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Headline News
Noridian Responds to Payment Delays
FARGO, N.D.--Responding to escalating complaints from home medical equipment providers about delayed or improperly denied reimbursement, Noridian Administrative Services acknowledged in a statement Thursday that it has a backlog of more than 1,000 claims older than 90 days and 27,582 claims older than 61 days.

The Jurisdiction D DME Medicare Administrative Contractor said the number of claims requiring manual review was greater than it had projected when it took over from Cigna--the region's former DMERC--on Oct. 1, resulting in the backlog.

According to Noridian, from October to December 2006, it received 3,485,941 claims. In that same time period, it processed 3,508,347 claims.

Of the claims it gets, Noridian said, more than 98 perecent are electronic. "The timeliness standard for electronic media claims is that 95 percent or more of clean electronic claims are processed in 31 days," the statement said. "We fell slightly short of this goal in December, processing 93.6 percent of electronic claims timely. However, in October and November we exceeded the EMC timeliness standard."

While 80 percent of claims process through to completion without manual intervention, Noridian said, approximately 20 percent of all DME claims submitted "suspend" and, therefore, require manual intervention.

Such manual steps--which include reviewing CMNs and verifying medical policy guidelines are met--cannot be automated and "require the expertise of a claim processor to review the claim information and process the claim accordingly," Noridian said. Oxygen and power mobility device claims were given as examples of claims that require manual intervention.

"We realize our high volume of suspended claims is impacting cash flow for some suppliers. We assure you that we are working on ways to reduce our claims inventory," Noridian said, noting that it is hiring additional staff and its claims processing team is working overtime.

That's small comfort to providers who have reported backlogged payments ranging from $20,000 to more than $3 million. In recent weeks, an increasing number of HME providers in the 17-state region have enlisted the aid of the CMS, state associations, the American Association for Homecare, buying groups and legislators to put pressure on Noridian to get their claims paid.

"I think the time has passed for them to tell us why they are behind. All we really care about is for them to get caught up," said Tim Pederson, CEO of Westmed Rehab in Rapid City, S.D. "They're supposed to be meeting that 14-day payment. We just want it met ... The short-term solution would be for CMS to tell Noridian to pay all the claims and audit to their heart's content."

Pederson said his company is down about $100,000 in payments. "Even a large provider is going to be hurt by that. We're living paycheck to paycheck with our payers."

Angelene Adler, vice president of operations for Care Medical Equipment, an 11-branch provider based in Portland, Ore., said her concern is how Noridian is training its new staff. Many of the MAC's employees don't seem to understand common industry terms, she said. (See HomeCare Monday, Jan. 8.)

Adler, whose company is still waiting for most of the more than $3 million it is owed, said she would welcome the opportunity to help Noridian train its staff. "I know providers would be very willing to help educate them or meet with them to help their staff."

Eric Sokol, director of the Power Mobility Coalition, noted that Noridian has given no timeline for when its problems might be resolved. For power mobility claims, he said, "this is a double whammy to suppliers, given that not only are payments being delayed ... but these are payments that are a lot less because they are the first ones under the new reimbursement as well." New codes and pricing for PMDs took effect Nov. 15.

Neal Hansen of Hansen Homecare Specialty Service in Ketchikan, Alaska, said his small HME is definitely feeling the pinch, and the $20,000 it is out cannot come too soon. "We've had to dig into our reserves to pay our vendors. But you can't keep taking it out of the bag. You have to put it back."

Hansen's company covers Ketchikan, its environs and Prince William Island. The payment delay combined with the cuts has caused him to rethink whether he can afford to service the island, which is accessible only by ferry. "We have to pay $600 just to go over there," he said. "We have to take the truck over and all the equipment, and you can't just come back. You have to stay two or three days and come back on the ferry."

Meanwhile, Sarah Hanna, vice president of ECS Billing & Consulting in Tiffin, Ohio, said her company has heard from Noridian that "any reopening we do, either over the phone or paper form, will take anywhere from 90 to 120 days to process." That's a big jump from the 45 days providers had been told previously. "This extra processing time will hit providers' cash flow," Hanna said.

For its part, Noridian offered these suggestions on how providers can help reduce the number of aging claims:

--Do not resubmit claims that are aging. Doing so only increases the claims inventory, and processing of the original claim may be further delayed.

--Use the Interactive Voice Response Unit to check the status of claims at (877) 320-0390, available between 6 a.m. and 8 p.m. Central time. For detailed instructions, download a PDF at http://www.noridianmedicare.com/dme/contact/docs/ivr_guide.pdf.

--Use the Education Status Letter, sent indicating why paper claims cannot be processed, and the CMS-1500 claim form instructions to correct paper claims.

For Noridian's complete DME claims update, click here.

The law had bipartisan support in Congress with Rep. Jim Langevin, D-R.I., supporting the House version and Sen. Hillary Clinton, D-N.Y., the chief sponsor in the Senate.

Health Care Spending Slows for Third Year
BALTIMORE--Health care spending growth in the U.S. slowed for the third consecutive year in 2005, CMS announced last week.

A report from the agency's Office of the Actuary said 2005's 6.9-percent spending increase compares to 7.2 percent in 2004 and 8.1 percent in 2003, marking the slowest growth rate since 1999 when spending rose 6.2 percent.

Despite the slowdown, health care spending in 2005 reached almost $2 trillion, or $6,697 per person, up from $6,322 per person in 2004.

Spending for hospital care accounted for the largest portion of overall health spending, reaching $611.6 billion in 2005. Spending in the sector was stable at a 7.9 percent increase, CMS said, due to hospitals' stronger negotiating positions and their ability to pass costs on to private payers.

Growth in overall public spending, 7.7 percent in 2005, outpaced overall private spending growth of 6.3 percent. Public spending now accounts for 45 percent of total health care spending, and its growth has exceeded that of private spending in each of the last two years, according to CMS.

Medicare spending rose 9.3 percent to $342 billion in 2005, following growth of 10.3 percent in 2004.

Medicaid spending growth increased 7.2 percent to $311 billion in 2005, compared with 7.5 percent in 2004. Efforts by states to implement cost-containment initiatives, such as provider payment cuts or freezes, pharmacy cost and usage controls, increased fraud and abuse control and greater use of disease or case management programs, contributed to the slowdown.

The report also found:

--Growth in retail prescription drug sales decreased for the sixth consecutive year at 5.8 percent in 2005, following 8.6 percent in 2004 and 10.6 percent in 2003. CMS attributed the deceleration primarily to a significant decrease in Medicaid prescription drug spending, along with increased use of generic drugs. Total spending for prescription drugs was $200.7 billion in 2005 compared to $189.7 billion in 2004.

--Spending for physician and clinical services was $421.2 billion in 2005, an increase of 7 percent over 2004.

--Spending for freestanding home health care agencies, although only 2.4 percent of total health spending, grew the fastest among all services in 2005, increasing 11.1 percent to $47.5 billion.

--Growth in freestanding nursing home expenditures increased 7.7 percent in 2005 to $121.9 billion.

To access the full report, click here.

Scooter Store President Leaves for Halliburton
NEW BRAUNFELS, Texas--The Scooter Store said Tuesday that company President Mike Pfister is leaving to become chief information officer for Halliburton.

When Pfister joined The Scooter Store in 2003, the power mobility industry faced serious challenges from impending changes in power mobility documentation, coding, coverage and pricing policies, founder and CEO Doug Harrison said in a statement. "Largely because of Mike's leadership, The Scooter Store, as well as the industry, has survived these many changes and are poised for success in the future.

"One of Mike's biggest contributions," Harrison continued, "was never letting us lose our compass--he kept our team focused on the fact that the Medicare beneficiary came first and foremost and that it was our responsibility as the largest supplier of mobility equipment in America to ensure that people living with disabilities continued to have access to a mobility benefit that could improve their quality of life."

Early last month, The Scooter Store laid off 200 employees, blaming Medicare reimbursement cuts for power wheelchairs and scooters. (See HomeCare Monday, Dec. 4.)

Houston-based Halliburton offers oil and gas production services in 120 countries. Its KBR subsidiary is a major construction company for pipelines and refineries.

Sunrise Adds New Marketing, Sales Execs
LONGMONT, Colo.--Sunrise Medical CEO Mike Hammes announced Tuesday that Hymie Pogir will join the company in the newly created position of senior vice president of marketing and program development. Tiago da Silva is also joining the company as senior vice president of sales. Both will report to Hammes.

Carey Winkel, who has been president of Sunrise commercial operations for North America over the last three-and-a-half years, will move back to her previous role as senior vice president of strategic planning, supporting Hammes with crucial strategic initiatives, according to a company release.

"On both sides of the Atlantic, and especially in North America, major changes are occurring in the DME industry," Hammes said in an internal communication. "Many of these external changes are quite significant and impactful (e.g. the continuing strong emergence of China as a major producer of DME products, the huge change process the public health care system in America is going [through], etc.).

"Because of the strategic and operational actions we have taken over the last three to five years," Hammes continued, "we believe that Sunrise today is the best-positioned company in the global DME industry, but if we are to maintain and build upon the successes that we have had and are continuing to have then we must be prepared to continue to make appropriate changes in a timely manner and to strengthen our ability to continue to be the leaders in our industry."

NRRTS' Margolis: No Second-Class Care
LAGO VISTA, Texas--Founding board member and past president Simon Margolis has been named executive director of NRRTS, the National Registry of Rehabilitation Technology Suppliers. He assumed his new duties last week.

As the organization moves forward, Margolis said, particularly as the industry deals with new mobility policies, codes and pricing, "the most important thing is to maintain the high level of expertise and performance and compassion that NRRTS registrants have for their clients, regardless of how much money we're getting paid.

"That's the key issue if we're going to continue to serve our clients as we have because people don't deserve second-class care."

Margolis added that it will be up to individual service-deliverers to dialog with their companies about maintaining service levels. "This is not the place to cut," he said. "We have to use our smarts and figure out ways to continue to provide service yet keep costs down."

As far as a carve-out of complex rehab from competitive bidding, Margolis said, "we're going to have to see what kind of support we can get from the new Democratic majority." Last year's Congress adjourned without any action on a bill that would have excluded the area from the Medicare bidding program.

However, he added, "this is still a critical issue, and it's equally important for the states to see the federal government set a precedent for carving out rehab so they treat it differently as well."

With more than a 30-year career in complex rehab, Margolis most recently spent seven years as vice president of clinical and professional development for National Seating & Mobility, Nashville, Tenn. He is a founding member of NCART, the National Coalition for Assistive and Rehab Technology, and a past president of RESNA, the Rehabilitation Engineering and Assistive Technology Society of North America.

Founded in 1992, NRRTS has more than 800 registrants. The credential of Certified Rehabilitation Technology Supplier (CRTS) can be carried only by NRRTS registrants who have passed the Assistive Technology Supplier (ATS) exam administered by RESNA.

State News
Schwarzenegger Proposes Universal Health Plan for California
SACRAMENTO, Calif.--Gov. Arnold Schwarzenegger said California's health care system is in need of repair and revealed a reform plan last week that would require all residents to have health insurance.

The $12 billion plan, intended to provide coverage for the state's 6.5 million uninsured, would be financed through a mix of funds from individuals, employers, providers, hospitals and state and federal government.

"More than 60 emergency rooms have closed over the past decade because they didn't want to keep treating people without insurance. Unpaid medical bills mean billions of dollars in hidden taxes for the rest of us because those services all have to be paid for. So we pay higher deductibles, costs for treatment, premiums and co-pays," Schwarzenegger said. "Companies stop offering coverage, which leads to more people without insurance, and the whole cycle keeps repeating."

Under the proposal, all Californians would be required to have enough insurance to protect families against catastrophic costs as well as minimize the "cost shift" that occurs when large numbers of people receive care without paying its full cost.

Other provisions in the plan include guaranteed coverage, encouraging personal responsibility for health, providing low-income residents with affordable coverage and increasing rates for Medi-Cal, the state's Medicaid program.

Connecticut Snags $24M Grant to Move Beneficiaries Home
HARTFORD, Conn.--Connecticut has been awarded a $24.2 million federal grant to help shift Medicare beneficiaries from nursing homes to home care under the Bush administration's "Money Follows the Person" initiative.

"The idea is to use Medicaid dollars as flexibly as possible to give people more choices about their living situation," said Gov. Jodi Rell. "Now, we can help get more people home by arranging support like 24-hour, in-home care, which Medicaid has not traditionally paid for."

The state projected that with the grant, 700 people would transition from nursing homes to the community over the next five years.

State officials said the most notable expense to be newly covered by Medicaid under the initiative is live-in assistance. Personal management, home alterations to accommodate wheelchairs and other medical equipment needs and support services are also covered.

The program will serve individuals with physical disabilities and mental illness ranging from children to the elderly. Residence options include the person's own home, a family home, an apartment and congregate housing like assisted living.

Massachusetts Provider Draws Prison Term for Respiratory Fraud
BOSTON--A Massachusetts HME provider who bilked Medicare and Blue Cross/Blue Shield out of nearly $1 million has been sentenced in federal court to two-and-one-half years in prison, according to the U.S. Attorney's Office, District of Massachusetts.

James Taylor, 67, of Westborough will also pay a $6,000 fine and restitution of $915,649, according to the judgment handed down Wednesday by U.S. District Court Judge Patti B. Saris.

Taylor and his three Westborough-based companies--Vejay Oxygen, West Suburban Medical Rental and Westborough Home Health--pleaded guilty in September to three counts of health care fraud. Saris accepted as final the guilty plea of Vejay Oxygen, noting the company was out of business and therefore could not pay a fine. Sentencing for the two other companies owned by Taylor and family members has been postponed.

According to prosecutors, from 1993 to 2003 Taylor and the companies billed Medicare and Blue Cross/Blue Shield for respiratory equipment that was never delivered or, if it was delivered, was less expensive than the company claimed. During the period, the defendants submitted 4,955 false claims using a code that indicated they provided intermittent positive pressure breathing machines to patients when they actually had only provided nebulizers, prosecutors said.

According to court records, Taylor and his companies defrauded the two entities of more than $900,000.

Taylor faced a maximum sentence of 10 years in prison, and a fine of up to $250,000. His companies each faced fines equal to the amount of the loss to Medicare and two times the loss to Blue Cross/Blue Shield.

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