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Headline News
Clock Is Ticking for First-Round Bidders; CMS Sets July 9 Call
BALTIMORE--CMS closed registration for the first round of Medicare DMEPOS bidding on Saturday and announced that it will hold a special 30-minute bidders conference July 9 "to address issues associated with the bidding process."

The agency had originally scheduled the registration deadline for June 30, with the close of bidding to follow on July 13. But after strong industry protests, CMS granted an extension for registration along with a one-week extension for submission of bids, which are now due by 9 p.m. ET on July 20.

Since the bid window opened May 15, stakeholders have complained that problems with the online bidding system have been persistent. One provider told officials in a recent teleconference he had spent two days trying to enter information into the system unsuccessfully because it kept crashing. (See HomeCare Monday, June 25.)

During the special conference call, CMS said it will discuss measures to expedite the overall bidding process and to manage data entered into the system. In the meantime, a Friday afternoon notice about the call offered information addressing some of the bidding system's time parameters:

--Bidders should be aware that the Competitive Bidding Submission System (CBSS) automatically logs users out of the system after two hours due to a systems security setting built into the bidding process.

--Suppliers should track their time while in the CBSS system. After being in the system for approximately an hour and 45 minutes, suppliers should save their data and log off the system entirely. After completely exiting the system, the supplier can go back and begin another session on the application. Citing "severe technical problems with bid submissions" among other reasons, the American Association for Homecare requested an extension of the bidding deadlines from CMS and has begun an effort directed at members of Congress to delay implementation of the program. (See HomeCare Monday, July 2.)

But for now, "providers are stuck with that clock that is ticking," said Don Clayback, senior vice president of networks for The Med Group, "and the frustration that people are feeling is not 'Gee, I'm having kind of a rough day here,' it's 'This is my business and my employees' lives and livehhoods that are at stake.' And yet, they are having to work within a government program that is making it much harder than it has to be.

"I'd like to be optimistic that [CMS] will take a look at making some adjustments," Clayback said, "but what we've seen over the last 60 days is not an openness to change things, even when we run into some obvious problems."

To participate in CMS' July 9 teleconference, scheduled for 2 p.m. ET, call (877) 356-8073 and use passcode 6553095.

To read the notice in full, go to www.dmecompetitivebid.com.

For an HHS fact sheet on the demonstration project, click here.

Walgreens to Buy Option Care for $850 Million
DEERFIELD, Ill.--Walgreen Co. said last week it will acquire specialty pharmacy and home infusion provider Option Care in a transaction valued at $850 million, the largest in Walgreens' history.

Buffalo Grove, Ill.-based Option Care runs a network of more than 100 pharmacies, 61 of them company-owned, in 34 states. The company has contracts with more than 400 managed care organizations representing 75 million people.

The acquisition "dramatically expands our specialty pharmacy and home infusion footprint and makes us a national player in both areas," said Walgreen CEO Jeffrey Rein in a conference call.

The specialty pharmacy and home infusion markets are estimated at $60 billion a year, with a projected annual growth rate of 20 percent. "This acquisition puts us in a sweet spot for that growth," Rein said, noting that the two markets are getting tied closer together as more biopharmaceuticals are delivered through infusible drugs.

According to Walgreen President Greg Wasson, growth in both markets is being driven by "cost-containment pressures, a strong pipeline of new therapies and an emphasis on care management and compliance monitoring to improve outcomes." He added that with more than 3,000 providers across the country, the infusion market is fragmented. But the new acquisition will give Walgreens a 6 percent share and the No. 2 position in the industry, behind market leader Coram, which has an 11 percent share.

Wasson said the deal is another step in positioning Walgreens to provide a variety of patient-focused health services with a series of recent acquisitions, including:

--Take Care Health Systems, which operates convenient care clinics;
--Medmark Specialty Pharmacy Solutions, a specialty pharmacy company;
--SeniorMed Pharmacy, which provides prescription services to residents in assisted-living, specialty care and independent communities; and
--Schraft's A Specialty Pharmacy, which provides fertility medications and services.

Walgreens' Health Services division includes Walgreens Health Initiatives, a pharmacy benefits manager, Walgreens Mail Service, Walgreens Home Care and Walgreens Specialty Pharmacy. Walgreens Home Care currently operates 45 facilities--including 20 home infusion pharmacies--in 18 states, and Walgreens Specialty Pharmacy operates six locations, including Medmark and Schraft's.

"We're moving beyond traditional pharmacy in ways that are beneficial to our patients and will help payers better manage their overall medical and pharmacy spend," Wasson said.

Walgreen Co. had 2006 sales of $47.4 billion. As of May 31, the company operated 5,751 stores in 48 states and Puerto Rico.

Battle Over Home Sleep Testing Heats Up
BALTIMORE--A battle among sleep industry stakeholders is brewing as CMS works through a review of its national coverage determination on testing for CPAP therapy.

Currently, CMS policy specifies that only polysomnography tests done in a sleep lab are acceptable to diagnose patients with OSA and prescribe a CPAP device. But a request from the American Academy of Otolaryngology-Head and Neck Surgery asking the agency to accept in-home testing prompted CMS to open its policy for review in mid-March. (See HomeCare Monday, March 26.)

"Home sleep testing is a validated alternative and an important step in improving recognition and control of OSA," according to the academy. "Additionally, the current reimbursement paradigm of high reimbursement for [polysomnography] and low reimbursement for treatment is not only a waste of precious resources, but also discourages more appropriate focus on rapid diagnosis and effective treatment for OSA."

CMS has set a public meeting of its Medicare Evidence Development and Coverage Advisory Committee for Sept. 12. All aspects of the NCD on diagnosing OSA will be open for review.

Based on comments CMS received earlier this year, the meeting is shaping up as a skirmish among medical professionals and other parties who are widely divided in their opinions on the policy:

--The American of Academy of Sleep Medicine said it objects to home testing, asserting that there is a lack of data to support a change in policy and labeling as "a myth" the idea that there are not enough sleep facilities to deal with the number of patients. "There is no evidence to suggest that a change in the NCD policy for portable monitoring will have a significant effect on patient access," the AASM commented. The group also pointed to studies that it said have not provided evidence in support of portable monitoring for the diagnosis of OSA and said more research must be done. In addition, the AASM said, "Wide use of portable monitoring by physicians and surgeons not trained in its use or in the comprehensive management of patients with sleep disorders will likely result in adverse patient outcomes. There is credible evidence that patients managed for OSA at accredited sleep centers have better outcomes."

--Robert D. Hoover Jr., M.D., MPH, FACP, writing on behalf of Longmont, Colo.-based Sunrise Medical and its DeVilbiss division, said the company "supports the expansion of home diagnostic testing" to include comprehensive portable and modified portable sleep apnea testing. "These devices, in combination with objective and subjective clinical data such as body mass index, neck circumference and a validated sleepiness scale, have consistently demonstrated comparable predictive value to that obtained by facility-based, attended [polysomnographic studies]," Hoover said.

--Mickey Letson, president of The Letco Companies, Decatur, Ala., noted: "By allowing the in-home qualification of CPAP, the Medicare system would see substantial savings as well as provide the much needed access to these products and a much faster speed than is currently achieved through in-lab qualification. The technology currently exists to perform in-home CPAP qualification."

--The American College of Chest Physicians disagrees. While portable monitoring may "ultimately have a place in the diagnostic armamentarium of physicians evaluating and treating patients with sleep apnea," the group said, "this approach has not yet been validated well, its limits clarified, nor the costs and benefits assessed beyond the unsupported assumption that it must be less expensive than polysomnography. Portable monitoring will require judicious application to avoid errors in diagnosis, and carefully designed investigations are underway. Until the results of these studies are available for critical review, modification of the CMS [NCD] to include at-home unattended portable monitoring is premature and not in the best interests of patients with obstructive sleep apnea or other sleep disorders."

--The National Sleep Foundation, on the other hand, champions using all meaningful testing that is available. "NSF encourages CMS ... to consider the prevalence and consequences of sleep apnea, current access-to-care barriers, and the need to emphasize long-term management when establishing policies which influence those with sleep apnea and the health care professionals caring for them. Physicians knowledgeable in the care of patients with sleep apnea should be able to use all evidence-based assessment and treatment procedures to maximize identification and management of those with sleep apnea."

--In its comments, the American Association for Homecare said it supports a revision to the current NCD that would "permit the use of portable, multi-channel sleep testing in the home as a diagnostic alternative to facility-based polysomnography." The association also recommended revising the criteria for determining the Apnea-Hypopnea Index, and developing a policy "for the use and coverage of positive airway pressure therapy for a select group of severe patients not yet evaluated through formal sleep testing."

At its September meeting, MedCAC may consider the AHI and additional issues, including qualifications for personnel who perform sleep tests.

"Sleep testing in the home would be valuable if licensed personnel were performing these tests," the Respiratory Care Board of California noted in its comments. "If you decide to allow for reimbursement for tests performed in the home, it is crucial that you require licensed personnel to perform these tests."

The American Association for Respiratory Care strongly recommended that CMS require testing facilities to be accredited, and also said for those administering the tests, "it is important for Medicare to set a high standard in terms of personnel qualifications to help assure a high quality of services provided to the Medicare beneficiary."

The MedCAC meeting has been scheduled from 7:30 a.m. to 4:30 p.m. at 7500 Security Blvd., Windsor Mills, Md. CMS said it would post additional information about the meeting at a later date.

The agency said it expects to complete the review by March 13, 2008.

To view comments on the NCD, click here.

Actuaries Study Solutions to Medicare Money Woes
WASHINGTON--In a new report, The American Academy of Actuaries has evaluated 16 possible reforms for Medicare's financial problems and concluded that it would take a number of the options to solve them.

"There is no single solution to the challenges facing Medicare," said Cori Uccello, AAA's senior health fellow. "Viable options will likely require shared burden among taxpayers, Medicare beneficiaries and health care providers."

Among the reforms, the actuaries looked at increasing the payroll tax rates for Medicare, increasing premiums, slowing the growth of provider payments and increasing the age at which people are eligible for benefits.

According to the most recent Medicare trustees' report, by 2011, hospital insurance expenditures will exceed all revenues into the program trust fund, including interest income. By 2019, the trust fund assets are expected to be depleted, and projected payroll taxes will cover only 79 percent of benefit costs, with the percentage decreasing thereafter, the report said.

Medicare's Part B, which covers physician services and DME, is already getting more of its funding from the government's general fund than it has in the past, according to the report.

Increasing health care costs and a dwindling ratio between workers paying into Medicare and beneficiaries taking out of the program are the reasons for its budget problems, the actuaries said.

"Reforms to the Medicare program are needed, and the sooner the better," the report said, noting that mounting Medicare expenditures will strain the federal budget--and maybe the entire economy.

To download the report, click here.

Coming Up
The American Association for Respiratory Care will hold its summer forum July 13-15 in Reno, Nev. For more information, call (972) 243-2272 or visit www.aarc.org.

CMS will hold its next regularly scheduled Home Health, Hospice and DME Open Door Forum on July 18. To participate by phone, call (800) 837-1935 and reference Conference ID 2467910.

July 20 is the bid submission deadline for providers participating in the first round of Medicare DMEPOS competitive bidding. For more information, visit www.dmecompetitivebid.com.