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Week of April 8, 2024

HEADLINE NEWS Missouri Man Charged with Benefiting Personally from Medicare Fraud Scheme ST. LOUIS--The U.S. Attorney for the State of Missouri has filed a civil complaint against a man allegedly involved in a Medicare fraud scheme for which six other individuals already have pled guilty. As an employee of Specialized Healthcare Products--a company that received more than $1.5 million in improper Medicare payments for incontinence products for nursing home residents in and around Chicago--Braun allegedly received $125,000 for his personal involvement in the scheme. Now the United States wants to recover monetary damages from Braun, on the grounds that Braun "was unjustly enriched through his participation in the scheme. This is a continuation of the government's efforts to collect damages, including interests and costs, from all of the individuals involved in the scheme." Invacare to Discontinue Lift Chair Line ELYRIA, Ohio--To divert more resources to its core rehabilitation and respiratory businesses, Invacare has decided to phase-out its line of lift chairs, according to a company press release. While the decision will not affect jobs--because lift chairs account for less than 1 percent of Invacare's revenue--it will provide the company "better opportunities to deploy its resources," according to Louis Slangen, senior vice president of sales and marketing for Invacare. These opportunities include marketing initiatives that "will achieve a higher payback as compared with continued investment in lift chairs, which have been a minor product line for Invacare," Slangen explained. Meanwhile, Golden Technologies of Old Forge, Pa. has agreed to assume sales, servicing and parts responsibility for Invacare's current line of lift chairs, the release said. Additionally, Golden Technologies "will continue to offer providers a comparable line of lift chairs, along with parts and service support on the Invacare line," Slangen said. Richard Golden, chief executive officer of Golden Technologies, said the company is pleased to assume these responsibilities for Invacare. "We are well-positioned from a manufacturing, distribution and customer support standpoint to handle Invacare's customers' needs," he added. Through June, Invacare will maintain an inventory of its lift chair products--which currently are being manufactured to Invacare's specifications by another company--and will continue to supply parts through 2002 or until the transition to Golden Technologies is complete, the release said. By April 22, Golden Technologies plans to send a conversion kit to each of Invacare's current lift-chair customers. The kit will include tools and information to help with the transition. AAHomecare Task Force Submits Wheelchair Code Applications to CMS ALEXANDRIA, Va.--Racing the clock to meet the federal government's October 2003 deadline for establishing national health-care-billing codes, the American Association for Homecare's Rehab and Assistive Technology Coding Task Force--which has been compiling code applications diligently for nearly six months--last week mailed 22 applications to the Baltimore-based Centers for Medicare and Medicaid Services. When in place, the national health care codes--mandated by a sweeping 1996 medical privacy law--will make everyone's life easier, but "I don't think anybody realized how huge this was going to be," said task force chair Rita Hostak, who also leads the association's Rehab and Assistive Technology Council, and serves as vice president of government relations for Longmont, Colo.-based Sunrise Medical. " Each year, CMS' deadline for receiving code applications is April 1. This year, the coding task force, which consists of rehab suppliers and representatives from five durable medical equipment companies, submitted applications for 14 product codes and eight accessory codes for pediatric mobility base and wheelchair products, AAHomecare said. To contact RATC's Coding Task Force, e-mail Mary-Lacey Reuther at [email protected].

PROVIDER NEWS Park Pharmacy Cuts Staff, Revamps Departments DALLAS--Implementing its reorganization plan, Park Pharmacy, a regional network of specialty pharmacies, has cut $1 million in annual overhead expenses by eliminating jobs throughout the company, according to the company. Additionally, Park has revamped its reimbursement department and adopted "more conservative accounting methods for booking future revenues," the company said. One of Park's goals is to improve its accounts receivable collections by decreasing overall days sales outstanding. To achieve this goal, the company has "bolstered staffing in the billing and collections areas and hired a director of reimbursement to oversee these functions," according to Craig Mackey, Park's president and chief operating officer. "We [also] are seeking external collections assistance and have already begun to realize significant progress with our aged receivables. We have also instituted electronic billing with our major customers this quarter, which is expected to further enhance the timeliness of our collection activities," Mackey added. Park now employs 270 people in facilities throughout Texas. MANUFACTURER NEWS Coloplast Restructures Breast Care Business ATLANTA--Coloplast has announced plans to restructure its breast care business into "a single, global unit," located in Atlanta, and to consolidate all development and manufacturing of breast forms in the company's Raubling, Germany, facility, according to the company. Consequently, breast form production at the company's Atlanta office will cease by the end of 2002, affecting 90 factory jobs, the release said. "Today, approximately 90 persons are employed in the Atlanta factory," the company said. "It is expected that the Raubling staff will be increased by 40 employees." Jens Stovgaard, president of breast care for Coloplast, will run the consolidated breast care business unit. Westmed Acquires Owens-BriGam TUCSON, Ariz.--Expanding its product offerings into respiratory and anesthesia-related markets, Westmed has acquired the assets and ongoing business of Morganton, N.C.-based Owens-BriGam Medical, according to a company press release. Terms of the transaction were undisclosed.

SPOTLIGHT Government Auditors Play Good Cop, Bad Cop in Medicare-Debt-Collection Reports WASHINGTON--On the heels of a sharply critical report about Medicare's debt-collection procedures, the U.S. Health and Human Services' Office of Inspector General last month took a softer approach to the same issue. Citing "significant improvements, particularly at the Medicare contractor level, in managing debt," the OIG praised several debt-collection initiatives already underway at the Baltimore-based Centers for Medicare and Medicaid Services. The fact that CMS was able to achieve improvements despite an antiquated accounting system is laudable, according to the OIG. "Working within the limitations of a flawed accounting system, this effort has succeeded in improving documentation for receivable balances." Nonetheless, the OIG generally agreed with a February report from the U.S. General Accounting Office, which found Medicare debt-collection procedures to be far from perfect. While CMS met its goal of reporting at least $2 billion in delinquent debt to the U.S. Treasury during fiscal year 2001, the OIG concedes that Medicare contractors made a significant number of debt-reporting mistakes. "Our review of [CMS' reported delinquent Medicare debt] identified an estimated $670 million (absolute value) in misstated and misclassified delinquent Medicare debt (or a net of 335 million)," the OIG said. Additionally, the OIG said that CMS still has a long way to go before achieving the agency's fiscal year 2002 goal of reporting 100 percent of delinquent Medicare debts to the Treasury. "During FY 2000, CMS referred [approximately $2 billion] in delinquent debt to Treasury," the report noted. "Although this is a significant increase over prior periods, improvements are still needed to ensure full compliance with the Debt Collection Improvement Act of 1996." The GAO took this criticism further, breaking down CMS' reported delinquent Medicare debt into two categories: "Medicare secondary payer" debt, which refers to money owed by private insurance companies, workers' compensation plans and legal settlements for services Medicare paid initially, and "non-Medicare-secondary-payer" debt, which refers to money Medicare pays up-front to institutional providers, based on the providers' historical Medicare-billing history. Apparently, CMS did well in reporting non-MSP debt during fiscal year 2000, referring $2.1 billion of a possible $2.6 billion in delinquent debt to the Treasury, according to the GAO. However, CMS' reporting of MSP debts was far less adequate, the GAO said. "CMS referred only about $47 million, or about 3 percent, of the approximately $1.8 billion of MSP debts that were reported as eligible for referral as of Sept. 30, 2000," the GAO noted. Such under-reporting is especially troubling in light of the fact that delinquent MSP debts historically have been much easier to collect than non-MSP debts, the GAO added. Of equal concern to the GAO is the fact that CMS did not refer the majority of FY 2000 delinquent debts to the Treasury until the end of the fiscal year. "Much of the referral volume was late in the year," the report said, "and substantial unreferred balances remained as of Sept. 30, 2001." Despite the auditors' different approaches, both the OIG and the GAO agreed that certain debt-collection challenges are insurmountable without significant technological accounting-system changes within CMS. "The agency lacks a comprehensive database for all MSP debts," the GAO said. And the OIG reported that a new, integrated accounting system currently in the works at CMS will not be ready until 2007. To read the GAO report, go to http://www.gao.gov, and search for reports published in February. To read the OIG report, go to http://www.oig.hhs.gov, and search for reports published in March.

SOURCES SAY BALTIMORE--Until last week, Medicare officially considered Alzheimer's patients to be incapable of medical improvement, and contractors routinely denied claims from beneficiaries with Alzheimer's. But on March 30, the Centers for Medicare and Medicaid Services outlawed the practice of summarily denying Medicare coverage for Alzheimer's patients. "Contractors may not use ICD-9 codes for dementia alone as a basis for determining whether a Medicare covered benefit was reasonable and necessary," CMS said in a transmittal, "because these codes do not define the extent of a beneficiary's cognitive impairment. For example, a claim submitted with only a diagnosis of Alzheimer's Disease may entitle a beneficiary to evaluation and management visits and therapies if the contractor determines that these therapies are reasonable and necessary when reviewed in the context of a beneficiary's overall medical condition." Now, contractors must determine payment for medical services and procedures based on an assessment of each individual's needs and capabilities, instead of basing a denial solely on a "dementia" diagnosis. WASHINGTON--For nearly 16 million Americans, the risk of developing type 2 diabetes is so great that the U.S. Health and Human Services Department recently coined a new medical term--"pre-diabetes"--to describe their condition. "The good news is if you have pre-diabetes, you can do something about it," HHS Secretary Tommy Thompson said in a press release. "We want people to know that pre-diabetes is a serious condition that can be reversed or alleviated with modest changes in their daily routines--such as eating fewer calories and walking regularly for exercise." People with pre-diabetes have blood glucose levels that are higher than normal but not yet diabetic, and studies have shown that most pre-diabetics go on to develop type 2 diabetes within 10 years. SAN ANTONIO--Syringe alternatives are shedding a new light on the insulin delivery market, according to a recent study from the research firm Frost & Sullivan. "Syringes currently remain the most widely used insulin delivery method," the report said. "But as diabetes patients and physicians increase knowledge as to the advantages of new devices, such as insulin pumps, pens and jet injectors, and emerging techniques, including oral and inhaled delivery, patients are expected to shift from syringes to more convenient methods." In fact, annual revenues for the insulin delivery market could reach $3 billion by 2008, increasing nearly 67 percent in only six years, the report added. WASHINGTON--The federal government should keep closer tabs on the Medicaid funds it provides to states, the U.S. General Accounting Office told the Baltimore-based Centers for Medicare and Medicaid Services in February. "Our review found that CMS had only recently begun to assess areas of greatest risk for improper payments, and thus did not have controls in place that focused on the highest risk areas," the GAO said. "The current organizational structure of CMS has created challenges to effective oversight because of unclear lines of authority and responsibility between the regions and headquarters." While CMS agreed with many of the report's findings, and outlined a plan to meet Medicaid financial management challenges, the agency did not agree that its audit tracking and resolution reports need improvement. CORAL GABLES, Fla.--Not as critical as some of her Democratic peers of Bush's recent proposal to amend a 1996 medical privacy law, Donna Shalala, former secretary of the U.S. Health and Human Services Department under Clinton, preached caution in a column she wrote last week for The New York Times. "In its latest version of the regulation, the [Bush] administration tried another approach: making consent for routine uses optional, not mandatory," she said. "While I'm pleased that the Bush officials chose not to eliminate the consent provision altogether, as some had advocated, I hope they will try to craft an alternative that retains the concept of patient consent and still allows providers, under certain conditions, to begin treatment before obtaining consent." Shalala now serves as president of the University of Miami.

INDUSTRY BRIEFS Chad Therapeutics, Chatsworth, Calif., has named Erika Laskey its vice president of sales and marketing. Laskey joined the company in 2001 as director of sales and marketing. Marie Knowles and Richard Syron have been elected to the board of directors for San Francisco-based McKesson. Knowles is the former executive vice president and chief financial officer of Atlantic Richfield, an integrated oil company. Syron is chairman and chief executive officer of Thermo Electron, a manufacturer of measurement and detection instruments. IN OTHER NEWS Pride Mobility Products, Exeter, Pa., has launched its Jazzy Provider Marketing Partner Program. Under the program, Pride-affiliated providers have a choice of Jazzy television commercials to run in the providers' respective markets. For information, call 800/800-8586. Pleasanton, Calif.-based Nellcor, a division of Tyco Healthcare, has entered into a four-year purchase agreement with Kaiser Permanente for Nellcor's pulse oximeters and pulse oximetry sensors. The Accreditation Commission for Health Care has moved its Raleigh offices to accommodate an expanded staff. The Commission's new address is 5816 Creedmoor Road, Suite 201, Raleigh, N.C. 27612. The ACHC telephone number is (919) 785-1214, and its fax number is (919) 785-3011.

STOCKS Investment analyst UBS Warburg has downgraded Elyria, Ohio-based Invacare from a "buy" to a "hold" rating. Company High Low PE Ratio 3/28/02* 4/5/02 Change Allied Healthcare (AHPI) 5.23 3.00 127.50 4.76 5.25 0.49 American HomePatient (AHOM.OB) 1.70 0.22 N/A 0.58 0.57 (0.01) AmerisourceBergen (ABC) 72.00 47.15 30.15 68.30 66.07 (1.77) Apria Healthcare (AHG) 29.85 19.50 18.92 24.51 25.05 0.56 Cardinal Health (CAH) 77.32 60.30 34.87 70.89 68.28 (2.61) CareCentric (CURA) 3.00 0.46 N/A 0.75 0.70 (0.05) Chad Therapeutics (CTU) 4.35 0.75 N/A 3.35 3.35 0.00 Coram Healthcare (CRHEQ.OB) 0.76 0.13 N/A 0.54 0.51 (0.03) Gentiva Health Services (GTIV) 25.50 15.60 29.52 24.76 25.05 0.29 Invacare (IVC) 41.25 28.50 34.27 37.60 38.20 0.60 Johnson and Johnson (JNJ) 65.89 42.60 34.50 64.95 63.05 (1.92) Lincare Holdings (LNCR) 34.39 22.25 23.09 27.12 29.24 2.12 Matria Healthcare (MATR) 40.00 12.66 29.44 24.25 25.04 0.79 McKesson (MCK) 41.50 24.85 89.00 37.43 35.18 (2.25) National Home Healthcare (NHHC) 19.85 6.10 12.29 12.07 12.01 (0.06) Option Care (OPTN) 22.15 8.44 24.59 16.51 18.12 1.61 Pediatric Services of America (PSAI) 14.10 4.70 18.65 10.90 11.50 0.60 Praxair (PX) 61.11 36.50 21.45 59.80 57.02 (2.78) ResMed (RMD) 62.20 35.20 85.78 40.13 38.68 (1.45) Respironics (RESP) 37.88 23.79 25.92 32.40 31.55 (0.85) Transworld Healthcare (TWH) 4.83 2.21 N/A 3.90 4.02 0.12 Tyco (TYC) 60.09 22.00 11.90 32.32 31.80 (0.52) Walgreen (WAG) 44.30 28.70 42.99 39.19 39.60 0.41 *The market was closed Fri., March 29, for the Good Friday holiday.

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