. She said the offices are located at C&C temporarily until new office space can be found. The important thing is, FAMES is now accessible.

“We got our phone number back up and running and our Web site should be back up [soon],” Cross said, adding that the group is also catching up on some back bills.

The revamped FAMES will focus on national and state issues, she said. “[Board members] each have very delineated jobs. Raul will be heading up our state issues. I will be doing national issues. Jamie will be the vice president focusing on our conferences, which we hope to expand. There’s always something somebody should know. If you are armed with information, then you have a better chance of getting people to be more proactive, and that’s what I am looking for.”

Cross said she is aware that some providers were frustrated by what they perceived as FAMES’ weak efforts to fight competitive bidding when it was rolled out last year by CMS. She said membership in the organization declined and, while she doesn’t know yet how many members remain, it is far fewer than the high of 200. That latter was achieved when, in 2002, FAMES spearheaded--and won--a fierce $200,000 legal battle against a competitive bidding proposal in Florida.

“At the time of the competitive bidding fight in the state, FAMES was absolutely fabulous,” Cross recalled. “There was a lot of energy and a lot of people dedicated to the cause.”

But after last year’s turbulent times, association membership declined.

“All of a sudden, FAMES was in trouble,” Cross said. “Did FAMES make some mistakes? They did. But are we going to correct those and move on and be bigger and better? Absolutely. I believe that.

“To get the people of Florida to trust us again, that’s a goal for me,” she added.

The new executive director said she was disappointed that another state association--the Florida Alliance of Health Care Services--has just been launched (see story this issue), but she hopes the two organizations can support each other.

Cross also said that she and her husband have put C&C up for sale. “I’ve been doing this so long, it’s going to be like cutting off my arm,” Cross said, noting she and Alan have co-owned the home oxygen and sleep business for 23 years. “It’s just one of those things where we made that decision one day and we know it’s the right one.”

For more information about FAMES, call 407/895-5573.

Florida Providers Form New State Association
DORAL, Fla.--Sunshine State members of the Accredited Medical Equipment Providers of America have banded together to form a new state association, the Florida Alliance of Home Care Services, the group announced Wednesday.

The news comes in tandem with last week's announcement that the Florida Association of Medical Equipment Services, which quietly closed in January, is being restructured (see story this issue).

FAHCS grew out of calls from Florida home medical equipment providers for stronger representation in the state and a state voice at the national level, said Rob Brant, president of AMEPA and owner of City Medical Services in Miami.

"[AMEPA] members wanted to have representation in Tallahassee," Brant said, noting that legislators in Florida's capital city are, among other things, discussing cuts to Medicaid programs, bringing competitive bidding back for Medicaid and making changes to state licensure.

As well, he said, CMS is set to make another go at national competitive bidding and Florida has two of the largest MSAs in the first round of the program. So it is important, he said, for Florida's voice to be united on the national level as the battle continues to sideline the DMEPOS bidding program permanently.

"We need stronger representation," Brant said.

Roger Ribas, owner of Hometown Medical Supply in Doral and president of the new organization, said serious issues at both state and national levels demand that, in order to be heard, state provider associations be strong and effective in getting their message across.

"We really didn't have any representation … We really had no voice," said Ribas, who told his fellow providers that FAHCS had to exist "because no one has. There has been a hole in leadership in this state and our patients are too important not to have a voice."

According to Sean Schwinghammer, a senior advisor to AMEPA who will serve as acting director of FAHCS, more than 20 AMEPA members from Florida attended AAHomecare's Washington fly-in last month. "Legislators wanted to know what our state association was," Schwinghammer said. "Our state association didn't even have a phone number.

"This is a major state in the number of providers, patients per capita and therefore, it is vital that we have an active, engaged organization to represent providers," he added.

Once the decision was made to organize, the fledgling group kicked into gear, talking with leaders in other successful state associations and creating bylaws and a code of ethics for its members. In addition to Ribas and Schwinghammer, the Alliance has named Deana Rollyson of Matrix Medical, Plant City, as vice president; Rudy Hernandez of South Florida Medical, Doral, treasurer; and Jerry Hall of Hall-Moore Medical, Jacksonville, secretary.

The new state association will not be a part of AMEPA, Brant said. However, all Florida AMEPA members who have renewed their membership in 2009 or who became members after June 30, 2008, will automatically become FAHCS members. AMEPA has more than 130 accredited provider members from Florida, Brant said, and 20 additional Florida associate members such as manufacturers, billing companies, consultants, attorneys and other industry vendors.

This week's announcement that FAMES was reorganizing did not deter FAHCS from moving forward. "FAHCS is not opposed to any group that is trying to better the industry," Schwinghammer said. The important thing is that Florida providers get the leadership they need on a state level, he said, and he believes FAHCS can provide it.

"There was a lack of leadership and inability to respond at the biggest crisis in the history of the industry," Schwinghammer said, referring to last year's industry fight to derail competitive bidding and halt the 36-month oxygen rental cap.

"We have many providers who are Medicaid providers," he added. "There has been no voice in changing state licensure issues, fraud issues. We want to be really engaged with the state legislature and the [Florida] Agency of Health Care Administration on rules and in making sure the direction of government comports properly with the reality of patient care and business."

In addition, he said, "We have a code of professional conduct that the board has already adopted and members will need to agree to. We understand that Florida has been a hotbed of fraud, and it needs to have a state association that is exceedingly active in the elimination of fraud. We've got to be active in advising on licensing, checks and balances to eliminate fraud … Combating fraud is a prime issue of this organization. No one needs to do it more than us."

Continued Schwinghammer, "It's vital that we speak and that we lead. We've got to be active as the state representative, active on the state level, active in education, active as the spokesperson for the industry and very active in standing up for the industry."

While the organization's Web site is not yet effective, Schwinghammer invites inquiries at info@FAHCS.org.

NEMED Speaks Out at Vermont Health Care Summit
BURLINGTON, Vt.--The New England Medical Equipment Dealers Association earned a place in the spotlight at the second regional health care reform summit sponsored by the Obama administration last week.

Moderated by Vermont Gov. Jim Douglas, Massachusetts Gov. Deval Patrick and Nancy-Ann Min DeParle, newly appointed director of the White House Office for Health Reform, the event drew some 400 people. It is one of five being held around the country. The first was held in Detroit and others are yet to come in Iowa (today), North Carolina (March 31) and California (April 6).

NEMED sent a delegation of three: Karyn Estrella, executive director, Gary Sheehan of Cape Medical Supplies in Sandwich, Mass., and Bob Simmons from Boston Home Infusion.

Sheehan was the first person chosen to speak, Estrella said. “He did a great job talking about the value of home care and the challenges of being a small business. His comments were well received,” she said, adding that both governors and DeParle referred to Sheehan’s statements and concerns several times during the meeting.

In additon to addressing the moderators, NEMED also drafted a statement that Estrella delivered to DeParle. The statement called for an “honest assement of all health care delivery models that are available” and made a case for HME as a cost-efficient model for health care.

“Oxygen can be provided to a chronic obstructive pulmonary disease patient who lives at home for one full year at less than the average Medicare cost for one day in the hospital, which is $3,606,” the association noted. “The average Medicare payment for stationary and portable oxygen equipment is approximately $230 per month, or less than $8 a day.”

NEMED also asked three questions in the letter:

1) Does the administration recognize the value home care provides?
2) What role will home medical equipment/home care and the millions of people served by our critical services play in the coming wave of health care reform?
3) What will the administration do to ensure that the small businesses and community-based organizations that provide home care services and equipment will survive and succeed?

Following a White House health summit March 5, Obama called the regional summits to get public input on health care concerns. The president has said he wants a health care reform package passed by the end of the year. For more, see “State Associations Seek a Say at Health Care Summits,” March 16.

Health Care Reform Debate Heats Up
WASHINGTON--As Congress prepares to tackle health care reform, Sen. Chuck Grassley, R-Iowa, staked his ground at an early morning briefing with reporters Thursday. Reform needs to be all encompassing, but if it includes a new federal health benefit, Grassley said, that could be a deal-breaker.

As the ranking member of the Senate Finance Committee, which has jurisdiction over Medicare and Medicaid, Grassley--who has previously worked with HME stakeholders on issues including competitive bidding--will be a key player in shaping the nation’s health reform effort. That effort is now on the fast track, with legislators from both sides of the aisle working to get a bill to the floor by June.

“I think if it doesn’t get done this year, it won’t be done for the next four years,” Grassley said of health reform, citing the timing of the country’s political cycle. “If it doesn’t get done this year, why won’t it get done? One word: elections.”

What’s more, Grassley said the overhaul must be comprehensive. “If we do something incremental this year we’re never going to get comprehensive health reform,” he said during the briefing, hosted by the Kaiser Family Foundation, Families USA and the National Federation of Independent Businesses.

While “everything’s on the table” as far as negotiating wide-ranging reform, Grassley said, he pointed to one big stumbling block: differences over a government insurance plan, which some call a “public plan option,” that would be open to most Americans. “This is a deal-breaker for Republicans if it’s in and it’s a deal-breaker for Democrats if it’s not,” Grassley said.

Some Democrats believe such a benefit would improve quality of care and decrease costs. But Grassley and other Republicans oppose creating a public plan because, he said, it would be “a step toward single-payer, government-run health care for everyone.” He added that a study by the Lewin Group estimated such a system and could prompt as many as 118 million people to leave private health plans for government-sponsored health care.

In the end, he said, “The major difference is the extent to which we will have a market-based insurance system or a government-based insurance system.”

While he did not touch on HME issues in the briefing, Grassley did say health reform legislation should be budget-neutral, with any new spending offset by cuts or new revenue. The HME industry is already on edge about further cuts to oxygen and the renewed threat of Medicare competitive bidding. Earlier this year, however, Grassley introduced the Medicare Rural Health Access improvement Act of 2009, which would exempt rural areas from competitive bidding, although it would not eliminate the program entirely.

Last week, Grassley appeared in a YouTube video asking for people's thoughts on health reform. "It only makes sense to seek input on an issue like health care reform where so many Americans have a stake. I look forward to taking common sense input from YouTube users to the national debate on health care reform," he said.

Grassley's video will be featured through tomorrow on YouTube's Senate Hub, where anyone can add comments. In a second video today, he will respond to some of the comments posted to the original video.

In Brief
Bohner: Reconsider Oxygen Cap; CMS Sends Accreditation Reminder
As the home oxygen sector works to reshape Medicare's oxygen benefit, last week House Minority Leader John Boehner, R-Ohio, wrote CMS Acting Administrator Charlene Frizzera to ask that the agency reconsider the payment policy and provide oxygen payments throughout the beneficiary’s period of medical need. Bohner said he was concerned that the lack of payments for maintenance and services post-36 months would jeopardize the quality of care that patients have come to expect from their provider. “Not only does this policy potentially harm the current care that many Medicare beneficiaries are receiving," Boehner wrote in the March 18 letter, "but oxygen providers may be forced to make difficult decisions and reduce services that these beneficiaries and their physicians traditionally rely upon.”

Are You Accredited Yet?
In a notice sent last week, CMS reminded DMEPOS providers that they are required to obtain accreditation by Sept. 30 or risk having their Medicare Part B billing privileges revoked. The agency has released a new MLN Matters article that outlines what to do if a provider has not yet complied with the program’s supplier and quality standards to become accredited. Providers "should contact an accreditation oroganization right away to obtain information about the accreditation process and submit an application," the reminder said. But it also noted the accreditation process takes an average of six to seven months to complete--or longer. Read more ...

Obama Campaign Adviser Named to HHS IT Post
HHS announced Friday that Dr. David Blumenthal, a former Harvard Medical School professor who has advised Sen. Edward Kennedy, is the Obama administration’s choice as National Coordinator for Health Information Technology. In the position, Blumenthal will lead the orchestration of a nationwide interoperable, privacy-protected health information technology infrastructure as called for in the American Recovery and Reinvestment Act. Blumenthal most recently served as a physician and director of the Institute for Health Policy at The Massachusetts General Hospital/Partners HealthCare System in Boston. In the late 1970s, he worked on Sen. Edward Kennedy’s Senate Subcommittee on Health and Scientific Research, and more recently served as a senior health adviser to the Obama for America campaign. Blumenthal will play a key role in determining how to spend the $19.5 billion devoted to health information technology in the recently passed economic stimulus package.

Pride Pairs with College Students on Design Ideas
Pride Mobility Products Corp., Exeter, Pa., said last week it is collaborating with Metropolitan State College of Denver’s Department of Industrial Design, which focuses on product design in manufacturing. During the 2009 winter semester, Pride will work with 15 junior and senior students on an industrial design project from design research, ideation and conceptualization to final presentation deliverables. Each student will be assigned a Pride mentor who will assist them throughout the project. The college will grade the students' projects, and Pride will review and comment on their submissions. "This project is intended to encourage and develop design thinking skills, foster disability awareness and give students a glimpse of professional life," said Col Jones, Pride's director of product design. "The return on educational collaboration is a future professional who thinks outside of the box, can identify and focus on a consumer and see that their needs are met with exceptionally well-designed products."

Study Finds Obesity Trims Years Off Life Expectancy
A new study has found that moderate obesity, which is now common, reduces life expectancy by about three years, and that severe obesity can shorten a person’s life by 10 years. The study, published online in the journal The Lancet, followed nearly 900,000 men and women from around the world for an average of 10 to 15 years. Recruited from North America and Western Europe, most people were age 46 when the study started. About 100,000 died during the study period, making it the largest-ever investigation of how obesity affects mortality. But the study also showed continuing to smoke is as dangerous as doubling body weight, and three times as dangerous as moderate obesity.

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