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| A Penton Media Property | |
| July 23, 2007 | Volume 13, Issue 34 |
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In This Issue: CMS Holds Bid Window Open for One More Week CMS Asks for Details about Competitive Bidding Problems Accreditation Mandatory for Providers in Medicare Fraud Demo House Members Take Leavitt to Task over Fraud Funds Legislation Would Create National Insurance Plan for Disabled Adults ReAble Therapeutics to Buy DJO in $1.6 Billion Deal Norwalk Exits CMS; Nicholson Resigns from VA Lewarski Signs On with Invacare SeQual Taps Richard as Senior VP of Marketing and Sales For more industry news, features and highlights from our latest issue, please visit our Web site at www.homecaremag.com. Headline News CMS Holds Bid Window Open for One More Week BALTIMORE--Home medical equipment providers in the 10 competitive bidding areas got an 11th hour reprieve late Thursday when CMS extended its bid submission deadline by one week. All bids for the first round of competitive bidding are now due by 9 p.m. prevailing Eastern Time on July 27. This is the second extension in as many weeks; the original bid deadline was July 13, but CMS extended that deadline to July 20. And in a late-breaking development, the agency has agreed to discuss issues related to the first round of bidding with the American Association for Homecare and other provider associations on a call set for Wednesday, July 25 (see "CMS Asks for Details about Competitive Bidding Problems" in this issue). According to Walt Gorski, AAHomecare vice president, government affairs, "there continue to be problems" with the online bidding system. "I think CMS recognized and heard that from the supplier community and had no other option but to extend the bidding window," he said. Suppliers on a Wednesday Open Door conference call complained of being shut out of the electronic bidding system, and some said they were still struggling to enter bids. Joel Kaiser, deputy director of DMEPOS policy for CMS, told callers he was unaware of any major system problems. CMS was working on each trouble call, he said. But Gorski said AAHomecare has heard from numerous suppliers about problems with the bidding system. As late as Thursday, "providers were encountering significant challenges," he said. "Obviously, of great concern to us ... is that we need assurances that when we are at the same point [this] week, everything is working properly. We should not be a beta test for this system," he said. "The system should be reliable so that any supplier who makes a good-faith effort to submit a bid and comply with the rules has fair consideration for a contract. It is unacceptable if suppliers are closed out because of no fault of their own." Another concern has been changes in bidding guidelines. As late as Wednesday, answers to questions about bidding forms and other instructions were still being posted on the Competitive Bidding Implementation Contractor Web site. On July 13, an alternate method for submitting product manufacturer, model and model numbers required for bidding was posted to the site. "We are very concerned with the educational and technical information that is coming out now. As this information comes out at the last minute and departs from previous guidance, how should a supplier react if they have already submitted a bid?" asked Gorski. "A supplier should not be rejected based on data submission that was based on the best guidance at that time." As well, some providers had not yet received their user IDs and passwords--necessary to submit a bid--even though they had met the bid registration deadline. In Thursday's bid extension notice, CMS said it is "continuing to process complete and accurate requests for user IDs and passwords for suppliers that applied for registration by the July 7, 2007, deadline." Extension of the bidding window came as a surprise to most stakeholders, particularly since Kaiser stated during Wednesday's conference call that there would not be one. On that call, Gorski inquired when CMS would respond to letters from Congress calling for a slowdown in the implementation of competitive bidding until quality and patient access issues were resolved. The letters, one each from the House and the Senate, were delivered to CMS last week and signed by 65 representatives and 14 senators, including Sen. Hillary Rodham Clinton, D-N.Y. (See HomeCareMonday, July 16.) Kaiser said he had not yet seen the letters. "I'll e-mail [them] to you," Gorski said. "We will be interested to hear how CMS plans to respond," Gorski said. "Clearly, the letters show that this issue is resonating in Congress and that lawmakers and their staffs are watching closely." To view the bid deadline extension notice, and for information on the option for submitting manufacturer make and model data, click here. The CBIC has also posted a notice that its help desk will be available from 6 a.m. until midnight EST weekdays, and that it will operate 24 hours a day the last day before bidding closes at (877) 577-5331. CMS Asks for Details about Competitive Bidding Problems ARLINGTON, Va.--On Friday, the American Association for Homecare held a conference call with officials at CMS and several other national provider associations regarding problems with the agency's competitive bidding system. According to a statement from the association issued late Saturday, "AAHomecare initiated the call due to the overwhelming concerns expressed by its member companies about technical issues related to submitting bids through the online system and also the issue of the consistency of instructions and information available to providers during the course of the bidding process." During the call, the association said CMS agreed to review the issues on another call to take place Wednesday, July 25. To better inform CMS and AAHomecare for that discussion, the association is asking for feedback from first-round bidders who 1) are still having problems submitting a bid or 2) have questions about whether their bids were based on consistent information from CMS. The second point is related to companies "that submitted a bid but after the fact received updated guidance or other information that might have influenced the bid had it been known earlier," the association said. AAHomecare said Herb Kuhn, acting deputy administrator of CMS, acknowledged the problems with the bid system during the call and cited them as the reason for the extension in the bidding deadline (to July 27) that was announced on Thursday. "CMS officials said they want to be responsive to providers' bidding problems but need to understand the nature and the magnitude of the problems," the association said. "Therefore, provider feedback is important." AAHomecare asked that comments be sent directly to the Competitive Bidding Implementation Contractor at cbic.admin@palmettogba.com and also copied to AAHomecare at staceyh@aahomecare.org. With declining reimbursements and industry changes, is your company planning to stop taking assignment of benefits from payers? To vote in HomeCare's monthly Web poll, visit www.homecaremag.com. Accreditation Mandatory for Providers in Medicare Fraud Demo ATLANTA--HME providers in Southern California and South Florida will be required to become accredited within a 90-day period under a stipulation in the massive anti-fraud demonstration to be implemented in those areas by CMS. Providers who do not become accredited within that time after receiving notification from the National Supplier Clearinghouse to do so will lose their Medicare billing numbers, according to details of the initiative. The requirement has stirred up industry stakeholders, who protested that it is an unreasonable standard. "You can't get accredited in 90 days," said Miriam Lieber of Lieber Consulting in Sherman Oaks, Calif. "You have to have four months of records; you can barely get the surveyors out [in that period of time] ... This is just not feasible." "I don't think it can be done in 90 days," agreed Mary Ellen Conway, president of Capital Healthcare Group, Bethesda, Md. "There is such a thing as a provisional accreditation for new companies, but not for existing companies. It's shocking to think that the NSC thinks this can be done in 90 days." Under CMS' two-year initiative, which is designed to prevent deceptive home care companies from operating in the greater Los Angeles and Miami areas, about 7,700 providers will be required to reapply for their Medicare billing numbers within 30 days of receiving a notice from CMS to re-enroll. (See HomeCare Monday, July 9.) Those that remain in the system will be subject to "intense review," CMS officials said when they announced the project on July 2. That process will include multiple unannounced site visits by NSC investigators, as well as a "fraud level indicator" for each provider that considers such factors as:
Revocation of billing privileges will occur if "the DMEPOS supplier failed to obtain accreditation from an approved DMEPOS accrediting organization within 90 days of notification from the NSC to do so," according to the demonstration rules. Providers and consultants quizzed NSC officials during a conference call last week, asking how the timeline could be met given the requirements of accreditation. NSC officials responded that they did not know the details, but that the 90-day time stipulation was what was planned. When contacted by HomeCare, the NSC declined comment. Conway said full accreditation could conceivably be achieved in 120 days. "It would still be a challenge, and it would have to be tightly watched, but it's doable," she said. Tim Safley, HME clinical advisor for the Accreditation Commission for Health Care in Raleigh, N.C., one of CMS' 10 approved DMEPOS accrediting organizations, said the 90-day limit could work, but only if the company was in the process of becoming accredited already. If companies in the demonstration areas have not applied, he added, "they've got to get started now. Those companies that wait are going to be put by the wayside." "They needed to be accredited yesterday," Lieber said bluntly. Both Lieber and Safley noted that questions still remain about the fraud initiative, including whether the NSC will recognize pending accreditation or whether the company must be fully accredited within the 90 days. Providers might buy a bit of time depending on when CMS sends its re-enrollment notification letters. No set date was given in the demonstration announcement, although an agency official said the letters would be sent within three to four months. However, the consultants said, the handwriting is not only on the wall, it is in large, blinking, neon letters: Providers must become accredited, and it is unwise to delay the process any longer. "There is no legislation [pending] to stop accreditation," Safley said. "It's not going away. If people wait, they are going to miss the window." CMS is expected to announce a deadline soon by which all providers who bill Medicare will need to be accredited; those in the first round of competitive bidding must be accredited by Aug. 31 in order to win a contract. Conway pointed out that it isn't just Medicare providers who will be affected by mandatory accreditation. "You have to keep in mind all your payers," she said. "It's going to affect everyone, even if they don't do Medicare. As Medicare goes, so go all the other payers." Indeed, late last month, Medicaid providers in Oklahoma received a letter from the state's Health Care Authority that said effective Jan.1, 2008, all DMEPOS suppliers "must be accredited by a Medicare-deemed accreditation organization for quality standards for DMEPOS suppliers in order to bill the SoonerCare program." The state agency said it was making the policy revision to "comply with the [CMS] accreditation standards." While CMS' two-year fraud initiative could expand to additional areas depending on its success in Miami and L.A., the agency is already planning to implement a similar demonstration project focusing on home health agencies in Harris County (Houston), Texas, and four California counties in the greater Los Angeles area: Los Angeles, Orange, Riverside and San Bernardino. Under that initiative, announced Tuesday, HHAs in those areas must also re-enroll within 60 days after being requested to do so and must adhere to certain standards. They will also be subject to on-site reviews and, if they have changed ownership within the last two years, a survey. For an HHS fact sheet on CMS' DME fraud demonstration project, click here. For a fact sheet on the HHA fraud initiative, click here. Instances of potential Medicare fraud can be reported to the HHS Office of Inspector General at 1-800-HHS-TIPS (800-447-8477) or HHSTips@oig.hhs.gov. House Members Take Leavitt to Task over Fraud Funds WASHINGTON--Legislators on the House Budget Committee put Health and Human Services Secretary Mike Leavitt on the hot seat Tuesday as he requested additional funds to fight Medicare fraud. The Bush administration is asking for $1.3 billion for the Health Care Fraud and Abuse Control program in 2008--$200 million more than the program received in 2007. Of the increase, Leavitt said most would be discretionary spending used to go after fraud in Medicare and improve oversight of Medicaid. Leavitt said much of the money was needed to pay for and prosecute DME fraud cases in areas like South Florida, where CMS recently announced a major anti-fraud demonstration project. (See HomeCare Monday, July 9.) Leavitt recounted his experience in visiting the area, where he told the congressional panel Medicare is losing millions in payments to sham companies. He said his department is also seeking to change statutes that send recovered funds back into the Medicare trust fund so that they go toward fraud prevention initiatives instead. But legislators questioned the agency's fraud control efforts to date and asked whether additional funding would be effective. Rep. Jim Cooper, D-Tenn., said Medicare has let its claims processing contractors "off the hook" and that they should be held accountable. "Don't these payment processors have some responsibility to flag suspicious claims?" Cooper asked. "Are they doing their job?" Cooper also challenged Leavitt's focus on small providers instead of on large health care companies, which Cooper said seem to regard penalties for Medicare fraud as merely a cost of doing business. According to the American Association for Homecare, which reported on the hearing in its newsletter, Leavitt also got hard questions from other congressmen, including Rep. Adrian Smith, R-Neb., who asked, "How often are people on the front lines included in the process of preventing fraud?" Rep. Bobby Scott, D-Va., asked about professional education for providers that could reduce mistakes. Rep. Dan Lungren, R-Calif., said he had hoped to hear more in Leavitt's testimony about deterring fraud. "That's what I found missing," he said. Rep. Patrick Tiberi, R-Ohio, mentioned the "hoops" providers have to jump through to get reimbursed. He commended his state's "strong and active DME industry," and suggested CMS work with DME associations to go after fraud, AAHomecare said. Committee ranking member Paul D. Ryan, R-Wis., said Congress should look at reforms to ensure federal funds appropriated in the regular budget process are spent wisely rather than appropriating funds year after year for program integrity. Legislation Would Create National Insurance Plan for Disabled Adults WASHINGTON--Lawmakers in the House and Senate introduced legislation earlier this month that would create an insurance program for adults who become functionally disabled. "The Community Living Assistance Services and Supports (CLASS) Act of 2007" bills (S. 1758 and H.R. 3001) were introduced July 10 by Sens. Ted Kennedy, D-Mass., and Tom Harkin D-Iowa, and Reps. John Dingell, D-Mich., and Frank Pallone Jr., D-N.J. The measure would provide a cash benefit to help people with functional impairments pay for services and supports that they need to maximize their independence and give them more choices about community participation, education and employment. The insurance program would be financed by voluntary payroll deductions of $30 per month and would provide benefits to adults who become severely functionally impaired. All working adults would be enrolled in the program automatically unless they decided to opt out. To qualify for the benefits, individuals would have to be at least 18 years old and have contributed to the program for at least five years. "Too many Americans are perfectly capable of living a life in the community, but are denied the supports they need," Kennedy said. There would be two benefit tiers under the program. Tier 1 benefits--$50 per day--would be payable to people who have two or more impairments in dealing with activities of daily living. Tier 2 benefits--$100 per day--would be payable to those who have four or more impairments on ADLs. The benefit payment would be posted to a debit account each month. People who didn't use the full monthly amount would be able to roll it over from month to month, but not year to year. Once a person becomes ineligible for CLASS benefits, the payments would end. If an eligible individual chose to move into an institution, the benefits would be used to settle those expenses. "As America continues to age, we are faced with an impending crisis in long-term care," Pallone said. "Today, we offer a new approach that builds upon our existing safety net system and helps our elderly and disabled finance the long-term care they need to remain active and productive members of their communities." The text of the bills should be available soon at http://thomas.loc.gov. ReAble Therapeutics to Buy DJO in $1.6 Billion Deal AUSTIN, Texas, and VISTA, Calif.--ReAble Therapeutics will buy DJO in a merger deal valued at $1.6 billion, the companies announced last week. The agreement, including assumption of debt, provides for a cash payment of $50.25 for outstanding shares of DJO common stock, representing a premium of 25 percent over DJO's average share price for the 30 trading days ended July 13. An affiliate of Blackstone Group is the controlling shareholder of ReAble and will provide the equity financing needed by ReAble to complete the transaction. The companies provide complementary products in orthopedic rehabilitation and pain management. According to a joint statement, the combination "will offer a broad go-to-market approach through multiple sales channels." With its Aircast, DonJoy and ProCare brands, DJO's range includes over 700 rehab products for musculoskeletal and vascular health, including rigid knee braces, softgoods and pain management products. Formerly known as dj Orthopedics, the Vista, Calif.-based company changed its name to DJO in 2006. Its products are sold in the United States and more than 70 other countries. ReAble also makes orthopedic devices, and through its Orthopedic Rehabilitation division, distributes electrical stimulation and other products used for pain management, orthopedic rehab, physical therapy and sports performance. Its Surgical Implant division offers a suite of reconstructive joint products and spinal implants. "DJO and ReAble have established strong positions in the orthopedic and rehabilitation markets," said Ken Davidson, CEO of ReAble. "The strategic fit, both in the U.S. and overseas, is absolutely compelling." The deal is expected to close in the fourth quarter subject to regulatory approvals and approval from DJO shareholders. DJO expects to hold a special meeting for shareholders to vote on the deal. Under the merger agreement, DJO may solicit superior proposals from third parties during the next 50 calendar days. If the company accepts a rival bid, DJO would be obligated to pay a break-up fee to ReAble of $18.7 million. Industry Movers Norwalk Exits CMS; Nicholson Resigns from VA BALTIMORE--In a recent e-mail, acting CMS Administrator Leslie Norwalk told agency employees that she was leaving the agency on July 20, CQ HealthBeat reported. Norwalk took over the job after her former boss, Mark McClellan, left the administrator's post in October to join a Washington think tank. The agency's employees "administer some of the most important programs in the world--the number of lives we touch, the importance of the health care services we cover and the amount of taxpayer dollars we spend mean that all the world watches us," Norwalk said in the e-mail. She added, "People often ask me about my greatest achievement at CMS. Some will imagine that it's the implementation of the drug benefit, the Medicare quality initiatives or revamping the Medicaid program. But those aren't even close. I'm most proud of the team that will lead CMS through its next phase of growth." President Bush has nominated HHS veteran Kerry N. Weems to serve as CMS administrator. Earlier, Norwalk withdrew herself from consideration for the nomination. (See HomeCare Monday, May 7.) Meanwhile, on Tuesday, VA Secretary Jim Nicholson resigned following months of accusations that the Bush administration has rendered substandard treatment to veterans hurt in the Iraq War. Lewarski Signs On with Invacare ELYRIA, Ohio--Invacare said Friday that Joseph S. Lewarski, BS, RRT, will join the company as vice president, respiratory products group. Lewarski, formerly vice president of clinical and government affairs for Inogen, Goleta, Calif., will be responsible for all of Invacare's respiratory and sleep-related activities, including new product development, business development and the creation of sales and marketing programs. Carl Will, Invacare's group vice president, home medical equipment division, said Lewarski's "strong business and clinical experience will make him an asset to growing our respiratory business." He said Lewarski would drive continued development of the company's key products, including its HomeFill oxygen system. "He also will be responsible for identifying new areas of growth in the sleep and international businesses," Will said. Lewarski has served in numerous roles in both the acute care and alternate health care settings, shifting to home care in 1991. He is a former partner and president/CEO of an Ohio HME/RT and pharmacy operation, which was acquired by Omnicare. Following the acquisition, he served six years as the subsidiary president until 2004 when he joined Inogen. In addition, Lewarski has published over two dozen scientific and research papers in peer review, primarily in the areas of oxygen technology and home ventilation, as well as numerous articles, white papers and health care industry commentaries. He has co-developed a number of medical devices, including a nasal CPAP humidifier and oxygen-conserving device and has served as a consultant on respiratory product development and marketing to a number of medical device manufacturers. "I'm looking forward to combining Invacare's immense experience and success in the home care business with my respiratory business and clinical background. I truly believe there is a lot of opportunity here," said Lewarski, who noted that he had "a great deal of respect" for the company's "strong contributions and commitments to the HME industry." SeQual Taps Richard as Senior VP of Marketing and Sales SAN DIEGO--SeQual Technologies announced last week that Ron Richard has joined the company as its new senior vice president of marketing and sales. Richard, formerly senior vice president of strategic marketing for the Americas at Poway, Calif.-based ResMed, brings over 30 years of knowledge and experience in respiratory, pulmonary, and sleep medicine with him. A 2004 recipient of HomeCare magazine's HomeCaring Award, Richard's background as a respiratory therapist and EMT has enabled him to bring a clinical perspective to the development and marketing of products for the respiratory and sleep markets, and he holds patents for products related to expiratory pressure support and for minimizing hypoventilation in patients using NPPV. Richard also developed one of the first home care ventilator support programs to aid the discharge of patients into the home care setting. Jim Bixby, SeQual CEO, said Richard knows the industry from the ground up. "He began his medical career as a respiratory therapist and has advanced steadily through the ranks of several notable institutions and companies," said Bixby. "His insights will help SeQual in working with every aspect of the market--from the patient to the therapist to the provider." Richard started as a therapist at the Wesley Medical Center in Wichita, Kan. He then helped found a distributor of respiratory products and held a number of senior marketing positions at Nellcor Puritan Bennett, Total Sleep Diagnostics and Thermo Medical before joining ResMed. Richard succeeds Ed Radtke, a SeQual founder, who recently retired. Radtke will continue to serve in a consulting capacity with the company. "We have nothing but praise for Ed and are incredibly fortunate to have had his wise advice and counsel over the years," Bixby said. Looking for life beyond Medicare? Then make plans now to attend Medtrade's special conference on Aug. 15-16 in Boston. In an all-day session on "Landing a Managed Care Contract (And How to Handle It Once You Do)," topics will include: managed care opportunities for HME companies; identifying MCOs in your area; promotional and pricing strategies; managing the sales process with MCOs; developing profitable contracts and more. Presented by Alison Cherney, president, Cherney & Associates. In addition, in "Survival Steps if You Are Not a Successful Bidder," learn about several steps you can take to preserve revenue under competitive bidding, including grandfathering, subcontracting and more. Presented by Jeffrey S. Baird, chairman of the Health Care Group at Brown & Fortunato, PC. For additional details and registration information, click here to visit Medtrade Conferences "On the Road." ADVERTISEMENT |
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