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Headline News
Price Reintroduces Bill to Repeal O2 Cap
WASHINGTON--Last Monday, Rep. Tom Price, R-Ga., reintroduced the Home Oxygen Patient Protection Act.

The bill would repeal the Deficit Reduction Act's rental cap on Medicare home oxygen and restore ownership of equipment to providers.

H.R. 621, its official designation this time around, is a carbon copy of legislation introduced in the last congressional session by Price, a physician, and Michigan Rep. Joe Schwarz, also a physician. (See HomeCare Monday, June 5, 2006.)

Known as H.R. 5513, last year's bill picked up 84 cosponsors but was referred to committee with no action before the 109th Congress adjourned. Schwarz, an ear, nose and throat surgeon, had vowed to reintroduce the bill if it didn't pass, but he was defeated in Michigan's Republican primary.

A Senate companion bill, introduced last year by Sen. Pat Roberts, R-Kan., had seven cosponsors at the session's end.

"Under the Deficit Reduction Act of 2005, Congress merely considered the economic issues of home oxygen therapy, and not the clinical aspects. This legislation to repeal this provision of the DRA is in the best interest of patients, the medical community and Medicare," said Price, minority whip in the House.

H.R. 621 would, in effect, repeal provisions in the DRA, which moved Medicare home oxygen from continuous rental to a rent-to-purchase model. The DRA caps oxygen rental at 36 months, and then requires that title to the equipment be transferred to the beneficiary.

The three-year counter for beneficiaries already using oxygen began Jan. 1, 2006.

But both patient and provider stakeholders, including the American Lung Association and the American Association for Homecare, have argued that the new policy could put patients in danger if they are responsible for upkeep and maintenance of their oxygen equipment--a service many companies currently provide as part of the rental fee.

A study conducted for AAHomecare last year determined that only 28 percent of the cost of providing home oxygen relates to equipment, while the bulk goes to services and overhead required as a part of providing the therapy. In June, Price presented the results of the study, conducted by research firm Morrison Informatics, at a briefing for Capitol Hill staffers. (See HomeCare Monday, July 10, 2006.)

"Home oxygen therapy provides an essential benefit to our seniors. Medical oxygen is complex and highly regulated, and requiring Medicare beneficiaries to own this equipment for their therapy raises numerous health and safety concerns," Price said. "Reintroducing this legislation allows us to make Medicare more efficient and ensure patients receive the highest quality of care in the safest manner."

According to AAHomecare President and CEO Tyler Wilson, "it is significant that we have this important marker in place now since the president's budget may propose additional cuts to the Medicare home oxygen benefit."

The industry must now drum up support for the measure, picking up enough cosponsors to garner attention in the House and get a new companion bill introduced in the Senate.

Provider Todd Tyson, president of Hi-Tech Healthcare, Norcross, Ga., said as soon as he learned Price had reintroduced the bill, he began contacting other members of the Georgia congressional delegation to sign up as cosponsors.

"All of us need to rally around Rep. Price and go after the representatives who supported the bill last year" to sign on again, Tyson said. With more Democrats in the House this session, he continued, "I'm pretty optimistic that it should be easier to get this bill through.

"Congressman Price has really stepped up to help [the industry]," Tyson said. "I could just kiss that man on the lips!"

To view the text of H.R. 621, click here.

To locate your state's federal representatives, visit the congressional Web portal at http://thomas.loc.gov.

CMS Formalizes Accreditation Mandate
BALTIMORE--In a formal change request issued Friday afternoon, CMS said all DMEPOS providers who bill Part B must be accredited before being awarded a contract under Medicare's upcoming national bidding competition--and to do business with the program.

The agency also formalized its mandate that all HME providers submitting bids meet both its business and product-specific service standards (see HomeCare Monday, Aug. 21, 2006) and be accredited by a CMS-approved accrediting body.

"This change request provides a new instruction to inform DMEPOS suppliers that they must comply with DMEPOS Quality Standards. This instruction indicates that a DMEPOS supplier must be accredited in order to receive and retain a supplier billing number and receive Medicare Part B payments for DMEPOS items or services," the request said.

The request also cited an implementation date of April 2, although a CMS spokeswoman confirmed that "all suppliers will have to be accredited, but we haven't set a deadline." Another source said Friday that the transmittal could be reissued to avoid any confusion over deadlines.

Industry stakeholders have been on tenterhooks in recent weeks as they wait for CMS to issue a final rule on competitive bidding and announce the 10 metropolitan areas where the first round of bidding will begin. According to the agency's current timeline, providers in the 10 cities it selects should be accredited by spring, with the bidding program slated to get underway in October.

To view CMS' Medicare Part B supplier standards, click here.

For a list of CMS' deemed accrediting organizations and information about what each is approved to accredit, visit http://www.cms.hhs.gov/CompetitiveAcqforDMEPOS.

Shortly before Bush's speech, the American Association for Homecare issued a press release noting that home care providers have been working to inform lawmakers in Washington of research that shows home care's cost-effectiveness, and said such research is "important for legislators to keep in mind as they will be looking for programs to cut, and home care has already been subjected to repeated cuts in recent years."

Providers Clamor for Guidance on Whistleblower Info
ATLANTA--A federal whistleblower protection mandate that went into effect Jan.1 has frustrated many Medicaid providers, who say they need more guidance from CMS.

Some 2,000 Medicaid providers clogged the agency's phone lines earlier this month with complaints about a provision in the Deficit Reduction Act that requires providers doing more than $5 million in annual Medicaid business to establish written policies educating their employees about the federal False Claims Act and its whistleblower protections. The policies must include specific procedures the provider has put in place to detect and prevent fraud and abuse, and also must inform employees that a whistleblower has protection against his employer.

According to Claudia Simonson, senior policy analyst, division of field operations, for the Medicaid Program Integrity Group, the phone lines maxed out at 2,046 during a Jan. 11 briefing about the provision given by Robb Miller, the group's acting director. While Simonson did not know how many HME providers called in, she said some callers had to be turned away because the phone system couldn't accommodate them.

"The provision says the policies must address both federal and state false claims acts," said Jeffrey Baird, a health care attorney with Amarillo, Texas-based Brown & Fortunato.

And therein lies the rub. Providers charge that most states have not yet finalized their mandated amendments to state whistleblower plans. Those amendments are not due until March 31. How, then, providers asked, are they to establish policies that adhere to both state and federal regulations?

Miller sidestepped that question, saying more guidance would be issued, but he gave no timetable.

Until then, Simonson said, "we're advising [providers] to seek their own counsel."

Both Baird, who noted that the provision is "buried deep inside the DRA," and attorney Neil Caesar of the Health Law Center in Greenville, S.C., are concerned that many HME providers might not know of the new provision.

"My guess is that most of the providers out there are unaware of this," said Caesar, continuing that HME companies should be aware "there's going to be another entity looking over their shoulder and holding them to standards of accountability." A provider could be compliant on the national level and noncompliant on the state level, he pointed out.

He said states have some incentive for paying attention to statutes covering fraud and abuse and any violations of those statutes. "Pursuing this usually brings in fines and penalties that can improve the states' bottom line," said Caesar, adding that it is not uncommon for states to reap 13 to 17 times the amount it costs them to pursue such issues.

Robbie Roberts, compliance officer at Boise, Idaho-based HME provider Norco, said his company already has written policies in place addressing the issue and has updated its company handbook to reflect the changes. In addition, the company has an online training course focusing on its procedures that "allows us to update folks and meet the intent of the legislation," Roberts said.

John Cassar, CEO of SuperCare in the City of Industry, Calif., said he has familiarized himself with the provision, but is relieved that it focuses on providers doing more than $5 million in Medicaid, not Medicare.

While at present his company is not impacted, "we're getting close [to the $5 million mark]," he said. "Regardless, it means you have to have a compliance program in your system, no matter what."

In the end, Baird said, he expects that the new provision will help in curtailing health care fraud. "Under the whistleblower provisions, the DOJ has, in essence, outsourced fraud investigations to the private sector ... As more people learn of the existence of the whistleblower provisions, then more people will file, or at least think about filing, qui tam actions."

Last year, funds recovered through cases originated by whistleblowers under the qui tam statutes added up to $1.3 billion, according to the DOJ. The agency recovered a total of $3.1 billion in fraudulent claims, a record, and of that, about 70 percent was related to health care fraud.

HME Mergers and Acquisitions Down
PITTSBURGH--HME mergers and acquisitions declined in 2006 because of reimbursement uncertainties, according to a report from The Braff Group, an M&A firm that specializes in the home care sector.

Based on preliminary year-end numbers, the report listed a 44 percent decline in overall HME transactions, with 53 deals in 2006 versus 95 in 2005. For the fourth quarter, the drop was even sharper with only 8 transactions completed compared to 21 for the same period in 2005, a 62 percent decline.

The report covers transaction trends in the home health, hospice, staffing, HME, infusion therapy and specialty pharmacy markets. Over all of these markets in 2006, there were 207 deals compared to 265 transactions in 2005, a decline of 22 percent.

"Not unexpectedly, in a year of substantial unknowns regarding potential further cuts to oxygen reimbursement, the greatest decline came from the home medical equipment sector," said company President Dexter Braff. "While Medicare legislation passed at year end did not include these cuts, an atmosphere of heightened risk remains which will likely make 2007 another challenging year for M&A in the HME arena."

While deal volume in infusion therapy and specialty pharmacy remains strong, the report said, the brightest spot in 2006 was the home health care sector, which set a transaction record of 86 deals, up 6 percent over the previous year's record of 81. This marks the first time that home health has led all the other sectors in transaction activity, the report said, attributing the volume to a combination of high demand from buyers, stable reimbursement and a favorable industry outlook.

For comments from Braff and others on the state of HME, see "Will a New Congress Reshuffle the Deck?" in the January issue of HomeCare magazine.

Cigna Gets OK as Region C DME MAC; Effective Date in Limbo
WASHINGTON--Cigna Government Services has won a year-long tug-of-war with Palmetto GBA to become the government's Region C Medicare Administrative Contractor, according to a recent ruling by the General Accounting Office.

The claims processing contract, valued at $144 million, includes a one-year base period and four one-year options, but the company will not take over its duties on April 1 as originally scheduled, officials said Friday.

"We are very excited about this opportunity to serve some new customers in Jurisdiction C," said Gloria Barone, public relations director or Cigna. "But as of this date, we have not done any of the implementation work and we don't have a date for the implementation. We are still speaking with CMS and going into a review and approval process with them about the implementation."

Palmetto spokesman Billy Quarles said it was likely the transition would occur between June 1 and Aug. 1. "We will work closely with Cigna Government Services to complete the transition as smoothly as possible and in a manner that minimizes any impact to the people with Medicare and their suppliers," he said.

The GAO said Friday that it is still working on the release of public information concerning its decision.

The contract had been in question since last January when CMS awarded the bid to Palmetto, which has been the Region C DMERC since 1993. Cigna, which had also bid on the contract, filed a protest, and the GAO ruled in its favor in late September. Palmetto subsequently protested that decision, which once again placed the contract in limbo until the GAO made its final ruling earlier this month.

Palmetto currently operates the National Supplier Clearinghouse and acts as the Statistical Analysis Durable Medical Equipment Regional Contractor. Those new contacts have not yet been settled by CMS.

But the agency has selected Columbia, S.C.-based Palmetto to help administer its DME competitive bidding program. As a DMEPOS Competitive Bidding Implementation Contractor, Palmetto will prepare the request for bids, perform bid evaluations, select qualified suppliers and set payments for all competitive bidding areas.

Provider News
Bradley Takes Helm at Utah's New HME Association
SALT LAKE CITY--Five home medical equipment providers have so far joined the new Utah Medical Equipment Dealers association, organizers said last week. Tom Bradley, president and CEO of Petersen Medical, has been named acting president.

Formed late last year by Salt Lake City-based providers Petersen and Alpine Home Medical, UTMED seeks to give the 30 HME providers in the state a voice that could influence federal regulations affecting the HME industry and its beneficiaries, the association said.

"By forming UTMED, HME dealers in Utah will have a united front and will be a positive force for change in the industry, and for the people we serve," said Bradley. The organization's stated goal is to "advocate the needs of patients and advance the HME industry through education and shared standards."

According to Bradley and UTMED Acting Vice President Jay Broadbent of Alpine, the group was founded in response to actions by federal legislators and CMS, particularly the cut in power wheelchair reimbursement rates and the cap on oxygen rentals.

UTMED will soon launch a membership campaign, its organizers said.

In Brief
Examining the competitive bidding program for DME is on the agenda for the House Ways and Means Health Subcommittee during the 110th Congress, according to full committee Chairman Charles Rangel, D-N.Y. In outlining the Ways and Means agenda, Rangel said the health subcommittee would also conduct oversight on quality improvement among providers, accreditation, and waste, fraud and abuse, among a long list of Medicare Part B-related activities. The subcommittee also plans to look at the adequacy of CMS' budget and staffing, its contracting activities and general agency accountability.

Last week, HHS Secretary Mike Leavitt accepted 30 standards from the Healthcare Information Technology Standards Panel, bringing a nationwide health information network one step closer to reality. The panel is charged with identifying the technical standards necessary for health care data interoperability and, over the past year, has worked on standards in the areas of electronic health records and consumer empowerment, such as giving patients access to their medication histories. President Bush has signed an executive order calling for any new or upgraded federal health information system launched after Jan. 1, 2008, to be compliant with the panel's standards, and testing is in progress by health care providers, public health and government agencies and other stakeholders, HITSP said. For more information, visit http://www.hitsp.org.

Cardiophonics, Timonium, Md., has introduced a mobile PC network that lets health care providers and patients "virtually" connect from home, in the car or even at Starbucks, the company said. Using the "Care From Anywhere" network as a gateway to the Internet, diagnostic information can be collected from wearable and implantable devices in real time, and patients can be monitored and reminded to monitor functions such as blood glucose, heart rhythm and vital signs, the company said. The network is designed for the Ultra-Mobile PC--which the company said can fit in a pocket--and uses software that collects information from sensors (USB, Bluetooth), then synchronizes that data for CardioViewer, a medical viewer that displays the data exported by the patient module.

Coming Up
CMS will hold a Home Health, Hospice and DME Open Door Forum tomorrow at 2 p.m. EST. To participate, call (800) 837-1935 and use conference ID 9398570.

The North Carolina Association for Medical Equipment Services (NCAMES) will hold its winter meeting and legislative conference tomorrow and Wednesday in Raleigh, N.C. For more information, call (919) 387-1221 or visit www.ncames.org.

Discovery Through Design's Rolling with Style gala is set for Feb. 6 in New York. Hosted by Lesley Stahl, event proceeds will benefit the Christopher Reeve Foundation, the Miami Project to Cure Paralysis and the Spinal Cord Injury Project at Rutgers University. Discovery Through Design is a not-for-profit that creates awareness for paralyzed women's health initiatives and spinal cord injury research. The organization was formed by four women in wheelchairs, including Quickie founder Marilyn Hamilton of Sunrise Medical. For more information, visit www.discoverythroughdesign.org.

The National Association for the Support of Long Term Care will hold is Winter Legislative & Regulatory conference Feb. 7-9 in Arlington, Va. For more information, call (703) 549-8500 or visit www.nasl.org.

Sarah Hanna of ECS Billing & Consulting and Lisa Bargmann of Bargmann Management will hold a seminar on Feb. 8 in Dallas called "Demystifying Third-Party Payer and Patient-Owned Receivables." For more information, call (888) 811-2250 or e-mail sbare@bright.net

The American Physical Therapy Association (APTA) will hold its Combined Sections Meeting Feb. 14-18 in Boston, Mass. For more information, call (800) 999-2782 or visit http://www.apta.org.

The National Community Pharmacists Association (NCPA) will hold its Multiple Locations Pharmacy Conference Feb. 14-18 in Palm Beach, Aruba. For more information, call (703) 683-8200 or visit www.ncpanet.org.

Dynamic Seminars & Consulting has scheduled February teleconferences on "Strategies for Handling Complaints" and "Audits Are a Matter of When, Not If" for Feb. 14 and 20, respectively. For more information, call 954/435-8182 or visit www.dynamicseminars.com.

The National Home Infusion Association (NHIA) will hold its annual conference Feb. 26-Mar. 1 in Savannah, Ga. For more information, call (703) 549-3740 or visit www.nhianet.org.

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

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