Sponsors

		Free Subscription
		Subscribe to HomeCare Magazine Subscribe to HomeCare Monday Weekly eNewsletter

2001 Gold Award Winner, "Best Online Newsletter" American Society of Healthcare Publication Editors HEADLINE NEWS INDUSTRY BRIEFS PROVIDER NEWS SOURCES SAY MANUFACTURER NEWS SPOTLIGHT IN OTHER NEWS HOMECARE MAGAZINE

SPONSOR MESSAGE Sunrise Medical announces our Fall Kickoff Promotion has been extended through the end of December 2001. Get discounts on Guardian patient aids, the Breezy 510, Jay Basic seating, select DeVilbiss respiratory products and the new DeVilbiss eCompliance System. Also, extended terms specials on volume purchases and our financing promotions. Visit us at www.sunrisemedicalonline.com or contact customer service at 1-800-333-4000 for details. For more industry news, featured articles and highlights from our latest issue, please visit our website at www.homecaremag.com

Week of December 3, 2023

HEADLINE NEWS CMS, Associations Have Sitdown to Discuss Industry Concerns WASHINGTON--Last Monday representatives from the home care industry's top trade associations met with officials from the Center for Medicare and Medicaid Services to discuss a long list of industry concerns. While much of the discussion centered on home health agency issues, the group also addressed concerns that affect home medical equipment providers, including contractor accountability, recoupment, extrapolation and establishing a permanent office of the ombudsman. Concerning contractor accountability, industry representatives recently presented CMS with a position paper calling for consistency in billing among the contractors that handle Medicare billing. At the meeting, Tim Hill, responsible for program integrity at CMS, addressed these concerns, according to Tom Connaughton, president of the Alexandria, Va.-based American Association for Homecare. "It was a good meeting and a positive discussion of important issues," Connaughton said. "CMS indicated it is working diligently to try to bring consistency among the contractors." On recoupment, industry representatives asked that the agency wait to recoup alleged overpayments until the appeals process has run its course. Currently, if CMS determines that it has overpaid a provider for Medicare services or equipment, the agency takes back the money immediately. This means the money stays in CMS' bank account--instead of in providers' bank accounts--while the overpayment is investigated. CMS officials indicated at the meeting that the agency is willing to wait to recoup overpayments until after the first stage of the appeals process is completed, Connaughton said. Another hot button addressed at the meeting was contractor use of extrapolation in determining overpayments. When auditing a provider, CMS sometimes uses extrapolation, whereby the agency looks at a sample of files and assumes that the percent of overpayments in the sample is equal to overall overpayments. CMS was sympathetic to the industry's concerns about the fairness of extrapolation, Connaughton reported. Agency officials said that extrapolation should happen only in the most egregious situations and agreed that extrapolation should be conducted using only scientific, fair methods. And CMS officials seemed to imply that the agency is willing to wait to conduct extrapolation until the first level of appeals is completed, Connaughton added. Finally, on the issue of having a permanent ombudsman to deal with Medicare billing and payment problems, Connaughton said the agency has expressed interest in the idea, but CMS officials said that permanently creating an office of the ombudsman could be cost-prohibitive. New Senate Bill Aims at Streamlining Medicare WASHINGTON--A bipartisan group of U.S. senators last week introduced S. 1738, a regulatory reform bill that addresses many of the home care industry's primary regulatory-relief concerns. But while this bill is similar to two U.S. House of Representatives bills--H.R. 2768 and H.R. 3046--that recently passed the Ways and Means Committee and the Energy and Commerce Committee, the Senate bill adds a one-year delay in lock-in procedures for open enrollment and disenrollment in the Medicare+Choice program. The Senate bill also would require CMS to develop standards that would take into consideration providers' reliance on written guidelines and would consider the financial hardship imposed on providers. However, some provisions in the Senate bill are less specific than their counterparts in the House bills, and some House provisions do not appear in the Senate bill. For example, while the Senate bill would require the Centers for Medicare and Medicaid Services administrator to develop procedures allowing providers to appeal after an enrollment application is denied, the bill does not call for specific requirements, as does H.R. 3046. And, while H.R. 3046 would require the administrator to develop a system where health care professionals could determine in advance whether Medicare covers specific items, the Senate bill does not offer such a provision. Major provisions of the S. 1738 include the following: -- a more reliable schedule of Medicare program changes; -- additional appeal rights; -- better provider education by CMS about program changes; -- updating CMS' outdated contracting guidelines and introduce competition into the contracting program; -- providing incentives for contractors to give timely and accurate information to health care professionals; and -- establishment of two ombudsman programs--one for health care professionals and one for beneficiaries--to clarify Medicare policies and make recommendations on improving communication among all interested parties. For more information about S. 1738, visit http://thomas.loc.gov/ and enter bill number S1738. $91M Spent on Claims Bearing Inactive, Invalid Physician Numbers, OIG Says WASHINGTON--If the Centers for Medicare and Medicaid Services had scrutinized the unique physician identification numbers attached to all 1999 medical equipment and supplies claims, the agency could have saved nearly $91 million, according to a new report from the U.S. Department of Health and Human Services' Office of Inspector General. In comparing CMS' 1999 medical equipment claims to information contained in the Unique Physician Identification Number Registry, OIG found that CMS paid $32 million in 1999 for claims bearing invalid UPINs and $59 million for claims bearing inactive UPINs. An "invalid" UPIN is one that CMS never assigned; an "inactive" UPIN is one that has not been associated with any claim activity for at least 12 months. In most cases, claims associated with invalid UPINs cost CMS less than $1,000 each in 1999. However, 106 of the invalid UPINs were attached to claims that cost CMS more than $50,000 apiece. Of the 28,000 inactive UPINs listed on 1999 claims, 30 percent had been inactive for at least three years. Notably, only 28 percent of the 90,000 suppliers who submitted 1999 claims were guilty of using invalid or inactive UPINs. Additionally, 100 of these suppliers alone submitted $17 million in claims bearing improper UPINs. "While it is possible that some of the equipment and supplies that we identified were medically necessary," the OIG concluded, "the inability of Medicare systems to determine whether claims are submitted with invalid or inactive UPINs creates the potential for widespread abuse." To stem this abuse potential, the OIG suggested that CMS revise its claims processing procedure to ensure that UPINs listed on medical equipment and supplies claims are valid and active. OIG also suggested that CMS relay to suppliers the importance of using accurate UPINs when submitting Medicare claims. CMS concurred with these recommendations, and in a letter to the OIG, CMS Administrator Tom Scully said, "fraud, waste and abuse-prevention are a priority within our agency, and we appreciate the work that the OIG has undertaken to help us correct this problem." In fact, CMS already is addressing one aspect of the UPIN problem. By April 2002, the agency plans to implement a system that will reject claims listing a deceased physician's UPIN. Once this system is implemented, CMS plans to expand the initiative to include all invalid and inactive UPINs. To read OIG's report, visit http://oig.hhs.gov/oei/whatsnew.htm. DOJ Recovers $1.2B in Health Care Fraud Payments WASHINGTON--Health care fraud once again topped the U.S. Justice Department's list of annual recoveries, accounting for more than $1.2 billion in fraud payments between Oct. 1, 2000, and Sept. 30, 2001. This includes a $745 million settlement with HCA-The Healthcare Company, Nashville, Tenn., for alleged fraudulent schemes throughout the nation's largest chain of for-profit hospitals. It also includes $104 million in recovered payments from Brentwood, Tenn.-based Quorum Health Group, which operates acute-care hospitals nationwide, for allegedly submitted false cost reports. All totaled, the DOJ collected a record $1.6 billion in civil fraud payments during the period, and awarded $210 million to individual whistleblowers. PROVIDER NEWS Transworld Loses $23.4M in Q4 NEW YORK--Transworld Healthcare posted a net loss of $23.4 million, or $1.35 a share, for the fourth quarter ended Sept. 30, compared with a net loss of $15.8 million, or 90 cents a share, for the same quarter last year. For the year, the company reported a net loss of $26.6 million, or $1.53 a share, , compared with a net loss of $24.9 million, or $1.38 a share, for fiscal year 2000. The 2001 results include a non-cash tax charge of $24.7 million, as well as expenses of approximately $4.6 million related to the closing of Transworld's U.S. mail-order business and the sale of the company's Amcare subsidiary. Option Care Enters Respiratory Therapy Market Through Acquisition BANNOCKBURN, Ill.--Option Care has acquired certain assets of Texas-based home infusion and respiratory therapy provider Healix Health Services, a move that establishes Option Care's entry into the respiratory therapy market. Terms of the deal were not disclosed. "The Healix acquisition marks a significant step toward strengthening our position in the state of Texas and expanding our network outside of established markets, marked by our entry into the state of New Mexico," said Raj Rai, president and chief executive officer of Option Care. "Importantly, this acquisition also establishes our diversification into respiratory therapy. In the past year, Option Care has added eight service locations as a result of four acquisitions in Texas. Healix has satellite offices in Houston, Fort Worth, San Antonio and El Paso, Texas, and in Albuquerque, N.M. MANUFACTURER NEWS Encore to Acquire Orthopedic Product Manufacturer AUSTIN, Texas--Encore Medical will acquire Hixson, Tenn.-based orthopedic rehabilitation equipment manufacturer Chattanooga Group, Encore announced last week. "We are very excited with this pending acquisition," said Kenneth Davidson, chief executive officer of Encore. "Chattanooga is recognized as the 'gold standard' for orthopedic rehabilitation equipment. With this acquisition, we will broaden our product offerings to include those products that provide the full continuum of care for patients who utilize the services of orthopedic professionals . . . [including] orthopedic surgeons, sports medicine professionals and physical therapists. "In addition to the products that are part of Chattanooga, more important are the Chattanooga management and employees that come as part of the transaction. They have proven that they know their business and we are looking forward to what they can contribute to Encore as it grows," Davidson added. This marks the second acquisition in a year for Encore Medical, earlier this year acquiring Kimberly-Clark's orthopedic soft goods, patient safety devices and pressure care product lines. Although terms of the transaction were undisclosed, Encore officials expect the transaction to occur before the end of the year. SOURCES SAY WASHINGTON--The American Health Care Association has joined the National Governor's Association in support of the Economic Recovery and Assistance for American Workers Act of 2001, S. 1732, which is under consideration in the U.S. Senate. Among other objectives, S. 1732 would temporarily boost by 1.5 percent the amount of federal Medicaid matching funds provided to all 50 states in 2002. In addition, states with higher than average unemployment rates in the three months leading up to the Sept. 11 terrorist attacks would receive an extra 1.5 percent increase in federal Medicaid spending, and states that expected a cut this year in federal Medicaid funds would receive a one-year reprieve. "Inherent in any economic downturn is the fact that state governments will be negatively impacted by revenue shortfalls at the same time demand for Medicaid services will rise significantly," said Charles Roadman, president and chief executive officer of AHCA. "Now is precisely the time for Congress to include in its economic stimulus package the funding necessary to ease the anticipated negative impact on long-term care providers and their vulnerable patients." WASHINGTON--The Medicare Payment Advisory Commission has approved several recommendations intended for inclusion in a December report to Congress on reducing Medicare's complexity and health care providers' regulatory burden. "Medicare will remain a complex program because much of the complexity is irreducible," MedPAC staff said. "However, part of that complexity that stems from difficulties in information sharing and from complex payment rules may be made less of a burden on providers through more modern information systems. Developing better systems is a long-term opportunity that CMS should be given the resources to take." MedPAC made several recommendations to reduce complexity and regulatory burden, including having the Centers for Medicare and Medicaid Services adopt a nationwide system of claims processing, thus eliminating local descriptions of policy and regulation; improving consistency and eliminating redundancy in enforcement roles between the Department of Health and Human Services and Department of Justice; and providing reasonable timelines and resources for CMS to test new regulations and obtain new technologies that will simplify administrative processes. WASHINGTON--Those individuals who will remain in the Medicare+Choice program in 2002 can expect overall increased premiums, increased copayments for prescription drugs and decreased brand-name drug coverage, according to Susanne Seagrove, staff analyst for MedPAC. In 2001, the average monthly premium was $23; in 2002, the premium is expected to rise to $35. And M+C beneficiaries who live in rural areas are more likely than their urban counterparts to see the decrease in benefits, she said. Thirty percent of beneficiaries in urban counties will have access to a zero-premium plan with drug coverage, while access to this coverage will be "practically nonexistent" for beneficiaries in rural counties, she said. PALM BEACH GARDENS, Fla.--Martin Weiss, chairman of Weiss Ratings, a provider of safety ratings on health maintenance organizations, has some advice for the more than 536,000 senior citizens on Medicare who will be dropped from their HMOs by the end of this year: avoid HMOs if possible. Instead, Weiss recommends beneficiaries think about shifting to traditional Medicare coverage and add a supplemental insurance policy. "You are guaranteed eligibility in Medicare supplemental insurance, [or Medigap], regardless of your health status," Weiss said. "With Medicare and Medigap, it's far less likely you will get dropped again. Plus, you will have more freedom to choose your provider or hospital." INDUSTRY BRIEFS Oxford, Michigan-based Essentially Women has named JoAnn Wandrey its director of business development. Wandrey will head the company's newly created sales and marketing division and will be responsible for member growth and promoting the organization's objectives. The Alexandria, Va.-based Health Industry Distributors Association has appointed to its board of directors Ronald Shinault, chief executive officer and executive vice president of Tucker, Ga.-based COSH Healthcare, and Pete Castagna, president, acute care, of Richmond, Va.-based McKesson Medical-Surgical; and Jenise Luttgens, president of Temecula, Calif.-based Professional Hospital Supply. The Accreditation Commission for Health Care, Raleigh, N.C. has added Mark DeLegge and Melissa McIntyre to its board of commissioners. DeLegge is an associate professor of medicine in the Division of Gastroenterology and Hepatology at the Medical University of South Carolina, a fellow of the American College of Gastroenterology, a certified nutrition support physician with the American Society of Enteral/Parenteral Nutrition and is affiliated with the American Academy of Home Health Providers. McIntyre is vice president of strategic program development for Lake Mary, Fla.-based Priority Healthcare, a national specialty pharmacy and distribution company. Praxair, Danbury, Conn., has named Randy Kramer its senior vice president of sales. Kramer will be responsible for establishing senior-level customer relationships worldwide and for guiding major commercial projects. Kramer, who has been with Praxair since 1979, formerly served as the company's global vice president for procurement and materials management. Succeeding Kramer in this position is Peter Mayer, who formerly served as senior vice president for sourcing and facilities at G.E. Financial Assurance. IN OTHER NEWS Salem, Ore.-based Ladies First, manufacturer of post-mastectomy products, has launched a new Web site, http://www.wvi.com/~ladies1. The site, intended for use by consumers, the retail health care community and medical professionals, contains product information, a question-and-answer page, educational tools, literature-request forms and commentary from breast cancer survivor and Ladies First president Linda Jackson. The Baltimore, Md.-based Centers for Medicare and Medicaid Services has scheduled three public meetings regarding coding and payment for new durable medical equipment. The meetings, which will be held at the CMS Auditorium in Baltimore, are scheduled for March 11, May 13 and June 17, 2002, from 8 a.m. to 5 p.m. The deadline for comments to be considered for inclusion at the meetings is 5 p.m., Jan. 7, 2002. Send an original and three copies to CMS, Department of Health and Human Services, Attn: CMS-1190-NC, P.O. Box 8017, Baltimore, MD 21244. Island Critical Care of Prince Edward Island, Canada, has received authorization from the U.S. Food and Drug Administration to market and distribute its Vitalsat Pulse Oximeter in the United States. Redwood, City, Calif.-based Cygnus and Parsippany, N.J.-based Sankyo Pharma, a subsidiary of Sankyo, have signed a co-promotion agreement for the GlucoWatch Biographer, an automatic blood glucose monitor, in the United States. Cygnus and Sankyo Pharma will collaborate on all sales and marketing efforts.

STOCK WATCH Investment firm Dresdner Kleinwort Wassersteins has upgraded McKesson, San Francisco, from a "hold" to an "add" rating. Also, investment firm UBS Warburg has initiated new coverage on Clearwater, Fla.-based Lincare Holdings at a "buy" rating. UBS Warburg also has initiated new coverage and Costa Mesa, Calif.-based Apria Healthcare, also at a "buy" rating. And, investment firm Morgan Stanley has downgraded New Brunswick, N.J.-based Johnson and Johnson from an "outperform" to a "neutral" rating.

Company High Low PE Ratio 11/23/01 11/30/01 Change Allied Healthcare (AHPI) 3.75 2.69 N/A --- 3.45 --- American HomePatient (AHOM) 1.70 0.12 N/A --- 0.80 --- Amerisource Bergen (ABC) 72.00 40.06 27.69 --- 59.50 --- Apria Healthcare (AHG) 30.50 19.50 19.98 --- 24.06 --- CareCentric (CURA) 4.53 0.51 N/A --- 1.00 --- Chad Therapeutics (CTU) 3.70 0.44 N/A --- 3.01 --- Coram Healthcare (CRHEQ.OB) 0.80 0.06 N/A --- 0.24 --- Gentiva Health Services (GTIV) 23.50 11.75 10.55 --- 20.43 --- Horizon Pharmacies (HZP) 2.00 0.10 N/A --- 0.00 --- Invacare Corp. (IVC) 41.25 27.25 16.88 --- 35.40 --- Johnson and Johnson (JNJ) 60.97 40.25 31.31 --- 58.25 --- Lincare Holdings (LNCR) 34.39 21.12 24.86 --- 29.72 --- Matria Healthcare (MATR) 26.50 7.25 28.68 --- 26.00 --- McKesson (MCK) 41.50 23.40 952.56 --- 37.27 --- National Home Healthcare Corp. (NHHC) 19.85 4.82 20.04 --- 16.30 --- Option Care (OPTN) 22.15 4.87 22.63 --- 17.00 --- Pediatric Service of America (PSAI) 8.90 3.81 51.33 --- 7.96 --- Praxair (PX) 54.00 34.44 26.65 --- 52.92 --- ResMed (RMD) 61.39 33.12 147.20 --- 58.50 --- Respironics (RESP) 37.05 21.56 27.31 --- 31.59 --- Transworld Healthcare (TWH) 4.83 0.75 N/A --- 2.84 --- Tyco (TYC) 63.21 39.24 20.68 --- 58.80 --- Walgreen Co. (WAG) 45.62 28.70 38.51 --- 33.00 ---

Visit this week's sponsor at: www.sunrisemedical.com

HomeCare Monday� is produced weekly by the editors and staff of HomeCare Magazine and HomeCare Extra. It is e-mailed on Monday 46 times a year by PRIMEDIA Business Magazines & Media 800/441-0294