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Headline News
Industry Awaits Bush Budget, Prepares for Action
WASHINGTON--With President Bush's 2008 budget proposal expected today, industry stakeholders, alarmed by rumors that it will include provisions harmful to home care, have been gearing up for a response.

In a recent interview with Treasury Secretary Henry Paulson, the Wall Street Journal reported that the president's new budget contains proposals that could generate $90 billion in Medicare savings, mainly from health care providers with some beneficiaries also affected (see HomeCare Monday, Jan. 29).

But as of Friday, Washington insiders said they had received verbal confirmation of two proposals more specific to HME: one for a 13-month cap on home oxygen therapy, and another to eliminate the first-month purchase option for power wheelchairs. The two proposals would be a repeat performance on the president's part, having also been recommended in his 2007 budget (see "Bush Budget Proposes 13-Month O2 Cap," Feb. 13, 2006). Both proposals were defeated after intense lobbying efforts by the industry.

Although implementing any specific budget recommendation the president makes would literally require an act of Congress, HME advocates say the prospect of further cutbacks is threatening.

"A 13-month [oxygen] cap would have a tremendously negative impact, not only on the industry but on patients as well," said Walt Gorski, the American Association for Homecare's vice president of government affairs. "Clearly, we will need to harness the collective efforts of the entire field to fight this proposal if it comes to pass--doing even more than we did last year."

The association "must also work to actively engage our patients to understand the real impact of such a proposal and help tell Congress why it should not be enacted," Gorski said.

Mike Marnhout, president and CEO of Lexington, Ky.-based Bluegrass Oxygen, said that while the current 36-month oxygen rental cap is bad enough, a 13-month cap would be "devastating," causing many providers to be forced out of business and beneficiaries to suffer due to a lack of service.

"For us to save our businesses, [large and small providers are] going to have to join hands, and it's going to have to be a collaborative effort to stop this," Marnhout said.

Last month, Rep. Tom Price, R-Ga., reintroduced the Home Oxygen Patient Protection Act, which would repeal the 36-month cap enacted under the Deficit Reduction Act, but the bill must gain enough support in the House and a companion bill in the Senate to pass.

Regarding elimination of the first-month purchase option for power chairs, Seth Johnson, chair of AAHomecare's Rehab and Assistive Technology Council and director of government affairs for Pride Mobility, said it "does not make sense" for Medicare to rent this equipment. He said a Pride position paper shows that eliminating the purchase option would cost Medicare more money than it would save.

"A very significant majority of the beneficiaries who need a power wheelchair need it because they have a long-term debilitating condition," Johnson said. "They're going to need that device for the rest of their lives."

CMS to HMEs: No Deadlines Yet, but Get Accredited Now
BALTIMORE--In what turned out to be only a blip on the accreditation radar, CMS has rescinded a change request that gave an April 2 implementation date for Part B providers to be accredited in order to maintain their supplier numbers and bill Medicare.

Issued on Friday, Jan. 26, then withdrawn on Monday, Jan. 29, the transmittal was sent in error, the agency said. In a note to contractors, CMS said, "Transmittal 188 is rescinded and will not be replaced at this time ... We apologize for any inconvenience this may have caused."

But Tuesday afternoon at an Open Door Forum, agency officials once again urged DMEPOS providers to get accredited, and said they were alarmed by the small number of providers they believe have begun the process.

CMS' Joel Kaiser said the agency had expected "a flow of suppliers to get their accreditation" after approved accrediting organizations were named in November, but instead had seen only "a trickle." Kaiser, deputy director of DMEPOS policy in CMS' Center for Medicare Management, said the agency's goal is to have suppliers accredited for the first round of competitive bidding, slated for 10 yet-to-be-named metro areas this year.

At the forum, officials repeated that no specific accreditation deadlines have been set. At a meeting in mid-December, however, CMS told accrediting organizations that suppliers who want to bid in 2007 should be accredited by spring, and that those who want to bid in 2009--when the program expands to 80 cities--should be accredited by spring 2008. After that, Kaiser said at the Open Door, additional bidding areas will be chosen "at the administration's discretion" and, at some point, all Part B providers will have to be accredited in order to do business with Medicare.

"My recommendation is that everyone should get accredited no matter what size area they are in, and they should start the process now," Kaiser said, noting that even the second round of bidding is "just around the corner."

Because CMS has not published its final rule on competitive bidding, required under the Medicare Modernization Act, providers don't know exactly which 10 cities will be selected as the first bidding locations or which products will be included. But Kaiser said the agency's draft rule, issued last May, explained the methodology it will use to choose those cities.

"We also know the law requires accreditation," Kaiser said. "If you are waiting for the final rule it's probably not that good an idea," he continued. "We recognize there is a cost associated with accreditation, but there is also a business risk associated with not being accredited."

Kaiser said CMS aims to have companies accredited before they enter into a competitive bidding contract, but that providers would not be barred from bidding if they are not yet accredited. He said the MMA said that supplier quality standards--which providers must meet in order to get accredited--should not delay the start of bidding.

The explanation confused some listeners once again.

"Did I hear correctly that suppliers do not have to be accredited before they submit bids, at least for this first round?" questioned one phone caller.

"We can't really give full details on what's going to be required in terms of who is eligible for entering into a contract for competitive bidding," came the response. "There are certain parts of the statute that allow us to start the bidding and proceed with the program. We definitely want our contract suppliers to be accredited and [to meet] the quality standards. But whether or not you need to be accredited prior to starting the bidding is not as important."

According to CMS' Sandra Bastinelli, director of the Division of Medical Review in the Office of Financial Management, the accrediting organizations have "reached out" to providers, particularly those in 2007's possible bidding sites. But she said four of the 10 deemed accrediting bodies reported they had no suppliers accredited or "as little as 30."

"The remark came back from suppliers that 'We're just waiting,'" Bastinelli said. "We're not sure what you're waiting for," she told the Open Door audience. "No matter when that rule comes out you have to be accredited ... We don't know how to make that more clear than we already have."

The caller apparently disagreed: "I think it's a surprise that you're surprised that more people are not accredited because the level of specificity about this program has been such that's it's very difficult to recommend to anyone that they go ahead and get accredited when they don't know the final rules of the game."

To view CMS' proposed rule on competitive bidding click here.

To view the agency's required supplier quality standards, click here.

For a list of CMS' deemed accrediting organizations, click here.

To access the document in its entirety, click here.

State Associations Say Members Grappling with Too Many Uncertainties
ATLANTA--Home medical equipment associations across the country are facing challenges on both the state and federal levels this year, but the biggest one is a question mark, association officials said last week.

"The primary concern that the independent [HME] companies have is the uncertainty of the health care industry, the Medicare implications and the fact that nobody quite knows what the future bears," said Tom Renk, executive director of the Illinois Association of Medical Equipment Suppliers. "Everybody is frustrated. They can't read the tea leaves. They can't see where this is heading."

The biggest area of concern is accreditation, according to Rose Schafhauser, executive director of the Midwest Association for Medical Equipment Services, which serves Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota. "The number one question has been the time frame for when all the providers are required to be accredited," she said.

Competitive bidding and the oxygen cap are also up in the air, officials noted, and rehab is a concern.

"In custom rehab, [providers] are dealing with the effects of the new [power mobility device] guidelines, codes and reimbursement and the impact this is having on other payers, especially Medicaid," said Karyn Estrella, executive director of the New England Medical Equipment Dealers Association.

Estrella said NEMED--which covers Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont--has also communicated to state Medicaid departments members' worries about providing medically necessary equipment to dually eligible beneficiaries. "There is great concern about funding for Group 4 chairs for duals since Medicare will not pay for these chairs," she said.

While all the above are also issues for the Pacific Association for Medical Equipment Services, which covers Oregon and Washington, there's another challenge for Washington providers. The state is one of only four that taxes HME and services, said Tom Coogan, president-elect of PAMES. "We're trying, for the seventh year in a row, to change that law. We're hopeful that this year we'll finally be able to get that legislation passed."

Coogan also cited as issues the CPI freeze, inherent reasonableness and, perhaps most important, declining reimbursement.

Several association officials said they are trying to help providers not only with reimbursement cuts but also with lagging reimbursement and stalled payments.

Both Bob Achermann, executive director of the California Association of Medical Product Suppliers, and MAMES' Schafhauser said their members are having problems getting paid through Noridian Administrative Services, the new Region C DME Medical Administrative Contractor. Achermann said CAMPS will provide workshops on the issue at its annual meeting in March.

Renk said another issue for Illinois providers is slow Medicaid payments. In his state, they can take months, he said, citing the example of a small HME company that waited nearly a year for $1.6 million. The company would not have survived if it hadn't been attached to a hospital, Renk said.

In an effort to help contain the spiraling level of frustration among their members, associations are using numerous tools to provide guidance and information on the issues. NEMED plans seminars on the new PMD coding and reimbursement at its March meeting, and is planning education sessions on developing new product lines.

IAMES' annual conference in April will feature billing workshops, updates on regulatory issues and even information on selling a business. The latter reflects a membership reality, Renk said. "In IAMES, companies are either giving up and getting out of the business or we have also seen a whole bunch of mergers."

MAMES will focus its March spring convention, "Thriving in the New Reality," on the new world of HME. "Our industry has always had challenges, but we have overcome those challenges by being creative and adjusting our strategic plans to address the challenges," said Schafhauser. "We will need to operate our business in the 'New Reality' in order to be successful in the future."

Manufacturer News
Catalina Cylinders Issues Safety Notice
GARDEN GROVE, Calif.--Catalina Cylinders has issued a safety notice regarding its aluminum oxygen cylinders equipped with a certain single o-ring valve manufactured by Young-Do Industries Co. The cylinders were sold between February 1999 and March 2003, the company said.

According to Catalina, one of its customers has reported oxygen content loss from a cylinder equipped with the valve. The company said it has received no reports of patient injury, but is notifying its customers that have purchased these cylinders to: identify patients who have kept cylinders for back-up use; test those cylinders for possible loss of contents; and take appropriate corrective action.

To view the full notice, visit http://www.catalinacylinders.com.

MAP Mobility Named Distributor for Invacare's Kuschall Line
ELYRIA, Ohio--Invacare Corp. has tapped MAP Mobility & Access Products, a subsidiary of Frank Mobility Systems, as exclusive distributor for Kuschall North America.

MAP was founded by Werner Frank, president of Frank Mobility Systems, an importer of specialty rehab equipment from Europe, where the Kuschall brand is well known.

In late December, Invacare announced that it would no longer distribute Kuschall products in North America in order to focus on its own brand of custom manual wheelchairs.

MAP began as Kuschall's official distributor on Jan. 22.

Respironics Posts Q2 Results, Launches My Life Mask Series
MURRYSVILLE, Pa.--Respironics reported record financial results for the three months ended Dec. 31. Net sales for the second quarter totaled $288.7 million, up 12 percent over $257.9 million in the same period a year ago.

Domestic sales increased 9 percent for the period, from $176.9 million a year ago to $193.2 million. The company said the gains were led by an increase in sleep therapy revenues during a quarter when its transition to the M-Series platform of positive airway pressure devices was completed, and also while working through a limited, voluntary recall of a heated humidifier device used with its older legacy CPAP systems.

While the M-Series is now fully launched, according to President and CEO John Miclot, "we have continued to increase our investment in research and development in the sleep therapy area, and we recently released our OptiLife mask, our newest patient interface offering."

Company execs said the chin-mounted, pillows-style OptiLife, launched in mid-January as the first mask in its new My Life series, is not only Respironics' easiest-to-use mask for patients but also makes it easier for therapists to get a proper fit more quickly--and for sleep therapy providers to reduce costs.

The mask headgear uses no buckles and has a chin support band so it can be easily put on and adjusted, making it a good choice for patients with limited mobility, the company said. An open forehead area allows seep lab techs to attach polysomnographic leads more easily. The design also allows side-sleeping without disrupting the seal.

"That's a huge deal," according to Donald Spence, president of the company's sleep and home respiratory group, noting that patients who are more comfortable with their equipment are more likely to be compliant with their therapy.

Weighing 2.4 ounces with only five parts, the lightweight mask comes with four pillow sizes--petite, small, medium and large--to fit a wide range of patients, which should help reduce inventory and increase efficiency, said Stan Jankowski, U.S. marketing manager, sleep disordered breathing. "For home care providers, OptiLife is a comfortable, quick-sealing pillows interface that will minimize patient 'call-backs' and 'can't-fit' scenarios. It will reduce costs and increase long-term revenue."

Calling the OptiLife "our flagship" mask in the pillows area, Spence said "the big thing for DMEs is they want happy customers ... They need trouble-free patients and fewer callbacks and visits that have to be made ... that's all money and time. Providers want something that's hassle-free and that works."

Spence said the company plans to introduce several additional masks in the My Life series within the next 24 months, all with modular designs, few parts and a wide range of fittings. The company will also continue to offer its Comfort series of masks.

Whitestone Acquires Humanicare International
BLOOMINGTON, Ind., and EAST BRUNSWICK, N.J.-- Whitestone Corp. has acquired Humanicare International, forming a combined company in the adult incontinence care market. The new company will distribute several incontinence product brands, including Dignity, Compose, Ultrashield and Disposese.

"The majority of our business historically has been in the long-term care segment, and this acquisition greatly strengthens our presence in the home health care segment," said Whitestone President and CEO Jamie Better, who will retain his titles with the combined companies.

Tony Gegelys, Humanicare's founder and CEO and a former Whitestone sales executive, will become a director of Whitestone.

According to the company, the demand for disposable adult incontinence care products continues to increase as life expectancy rates rise and the baby boom generation ages.

In Brief
The American Association for Homecare is moving its offices. The association's new location is 2011 Crystal Dr., Suite 725, Arlington, VA 22202. AAHomecare's phone numbers, fax, and email addresses remain unchanged.

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

CMS APPROVED ACCREDITATION FOR ALL DMEPOS
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USA 1-215-654-9110
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