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SPONSOR MESSAGE ResMed releases Boomerang software, a comprehensive SDB patient management program to satisfy third-party payer requirements, decrease costs, and increase revenue, referrals, and efficiency. It matches patients with providers and equipment and schedules those patients for follow-ups. Print inventory projection reports and track eligible replacement dates, follow-ups, provider/referral lists, and compliance data. For more information and a FREE 90-day trial, visit us online at http://www.resmed.com/us/1010002895326.html For more industry news, featured articles and highlights from our latest issue, please visit our website at www.homecaremag.com

Week of April 22, 2024

HEADLINE NEWS Associations Draw Battle Lines for Federal, State Competitive Bidding Fights WASHINGTON--The U.S. House Ways and Means Committee currently is drafting a proposal to implement competitive bidding for Medicare Part B drug reimbursement, according to the Bureau of National Affairs. ALEXANDRIA, Va.; ORLANDO, Fla. and CARY, N.C.--After amassing a federal budget deficit of $133.6 billion during the first half of the fiscal year, the U.S. government is looking everywhere to cut costs. Consequently, what many hoped was a fleeting mention of nationwide competitive bidding in President Bush's 2003 budget is becoming a distinct possibility, according to federal and state home medical equipment associations. Not only do two prominent U.S. House committees plan to include competitive bidding provisions in upcoming Medicare-reform legislation, but state Medicaid agencies also have begun to implement competitive bidding for HME, according to the American Association for Homecare. "The President's proposal for nationwide competitive bidding for durable medical equipment has engendered significant interest on Capitol Hill, and the staffs of the House Ways and Means and Energy and Commerce Committees both intend to include language on competitive bidding in Medicare legislation later this spring," AAHomecare said. To stem the flow of competitive-bidding rhetoric, AAHomecare has organized a coalition of national associations--including the Washington-based Advanced Medical Technology Association and the National Association for Home Care; as well as the Alexandria, Va.-based National Association for Infusion Therapy, National Association for Support of Long Term Care and National Community Pharmacists Association--to present what AAHomecare is calling "a unified industry voice" to lawmakers. "Through joint letters and visits, these organizations will raise awareness on Capitol Hill as to the flaws in the current competitive bidding demonstrations in Polk County, Fla. and San Antonio, Texas, and the danger of expanding that model on a nationwide basis," AAHomecare explained. In addition to establishing this national coalition, AAHomecare is scheduling frequent meetings with federal lawmakers, the association said. A series of such meetings took place on April 17, when representatives from the Albany, N.Y.-based New York Medical Equipment Providers Association and other active AAHomecare members spoke with 10 U.S. House members and four U.S. senators about competitive bidding issues. On the state level, the Orlando-based Florida Association of Medical Equipment Suppliers has filed suit against Florida's Medicaid-dispensing arm for allegedly misinterpreting a state competitive bidding law that legislators say was intended only to apply to disposable products. In March, the state's Agency for Health Care Administration issued a "request for proposal" to implement statewide competitive bidding for hospital beds and respiratory equipment and supplies. The plan would award a contract to only one provider in each of eleven state regions. Such a program would compromise vital services and would put some Florida pediatric providers out of business, according to Joan Cross, FAMES' president. "We understand that everyone needs to participate in solving the budget deficit problem, and we were negotiating with AHCA to save them money without any risks" when AHCA issued a competitive-bidding RFP, she added. A state court hearing in this case, originally scheduled to take place on April 18, has been postponed until May 2 and 3, to give AHCA more time to prepare, Cross said. Meanwhile, competitive bidding also is heating up in North Carolina. Last week, HME providers learned that the state's Medicaid arm has initiated a private contract to develop an RFP for competitive bidding for HME, home infusion and home health supplies, according to Clark Robichaux, vice president of the Cary, N.C.-based North Carolina Association for Medical Equipment Services and president of Wilmington, N.C.-based Oxy-Care. NCAMES already has scheduled a meeting with its home-health counterparts to discuss the issue, but Robichaux says it is too early to speak of a strategy. "All we have heard from the [state's Department of Medical Assistance] is that this is a top priority," he added. CMS Proposes Data-Swapping Partnership with Social Security Administration BALTIMORE--In an April 16 Federal Register notice, the Centers for Medicare and Medicaid Services announced a proposal to swap data with the U.S. Social Security Administration. CMS would use this "computer matching program" to verify the identification information that providers submit when enrolling in the Medicare process, the notice said. Under the terms of the agreement, CMS would provide SSA with files consisting of the name, social security number and date of birth of all Medicare providers. Send comments to Director, Division of Data Liaison and Distribution, Enterprise Databases Group, Office of Information Services, CMS, Mailstop N2-04-27, 7500 Security Blvd., Baltimore, Md. 21244-1850.

PROVIDER NEWS Option Care Completes Mt. Sinai Acquisition BANNOCKBURN, Ill.--Option Care has purchased Mt. Sinai's New York-based infusion and specialty pharmacy businesses for $1.5 million in cash, according to an Option Care press release. "The acquisition will be immediately accretive to earnings and is expected to generate about $8 million in annual revenues and add $.02 cents to earnings per share in 2003," the release continued. "We will continue to focus on expanding our operations in the state of New York via acquisitions," said Raj Rai, Option Care's president and chief executive officer. MANUFACTURER NEWS Invacare Reports Q1 Earnings ELYRIA, Ohio--For the first quarter of 2002, Invacare reported net earnings of $11.9 million, or 38 cents per diluted share, compared to net earnings of $11.6 billion, or 37 cents per diluted share, for the same quarter a year ago. Sales for the quarter increased slightly, from $254.1 million during the first quarter of 2001 to $255.1 million. CareCentric Announces 2001 Results ATLANTA--CareCentric lost $25.4 million, or $6.11 per diluted share, in 2001, compared to a loss of $10.2 million, or $3.16 per diluted share, in 2000. The company's revenue increased from $19.6 million in 2000 to $20.4 million in 2001. Johnson & Johnson Releases First-Quarter Results NEW BRUNSWICK, N.J.--For the first quarter of 2001, Johnson & Johnson reported net earnings of $1.83 billion, or 59 cents per diluted share--up 18 percent from $1.55 billion, or 50 cents per diluted share, for the first quarter of 2000. Sales for the quarter rose 11.3 percent to $8.7 billion. "Worldwide sales for the medical devices and diagnostics segment were $3.0 billion in the first quarter of 2002, which represented an increase of 11.1 percent in local currency as compared to the same period in 2001," the company said in a press release. Respironics Completes Novametrix Acquisition PITTSBURGH--On April 15, Respironics announced it had completed its acquisition of the cardiorespiratory monitoring company Novametrix Medical Systems. The tax-free, stock-for-stock transaction was worth $85 million, according to a Respironics press release. Under the terms of the deal, Novametrix stockholders will receive 0.25 shares of Respironics common stock for each share of Novametrix common stock, based on a ratio of the two companies' weighted-average selling prices. Respironics' president and chief executive officer, James Liken, said the acquisition--which gives the company a combined annual revenue of $502 million--"enhances the breadth of our products and services, strengthens our infrastructure and positions us to better serve our customers in the hospital marketplace."

SPOTLIGHT OIG Publishes Annual Summary of Recommendations, Medical-Device Highlights WASHINGTON--Last week, the U.S. Health and Human Services' Office of Inspector General published its annual summary of recommendations. Describing all of OIG's 2001 audits and reports, The Orange Book includes many recommendations that affect the home medical equipment industry. In addition to 2001 recommendations, the book includes previous years' recommendations that HHS has not yet implemented. Following is a brief summary of eight reports directly related to HME: In February 1999, OIG recommended that the Baltimore-based Centers for Medicare and Medicaid Services take steps to improve the relationship between physicians and beneficiaries during the ordering process for Medicare equipment and supplies. While two-thirds of physicians OIG interviewed were satisfied with the current ordering process, 6 percent of referring physicians reported not knowing the patient, and 13 percent said they knew that qualified beneficiaries often did not order the prescribed equipment, OIG found. To save as much as $414 million in reimbursements for questionable or medically unnecessary equipment, CMS should work to better educate physicians regarding the ordering of medical equipment and supplies, and ensure that the physician who orders the equipment is required to treat the patient prior to the order, OIG concluded. More than one year later, in June 2000, OIG found that inappropriate payments for blood glucose test strips are costing CMS as much as $79 million annually. In reviewing sample test-strip claims, OIG found that 25 percent of the claims failed to establish beneficiaries' eligibility for the supplies, and 58 percent had incomplete orders or no supplier delivery records. Additionally, because suppliers submit test-strip claims at irregular intervals, it is difficult for CMS to identify inappropriate claims, OIG said. To avoid such problems in the future, CMS should educate suppliers about the importance of including proper documentation with test-strip claims, should require suppliers to indicate "actual and accurate" start and end dates on claim forms, and should advise beneficiaries to report suspect instances such as the receipt of excessive numbers of test strips. At the same time, OIG recommended that CMS educate suppliers and beneficiaries about misleading diabetic-supply advertisements. By reminding suppliers who routinely waive deductibles or who engage in misleading practices about anti-kickback provisions, by reminding all suppliers that beneficiaries must specifically request new supplies before supplies can be delivered and by promoting suppliers' adherence to OIG's Compliance Program Guidance for DME, CMS can stem abusive marketing practices, OIG said. A January 2001 report showed that Medicare beneficiaries in 1999 paid $41 million above the Medicare-allowed amounts for medical equipment and supplies. Additionally, most of the beneficiaries OIG surveyed were unaware of the differences between assigned and non-assigned claims. To avoid such overpayments in the future, CMS should educate beneficiaries on ways to reduce financial liability for medical equipment and supplies, and re-evaluate Medicare fee schedules for ostomy supplies. Because supplier services for bi-level respiratory assistance devices "consist primarily of routine maintenance and patient monitoring," OIG recommended in June 2001 that CMS change the payment category for these devices. Instead of remaining in the "frequent and substantial servicing" payment category, these devices should move to the "capped rental" payment category, the report concluded. In August 2001, suppliers received a good report card from OIG in most areas of standards compliance. However, because half of the suppliers OIG studied did not comply with the standard to provide consumer information, OIG recommended that CMS require suppliers to provide beneficiaries with a list of supplier standards. OIG also suggested that CMS institute random, unannounced site inspections to ensure that suppliers comply with inventory, liability insurance and licensure standards. After determining that one-third of oxygen Certificates of Medical Necessity are inaccurate or incomplete, that 13 percent of beneficiaries never use their portable oxygen systems and that 22 percent of sampled suppliers who billed Medicare for portable oxygen systems in 1996 did not provide any refills in 1997, OIG recommended in February 2000 that CMS delay payment for oxygen equipment claims until suppliers submit complete CMNs. CMS also should conduct periodic checks to ensure that original CMNs confirm the electronic versions submitted to Medicare carriers, should target oxygen equipment for "focused medical review" and should continue to stress the importance of physicians' role in determining medical need for home oxygen equipment, OIG concluded. Then, in March 2000, OIG recommended that CMS take action to improve Medicare billing for orthotic devices. In reviewing a sample of orthotics claims, OIG found "significant levels" of inappropriate reimbursements. Additionally, OIG noted that "qualifications for orthotic suppliers vary, with non-certified suppliers being most likely to provide inappropriate devices." To read more of OIG's recommendations, go to http://oig.hhs.gov/publications.html and download a copy of The Orange Book.

SOURCES SAY NORTHAMPTON, United Kingdom--Researchers at University College Northampton have installed the same high-tech global positioning systems that Airforce pilots use to pinpoint targets, on wheelchairs, enabling wheelchair users to avoid obstacles such as high curbs, steps and cobbled streets, according to a college press release. "Imagine an auto-router device in a car, which shows you how to get from A to B. This is the equivalent for a wheelchair," said Phil Picton, a professor who has worked on the project for the past two years. "You type in where you want to go and the navigation system will tell you how to best get there, and how to avoid everything that is not wheelchair-friendly." The developers already have given the MAGUS system to urban planners, to help the planners see a town center from a wheelchair user's perspective. KFAR SABA, Israel--While laser surgery on the uvula may decrease snoring initially, the procedure is not a long-term cure for obstructive sleep apnea, according to researchers at Israel's Sapir Medical Center. "The favorable subjective short-term results of [laser surgery] deteriorated in time," the researchers concluded. In fact, postoperative tests revealed that laser surgery "might lead to deterioration of existing apnea." To read the report, published in the April edition of Archives of Otolaryngology Head & Neck Surgery, go to http://archotol.ama-assn.org/. WASHINGTON--Calling for reform, a group of conservative state lawmakers are saying Medicaid could potentially bankrupt every state in the union. "To avert a fiscal disaster, Congress should give the states all responsibility for implementation of Medicaid and mandate a change from Medicaid's welfare-entitlement-style structure to a market-oriented, defined contribution structure," the American Legislative Exchange Council said in a recent report. "If Congress refuses or fails to act, state officials should take the lead." ALEC members believe in "limited government, free markets, federalism and individual liberty," according to the organization's Web site.

INDUSTRY BRIEFS Former U.S. Surgeon General David Satcher has been elected to the board of directors of New Brunswick, N.J.-based Johnson and Johnson. Satcher served for four years as Surgeon General and next fall will assume the position of director of the National Center for Primary Care at the Morehouse School of Medicine in Atlanta. Barry Steelman has joined Lebanon, Tenn.-based Permobil as marketing manager. Steelman has more than 17 years' experience in product marketing, advertising and public relations. Lawrence Biondi, David Durack and Richard Frankenstein have been appointed to the board of directors of Joint Commission Resources in Oakbrook Terrace, Ill. Biondi is president of Saint Louis University and has served since 1998 on the board of commissioners of the Joint Commission on Accreditation of Healthcare Organizations. Durack is vice president of corporate medical affairs at Becton Dickinson in Franklin Lakes, N.J., and previously served as chief of the division of infectious diseases at Duke University. Frankenstein is a pulmonary disease specialist and has served since 1997 on the board of commissioners of JCAHO. DJ Orthopedics, based in Vista, Calif., has named David Derminio its senior vice president of U.S. sales. Derminio has more than 24 years of health care sales experience in cast materials, joint replacements, orthopedics and sports medicine distribution. Larry Papasan, president of the orthopedic division for London-based Smith & Nephew, will retire at the end of this year. David Illingworth will succeed Papasan as president. Beginning May 1 and continuing until his retirement, Papasan will become chairman of the company's orthopedic division. Boca Raton, Fla.-based Innomed Technologies has appointed Akshay Mahadevia and Lee Brooks to its Idea Forum medical advisory board. Mahadevia is a sleep specialist and pulmonologist in Davenport, Iowa. Brooks is a pediatric pulmonary specialist for the Children's Hospital of Philadelphia. IN OTHER NEWS Tempe, Ariz.-based O2 Science, a provider of respiratory services and home health care products, has opened a branch in Lake Havasu City, Ariz. The branch is located at 1979 McCullach Street, Suite 104 in Lake Havasu City, and serves patients in Lake Havasu City and Parker, Ariz., as well as those in Havasu City and Needles, Calif. Les Boatwright, general manager of O2 Science's Bullhead City, Ariz., location, will oversee the Lake Havasu operation. Gentiva, based in Melville, N.Y., has opened a location in Seattle and expanded its Georgia service area to include five additional counties in the Atlanta metropolitan area. The Seattle branch is located at 9709 Third Ave. N.E., Suite 505. The GlucoWatch Biographer from Redwood City, Calif.-based Cygnus is now available to the United States diabetes product market. The Biographer collects glucose samples through the skin, not from blood. It automatically measures and displays glucose levels, and detects trends and patterns in those levels. The Biographer also includes alert systems to inform users when glucose levels are too high, too low or declining rapidly. For more information, call toll-free (866) 459-2824 or visit http://www.glucowatch.com. The NovaSom QSG sleep-disordered breathing detection device from Palo Alto, Calif.-based Sleep Solutions has been approved for patient use by the FDA. According to the company, the NovaSom QSG, which is based on proprietary sound analysis technology, is the first device designed for unattended, unassisted patient use at home and is equivalent to overnight, in-laboratory polysomnography. The device currently is available only through Sleep Solutions' direct-to-patient diagnostic service, whereby Sleep Solutions delivers the prescribed device to a patient, retrieves it, and generates a data report for the prescribing physician. For more information, visit http://www.sleep-solutions.com. The board of directors of the Washington-based American Accreditation Healthcare Commission, or URAC, have approved the organization's new disease management standards, which are designed to promote best practices in care management strategy for individuals with chronic diseases. The standards emphasize evidence-based practice, collaborative relationships with providers, consumer education and shared decision-making, and are available to accredit all organizations that provide disease management. For more information on the standards, contact Liza Greenberg at (202) 216-9010. Siemens Medical Solutions has relocated its U.S. headquarters from Iselin, N.J. to Malvern, Pa., the current headquarters of Siemens Medical Solutions Health Services. According to the company, the relocation allows Siemens Medical to combine its strengths and present a unified presence to customers.

STOCKS Company High Low PE Ratio 4/12/02 4/19/02 Change Abbott Laboratories 58.00 44.16 32.23 53.69 54.75 1.06 Allied Healthcare (AHPI) 5.30 3.00 125.38 5.00 5.02 0.02 American HomePatient (AHOM.OB) 1.70 0.25 N/A 0.60 0.70 0.10 AmerisourceBergen (ABC) 72.00 50.00 31.51 68.92 72.30 3.38 Apria Healthcare (AHG) 29.85 19.50 20.73 27.00 27.50 0.50 Cardinal Health (CAH) 77.32 60.30 34.95 68.57 72.18 3.61 CareCentric (CURA) 3.00 0.46 N/A 0.75 0.64 (0.11) Chad Therapeutics (CTU) 4.35 0.85 N/A 3.27 3.05 (0.22) Coram Healthcare (CRHEQ.OB) 0.76 0.13 N/A 0.47 0.43 (0.04) Gentiva Health Services (GTIV) 26.87 15.60 31.34 25.64 26.87 1.23 Invacare (IVC) 41.25 28.50 33.48 38.31 37.50 (0.81) Johnson and Johnson (JNJ) 65.89 45.44 33.31 62.67 64.49 1.82 Lincare Holdings (LNCR) 34.39 22.25 26.40 31.28 32.60 1.32 Matria Healthcare (MATR) 40.00 12.66 27.91 24.40 24.00 (0.40) McKesson (MCK) 41.50 26.02 96.07 36.62 38.74 2.12 National Home Healthcare (NHHC) 19.85 6.10 14.35 13.85 13.75 (0.10) Option Care (OPTN) 22.15 10.01 26.03 18.99 19.48 0.49 Pediatric Services of America (PSAI) 14.10 4.70 17.34 11.01 11.00 (0.01) Praxair (PX) 61.11 36.50 22.35 59.17 58.95 (0.22) ResMed (RMD) 62.20 35.20 89.64 39.02 40.16 1.14 Respironics (RESP) 37.88 23.79 27.37 33.00 32.53 (0.47) Transworld Healthcare (TWH) 4.83 2.21 N/A 4.02 3.70 (0.32) Tyco (TYC) 60.09 22.00 11.49 30.60 29.89 (0.71) Walgreen (WAG) 44.30 28.70 42.45 39.24 39.30 0.06

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