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Headline News
CMS Tightens the Screws on Supplier Standards
WASHINGTON--For years, home medical equipment providers have been asking for further guidance on what many have called vaguely written supplier standards with inconsistent interpretation among inspectors and lax oversight. On Friday morning they got a response from CMS--in spades plus some.

In an 11-page draft rule published in the Federal Register, CMS proposed clarification and expansion of existing standards along with the addition of others that all HME providers must meet to participate in Medicare and retain billing privileges.

"For many years, concern about easy entry into the Medicare program by unqualified or even fraudulent providers or suppliers has led us to increase our efforts to establish more stringent controls," CMS said in explaining the proposal. The agency said the additions and modifications are necessary "to ensure that legitimate DMEPOS suppliers are furnishing items of DMEPOS to Medicare beneficiaries."

"These changes are substantive and dramatic in many respects, and they will alter the way many suppliers do business," said industry attorney Neil Caesar, who runs the Columbia, S.C.-based Health Law Center. Caesar added he thinks "it is likely that most of these proposals will become law."

Following are some among the proposed rule's changes to existing standards:

--A change to standard No. 1, which deals with state and federal licensure and regulatory requirements, would require that suppliers providing licensed services not contract out those services. In order words, personnel furnishing licensed services (in states that require licensing of any aspect of a provider's business) must be "W-2 employees, not 1099 independent contractors," Caesar said. "A huge number of suppliers have their nurses and respiratory therapists working on a contract basis," Caesar pointed out. "That's a major change that will affect not just a lot of suppliers, but a whole lot of suppliers."

--CMS would expand existing standard No. 7 regarding physical facilities and appropriate sites. The agency is proposing that hours of operation be posted on permanent signage at the main entrance to the supplier location, even if the business is in a building complex where it is not the only tenant. "That means everything showing who you are, where you are and when you are open" has to be posted at the main entrance, Caesar said. "That's going to be a problem with a lot of buildings because the landlords don't do this for any of their tenants. It may be contrary to the signage options that are available."

In addition, the location must be staffed during the posted hours and must be accessible "regardless of whether beneficiaries routinely visit the facility," according to the proposal. The requirement also would apply to "closed door" businesses, such as pharmacies or suppliers providing services only to beneficiaries in a nursing home. "A supplier is not in compliance with this standard if no one is available during the posted hours of operation," CMS said.

Under standard No. 7, the agency is also seeking comments on whether to establish a minimum square footage requirement, and notes that suppliers must meet "applicable local zoning requirements."

--A revision to standard No. 9 "is a big one having to do with the business telephone," Caesar said. While the current standard requires a phone number to be listed in the directory and prohibits a cell phone number as the primary business telephone, "what they are thinking about is expanding the old rule to say you can't use a cell phone or a beeper as a method of receiving calls, or call forwarding to forward calls to a cell phone or a beeper." The proposal also prohibits answering machines, answering services or fax machines as the primary business phone during operating hours.

"What they are really trying to do here is to force suppliers to operate in a traditional retail context regardless of whether they are doing retail," Caesar said. "The ability to field calls from the road is really being curtailed under these proposed rules," he continued. "They tout the problem of questionable businesses as the reasoning behind the rule, but it is going to affect many one- or two-man operations where they have to multi-task and are often off-premises."

Under this revision, Caesar said, "the phone rings on location and someone on location picks it up."

--CMS has proposed two changes to standard No. 10, which requires $300,000 in comprehensive liability insurance. "The differences are that now the policy will be required per incident, and it has to expressly cover both the place of business and all customers and employees," Caesar said. "In addition, you will have to have this in force before you apply to enroll in the Medicare program, which means you are going to have to pay for the policy not knowing whether you are going to get a supplier number."

--A revision to standard No. 11, which nixes contacting beneficiaries by telephone in order to solicit business, extends the prohibition to email, instant messaging, Internet advertising on sites unrelated to DMEPOS products and in-person contacts. "Basically you can't do cold-calling unless you're an exception, the exception being you've had a recent relationship with the person or they've given you permission to do it," Caesar said, adding that CMS "is making it clear they are cracking down on enforcement. You can lose everything if you violate this."

Among new supplier standards, CMS is proposing:

--That suppliers obtain oxygen from state-licensed oxygen suppliers. The standard would only apply in states that license oxygen suppliers, but when a DME company is located in a state that requires licensing for oxygen suppliers, the company must obtain oxygen from a licensed supplier, regardless of the state where the oxygen supplier is licensed.

--That historic ordering and referring documentation, including NPI numbers, be maintained for seven years after claims have been paid.

--That suppliers cannot share a location with other Medicare suppliers, including physicians. "Because they recognize that could create issues for medical practices or doctors who also supply DME, CMS is soliciting comments on what to do about that," Caesar said.

--That suppliers must be open to the public a minimum of 30 hours per week (either six hours a day, five days a week or five hours a day, six days a week). "We believe that ... all legitimate DMEPOS would need to be open at least 30 hours a week in order to attract, retain and serve Medicare beneficiaries," according to the proposal. According to Caesar, this could be another significant issue for small providers "who must handle both the office activities and deliveries. They will have to be in the office a significant amount of time, which could limit routine delivery times," he said.

--That suppliers cannot have an IRS or a state "tax delinquency," defined as money owed, a conviction for or a charge of tax evasion, or a tax lien. Providers who do not comply with this standard will have billing privileges revoked, CMS said. In its reasoning, the agency noted a report from the Government Accountability Office that found more than 21,000 providers reimbursed under Part B owed taxes totaling more than $1 billion in 2005.

CMS will accept comments on the proposed rule until March 25.

To read the proposed rule in full, click here.

For a review of current supplier standards, see "Are You on the NSC's Naughty or Nice List?" by Neil B. Caesar and Kelly R. Pickens, HomeCare, May 2004.

"With the support of every HME provider, this campaign could be a turning point for us this year," stated Don Clayback, vice president of government relations for The MED Group. "The key is for every provider to get involved. While many have been working on this in the past, we have a window of opportunity that requires everyone to get on board to generate the biggest push we can."

CMS Briefs Congress on NCB, Disses DME
WASHINGTON--On Tuesday, CMS held a congressional briefing on national competitive bidding. According to a report from the American Association for Homecare, senior CMS officials outlined the agency's work on the program and summarized efforts to expand bidding to another 70 areas. But they also "slammed the industry as a hotbed of fraud."

From AAHomecare's report:

During the briefing, CMS staff claimed that DME fraud is the largest area of fraud in the Medicare program, the biggest loss to the program and the biggest vulnerability in the program.

However, CMS staff did not describe their agency's accountability for failing to prevent criminals from obtaining Medicare supplier numbers.

Nor did CMS provide the math for how, exactly, the DME sector, about 1.7 percent of Medicare spending, could account for the largest amount of fraud in the entire Medicare program, which spends more than $400 billion per year. The most recent National Health Expenditure data from CMS show that durable medical equipment is the slowest growing sector of Medicare, increasing 3.8 percent between 2005 and 2006 (from $6.7 billion to $6.9 billion). CMS estimates that the total cost of fraud across all sectors of Medicare is somewhere between $40 billion to $80 billion per year. So the agency's own margin of error for calculating Medicare fraud is many times greater than the total DME spending in Medicare.

In reference to round one of competitive bidding, CMS stated the 10 metropolitan statistical areas (MSAs) were chosen by focusing on the areas with the highest allowed DME charges. The winning suppliers for round one will be announced in March. For round two, CMS says they focused on MSAs with the largest population, which doesn't explain why certain MSAs were included and other large MSAs were not.

Some general comments made by CMS staff during the briefing and in response to questions are summarized below:

--CMS will release ZIP codes and other information that will be included in each competitive bidding area (CBA) sometime later this spring. A detailed timeline for round two will be announced in the next four to six weeks.

--According to CMS staff, there is no product category for mail order diabetic supplies in round two because CMS is planning on having a national mail order diabetic program in the near future, which they are hoping can begin in 2010.

--On the topic of competitive bidding for complex rehab power wheelchairs, CMS staff acknowledged that it does require more of a service component than some of the other product categories, but claimed it is not very different from other areas of DME. They noted that suppliers should be submitting bids that include the costs of services and customization.

--For round two, CMS says a number of refinements have been made to the bidding process designed to decrease the burden on bidders, including an updated bid submission system. Bid submission for round two will require suppliers to enter less information for their bids so that the process will take fewer hours. Also, for many suppliers, there will be almost two-thirds fewer financial documents required.

--Pre-bidding items for round two will likely commence sometime this spring, and will include online registration and supplier education. A 60-day bid submission window will begin sometime this summer, and contracts for round two suppliers will begin sometime in the summer of 2009.

Focus on Round Two, Roberts' Staff Tells MAMES Members
TOPEKA, Kan.--Rather than trying to beat a "done deal," HME providers should instead focus their efforts on delaying round two of competitive bidding, staff members for Sen. Pat Roberts, R-Kan., suggested during a meeting with members of the Midwest Association of Medical Equipment Dealers last week.

"[They] said round one is done and over with. They would like to look at a delay for round two so they could look at the effects of round one," said Rose Schafhauser, MAMES executive director.

About 20 MAMES members representing 13 HME companies attended the meeting, held Thursday at Roberts' Topeka, Kan., office.

"It went very well. This office definitely understands the situation and they are very compassionate about it," Schafhauser said.

Gerald Sloan, owner of Progressive Medical Equipment in Flint, Kan., and a MAMES board member, agreed. "They have a very comprehensive understanding of what the impacts [of competitive bidding] will be," he said. "They were very straightforward with us in letting us know it is an uphill battle. There's not a lot to do with round one at this point, but we could work to delay round two. And that's where they are saying we should probably focus our efforts."

In addition to competitive bidding, MAMES representatives had the chance to discuss HME fraud and abuse and the industry's frustration with CMS' unwillingness to enforce rules already on the books. They pointed out, Schafhauser said, that CMS persists in giving out supplier numbers to those who don't even have a location or a workable phone number, both of which are supposedly requirements to enroll as a Medicare DMEPOS supplier.

"Palmetto GBA is supposed to be the gatekeeper, and CMS is supposed to be the watchdog. And they both have failed miserably," said Sloan. "They can't even police a simple operation, let alone one as complex as [competitive bidding]."

"Our providers will send copies of the letters they have received ... to show the system is not set up and working the way [members of Congress] thought it was," Schafhauser said. "We're going to build up their toolkit. It's not just people whining," she added. "The whining has to stop. We have to say, 'Here are the specifics, here's who ends up suffering.' The access issue becomes a huge problem."

Schafhauser said the meeting with Roberts underscored MAMES' intent to get the truth out about HME to members of Congress. The organization has already pledged to send all of its board members or their representatives to the American Association for Homecare Washington Legislative Conference March 4-6, where Roberts will be a keynote speaker.

"We have to get people out to Washington," said Schafhauser. "We consider this kind of 'do or die.' We have to pony up and bite into our savings. We're fighting for our members and their beneficiaries."

Draft Rule Outlines Medicaid Proposal for Personal Assistance Care
WASHINGTON--CMS is seeking input on a proposed rule that would allow Medicaid beneficiaries to take charge of their own personal assistance services.

If finalized, the rule would allow Medicaid beneficiaries needing help with activities of daily living to hire, direct, train or fire their own personal assistance care workers. Under the proposal, beneficiaries could even hire qualified family members to perform the caregiver tasks.

"This proposal would give Medicaid beneficiaries significant new freedom to determine how their personal assistance services are delivered and by whom," said Kerry Weems, CMS acting administrator. "As health care is not simply an economic transaction, this proposal represents a fundamental shift that restores a person's ability to improve their overall health by taking greater control of his or her own decisions."

The proposal would put into place a provision of the Deficit Reduction Act of 2005 that allows states to elect a plan option to provide care in ways that previously required waivers of Medicaid rules.

If a state adopts such an option, beneficiaries could receive a cash allowance to hire workers to help with bathing, preparing meals, household chores and related services. Allotments could also be used to purchase items that help foster independence, like wheelchair ramps or microwave ovens.

According to CMS, two national demonstration projects conducted in the 1990s showed the success of personal assistance services programs. If implemented, the program is estimated to cost $225 million between 2008 and 2012. Of that, the federal share would be $127 million, CMS said.

Notice of the proposed rule was published Jan. 18 in the Federal Register. Comments on the proposal are due Feb. 19.

To view the proposed rule, click here.

Groups Back Invacare's Break with Scooter Store
ATLANTA--In an interview last week, Invacare's Lou Slangen, senior vice president, global sales and marketing, said the manufacturer's decision to halt power wheelchair sales to The Scooter Store "to me is a defining moment in the complex rehab business in how we look at servicing that patient and beneficiary."

It looks like other industry groups might think so, too. NRRTS, NAIMES and VGM's US Rehab have lined up in support of the Elyria, Ohio-based company's decision.

The rift developed between the two industry giants after The Scooter Store sent a letter to some congressional offices in December arguing against a carve-out of complex rehab from competitive bidding.

"We felt the Scooter Store's position was against everything the rehab industry has stood for," said Slangen, who said Invacare is giving up $10 million in annual sales of consumer power to the provider in a relationship that has been ongoing for more than five years. "Competitive bidding for complex rehab is not right for the beneficiary, it is not right for the industry, and we are not aligned with the Scooter Store on this matter.

"We have put our money where our mouth is," Slangen continued, "and we hope providers will see that we have taken a stand for them and support us."

With 129 locations in 47 states, New Braunfels, Texas-based The Scooter Store is the country's largest provider of standard power wheelchairs and scooters, billing Medicare for "substantially more" than $100 million annually, according to founder and CEO Doug Harrison.

Late last year the company began providing custom rehab at five locations in Texas, Harrison said. "Moving into rehab is a very logical expansion for us. We have for 17 years had to refer patients away if they needed something more complex than we could provide. It's a hard thing to tell somebody 'No, we can't help you.' We want to be able to take care of more of those people."

Harrison said competitive bidding "is a horrible program that will hurt beneficiaries, it will hurt suppliers, it will hurt manufacturers. But if they are going to do it--and they are--I believe the group that's going to be hurt the most is every beneficiary that needs power mobility ...

"If there's going to be a carve-out of this current so-called bidding program," he continued, "it ought to be for all power mobility, not just for my part of the industry, not just for the complex rehab part of the industry but for all power mobility because it's all being under-utilized."

Harrison, who said The Scooter Store submitted bids in all 10 cities in the first round of bidding, said he felt the company's split with Invacare over the complex rehab carve-out was an "honest difference." But he also said sales discussions between the two companies played into Invacare's decision.

"They wanted us to more than double our purchases from them, and we did not think that was the best decision for us at the time," Harrison said, adding he feels Invacare is taking advantage of the situation that developed to sell more of its products.

On Wednesday, the provider sent another letter, this time to state DME association leaders, explaining its stance on the carve-out:

"We recently informed a handful of lawmakers about our concerns regarding legislation that would "carve out" complex rehabilitation equipment and remove it from competitive bidding. Our position has always been that all power mobility equipment should be removed from competitive bidding; we don't see much benefit in separating this small group of Medicare beneficiaries from a larger group of seniors and people living with disabilities.

"Strategically, we believe that a united front is the best position for the power mobility industry--not splintering into camps. Needless to say, The Scooter Store is astonished that our position is now being characterized as dividing the industry. We want members of your organization to know that nothing is further from the truth: We simply believe there is strength in numbers and, more importantly, that all Medicare beneficiaries in need of power mobility deserve to have us fighting on their behalf ...

"We are urging that competitive bidding for both standard and complex rehab power wheelchairs be postponed until utilization reaches CMS projections, at least."

Other letters were flying as well.

US Rehab President Jerry Keiderling informed members of the VGM rehab network that a letter to AAHomecare's Rehab and Assistive Technology Council asked the RATC to "reconsider the involvement" of Scooter Store representatives. "We simply cannot align ourselves in any way, shape or form with those destined to undermine our industry for the sake of market share," Keiderling wrote. The message urges members "to support the vendors and associations who truly support the industry ... It's time to take a stand for what we truly believe in."

Simon Margolis, executive director of the National Registry of Rehabilitation Technology Suppliers, sent a similar message to members. "NRRTS applauds Invacare Corporation's decision to no longer sell power wheelchairs to the Scooter Store ... We strongly urge all other manufacturers who do business with suppliers of complex rehab products to do the right thing and adopt a similar policy."

Harrison, however, said he is not worried that the company's other vendors will follow Invacare's lead. "We have no shortage of vendors that would like us to buy a lot of their product," he said.

"What's the surprise behind that? I have nothing but respect for Mal Mixon and Invacare and the way they have grown their business and the way they have treated us over the years we have done business with each other," Harrison said.

"The entire industry owes Mal a huge debt of gratitude that we can probably never repay for all the work he has done fighting for independent suppliers, fighting for the industry, fighting for the benefit," he continued. "A lot of people would like to find out that behind the scenes there is some dirty, juicy piece of gossip about how we got in a fight with each other, and it was just a simple disagreement on how we were going to move our businesses forward.

"I have no doubt we're going to be doing business with Invacare again some time in the future," Harrison said.

As note of Invacare's decision filtered through the industry, insiders said it was hard to tell whether The Scooter Store would feel the pain or if Invacare would see a gain.

But late in the week, a statement released by Wayne Stanfield, president and CEO of the National Association of Independent Medical Equipment Suppliers, crystallized sentiment from the independent camp:

"NAIMES applauds the stand that Invacare Corporation has taken in unity with independent equipment suppliers ... This decision sends a clear message that Invacare places consumer care and the well being of our nation's independent supplier community ahead of just making money or gaining market share.

"The DME industry must be united, and with one message, speak strongly in support of the principles and ethics that [are] the hallmark of the independent suppliers in America. Invacare has taken a positive and difficult stand by its actions and deserves the support of industry in return."

Industry's Thomas-Payne Loses Battle with Cancer
ALBUQUERQUE--Lisa Thomas-Payne, a top HME reimbursement specialist who retired to race sports cars, died Jan. 10 of cancer at her home in Albuquerque. She was 46.

Although Thomas-Payne left the industry in 2000, she left it better than she found it, longtime industry stakeholders said. Through her consulting business, Medical Reimbursement Systems, she challenged, cajoled and coaxed providers to do better, to submit clean claims, to be knowledgeable about billing.

Her colorful manner and straight talk combined with deep knowledge of the industry frequently propelled her onto the pages of HomeCare magazine, and she was a well known headliner at industry conferences.

"Industry icon is what I called her," said Cara Bachenheimer, vice president of government relations for Elyria, Ohio-based Invacare, who often teamed up with Thomas-Payne to present seminars at Medtrade and other venues.

"There have always been a handful of true educators in our industry," said consultant Shelly Prial. "At the top of the list was Lisa Thomas-Payne ... Her lectures were always filled with brilliant ideas and ways to improve one's business ... She provided excellent goals that all of us should try to reach."

"Lisa was a legend in the industry," said Miriam Lieber of Sherman Oaks, Calif.-based Lieber Consulting. "Outspoken and vocal, Lisa was a popular industry consultant who commanded quite a following."

HME was a natural route for a girl who grew up in the business. Her mother, Cecelia Thomas, recalled that "Lisa and health care first came together in 1976 when her dad [Bill] and I started a small DME company in southern California."

It was a family business, and Thomas-Payne soon was soon learning about mobility aids, wheelchairs and the customers who used them. In 1983, the Thomases sold their company, and Thomas-Payne joined National Medical Homecare. Eventually, she broke away and started Medical Reimbursement Systems.

"Lisa would speak to any group who needed assistance to submit 'clean claims,'" said Cecelia Thomas. "She was famous for her shoot-from-the-hip sayings."

She was also famous for her attention to detail. Cecelia Thomas remembers walking into her daughter's office one day and finding her "bent over a set of proposed regulations. She had a ruler in one hand, eyeglasses on her nose and [a] drafting light over the document. She was going through the regs word by word to make sure she understood exactly what was intended and the stated goal of the reg."

She was, Cecelia Thomas added, "focused and fearless in defense of her clients and the industry."

Schuyler Hoss, president and principal consultant for Northwest Healthcare Management in Vancouver, Wash., called Thomas-Payne "a force of nature. She could walk into any room and, with her energy and enthusiasm, change the very atmosphere," he said. "She was so smart, so articulate and so much fun that working with her was always a pleasure ... Lisa has been, and always will be, one of a kind. Our industry is better because of her and [is] just not the same now that she is gone."

In the 1990s, Thomas-Payne discovered sports car racing. She won numerous honors with her Porsche #20 and, in 2000, retired from the HME industry to pursue that passion.

Always energetic and enthusiastic, Thomas-Payne nevertheless had serious health issues reaching back to 1992, when she was diagnosed with cancer. There was a recurrence in 1997 and another in 2005.

In her final days, her mother said, Thomas-Payne was surrounded by those she loved. "I arrived the last day, so in the end, I was allowed to be there at the beginning and the end," Cecelia Thomas said.

A celebration of Thomas-Payne's life will be held at a later date. Donations may be sent in her memory to the New Mexico Cancer Center Foundation, 4901 Lange Ave., NE, Albuquerque, NM 87109; or Casa Angelica, 5629 Isleta Blvd. SW, Albuquerque, NM 87105.

In Brief
In his State of the Union address tonight, President Bush is expected to reveal his proposal for changing Medicare's physician fee formula, CongressDaily reported. A fee cut for doctors had been scheduled to take effect Jan. 1, but last month Bush signed a law that includes a "doc fix," putting off the cut until July 1. Lawmakers are waiting to hear details of the proposal before fashioning legislation that would further delay the cut, according to the report, which added that congressional insiders say Bush's Medicare plan "could significantly alter Capitol Hill discussion surrounding Medicare and other health-related issues."

With a 260-152 vote, the House of Representatives failed Wednesday to override President Bush's second veto of a bill to reauthorize funding for the State Children's Health Insurance Program, or SCHIP, for five years. If passed, the bill would expand the program from $35 billion to $60 billion, financed by hiking the cigarette tax to $1 per pack. Democrats said the money would be enough for SCHIP to cover 10 million children, 4 million more than at present. SCHIP is funded through March 2009, but Democrats consider the program's expansion a powerful political issue and may try to force Republicans to vote on it again before November's elections, according to press reports.

Today marks CMS' deadline for comment on a proposed rule that would give HHS the last word in the appeals process. The proposal, published in the Federal Register Dec. 28, requires the Department Appeals Board to follow published guidance on Medicare rules and regulations "to ensure that the final administrative decision of the Department reflects the considered opinion of the Secretary of Health and Human Services." Presently, the DAB's decisions, made in cases not resolved at the administrative law judge level, are considered the final agency action on appeals matters. The proposed rule would allow HHS to review DAB decisions "to correct errors in the application of law, or deviations from published guidance, in such disputes." To view the proposed rule, click here. Comments will be accepted until 5 p.m. today. Email comments to randolph.pate@hhs.gov.

Coming Up
The North Carolina Association for Medical Equipment Services (NCAMES) Winter Meeting will be held Feb. 5-6 in Greensboro, N.C. For more information, visit www.ncames.org or call (919) 387-1221.

CMS has scheduled a National NPI Roundtable on Wednesday, Feb. 6, from 2:30 p.m. to 4 p.m. ET. The call will focus on the status of Medicare's implementation and include a question-and-answer session. Click here for registration details.

The National Community Pharmacists Association Multiple Locations Conference will be held in Cancun, Mexico, Feb. 13-17. For more information, visit www.ncpanet.org or call (800) 544-7447.

Louis Feuer's Sales Training University, sponsored by VGM, will be held Feb. 13-14 in Charlotte, N.C. For more information, visit www.dynamicseminars.com or call (954) 435-8182.

The Virginia Association of Durable Medical Equipment Companies (VADMEC) Winter Meeting and Legislative Conference will be held in Richmond, Va., Feb. 20-21. For more information, visit www.vadmec.org or call (919) 387-1221.

The National Mobility Equipment Dealers Association Conference will be held in Phoenix, Ariz., Feb. 20-22. For more information, visit www.nmeda.org or call (813) 264-2697.

The Medical Equipment Suppliers Association (MESA) All-Star Conference will be held in Austin, Texas, Feb. 27-29. For more information, visit www.mesanet.org or call (800) 722-2310.

The American Association for Homecare Legislative Conference will be held in Washington, D.C., March 4-6. For more information, visit www.aahomecare.org or call (703) 535-1887.

The International Seating Symposium will be held in Vancouver, B.C., March 5-8.For more information, visit www.interprofessional.ubc.ca/ or call (877) 328-7744.

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

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