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Headline News
Stark Lauds OIG Report; AAHomecare Disputes 'Apples to Oranges' Findings on PWC Prices
WASHINGTON--According to the American Association for Homecare, an influential congressman lent credibility on Friday "to the inaccurate and misleading government study" that suggests Internet prices available to consumers should be the basis for Medicare reimbursement of power wheelchairs.

House Ways and Means Health Subcommittee Chairman Pete Stark, D-Calif., sent a "Dear Colleague" letter to fellow representatives about a Department of Health and Human Services Office of Inspector General report, released Oct. 30, that found Medicare payments for PWCs were 45 percent higher than median Internet prices for the equipment.

Called "A Comparison of Medicare Program and Consumer Internet Prices for Power Wheelchairs," the report said that for the first three months of 2007, the government could have saved nearly $40 million if its fees had been the same as those Internet prices, and beneficiaries could have saved $233 in copays for the products. (See HomeCare Monday, Nov. 5.)

"Based on this analysis, the OIG concludes that lower prices for wheelchairs--and savings--are available to consumers and the Medicare program," Stark wrote in his letter.

But because "this study and the flawed comparison of Medicare and Internet pricing will be used by some members of Congress [to] justify further cuts to power wheelchair reimbursement rates," according to AAHomecare President Tyler Wilson, the association is scheduling meetings with both Rep. Stark and Inspector General Daniel Levinson to rebut the OIG's "apples to oranges comparisons."

The association said it will make the following points to both OIG and Stark:

--The cost of acquiring power wheelchairs used by Medicare beneficiaries through the Internet does not in any way compare to the cost of providing these devices to Medicare beneficiaries adhering to the appropriate standards of care. The implied cost savings of Internet pricing is extremely misleading.

--In a previous OIG analysis of power wheelchair prices--"A Comparison of Prices for Power Wheelchairs in the Medicare Program"--from April 2004, the OIG acknowledged that "the estimates of potential program savings presented in the findings of the report would be lower if median prices had included any supplier administrative costs."

--In former Inspector General Janet Rehnquist's testimony before the U.S. Senate Appropriations Subcommittee on Labor, Health and Human Services and Education on June 12, 2002, the OIG indicated that when CMS compared Medicare prices to those from the Department of Veterans Affairs they added a 67 percent markup to the VA prices.

--Internet pricing does not account for the specialty evaluations performed by certified medical professionals, training, repairs and other non-equipment costs that are required in furnishing power wheelchairs to Medicare beneficiaries. Under Medicare, durable medical equipment providers must bear the expense of evaluating the beneficiary's specific needs, assessing the home, assembling the wheelchair, delivering the equipment to the home, conducting customized onsite fitting to accommodate the individual's seating needs, performing onsite training, processing claims for payments to insurers and maintaining facilities to provide service and repair. Any accurate analysis of costs required to provide the expected Medicare standard of care must take into account these services and administrative costs, which are distinct from the costs of acquiring the equipment.

--Online power wheelchair merchants cannot comply with Medicare standards. They carry limited product inventories and offer little or no assistance with product set-up, beneficiary training or repairs.

--Internet prices for power wheelchairs are an inappropriate and inaccurate source of data for establishing Medicare fees for these devices. Use of such data would skew the median price downward because the data does not account for all of the required services and activities necessary to furnish power wheelchairs to Medicare beneficiaries in a manner that ensures the beneficiary's safety or complies with standards applicable to Medicare enrolled providers.

To read the OIG report in full, click here.

For a transcript of the Nov. 6 report, click here.

Pharmacists Sue CMS over Medicaid Drug Cuts
WASHINGTON--Trade organizations representing chain drug stores and community pharmacists have brought suit against CMS to block more than $8 billion in Medicaid drug reimbursement cuts scheduled over the next five years.

In their lawsuit, filed Nov. 7 in the U.S. District Court for the District of Columbia, the National Association of Chain Drug Stores and the National Community Pharmacists Association argue that CMS' final AMP (average manufacturer price) rule, published in the Federal Register in July, violates the Social Security Act and will result in the closure of thousands of pharmacies nationwide. (See HomeCare Monday, July 16.)

The groups said that the AMP rule, set to take effect in January, contradicts the language of the Social Security Act by inappropriately including dozens of prescription transactions that do not fit within the rule's definition, such as sales to patients and physicians. The rule will result in reimbursement for Medicaid generic drugs at a rate 36 percent below those drugs' acquisition costs, the groups said.

"We're being asked to lose money on almost every generic we dispense," Charles Sewell, NCPA's senior vice president of government affairs, told reporters in July. Sewell estimated that 2,300 NCPA members could be forced to close their doors if the rule is implemented.

In a joint letter to Congress about the lawsuit, the trade groups--which represent 62,000 community pharmacies--called implementation of the rule "an impending crisis ...We cannot risk the potential that patients will not receive the medications they need, as this creates unacceptable human costs and higher health care costs in the form of emergency room visits and other catastrophic care."

The lawsuit asks for a court order declaring the AMP rule illegal, as well as for permanent relief against its implementation and against the posting of AMP data based on the rule.

For a copy of the lawsuit, click here.

To read the NCPA/NACDS letter to Congress, click here.

Ex-OIG Investigator Guilty in $1 Million Fraud Scandal
PHOENIX--After confessing to more than $1 million in bank fraud and forgery charges, a former special agent with the Department of Health and Human Services Office of Inspector General now faces up to 35 years in prison and more than $1.2 million in fines.

In a guilty plea entered Oct. 30 in the U.S. District Court for the District of Arizona, former HHS special agent Scott Allen Gompert admitted to using his expertise and connections as an investigative agent specializing in Medicare fraud to seize more than $1 million illegally.

According to court documents, through his knowledge of the system, Gompert identified various bank accounts that held money from fraudulent activity. He then prepared fraudulent seizure warrants with forged signatures of U.S. magistrate judges and presented the warrants to banks holding the funds from the fraudulent accounts he had previously discovered. The banks were then directed to issue cashier's checks to a government seizure account that Gompert had actually established for personal use.

Gompert used the money to pay off his mortgage and credit cards and to purchase a Toyota Avalon and land in Peoria, Ariz., which he intended to develop, the court papers said.

As part of his plea agreement, Gompert agreed to forfeit assets equal to the criminally seized amount, including nearly $550,000 in cash, the development property and the Avalon.

Gompert faces up to 30 years in prison and a $1 million fine on the bank fraud charge. In addition, he faces five years in prison, a $250,000 fine and a term of supervised release on the forgery charges.

Gompert's sentencing is set for Jan. 28 of next year.

NAIMES Forms Board of Directors
HALIFAX, Va.--The National Association of Independent Medical Equipment Suppliers, launched in April as a grassroots advocacy and support organization, announced its initial board of directors on Wednesday.

H. Wayne Sale, RCP, president of Health First in Richmond, Va., will serve as board chairman. Others on the nine-member board include:

--Tim Good, RCP, president of Goodcare by CPCI in Logan, Ohio;
--Joan Cross, co-owner of C & C Homecare in Bradenton, Fla.;
--Bob Miller, Rph, president and CEO of New Jersey-based Bach's Home Health Care Supply, and president and pharmacist of Skylands Community Pharmacy, Hackettstown, N.J.;
--Jason Rogers, president of Care Medical, Athens, Ga., and president of the Georgia Association of Medical Equipment Suppliers;
--John Eberhart, RCP, president of Eberhart Home Health Care in Laguna Niguel, Calif.;
--Michael Flores, vice president/general manager of Huntleigh Home Medical, San Antonio;
--Tom Bradley, CEO and owner of Petersen Medical, Orem, Utah, and president of Utah Medical Equipment Dealers, that state's HME association; and
--Tom Coogan, vice president of Care Medical Equipment, Portland, Ore., and president of the Pacific Association for Medical Equipment Services.

According to a press release, NAIMES' new board will be charged with review and revision of its bylaws, refining a three-year strategic plan, developing positions on industry issues and the launch of the DMEHelp Political Action Committee next year.

Focused specifically on independent DME suppliers, the group is "on target" to reach 500 members by early 2008, the release said.

Wayne Stanfield, a DME owner who is also executive director of the Home Care Alliance of Virginia, a provider network, is the organization's president and CEO.

For more information, visit www.dmehelp.org.

Manufacturer News
Authentidate Bridges Technology Gap for Small Providers
BERKELEY HEIGHTS, N.J.--Authentidate is targeting smaller HMEs with a variation on its Inscrybe Healthcare offering.

Released in 2006, Inscrybe is an Internet-based platform that lets physicians, hospitals, payers and HME providers exchange and track documents and forms, like physician orders and CMNs, electronically. A physician can still send and receive faxes through Inscrybe if he or she wants, but the system converts them into an electronic version for the provider.

Inscrybe has picked up a roster of large clients, among them American Home Patient. But at Medtrade last month, Authentidate debuted a new version of its information network suited for small to mid-sized HMEs.

The Inscrybe Healthcare Small Business Portal is for "people that want to have something that's quick, that can get off the ground fairly easily, and they don't have to pay a lot of money to customize," according to Jakes Srinivasan, the company's vice president of corporate development.

While Inscrybe can be configured to meet different health care parties' needs, such customization can be expensive, Srinivasan said. So Authentidate looked at ways to standardize some processes, like preloading standard forms into the forms library, to lower costs. In the version for smaller companies, users pay an upfront fee and then are charged per transaction.

"A typical transaction will be anywhere from $1 to $3," Srinivasan said. That's significantly less than the costs involved in getting a CMN or a written order confirmation of a verbal order, he said, considering the time providers typically spend getting documentation signed, returned, resigned if needed and filed.

The system keeps track of the document trail, and is fully secure and compliant with HIPAA and Medicare policies and procedures, Srinivasan said. Smaller providers get many of the same reports as with the larger version of Inscrybe, he added, though the reports are somewhat less detailed.

German Company Buys FLA Orthopedics
MIRAMAR, Fla.--BSN Medical, a Hamburg, Germany-based multinational health care supplier, has acquired orthopedic bracing and supports manufacturer FLA Orthopedics for an undisclosed amount, officials announced last week.

The acquisition, an all-cash transaction between BSN and The Riverside Company, a private equity firm that acquired FLA in 2004, positions BSN to expand its reach to fast-growing markets such as the U.S.

Following its acquisition by Riverside, FLA made two acquisitions of its own--American Professional Bracing and Christina Studio--in 2005 and 2006, respectively. The company strengthened its management team, expanded its product offerings and currently supplies supports and bracing, as well as compression hosiery and therapeutic footwear, to medical retailers, independent pharmacies and HME providers throughout the country.

"FLA's net sales have increased by 70 percent since Riverside's partnership with the company began," said Karen Pajarillo, Riverside partner. This year, FLA expects sales of $40 million in the U.S.

"We are particularly pleased to have acquired a company whose product range ideally complements that of BSN Medical in the U.S. and at the same time offers room for synergies from which both parties and our customers can benefit," said Graham Siddle, BSN CEO.

BSN also owns compression hosiery giant Jobst, "so we obviously consider FLA to be a strategic acquisition," said Shaun Fry, BSN general manager for North America.

Founded in 1975, FLA Orthopedics has long been known for its retailing programs aimed at helping providers. Fry said that would not change. Indeed, he noted, it could be enhanced because BSN has an extensive program to aid providers in marketing the company's products.

"We think they will definitely benefit from this," Fry said.

Sunrise Medical Appoints New Senior VP
LONGMONT, Colo.--On Thursday, Sunrise Medical announced the company had brought on a new senior vice president of mobility sales and marketing. Pete Coburn, who most recently served as vice president for sales and health systems at Cardinal Health Medical Products, will bring 24 years of experience to his new position.

Michael Cannizzaro, vice chairman, president and CEO of Sunrise Medical, said Coburn's successes with Cardinal made him a standout in his field. "[At Cardinal] Pete led a $500-million enterprise that provided health care products and services to physicians, surgery centers, long-term care and home health providers through a professional sales organization of 350 professionals," he said.

Coburn began his career with Abbey Medical and subsequently worked for American Hospital Supply, Baxter Healthcare and Allscripts Healthcare Solutions prior to his position at Cardinal. "To be part of delivering revolutionary technology to people that experienced life-changing events, and to see how a new product can improve people's lives are the reasons why I established my career in health care," Coburn said in a statement.

Coburn will lead the sales and marketing efforts for the Sunrise mobility division, which includes the Quickie, Jay and Guardian brands.

In May, Sunrise Medical announced it would operate as two separate organizations, Sunrise Mobility and DeVilbiss Healthcare.

In Brief
The world will mark the first United Nations-observed World Diabetes Day on Wednesday, Nov. 14, as part of a global awareness and education campaign. To celebrate, the International Diabetes Foundation will join the American Diabetes Association, the Juvenile Diabetes Research Foundation and other organizations for demonstrations throughout the nation. In New York, the organizations will hold several demonstrations, including forming a human blue circle--the symbol for diabetes--and a march to the UN. At sunset, over 120 iconic sites, including the Empire State Building, the Sears Tower in Chicago and the Soldiers' and Sailors' Monument in Indianapolis will light up blue. Diabetes currently affects 246 million people globally, including nearly 21 million children and adults in the United States. For more information on World Diabetes Day, visit www.worlddiabetesday.org. For information about Medicare's coverage of diabetes screening and related services, click here. For literature to share with your Medicare patients, visit www.medicare.gov.

Westat, a survey research firm, will be conducting the 2008 Medicare Contractor Provider Satisfaction Survey for CMS beginning in December. If you have questions about the survey, call the MCPSS provider helpline at (888) 863-3561 or contact a survey representative by e-mail at mcpss@westat.com.

CMS announced last week that "the vast majority" of Medicare claims are being sent in with a National Provider Identifier. Moreover, the agency said, the NPI crosswalk is successfully matching NPIs to legacy numbers for most claims. "Given these favorable results," a CMS notice said, "we are taking the next step towards full implementation of the NPI in Medicare. Effective March 1, 2008, your Medicare fee-for-service claims must include an NPI in the primary fields on the claim (i.e., the billing, pay-to, and rendering fields) ... Failure to submit an NPI in the primary fields will result in your claim being rejected or returned as unprocessable." For an MLN Matters article on the NPI Final Implementation, click here.

AAHomecare and the California Association of Medical Product Suppliers have set Dec. 3-4 as the new date for the Road Scholars Tour Medicare Survival Toolkit seminar. For more information, call (703) 836-6263 or visit www.aahomecare.org.