Congressional hearings on the budget proposal are scheduled for later this month. To view the proposal for the Department of Health and Human Services, visit http://www.hhs.gov/budget/08budget/2008BudgetInBrief.pdf. Go to page 50 for a discussion of proposals affecting home care.

Invacare: Good News for New O2 Technology
ELYRIA, Ohio--On Friday, HME manufacturing giant Invacare Corp. issued a statement objecting to cuts in President Bush's budget proposal for 2008 that would impact both home oxygen and power wheelchairs.

But company officials pointed to a good news-bad news scenario regarding the oxygen proposal. While the budget would reduce the rental cap on home oxygen therapy from 36 to 13 months, it would also exempt "new oxygen technologies," such as home transfilling equipment, from the 13-month cap, said Cara Bachenheimer, Invacare's vice president of government relations.

Invacare and other HME stakeholders have spent months trying to educate the administration about the effects of capping oxygen equipment, Bachenheimer said, one of them being that if new technology were capped, "no one would buy it" and no one would develop it.

"We still oppose the cap on the traditional technology," she said, though she added that the exemption puts the oxygen market in a "much better position."

Bachenheimer also noted that Bush's new oxygen proposal does not specify what happens with the equipment once the 13-month limit is reached.

In his 2007 budget, Bush had proposed that after 13 months of rental, oxygen patients would own their equipment. The industry managed to gain support in Congress to beat back that idea, however, leaving in place the Deficit Reduction Act's provision of a 36-month capped rental for home oxygen. The DRA provision also requires that ownership of oxygen equipment must be transferred to beneficiaries after the rental period ends.

Bush's new proposal, however, says nothing about the beneficiary taking ownership of the equipment, Bachenheimer said. "That's intentional," she said. "You have to understand the nuances of the administration's proposal. The devil is in the details."

In this case, Invacare said in its statement, "The budget proposal's silence on this issue sends a clear signal to Congress that the administration does not oppose reversal of the mandatory beneficiary ownership."

That is heartening news to the industry, which is already marshalling support for the Home Oxygen Patient Protection Act (H.R. 621), a bill introduced by Rep. Tom Price, MD, R-Ga., that would repeal the DRA oxygen provision.

Bachenheimer also noted that oxygen savings in the Bush budget are pegged at $2.4 billion over five years. That is a significant drop from previous estimates, when a 13-month cap had been estimated to save more than $6 billion over five years.

"We don't fully understand why," Bachenheimer said about newest estimates. She speculated that, among other reasons, the savings drop could be explained by the fact that the current proposal says payments would be capped for "most" oxygen equipment rather than "all."

Regarding elimination of the first-month purchase option for power wheelchairs, Bachenheimer called the proposal "ridiculous."

While the administration says the proposal would save about $500 million over five years, Invacare officials estimate that, in reality, the provision would end up costing Medicare and beneficiaries 5 percent more over five years than they are currently expending under the first-month purchase option.

"We recommend that Congress again reject this proposal," the Invacare statement said.

Answers on MSAs and Bid Products Coming, CMS Says
BALTIMORE--In a scheduled conference call Thursday with accrediting organizations, CMS officials confirmed that the agency's final rule on national competitive bidding is in the final clearance stage before publication.

The list of 10 MSAs where CMS plans to roll out the Medicare bidding program and the products to be included in the bid will be issued at the same time, the accreditors were told.

"My understanding is we should know all of those things" a soon as the rule comes out, said Sandra Canally, president of The Compliance Team, one of 10 organizations approved by CMS to accredit DMEPOS providers.

The agency also plans to notify the accrediting bodies when the rule is published so that they can begin in earnest to focus their operations in the bidding areas to move unaccredited Part B providers through the process. CMS has asked the accreditors to give preference to providers in the bidding locations it selects.

No specific deadlines have been set for accreditation, but in another twist, during last week's conference call "it was said several times that providers do need to be accredited in order to be able to bid," one accreditation representative said. At an Open Door Forum on Jan. 30, however, agency officials gave contradictory information, stating that providers must be accredited in order to win a bidding contract but that they did not need accreditation in order to enter a bid. (See HomeCare Monday, Feb. 5.)

One thing that hasn't changed, the accreditors said after the call, is CMS' message to providers: Get accredited now.

In December, CMS gave the accrediting organizations a list of 19 possible target areas, and in a notice shortly thereafter, added a 20th city--Orlando--to the list. The agency said its goal is to have all providers in those 20 MSAs accredited before bidding begins. But the flood of companies expected to apply for accreditation in those cities hasn't happened.

"My view of this whole thing is [providers] are still waiting for that magical statement that says 'these are the 10 cities and these are the products,'" Canally said. "Do I need to spend the money or can I put it off six months?"

But if providers continue to delay accreditation, she warned, "thousands are going to be ahead of them.

"I know providers are confused," Canally, said, but she added that "CMS wants us to accredit the providers in those 20 MSAs as soon as possible. If providers are in those 20 areas and they don't come forward now, they are placing their business at risk," she warned. "That's the message, and that message has not changed."

From an accreditors' viewpoint, Canally said, "we just wish they would come forward and sign up. Nobody's getting out of it. Everybody's gotta do it."

According to CQ, Norwalk and Deputy Acting Administrator Herb Kuhn were considered the "two top candidates" for the job after McClellan resigned.

Provider News
Central Line Infusion Opens Houston Branch
IRVINE, Calif.--Central Line Infusion, an Amerita company, has opened a full-service infusion pharmacy in Houston.

According to the company, the new facility is specifically designed to meet "the stringent new standards set for sterile compounding." To ensure quality, medications are compounded in a sterile clean room, dispensed under the supervision of a registered pharmacist and delivered directly to the patient's home. A registered nurse then ensures safe administration of the medication.

The location gives Central Line a foothold to expand its current service area in southeast Texas, the company said.

"Health care is a local business," said Ray McCaslin, branch manager of the new location. "This local approach is just what this industry needs to bring patient care, customer service and responsiveness back into focus."

According to the company, the specialty infusion market is expanding rapidly, driven by increasing health care costs, a growing bio-pharmaceutical pipeline of infuseable and injectable medications and an aging population.

Amerita is a privately held specialty infusion company that provides complex pharmaceutical products and clinical services to patients outside of the hospital.

MED Group Develops PMD Formulary
LUBBOCK, Texas--The MED Group has developed a power mobility device formulary of products keyed to CMS' new PMD codes and recent changes in allowables.

The buying group said the formulary is designed to help its members "identify the highest quality PMD product while maintaining the best margins."

Using a tool on MED's Web site, providers can choose base chairs, add an array of accessories and batteries and choose from a variety of funding scenarios to help figure out the best product for their customers and their best profit margin.

To create the formulary, MED analyzed all power mobility products from manufacturers it contracts with and then determined the appropriate product corresponding to the new PMD codes. In addition to variables such as accessories and battery types, providers can create their own fee schedules for private payers and can also see products from some non-MED contract vendors.

According to Scott Austin, executive vice president, the PMD formulary is just one of several new tools MED is developing. Future categories will include best practices, assessment tools and tools for understanding the market.

Manufacturer News
KPS Buys PaperPak
NEW YORK--KPS Capital Partners announced that its affiliate Attends Healthcare has acquired PaperPak Products. Terms of the transaction were not disclosed.

Greenville, N.C.-based PaperPak manufactures adult incontinence products that are sold mainly under the Attends brand name. The company chiefly serves non-retail sectors and concentrates on the acute care, long-term care and home health care sectors. It operates two manufacturing facilities located in North Carolina and California.

ResMed Posts Record Financials
SAN DIEGO--Sleep giant ResMed reported record revenue and income results for the quarter ended Dec. 31. Revenue for the quarter was $178.4 million, up 22 percent over the same period a year ago. Pro forma income from operations and pro forma net income were $47.0 million and $33.7 million, an increase of 23 percent and 25 percent, respectively.

"In the second quarter of fiscal 2007, overall Americas sales for our sleep products increased by 23 percent; including sales from our motor division, Americas sales increased by 20 percent over the year ago quarter," said Peter C. Farrell, PhD, chairman and CEO. "In this regard it is noted that the ResMed motor division has significantly reduced sales of low margin non-core products to concentrate more exclusively on the supply of motors for ResMed products."

Farrell said sales growth in sleep products for the Americas reflects continuing demand for the company's Swift nasal pillows system, full-face masks and the Adapt SV, which was only launched in the previous quarter.

"We are pleased with the inroads we continue to make into the cardiology and complex sleep apnea markets with the Adapt SV, and we are making good progress with our Occupational Health strategy. We are also excited by the upcoming launch of the Tango into the value end of the CPAP market," Farrell said.

Sales outside of the Americas totaled $84.4 million, a 24 percent increase over last year.

In Brief
Tennessee has the highest rank in the country for prescription drug use, according to a report by BlueCross BlueShield of Tennessee. Tennesseans average 17.3 prescriptions per person, compared to the U.S. average of 11.3 prescriptions. When it comes to costs, the state has the nation's No. 2 spot (behind the District of Columbia) at $1,192 per capita in prescription drug spending. But "for all our drug use and spending, Tennessee still ranks 47th in health status for its citizens," said Bill Cecil, health policy director for BlueCross, The report, "Inside Tennessee's Medicine Cabinet," is available at www.bcbst.com.

Retail clinic trade group Convenient Care Association expects the number of retail clinics nationwide--currently 300--to double by the end of the year, the New York Times reported Feb. 4. Staffed by nurse practitioners instead of doctors, and often set up in drugstores or supermarkets, the clinics offer a low-cost answer for minor health problems for the uninsured and those who want after-hours or quick care. But according to the Times, critics say they could negatively impact relationships between patients and doctors and provide insufficient follow-up care. Also, visits are not covered by all insurers.

In a Feb. 5 article called "Patient, protect thyself," USA Today took a look at the frequency of medical errors in the country and what patients can do to minimize their risk. The newspaper reported that according to the Harvard School of Public Health, 34 percent of people say they or their families have experienced a medical error--and half of those with chronic illnesses have been affected by one. Moreover, according to the Institute of Medicine, which advises Congress on health policy, hospitalized patients can expect to experience at least one medication error per day. Though hospitals are implementing initiatives to try to prevent errors, the newspaper reported, "many experts say patients and their families also need to take a larger role in ensuring their safety in the hospital."

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