Speculating on a similar buyout of Apria rival Lincare, Wall Street analysts said it is unlikely. Following news of the Apria deal, on Thursday, Lincare's shares rose to $28.69 on the Nasdaq but had settled to $27.21 by Friday's market close. Headquartered in Clearwater, Fla., Lincare serves 700,000 customers in 47 states with more than 1,020 branches.

'Are You Ready?' CMS Asks; Agency Releases Ombudsman Info
BALTIMORE--Even as the industry fights down to the wire to delay competitive bidding, CMS wants to know: Are you ready?

In a list-serv message sent Wednesday, CMS said, “The Medicare DMEPOS competitive bidding program begins July 1--just two weeks away--Are you prepared?”

According to the message, “If your practice location is in one of the 10 CBAs, you probably will be affected. If you are not located in a CBA, but treat Medicare patients who permanently reside in a CBA, you also need to understand the program. Be ready for July 1st, 2008.”

CMS recommended checking its competitive bidding Web site at www.cms.hhs.gov/DMEPOScompetitivebid. “All the information that you need to know as a DMEPOS supplier or an enrolled Medicare provider who refers beneficiaries for DMEPOS is available on the CMS DMEPOS competitive bidding dedicated Web site,” the message said.

Last week, the agency posted two CBA zip code files on the CBIC Web site at www.dmecompetitivebid.com, one containing mail order zip codes and another containing non-mail order zip codes per CBA. The files will be updated on a quarterly basis "to reflect changes in zip codes included in the various CBAs," CMS said. "Although the boundaries of a CBA will not change during a competitive bidding contract period, zip codes in general do change from time to time (e.g., when one zip code/area is subdivided into two or more new zip codes/areas, etc.)."

The agency also released information on its competitive bidding ombudsman program. With eight ombudsmen located witihin the initial CBAs, “the ombudsmen's role is to investigate and address complaints by providers, suppliers and beneficiaries specifically related to the competitive bidding program,” CMS said.

You may contact an ombudsman:

--For general information about the DMEPOS competitive bidding program;
--To obtain assistance in locating a contract supplier;
--For educational programs and activities;
--To report concerns about the program, a supplier or a referral agent;
--About the quality of services or items, and/or suspected fraud or abuse; and
--For assistance with questions, issues and complaints specifically pertaining to the competitive bidding program and policies.

A list of the ombudsmen with contact information is available on the CBIC Web site at www.dmecompetitivebid.com.

CMS Establishes Denial Codes for Processing NCB Claims
BALTIMORE--In a Change Request sent to the DME MACs on Friday, CMS established a number of denial reason codes to be used when processing claims under national competitive bidding.

Among the new denial codes:

--45: "Charge exceeds fee schedule/maximum allowable or contracted/legislated fee arrangment," to be used when the submitted charge on the claim is higher than the allowed charge; and
--96: "Non-covered charge(s)," to be used when denying claims for a beneficiary who resides in a CBA who obtains an item from a non-contract supplier that has not obtained a signed ABN.

The Change Request, No. 6069, noted three new reason codes when denying claims under NCB where a contract suplier submits a claim for oxygen equipment after the payment cap has been reached (maximum of 45 total payments for the beneficiary), or when the payment cap for a capped rental item has been reached (maximum of 25 total payments for the beneficiary):

--B7: "This provider was not certified/eligible to be paid for this procedure/service on this date of service."
--N211: "Alert: You may not appeal this decision."
--N307: "Billing exceeds the rental months covered/approved by the payer."

The new denial codes are effective July 1 with an implementation date of July 7, according to the Change Request.

Lawsuit Labels Government Actions 'Arbitrary, Capricious and an Abuse of Discretion'
WASHINGTON--CMS may be held accountable for what 18 providers in the Miami-Ft. Lauderdale CBA are calling “wrongful disqualification” from the competitive bidding process pending a lawsuit alleging the government's actions were “arbitrary, capricious and an abuse of discretion.”

The suit, brought on behalf of the All Florida Network, charges CMS' claims that the network failed to submit proper financial documentation for bidding are erroneous. Further, the suit says CMS' refusal to allow the network to participate in competitive bidding resulted in the loss of contracts for some of the bid items. Without those contracts, the All Florida Network contends many of its members may have to shut their doors.

The suit was filed June 16 in the U.S. Court of Federal Claims--a court that hears actions against the government--by Miami law firms de la O, Marko, Magolnick & Leyton and Kravitz & Talamo LLP. The action was supported by the efforts of the American Association for Homecare, Waterloo, Iowa-based VGM and the Accredited Medical Equipment Providers of America.

“As industry observers and commentators have noted in overwhelming numbers, the entire process behind this new system has been riddled with errors; e.g., suppliers' associations being disqualified for failing to provide financial documentation, when those suppliers, in fact, submitted everything that they were supposed to,” the lawsuit reads.

“This is precisely what happened to [the All Florida Network], a bidding group whose members face total financial ruin as a result of CMS' error and whose (often elderly) customers face uncertainty and confusion in acquiring the DME products they cannot live without. It is urgently necessary that round one be enjoined to correct the error.”

Daniel L. Leyton of de la O, Marko, Magolnick & Leyton, said All Florida's problems with CMS began when the group was initially disqualified March 20 based on CMS' contention that the network included an ineligible company and also failed to provide the proper documentation for bidding. But Leyton said All Florida contacted CMS immediately to dispute the claims, as the ineligible company had notified CMS months prior to submission of the bid that it would not be participating with All Florida.

“The company that was ineligible had been withdrawn from the network. There was a letter [both to and from CMS] to prove this--all of this was done five months before the disqualification letter came out,” Leyton said.

“And,” he continued, “we were certain from the beginning that we weren't missing these financial documents. [All Florida Network] had a lawyer … go over the documents and then VGM went over it and then it was sent [to CMS]. So we called CMS promptly and let them know all of this and they took it under investigation. Roughly 30 days later they came back and said 'You are disqualified,' but this time they did not say anything about the ineligible provider or the previously identified missing financial documents. This time they identified new missing financial documents.”

The All Florida Network received its second disqualification notice April 21 and CMS has since refused to reconsider its decision, Leyton said, despite the network's contention that the “missing documentation”--mostly income tax statements--were, in fact, submitted.

The types of documents CMS said were missing “were documents that would raise red flags with anyone," according to Leyton. "Balance sheets, income tax statements--these are the types of items that would set off red flags for anyone who was doing even a cursory examination and certainly would set off alarms for anyone who was heavily invested in making sure that the financial documentation was complete,” he said.

Based on the winning bids, All Florida would have been awarded contracts in five of the 10 bid product categories and might have been awarded a contract in three additional categories, according to the court filing. The denial of these contracts, All Florida contends, could put its members out of business.

“These are critical decisions for all of the providers in the network. They rely on Medicare reimbursements … if they are excluded from the Medicare program beginning July 1, very quickly their businesses are going to wither and many of them may have to shut their doors,” Leyton said.

The suit requests a preliminary injunction “requiring that the United States offer [All Florida] the same standardized contract it offered winning bidders in [several] product categories.” In addition, the suit seeks “a declaratory judgment that [All Florida] should not have been disqualified from consideration in the round one DMEPOS competitive bidding program” and “an appropriate award of damages.”

“The first alternative for us would be to have the standardized contracts extended to round one winners extended to us as well until a decision can be made. The alternative is a postponement of round one until these issues can be resolved,” Leyton said.

Leyton said his firm has asked the court for an expedited hearing before July 1, the day round one contracts become effective.

“I can't emphasize enough how pressing the issue is for DME providers across the country, and we are hopeful the court will give us the opportunity … to see a final decision made,” Leyton said.

The lawsuit makes five that have been filed disputing various aspects of the process and implementation involved with competitive bidding. For more, see HomeCare Monday, June 16.

PAOC Meeting: Much Ado About Little New
BALTIMORE--Despite a last-minute push on Capitol Hill for a delay of competitive bidding, CMS is moving forward with its implementation, government officials said last week.

Speaking at a June 16 meeting of the Program Advisory and Oversight Committee, CMS Deputy Administrator Herb Kuhn acknowledged H.R. 6252, legislation calling for delay of the bidding program.

“He said, ‘We know there is legislation on Capitol Hill that may change this. But given that it has not yet passed, we need to go forward,’” reported HME consultant Mary Ellen Conway, president of Capital Healthcare Group in Bethesda, Md., who attended the all-day session.

Formed under the Medicare Modernization Act to advise CMS on implementing competitive bidding, the PAOC held its first meeting in 2004 and will meet periodically through 2009. But many of the committee’s members have argued the group is ill-named: Some say they're playing a purely “advisory” role and have no “oversight” over CMS.

At Monday’s meeting, held at the Pikesville Hilton, Kuhn and other CMS staffers stuck to the agenda for the day: a review of round one and a preview of the upcoming 2008 DMEPOS bidding system, nicknamed “DBidS.”

Acknowledging some problems with the round one bid system and education process, CMS sought input from the committee “on how to improve the program moving forward,” said Seth Johnson, vice president of government relations for Pride Mobility Products, Exeter, Pa., and a member of the PAOC. “They recognized that there were problems with round one, although they said they were minor and could be easily fixed.”

PAOC members also asked questions involving licensure, networks, financial benchmarks, repair issues and beneficiary education, but the answers divulged little new information, they said.

“It was the usual frustrating experience,” said committee member Cara Bachenheimer, senior vice president of government relations for Elyria, Ohio-based Invacare. “Nothing new.”

Attendees hoping for some idea of when details about round two would be rolled out were disappointed on that level, too.

“All that was mentioned is that they are in the final phase of testing the new DBidS, which will replace the online bidding system that was utilized in round one,” Johnson said. “[CMS’] Laurence Wilson indicated that further guidance as to the timeframe for implementing round two should be released within a month.”

CMS also discussed education of beneficiaries and referral sources but lost credibility when audience members saw the brochure the agency expects to be mailing soon. ”[It] did not mention that negative [pressure] wound therapy would not be a bid item in the Kansas City bid area, barely touched on the grandfathering option and provided unclear information about advance beneficiary notices,” according to the American Association for Homecare. “The brochure also sported pictures of DME products that were not subject to bid.”

A public comment period followed CMS’ presentation, and Conway said one provider cited a dearth of information, saying that while the agency has asked the industry to help educate beneficiaries and referral sources on competitive bidding, “we can’t do it because the information isn’t there.”

The provider told CMS representatives that discharge planners in the Pittsburgh area trying to find contract providers for enteral nutrition patients were stymied because the providers that supposedly won those contracts didn’t answer their phones, Conway said.

Kuhn said CMS would try to reach those providers, she said.

In other notes from the meeting, AAHomecare reported:

--CMS reiterated it had gone over 100 of the disqualified bids from round one and had made correct decisions in disqualifying them.
--Bachenheimer argued that experience in providing HME items and service should be a factor in choosing contract winners: “A successful track record should count in your favor.”
--Asela Cuervo represented AAHomecare on the PAOC and inquired about financial benchmarks, asking, “How does a company know if it was disqualified because of their credit score?” Joel Kaiser, CMS deputy director for DMEPOS policy, replied, “We didn’t disclose financial benchmarks because we didn’t want people to have an opportunity to ‘cook the books.’ You’ll know what shape your business is in on your own.”
--In what some providers in the audience interpreted as a threat, Kaiser suggested several times that additional studies of the HME industry by the HHS Office of Inspector General may be undertaken. He also suggested a link between the high number of providers in Miami and fraud. According to the charts CMS used in its presentation, there are 488 oxygen providers in Miami but only 43 contract winners--fewer than 10 percent. For enteral nutrition, there are 338 providers in Miami but only 29 winners.
--Walt Gorski, AAHomecare vice president of government affairs, said during the public comment period that the shortcomings in round one should be corrected prior to round two.

AAHomecare said about 80 people--including six armed policemen invited by CMS--attended the meeting.

HHS Declares Iowa, Indiana 'Health Emergency' Areas
WASHINGTON--Operating under authority from the Public Health Service Act, HHS Secretary Michael Leavitt has declared a public health emergency in the flood-stricken states of Iowa and Indiana. The action gives CMS greater flexibility in meeting emergency health needs, according to HHS.

“Because of flood damage to local health care facilities, many beneficiaries have been evacuated to neighboring communities, where receiving hospitals and nursing homes may have no health care records, information on current health status or even verification of the person's status as a Medicare beneficiary,” HHS said. “CMS is assuring those facilities that in this circumstance, the normal burden of documentation will be waived and that they can act under a presumption of eligibility.”

The news is welcome in the states, which have experienced record-breaking floods. In Waterloo, Iowa, attendees at the VGM Heartland Conference had to be evacuated from the city as floodwaters from the rising Cedar River threatened the Five Sullivan Brothers Convention Center and downtown businesses June 11.

Carolyn Cole, vice president of corporate communications for VGM, said while the water has receded from downtown Waterloo, homes in some residential neighborhoods were devastated.

“A very preliminary estimate of damage by [Waterloo Mayor Tim Hurley] is $18 million. Landfill hours have been extended, and usage is double what it normally is,” Cole said.

According to VGM's John Gallagher, the clean-up effort "will be a long and arduous process."

Rose Schafhauser, executive director of the Midwest Association of Medical Equipment Suppliers, which includes Iowa, said she estimates between 15 and 20 MAMES providers have been affected by the floods, with “employees not being able to get to work, customers' homes flooded [and] multiple hours to get to customers' homes where major bridges were flooded.”

In response to the regional flooding, which continues to affect areas in the Midwest, CMS said it is providing resources to ensure health care coverage. Among other actions, the agency said it will:

--Waive certain program requirements for some institutional providers.
--Expand the definition of “home” to allow beneficiaries who are receiving home health services to receive those services in alternative sites.
--Ensure that rules preventing early refills of prescriptions under Part D are waived.
--Work with FEMA to manage lost, stolen or left-behind DME equipment.

A notice from Noridian, the Jurisdiction D DME MAC, reminded providers that CMS established the modifier “CR” (Catastrophe/Disaster Related) in August of 2005. In that month, Hurricane Katrina hit the nation's Gulf Coast, leaving 1,836 people dead and causing an estimated $81.2 billion in damage.

Reporting the CR modifier “will indicate emergency health care needs and facilitate Medicare claims processing for victims of a disaster,” Noridian said.

Information about CMS’ emergency relief activities can be found on the CMS Web site at www.cms.hhs.gov/emergncy/20_midwestflooding.asp.

Advocates Push for Amendments to ADA
WASHINGTON--Last week, former U.S. Congressman Tony Coelho--primary author of the Americans with Disabilities Act--along with U.S. Chamber of Commerce President Tom Donohue, Leadership Conference on Civil Rights Executive Vice President Nancy Zirkin and autism advocate Ari Ne'eman, announced formation of the Employer & Disability Alliance to promote the ADA Amendments Act. The broad alliance includes some of the nation's largest employer groups and disability advocates.

“Narrow court interpretations have removed ADA protections for people Congress intended to cover--those with serious heart conditions, epilepsy, diabetes and even cancer,” said Zirkin. “Organizations in the Employer & Disability Alliance have been working around the clock with leaders in Congress to return ADA coverage through the ADA Amendments Act to these people and to craft an agreement that is fair to both employers and those with disabilities.”

According to a background summary from the House Education and Labor Committee, which approved the proposed legislation by a 43 to 1 vote on Wednesday:

"The Americans with Disabilities Act of 1990 was intended to 'provide a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities.' The ADA has transformed our nation since its enactment, helping millions of Americans with disabilities succeed in the workplace, and making transportation, housing, buildings, services and other elements of daily life more accessible to individuals with disabilities.

"Just as other civil rights laws prohibit employers from basing decisions on characteristics like race or sex, Congress wanted the ADA to stop employers from making decisions based on disability.

"Unfortunately, since 1999, several U.S. Supreme Court decisions have narrowed the definition of disability so much that people with serious conditions such as epilepsy, muscular dystrophy, cancer, diabetes, and cerebral palsy have been determined to not have impairments that meet the definition of disability under the ADA."

The ADA Amendments Act would reverse these court decisions and restore the original Congressional intent of the Americans with Disabilities Act, a statment from the committee said, by:

--Clarifying the definition of disability, including what it means to be “substantially limited in a major life activity.”
--Prohibiting the consideration of measures that reduce or mitigate the impact of impairment--such as medication, prosthetics and assistive technology--in determining whether an individual has a disability.
--Covering workers whose employers discriminate against them based on a perception that the worker is impaired, regardless of whether the worker has a disability.
--Making it clear that the ADA provides broad coverage to protect anyone who faces discrimination on the basis of disability.

The newly formed alliance sent a letter to Capitol Hill explaining these points last week. The letter was signed by organizations including:

--American Association of People with Disabilities
--American Diabetes Association
--Bazelon Center for Mental Health Law
--Epilepsy Foundation
--HR Policy Association
--International Franchise Association
--Leadership Conference on Civil Rights
--National Association of Manufacturers
--National Disability Rights Network
--National Council on Independent Living
--National Restaurant Association
--Society for Human Resource Management, and
--U.S Chamber of Commerce.

“I'm thrilled to be able to speak up in support of this essential restoration of civil rights law that will ensure that Americans with disabilities, like myself, will continue to enjoy protections and are included throughout society,” said Ne'eman, founding president of the Autistic Self Advocacy Network.

"We have been negotiating with representatives of the disability community for months, and after rigorous debate and compromise we've reached a solid agreement,” said Donohue. "This is a good change for America and we urge Congress to pass this legislation now."

The bill is expected to move to the House floor before Congress' July 4 recess.


In Brief
NHIC, the Jurisdiction A DME MAC, will hold two "Ask the Contractor" teleconference sessions tomorrow, June 24. The subject will be competitive bidding, and representatives from the CBIC will be available to answer questions. The sessions will begin at 10 a.m. and 2 p.m. ET and will last one to one-and-a-half hours. No registration is needed, but the DME MAC said the number of lines will be limited. Call details and teleconference materials are available at www.medicarenhic.com/dme/dme_act.shtml#upcoming.

CMS will hold a home health, hospice and DME Open Door Forum on Wednesday, June 25. To participate by phone, call 800/837-1935 and use conference ID 5024882.

According to Rob Brant, general manager of City Medical Services in North Miami Beach, Fla., and president of the Accredited Medical Equipment Providers of America, a response to his query from the Florida Department of Health confirmed that nine of the 44 round one oxygen contract winners in the Miami CBA are not licensed as "medical oxygen retail establishments" in the state.

CMS will rate nursing homes on a "five-star scale" so beneficiaries can see which faciities are performing better than others, acting CMS Administrator Kerry Weems told reporters Wednesday. To become part of the larger Nursing Home Compare Web site, Weems said the rating system would be available by December.

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

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