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Headline News
Providers Worried: NSC Numbers Revealed on NPI Registry
ATLANTA--The new Internet registry of National Provider Identification numbers contains a potential landmine, warned Chris Rice, founder of provider forum competingbid.com, last week.

Activated Sept. 4 after months of preparation, the National Plan and Provider Enumeration System database allows health care providers to locate their referral sources' NPI numbers, necessary for submitting compliant claims to Medicare.

But Rice said the online registry, which discloses information obtainable through the Freedom of Information Act, also reveals providers' National Supplier Clearinghouse numbers. Displaying an NSC number to the public is akin to knowing someone's Social Security number, he said.

"You can call into any one of the [DME] MACS and enter that NSC number and you have access to all kinds of information," said Rice.

For example, he said, people who know those NSC numbers could find out how much Medicare paid a specific provider. "A provider can easily listen to automated recordings of checks written to their competitors," he said. "Further, patient information can also be obtained (assuming they have the patient's HIC number)."

Once he became aware of the issue, Rice posted a warning on his site that elicited more than 130 e-mails from providers, he said.

"One concern I have--other than payment/check-write information and patient/claim-specific information being readily available if someone has your NSC ID--is that someone with the information on the NPI site could potentially make changes to your NSC provider file without your knowledge or consent," wrote one of the Web site respondents.

The possible ramifications are of such concern that Rice and several providers on the forum said they had tried to contact the NSC about the issue, but with little success. "I spoke with the NSC, the MAC and the NPI folks ... Each referred me to the other," Rice said. "Finally, they sent me to a CMS phone number. It referred me to the NSC."

One agency suggested deleting the information, but Rice and other forum writers were leery of doing that. "If you go and delete your NSC numbers, [other sources] say it will confuse the system and it won't cross-link, and then you won't get paid," Rice said. "We don't know if that is true or not yet, but that's what they are telling us."

According to a recent CMS communication sent to providers, Part B carriers and DME MACS have begun to turn on edits to validate the NPI/legacy number pairs submitted on claims. "If the pair is not found on the Medicare NPI crosswalk, the claim will reject," CMS said. (See HomeCare Monday, Sept. 10.)

Rice questioned the need for all the information listed on the registry. "You can understand names, addresses, phone numbers and the NPI number, but why it needs to go beyond that, I don't get it," he said.

"The easiest fix," he noted on his Web site, "would be for the NPPES to just not show those [extra] fields."

The solution for preventing unscrupulous people from using other NSC numbers is also easy, he said: "The MACs should require a PIN to access their automated systems." Rice said that physicians' provider numbers are also shown in the registry, but a separate PIN is required to access their proprietary information. "That's what HME needs," he said.

The NSC could not be reached Friday for comment.

To access the NPI registry, click here.

To read both notices in full, go to the CBIC Web site at www.dmecompetitivebid.com.

SBA Wants Better Impact Analysis of Surety Bond Rule
WASHINGTON--The SBA Office of Advocacy has filed a comment letter with CMS urging the agency to improve its analysis of a proposed rule that would require DME suppliers to obtain a $65,000 surety bond. (See HomeCare Monday, July 30.)

The Advocacy said it had been approached by representatives from small DME companies who were concerned that CMS had not adequately analyzed how the regulation would impact their businesses.

In a Sept. 13 letter addressed to CMS Acting Administrator Kerry Weems, the SBA Advocacy said "those stakeholders argue:

--that CMS has failed to take into account the effect of cumulative regulations on the industry;
--that CMS failed to appreciate and analyze the economically burdensome nature of this regulation on the small suppliers;
--that there are reasonable alternatives to the rulemaking that would help mitigate the burdensome nature of the rule on small suppliers;
--that the rule gives large DME suppliers a competitive advantage over small suppliers;
--and that in light of other proposed and/or final regulations on the DME industry (e.g., the DME competitive bidding rule and accreditation rule) this rule will force many of the small suppliers out of business."

In a HomeCare Web poll last month, 70 percent of those participating said the $65,000 bond proposal was a bad idea: 45 percent said they were honest providers but couldn't afford the additional costs, and another 25 percent said they thought government contractors should be held accountable for rooting out fraud. Only 30 percent of those responding to the poll said they thought the surety bond was a good idea; 15 percent of those said it would keep sham companies out of the industry.

The Advocacy letter points out that in the rule's preamble, "CMS acknowledges that of the approximately 116,500 individual DME suppliers, a large number will either not recoup their bond cost, or will decide to forgo their Medicare enrollment as a supplier. CMS calculates that if the rule is implemented 15,000 DME suppliers (suppliers affiliated with chain business entities) and 17, 471 individual DME suppliers currently enrolled in Medicare could decide to cease providing items to Medicare beneficiaries. CMS also admits that Medicare beneficiaries will be directly affected by small DME suppliers' decision to leave the program ...

"It is obvious that it will be more difficult for small suppliers to absorb the cost of the bond than it will be for larger suppliers," the letter goes on. "Allowing a significant percentage of businesses to disappear from an industry that is largely populated by small entities is tantamount to sectioning the market into those who can afford the bond and those who cannot. This market manipulation is based less on the rule's public policy objective of preventing fraud and more on the affected small businesses' economic ability to pay for the bond."

Based on discussion with industry sources and its analysis of the rule, the Advocacy office offered some suggestions for CMS to consider, among them the following:

--CMS should assess whether an increase in the surety bond amount, originally proposed in 1997 at $50,000, "will have any appreciable increase in the benefit from the rule." CMS should consider whether a tiered bond amount, with a lower amount for small suppliers, would meet its regulatory objective.

--"CMS seeks public comment on whether to exempt large, publicly traded chain suppliers from the surety bond requirements. If flexibility exists for these suppliers, CMS cannot in good faith neglect to analyze alternatives that exempt smaller suppliers, or entertain reducing the required bond for those suppliers. Eliminating small suppliers from the industry benefits the larger companies and is anti-competitive."

--"Casting such a wide regulatory net does not assure elimination of the bad actors in the Medicare program. If CMS better analyzed the demographics of those suppliers who are more likely to perpetrate fraud, it might be in a better position to determine which small DME suppliers are not likely to be part of the problem. Any suppliers not deemed to be bad actors should then be both grandfathered into the program and not required to obtain the bond, subject to a lesser bond requirement, or allowed to post one bond for multiple business sites."

--CMS should analyze alternatives to the requirement for annual "audited" financial statements because the costs of obtaining them could be "far in excess of the government's intention with the original legislation."

--"CMS should better analyze how the regulation will affect Medicare beneficiaries in rural areas, many of whom may not have Internet access, and may encounter real difficulty obtaining DME if a significant number of DME suppliers cease to exist."

To access a complete copy of the SBA Advocacy letter, click here.

Comments on CMS' proposed surety bond rule must be submitted by Oct. 1. To comment on the rule electronically, click here, then scroll down to CMS-6006-P.

PAOC Meeting Set for October
BALTIMORE--CMS has announced that the next meeting of the Program Advisory and Oversight Committee will be held Oct. 11 from 8 a.m. to 5 p.m. at the Hilton Pikesville Hotel in Baltimore.

While they have not yet been notified about the meeting agenda, according to some PAOC members, they are hopeful discussion could center around issues related to the first round of competitive bidding, which is set to close Sept. 25.

"We have only been notified of the date [and] haven't received any details re agenda or a public comment portion or anything, just the date and time so far," said committee member Cara Bachenheimer, senior vice president of government relations for Invacare Corp., Elyria, Ohio.

Along with its mandate for DMEPOS competitive bidding, the Medicare Modernization Act required CMS to form the committee to advise the agency on implementation of the bid program.

Industry observers, however, have argued the group is ill-named: Some committee members say they're playing a purely "advisory" role and have no "oversight" over CMS.

Others contend that while the insights provided by the PAOC's members are valuable, CMS has paid little attention in its ramp-up of the bidding program. Providers in the first 10 CBAs have complained about missing program details and product category issues. And with only days remaining before the first-round bid deadline, many say they still don't understand exactly how their bids will be evaluated or, if their bids are not selected, how they will know what went wrong.

"It's a black hole," said Bachenheimer. "You put together a bid, based on hopefully fairly informed, educated analysis of your operation, but how is CMS going to look at that data? We have no idea."

While CMS has said it will not "go into specifics about our internal processes," neither has the agency released information about the number of providers who registered to bid, in which categories or in which CBAs.

Last week, the American Association for Homecare said it will develop "a comprehensive list of issues and questions that should be addressed" at the upcoming PAOC meeting, its first since May of 2006. The committee is scheduled to meet periodically through 2009.

For information about previous PAOC meetings, click here.

NCART Hits the Hill for Support of Complex Rehab Carve-Out
WASHINGTON--Hoping to put a face on complex rehab and drum up support for a bill that would exempt it from competitive bidding, the National Coalition for Assistive Rehab Technology will hold a Capitol Hill press conference next week featuring consumers who use the equipment.

The event falls on Sept. 25, the same day the bid window closes for the initial round of CMS' DMEPOS competitive bidding program. The press conference will be held at 11 a.m. in the Rayburn Health Building.

"The goal is to raise the visibility of H.R. 2231," said Sharon Hildebrandt, executive director of NCART, referring to the Medicare Access to Complex Rehabilitation and Assistive Technology Act of 2007.

Introduced in May by Reps. Tom Allen, D-Maine, and Ron Lewis, R. Ky., the bill seeks to carve out complex rehab equipment from the competitive bidding program, which will be implemented in July 2008.

Industry stakeholders have challenged the inclusion of complex rehab in the project, saying that the equipment is too customized to be considered a commodity. In its position paper on the bill, NCART also notes: "Competitive bidding fails to allow for the level of services and significant costs associated with the delivery of complex rehab technology to people with disabilities." The paper also points out that "significant savings will not be achieved by including complex rehab technology in competitive bidding."

So far, the carve-out bill has 18 cosponsors.

"The legislation needs a vehicle to be attached to," Hildebrandt said. "It's very unclear what's going to happen with any Medicare bill this year. We would hope that if one gets put together, [our bill] could be included in that."

Hildebrandt said she and other stakeholders used Congress' annual summer recess to stump for the bill. "We did a lot of visits over the August recess," she said. "We hope that will bear some fruit pretty soon."

The visits to legislators have largely been educational, she said, because few of them are familiar with complex rehab.

The press conference itself will be educational in nature. Hildebrandt said that in addition to comments from Reps. Lewis and Allen, two consumers who use the equipment "will speak on how complex rehab has helped them."

That should help put a face on the issues, she said. "It's the consumers of complex rehab that are going to be hurt by [including complex rehab in competitive bidding]."

In addition to the press conference, NCART continues to encourage provider action to get H.R. 2231 passed. It has joined with several other stakeholder organizations to create a Web site, www.ComplexRehab.org, where visitors can read background and text of the bill and access tools for supporting its passage. Several documents are available on the site that can be used as guides in communicating with referral sources and clients, as well as for urging members of Congress to pass the bill.

"Successful passage will ensure that people with complex disabilities receive the products and services they need," the site says. "Congress needs to understand what this means, and it is critical they hear directly from you."

VGM Names Hassman COO
WATERLOO, Iowa--On Friday, VGM Group announced it has named Jeff D. Hassman as COO, responsible for the day-to-day activities of the company's operating divisions. He will report directly to Van Miller, CEO, board chairman and founder.

Hassman, 37, has been working with VGM for more than two years on a variety of projects, according to the member services group. Prior to joining VGM, he worked for A.T. Kearney, an international business consulting firm.

"I am very pleased to announce Jeff's appointment as COO," said Miller. "VGM has grown and now comprises 15 different companies. Jeff brings to VGM a tremendous amount of experience and expertise in a broad variety of service businesses, in addition to his experience in the health care sector. The future is very bright for VGM, and I look forward to working closely with Jeff as we continue to improve and expand our businesses."

Since its beginning in 1986 when HME was its primary focus, the company said, VGM now has more than 400 employees in four different locations with members comprising 6,000 independent businesses in the U.S., Canada and Puerto Rico. Its VGM Club/Resort Division offers programs for golf, casino, resort and private club operations. The company also offers insurance and managed health care services and provides finance products.

Hassman will assume his new duties Oct. 1. All other executive-level positions will remain as they were, the company said.

AAHomecare Mounts Public Awareness Campaign
WASHINGTON--The American Association for Homecare said last week that it plans to launch a "comprehensive public awareness campaign to promote the mission of the home care industry."

To raise funds for the campaign, the association will hold a "Stand Up for Home Care" reception at Medtrade on Oct. 2 from 5:30 to 7:30 p.m. in the Orlando Peabody Hotel.

According to Mike Reinemer, vice president, communications and policy, AAHomecare has been working in some states to make local consumer press aware of the industry's circumstances. Members have also intensified efforts in educating federal legislators about the impact of competitive bidding and reimbursement cuts on HME.

While those efforts are ongoing, Reinemer said, "we are looking for additional resources to ratchet it up a couple of notches to see how we might be able to break through the clutter in the media." With all of the issues in today's news--the war in Iraq and children's health among them--Reinemer said it's hard for home care issues to attract the attention of the press, consumers or those in Congress.

"These are complicated issues," Reinemer said, "and the reality is you have to boil them down to something that is easy to understand. You can't do justice to them in a couple of sound bites."

As a result, he said, the association has begun a series of targeted press conferences in states whose congressional members may play key roles in decisions affecting Medicare. Last week, AAHomecare and the Council for Quality Respiratory Care teamed up to hold teleconferences with consumer press in Florida and Kentucky. With the help of the Big Sky Association for Medical Equipment Services, another is being planned in Montana, the home state of Sen. Max Baucus.

Baucus chairs the powerful Senate Finance Committee, which is now in conference with members of the House to reconcile differences over funding for the State Children's Health Insurance Program. The House version of the measure includes provisions that would cut Medicare's home oxygen rental cap from 36 to 18 months and eliminate the first-month purchase option for power wheelchairs. The Senate version includes no Medicare cuts.

Reinemer said the current press conferences are focused on how beneficiaries would be affected by the oxygen cuts. In Florida, for example, the associations told the press that an estimated 125,000 seniors are using the home oxygen benefit and that 41,000 Floridians would be directly impacted by the 18-month cap. In Kentucky, 34,800 beneficiaries currently use the home oxygen benefit and 11,400 would be affected by the proposed cap.

Nationwide, the associations estimate that nearly half of the more than 1 million seniors who rely on the benefit would be affected by the oxygen cuts, which amount to nearly $2 billion over five years.

"The House has had their say, and now the actions of the Senate Finance Committee will be critical over the next weeks and months," Reinemer said. "We need to get the word out about the threat to oxygen and to power wheelchair policy."

Specific elements of the public awareness campaign won't be decided until the association knows how much money it will have to work with, Reinemer said. "In all likelihood, it will probably be a fairly targeted effort because in the media world [millions] don't go very far--and we won't have millions," he said, adding that the association hopes to develop tools for providers so they can help in raising consumer awareness about home care in their local areas.

For information about the Stand Up for Home Care fundraiser, e-mail Kim Kianka at kimk@aahomecare.org or visit the Calendar of Events section at www.aahomecare.org to download an event form.

Ohio Medicaid Proposes HME Bidding
WASHINGTON--The American Association for Homecare reported last week that Ohio HME providers could face "selective contracting" under a new Medicaid rule proposed by the Ohio Department of Job and Family Services.

The rule creates a bidding program that would selectively contract HME items and services provided to the state's Medicaid beneficiaries. According to the association, the rule is a response to recommendations made by the Ohio Commission to Reform Medicaid regarding negotiation of provider contracts for durable medical equipment and supplies.

Quoted in the association's newsletter, Kam Yuricich, executive director of the Ohio Association for Medical Equipment Services, called the announcement "discouraging on many levels. First of all, the rule is so vague that by its very simplicity it is unacceptable. It's wide open. Also, Ohio Medicaid has moved aggressively into managed care over the past two years with almost 1.2 million consumers enrolled at a savings of approximately $127 million to the state program."

Yuricich said members of Ohio's congressional delegation have been "vocal opponents" of Medicare competitive bidding. Rep. David Hobson, R-Ohio, is a co-author of H.R. 1845, which would amend the competitive bidding program to allow all qualified providers to participate in Medicare at the bid rate. But now, Yuricich said, they find their "own state Medicaid program moving in that direction."

Arcadia Sells Florida, Colorado Locations for $7.7 Million
SOUTHFIELD, Mich.--Arcadia Resources announced on Thursday it has sold its DME locations in Florida and Colorado to Aerocare Holdings in two separate transactions totaling $7.7 million.

In connection with the sales, Arcadia will retain the accounts receivable for services provided at these sites before Aug. 16, totaling approximately $7 million. After using part of the proceeds to reduce debt and other obligations by $4.3 million, Arcadia will have approximately $10 million to support its ongoing operations, the company said.

Arcadia's remaining DME operations include 22 locations that generate approximately $24 million in gross revenues, according to the company. Earlier this year, Arcadia--which had made more than 20 DME acquisitions and opened stores inside Sears and Wal-Mart--announced it would sell other portions of its DME business for $16.5 million. In July, the company restructured operations.

The company also said CMS had confirmed a correction of the issuance date for one of its supplier numbers and, as a result, expected to receive Medicare reimbursement for equipment and services previously thought to be uncollectible.

"We expect this will provide between $700,000 and $800,000 in additional EBITDA and cash flow for the company and will help us move towards our stated commitment of being EBITDA and cash flow positive beginning in October 2007, our fiscal 2008 third quarter," said CEO Marvin Richardson.

In Brief
Sponsored by HomeCare, Accreditation Central at Medtrade will feature many of CMS' approved accreditation organizations whose representatives will be on hand during exhibit hall hours all three days of the show. Medtrade 2007 will be held Oct. 2-4 at the Orange County Convention Center in Orlando. Don't miss the chance to find the accrediting organization that's right for you. For a list of participating accreditors and a schedule of their presentations, click here.

On Wednesday, both supporters and opponents of home sleep testing spoke at a public meeting of CMS' Medicare Evidence Development and Coverage Advisory Committee, which met in Baltimore to review the National Coverage Determination on diagnosing OSA (see HomeCare Monday, July 9). Earlier this year, CMS said it would reconsider coverage criteria after the American Academy of Otolaryngology-Head and Neck Surgery requested that the NCD be modified to include the use of portable, multichannel home sleep testing devices as an alternative to facility-based polysomnography in the evaluation of OSA. CMS said it expects to complete the review by March 2008.

In a nationwide poll of its members released last week, more than 41 percent of Medical Group Management Association members said they might have to limit the number of Medicare patients they see if CMS' proposed reduction in Part B physician payments is implemented. More than 19 percent of the medical practices said they would stop accepting new Medicare patients.

National Association for Home Care and Hospice members lobbied on Capitol Hill last week against proposed legislative and regulatory cuts in Medicare home health payments. Participants met with staff and representatives from 45 states to explain that in Kansas alone, for example, the cuts would reduce home health payments by more than $46 million and result in more than 68 percent of rural agencies and 39 percent of urban agencies in that state having negative Medicare margins by 2011. Sen. Pat Roberts, R-Kan.--who has championed HME providers' issues with competitive bidding--told the group he would sign on to a Senate letter opposing the cuts. NAHC has additional lobbying days scheduled tomorrow and Oct. 9.

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

Visit this week's sponsor at www.dynamicenergy.com.