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Week of December 17, 2023

HEADLINE NEWS AHCA to Join Forces with AAHomecare JACKSONVILLE, Fla.--To offer more choices and services to its members, the American Home Care Association board of directors has voted to cease operations and to combine its members with the industry's largest association, the Alexandria, Va.-based American Association for Homecare. As a result of running at a financial deficit, AHCA has been forced to cull its members' benefits in recent months, and "we thought that was not fair," said AHCA board member Michael Caracci. Consequently, when AAHomecare proposed this solution, AHCA--which serves home health agencies almost exclusively--recognized an opportunity to present what Caracci calls "a more united front for home care." "This is a win-win situation for both organizations," Caracci said. "Until now, AAHomecare has focused primarily on home medical equipment issues. But with our addition, AAHomecare will gain members and staff who are more versed in home health agency issues. They will continue to fight the fight that we have fought." In addition to merging its more than 200 members with AAHomecare's members, AHCA will send two of its staff to join AAHomecare. Both Ann Howard, AHCA's vice president of legislative affairs, and Carmen Johnston, AHCA's executive director, will continue to address home health agency issues as AAHomecare employees. Ultimately, these changes will mean more choices and more services for current AHCA members, Caracci explained. "Our members will have access to a broader base of information," he said. "They will be able to attend more educational seminars, access more teleconferences and benefit from increased legal advocacy efforts." Additionally, eight of AHCA's board members will work with AAHomecare in a yet-to-be-determined capacity, Caracci noted. CMS to Publish New Codes for Diabetic Shoe Inserts BALTIMORE--The Centers for Medicare and Medicaid Services will add three new billing codes for diabetic shoe inserts. Effective Jan. 1, 2002, the new codes will replace the current code, A5502, which some specialists say is too general. "[A5502] was a single code that was actually describing two different devices," said Janis Gregory, director of reimbursement and government issues for the Columbia, Md.-based Pedorthic Footwear Association. While some patients need only the device described in A5502, Gregory explained, "some patients who are more at risk need to have a customized device with a different code," she added. The new codes describe specific inserts designed to treat subtly different conditions. For example, A5509 is a diabetics-only, direct-formed, multiple-density insert that molds to the foot with an external heat source; whereas A5510 is a diabetics-only, direct-formed, multiple-density insert that is molded to the foot using compression and no external heat source. To allow providers time to adjust to these new categories, CMS will accept the current A5502 code until April 1, 2002, according to an agency spokesman. For more information on these code changes, visit http://www.pedorthics.org and click on "reimbursement." DMERCs Propose New Wheelchair Seating Codes COLUMBIA, S.C.; WILKES-BARRE, Pa.; INDIANAPOLIS, Ind.; BOISE, Idaho--The four durable medical equipment regional carriers have proposed new wheelchair seating codes to include detailed coverage criteria for prefabricated wheelchair seat cushions, wheelchair back cushions and other positioning accessories. The DMERCs currently are soliciting comments on the draft policy. Providers who wish to submit comments regarding medical necessity criteria should include references from standard textbooks and/or peer-reviewed journals, according to the DMERCs' request. Additionally, the DMERCs have asked that providers submit all comments by Jan. 21, 2002. To encourage stakeholders to submit comments, both AdminiStar Federal (the Region B carrier) and CIGNA Medicare (the Region D carrier) have scheduled public meetings for Jan. 16, 2002. To read this local medical review policy, visit http://www.cignamedicare.com/dmerc/dmsm/c09/draft/RegionD_WCS_draft.html. DME Fee Schedule Gets Additional Increase BALTIMORE--The fee schedule for durable medical equipment will increase an additional 0.6 percent for 2002, according to the Alexandria, Va.-based American Association for Homecare. AAHomecare warned, however, that the January 2002 payment amounts might actually decrease, because the special assessment increase of 3.28 percent in place from July through December 2001 won't carry over into 2002. The special assessment was instituted by Congress to increase the fee schedule average to 3.7 percent. Likewise, the 0.6 percent increase won't carry into 2003. PROVIDER NEWS NHHC Gains in Q1 SCARSDALE, N.Y.--National Home Health Care reported a net income of $1.4 million, or 26 cents per share, for the first quarter 2002 ended Oct. 31, 2001, compared to a net income of $872,000, or 16 cents per share for the same quarter a year ago. MANUFACTURER NEWS Perigon Files for Bankruptcy LAKE FOREST, Calif.--Durable medical equipment and supplies distributor Perigon Medical filed for Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court for Central California in Santa Ana. Perigon officials declined comment when contacted on Friday. Financial troubles for the company began a year ago, when a major customer, Legend Healthcare, failed to pay a $4 million bill, according to The Los Angeles Times. Consequently, Perigon violated a loan agreement with Bank of America, prompting the bank to cut off a $22 million revolving line of credit, the Times reported. Since its founding in 1996, Perigon has acquired more than 10 companies, in an effort to become what it calls "a highly efficient national distributor of medical products to multiple markets in the healthcare industry." SEC to Investigate PolyMedica WOBURN, Mass.--The No. 1 seller of diabetes test kits, PolyMedica, has announced that the U.S. Securities and Exchange Commission will investigate the company's accounting practices, financial reports and securities sales. Previously, PolyMedica reported that the SEC was conducting an inquiry, but on Dec.r 4, the company announced that the SEC had issued a formal order of investigation. Following this announcement, PolyMedica's share prices fell 22 percent. Despite the formal investigation order, which enables the SEC to obtain information from third-party sources, Herbert Denton, the company's oversight committee chairman, says that PolyMedica will continue to cooperate with the SEC. "The formal order changes neither the company's assessment of this matter nor its intention to continue to cooperate with the SEC," he said. The U.S. Federal Bureau of Investigation in August searched the Florida offices of PolyMedica's diabetes products subsidiary Liberty Medical Supply. CORRECTION--In the Dec. 10 issue of HomeCare Monday, the recent vote on Coram Healthcare's reorganization plan was mischaracterized. The company's creditors voted to approve the reorganization plan, while the company's shareholders voted not to approve it. Additionally, the company stated that under the terms of its reorganization plan and certain provisions of bankruptcy law, shareholder approval is not required for confirmation of the plan.

SPOTLIGHT OIG's Semi-Annual Report Boasts Big Savings, DME Findings WASHINGTON--The U.S. Health and Human Services Department's Office of Inspector General saved the government approximately $18 billion in 2001 and excluded 3,756 individuals and entities guilty of health care fraud from participating in the Medicare and Medicaid systems, according to the OIG's semi-annual report. By implementing OIG recommendations, government health care programs saved more than $16 billion during fiscal year 2001, the OIG reported. The government reclaimed an additional $2 billion during 2001 as a result of the OIG's fraud-and-abuse investigations and audit disallowances, the agency said. Since April of this year, the OIG has studied several subjects pertinent to the durable medical equipment industry. In one study, the OIG reviewed the way in which CMS reimburses bi-level respiratory assist devices. Under the current payment category, CMS pays providers a monthly rental fee for as long as the device is medically necessary. However, the OIG has recommended that CMS move bi-level respiratory assist devices into the "capped rental" payment category, under which CMS pays providers only for a stipulated amount of time. At the end of the stipulated period, a beneficiary could ask Medicare to purchase the device or could pay to rent the device. The OIG estimates this category change would save Medicare $11.5 million annually. Another study looked at DME providers' efforts to comply with Medicare billing requirements. After the OIG uncovered billing compliance problems in a 1997 study, CMS began requiring physical site inspections before issuing billing numbers. This year's follow-up study found that providers' billing compliance had improved markedly since 1997. In fact, less than 1 percent of suppliers failed to comply with physical address standards, and less then 15 percent of suppliers failed to comply with liability insurance, licensure and inventory standards. A third study looked at Medicare home health beneficiaries who come directly from the community--those who receive equipment and services at home without first being discharged from a hospital. The OIG found that this "community" group constitutes approximately 40 percent of all Medicare beneficiaries. Additionally, the OIG reported evidence that community beneficiaries are more likely to have chronic conditions than are hospital-discharged patients. In general, the OIG found that community beneficiaries appear have unfettered access to Medicare home health care benefits. However, study respondents expressed concerns about patients with certain medical conditions and about home health agency staffing shortages. Also during the past six months, the OIG decided not to provide safe harbor for sleep disorder centers that want to sell DME. "There is no comparable safe harbor under the anti-kickback statute for other providers," the OIG explained, noting that providing such a safe harbor for sleep centers could open the door to abuse. Finally, the OIG measured beneficiaries' satisfaction with DME regional carrier services, and found that one regional carrier received low ratings from beneficiaries. Consequently, the OIG recommended that CMS review effective ways to educate beneficiaries about fraud and abuse, and CMS concurred. The OIG's semi-annual report also summarized recent fraud settlements and convictions involving durable medical equipment suppliers. In one case, nine defendants were sentenced in a kickback-related DME fraud scheme in Puerto Rico. In another case, Missouri-based Lancer Medical agreed to pay the U.S. government $324,392 to resolve liability for alleged point-of-sale violations. And in California, a DME company-owner and a health insurance company employee were sentenced to 5 years probation and required to pay a total of $25,086 in restitution for mail fraud. To read OIG's semi-annual report, visit http://oig.hhs.gov/semann/index.htm, and download the April through September, 2001 PDF file. SOURCES SAY WASHINGTON--Obesity may eventually cause as much preventable disease and death as cigarette smoking, according to a report issued by U.S. Surgeon General David Satcher. According to the report, close to 300,000 deaths a year are associated with overweight and obesity--compared with 400,000 deaths a year associated with cigarette smoking. And in the last two decades, according to the report, obesity among adults has doubled; among adolescents, the number has tripled. These trends are associated with sizable increases in conditions such as asthma and type 2 diabetes in children, Satcher said. The Surgeon General's call to action details community-based strategies to address the problems of obesity. To view the entire report, go to http://www.surgeongeneral.gov/topics/obesity. PARK RIDGE, Ill.--At least 15 percent of the estimated 16 million Americans with diabetes will develop a serious foot ulcer during their lifetime, according to John Giurini, associate professor of surgery at Harvard medical school and a diabetes expert with the American College of Foot and Ankle Surgeons. However, ulcers and other foot complications, which are responsible for more than 20 percent of diabetes-related hospitalizations each year, can be prevented if patients are made aware of the risk factors for foot ulcers, he said. "Early detection of risk factors associated with ulcer formation is essential in the overall management of diabetic patients and can significantly reduce the incidence of ulcers and eventual amputation," Giurini said. "We recommend that diabetic patients inspect their feet every day, wear shoes that fit properly and minimize pressure, and maintain their blood glucose levels within the desired range." For more information, go to http://www.acfas.org. MADISON, Wis.--Could gender be a factor in the onset of obstructive sleep apnea? All signs point to yes in a new study by researchers at the University of Wisconsin-Madison's School of Veterinary Medicine. According to the study, which compared male and female rats' reactions to oxygen deprivation as they aged, female rats had an increased protective reaction to oxygen deprivation as they matured, while male rats experienced a decreased response with age. Researchers linked the increased response in females to increases in estrogen, which influences serotonin, a chemical in the brain that controls nerve signals--including those that control the tongue and breathing. "When you think of the benefits of estrogen, you think of protecting the body against osteoporosis, Alzheimer's disease and depression," said researcher Andrea Zabka. "No one thinks of breathing." ELYRIA, Ohio--Home medical equipment providers have remained extremely cautious since the Sept. 11 terrorist attacks, creating a decline in demand that has forced some manufacturers to revise their earnings outlooks for the current fiscal quarter. Citing slow sales and a limited credit available to dealers, Invacare lowered its earnings outlook for the fourth quarter of 2001. "Overall, the fundamentals of the industry remain strong, but we believe that several additional factors have exacerbated the temporary decline in demand since Sept. 11," the company said. "Banks have been cautious due to the weakening economy and have tightened further after the events of Sept. 11. Several financial institutions have. . .eliminated health care lending units. Invacare helped fill this credit gap through the year,. . .[but] has determined that it is not prudent to continue filling this void. This action will limit the ability of certain dealers to continue purchasing at past levels until their payable balances are reduced or the credit environment improves and will temporarily dampen sales. Invacare also blamed the delay by the Centers for Medicare and Medicaid Services in issuing regulations required for implementing consumer upgrade provisions, along with a recent drop in consumer confidence, for slower-than-anticipated market growth. "In addition, there has been an increase in acquisition activity at the provider level that has resulted in reduced demand due to the normal inventory demand that occurs during these transactions," Invacare continued. "As the talk of further consolidation continues, there is some evidence that providers are reducing inventories to make themselves more attractive acquisition targets." INDUSTRY BRIEFS Rocco Morelli has joined St. Paul, Minn.-based Medwave as vice president of business development and international sales. Previously, Morelli was vice president of domestic sales, marketing and business development for SIMS BCI. He most recently served as vice president of OEM business for Masimo. IN OTHER NEWS Farmington, Conn.-based directDME, a direct marketer of DME, has been chosen as the first Web-based retailer for New Brighton, Minn.-based Rehabilicare. Effective immediately, the Rehabilicare product line, which includes TENS units and a full range of electrotherapy devices and accessories, is available through directDME�s Web site at http://www.directDME.com. Irving, Texas-based AdvancePCS and Bearsville, N.Y.-based LifeLink Monitoring have entered into a strategic partnership to provide biometric home telemonitoring services to clients of AdvancePCS. The telemonitoring system monitors blood pressure, heart rate, weight, blood glucose and self-reported symptoms. Respiratory function and other services will be added in the coming months. Terms of the agreement were not disclosed. BioSphere Medical, Rockland, Mass., has received FDA approval to distribute its EmboCath hydrophilic infusion catheter through the company�s direct field sales organization in the United States. Pending final approval, BioSphere also plans to market the product in Europe. STOCKS Investment firm Banc of America Securities has downgraded Elyria, Ohio-based Invacare from "buy" to "market perform." Pembroke, Bermuda-based Tyco International has declared a regular quarterly cash dividend of $0.0125 per common share payable on Feb. 1, 2002, to shareholders of record on Jan. 2, 2002. In other Tyco news, investment firm Legg Mason downgraded Tyco from "strong buy" to "market perform."

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