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Week of June 10, 2024

HEADLINE NEWS AdminaStar Explains Appeals Backlog INDIANAPOLIS--There may be no end in sight to a backlog that has some durable medical equipment providers in Region B waiting more than 90 days for a response from AdminaStar Federal's Reviews department, the company said." "Based on the most current inventory, there are 23,776 cases pending," AdminaStar said. "Of that inventory, 58.7 percent are past the 45-day mark, and nearly 80 percent have been pending 90 days or less." This is bad news for DME providers in the northern central United States who spend time and money maintaining products for which they have not yet been reimbursed, said Jane Bunch, chief executive officer of Jane's Billing and Consultation Services in Marietta. "With this kind of backlog, you've got equipment out there 120 days to a year that you're not getting paid for," she explained. "Region B is so backlogged on appeals and review requests that our [days sales outstanding] are going through the roof. If you're a mom-and-pop DME, you can pretty much hang it up." But AdminaStar--Medicare's durable medical equipment regional carrier for Region B--said that providers bear some responsibility for the current backlog. "The majority of denials [clogging the appeals system] are avoidable if the supplier furnishes appropriate information when the initial claim is submitted," the DMERC said. Urging DME providers to compile reimbursement claims carefully, AdminaStar described the top five "avoidable" mistakes that providers make, which include: --submitting expired oxygen tests; --neglecting to list all applicable diagnosis codes on nebulizer claims; --billing additional calories for enteral feeding claims before receiving a revised certificate of medical necessity from the attending physician; --billing for services incurred while the patient is in a skilled nursing facility; and --submitting incomplete certificates of medical necessity with manual wheelchair claims. Without predicting a resolution date, AdminaStar said the DMERC is working closely with the Baltimore-based Centers for Medicare and Medicaid Services to resolve the backlog. Meanwhile, the DMERC will follow Mediare's appeals-processing guidelines--which CMS issued as a "program memorandum" on March 20, 2002--to process the current cases pending, AdminaStar added. Infusion Market to Outpace Other Home Care Segments, Report Says NEW YORK--Growing at an annual rate of 10.3 percent, the U.S. infusion products market will, between now and 2006, outpace all other home care segments, according to a recent report from the New York-based market research firm Kalorama Information. The report, entitled "The U.S. Market for Home Care Products," defined infusion products as ambulatory infusion pumps, nutritional supplements and pharmaceuticals, and said that, in 2001, these products generated a revenue of $815 million. Consequently, if Kalorama's growth predictions are correct, infusion products will generate a revenue of $1.33 billion in 2006�more than the respiratory and mobility markets combined. To learn more about this report, contact Kim Bolus via e-mail at [email protected]. CMS Publishes New Guidelines for Diabetic Testing Supplies BALTIMORE--The Centers for Medicare and Medicaid Services last week published a program memorandum outlining new claims guidelines for diabetic testing supplies. The memorandum includes a list of general requirements, as well as specific requirements for claims that home medical equipment providers submit to durable medical equipment regional carriers, including: --guidelines for justifying a quantity billed; --guidelines for renewing an order; --rules about the maximum supply a provider can dispense at once; --a reiteration of providers' responsibility to provide only what is medically necessary; and --a warning that the DMERCs will not accept providers' self-generated forms. To read this memorandum, go to http://www.hcfa.gov/pubforms/transmit/memos/comm_date_dsc.htm.

PROVIDER NEWS Matria to Acquire MarketRing, Refocus Women's Health Division MARIETTA, Ga.--Matria Healthcare has agreed to acquire MarketRing.com for 310,000 shares of Matria's common stock, the company said." MarketRing, an Atlanta-based health care information technology company, provides a disease-management program that Matria currently uses. "The acquisition of MarketRing will enhance our secure connectivity capabilities with all the constituents in our disease management process," said Parker Petit, Matria's chairman, president and chief executive officer. Additionally, Matria announced plans to refocus its women's health division on disease management. North Carolina Provider Sentenced in Fraud Case GREENVILLE, N.C.--U.S. District Judge Malcolm Howard imposed a sentence of 14 months imprisonment, followed by a supervised release term of three years, on Scott John Thompson, founder of North Carolina Mobility in Clayton, N.C., for using the U.S. mail to defraud Medicare, Medicaid and a private insurer. The sentence also required Thompson to pay a total of almost $200,000 to the health care organizations he defrauded. According to the U.S. Attorney for the Eastern district of North Carolina, Thompson provided motorized scooters to elderly citizens and charged Medicare, Medicaid and a private insurer for motorized wheelchairs that cost approximately twice as much as the motorized scooters. Transworld Announces Name Change NEW YORK--At its annual meeting last week, Transworld Healthcare changed its name to Allied Healthcare International. The name change is effective immediately, the company said. MANUFACTURER NEWS Tyco Announces Internal Investigation, Growth Plan PEMBROKE, Bermuda--After months of upheaval--during which the company waffled on its decision to split and saw the its chief executive officer, Dennis Kozlowski, resign--Tyco is making plans for the future and launching an investigation into the past. In a June 7 press release, Tyco's interim leader, John Fort, listed Tyco's top priorities: to complete an initial public offering for the company's CIT division and reduce debt, to find a new chief executive officer, to investigate Kozlowski's use of company funds, to grow "organically" and to cut costs. Tyco released these statements one day after The Wall Street Journal reported that Kozlowski may have used company funds to buy a New York apartment and purchase artwork. Chad Reports Q4, Annual Results CHATSWORTH, Calif.--For the fourth quarter ended March 31, 2002, Chad Therapeutics reported a net income of $996,000, or 10 cents per share, compared to a loss of $750,000, or a loss of 7 cents per share, for the same quarter the previous fiscal year. Revenue for the quarter was $4,108,000, a 24 percent increase over revenue for the same quarter a year ago. Chad earned a total of $1.2 million, or 12 cents per share, during fiscal year 2002, compared to a loss of $3 million, or a loss of 30 cents per share, during fiscal year 2001. The company's fiscal year 2002 revenue was $18.7 million, an increase of 54 percent over revenue for the previous fiscal year.

SOURCES SAY ALEXANDRIA, Va.--Answering the question, "Why are so many more children being diagnosed with type 2 diabetes today than were a decade ago?" is easy, according to an article published last week on the American Diabetes Association's Web site. "American children are exercising less and eating more, a combination that leads directly to childhood obesity," said author Pamela Hardy, a clinical instructor of pediatrics at the Brody School of Medicine at East Carolina University in Greenville, N.C. "We can stop this disease in children. To do so, however, will be most difficult because it is our culture itself that is helping to create this situation. On the other hand, the solution is very straightforward: better nutrition and more exercise for the whole family." PALO ALTO, Calif.--Exercise helps female caregivers to cope with stress and prevent depression, according to researchers at the Stanford Unversity School of Medicine. After recruiting 100 sedentary women who care for relatives with dementia, the researchers split the participants into two groups. One group received 12 months of home-based exercise counseling to achieve at least four, 30-minute exercise sessions per week, and the other group received nutrition education. After one year, the women in the exercise group "demonstrated increased knowledge of the benefits of exercise and increased motivational readiness for exercise compared with the nutrition education condition," the researchers found. Additionally, "Both groups significantly improved in perceived stress, burden and depression from baseline to posttest." Based on these findings, the researchers concluded that female caregivers need programs that focus on improving healthy behaviors. WASHINGTON--In 2001, the U.S. government spent more on erroneous payments than the entire budgets of the Departments of State and Labor combined, according to a May 31 report from the Office of Management and Budget. "Contributing to the $20 billion total, Medicare made $12.1 billion in erroneous payments--6.3 percent of the program's total expenditures," the report said. The report also included a copy of President Bush's plan to improve financial management across the federal government. To read the report, go to http://www.omb.gov/financial/index.html.

INDUSTRY BRIEFS Brent Martini, senior vice president of AmerisourceBergen and president of AmerisourceBergen Drug Company, has resigned from the Valley Forge, Pa.-based company, effective in September 2002. Kurt Holzinger, AmerisourceBergen's chief operating officer, will assume Martini's responsibilities. Three new members have been appointed to the Washington-based Medicare Payment Advisory Commission. The new members are Nancy-Ann DeParle, senior advisor for JP Morgan Partners and adjunct professor at the Wharton School of the University of Pennsylvania; David Durenberger, president of Public Policy Partners and former U.S. Senator from Minnesota; and Nicholas Wolter, chief executive officer of the Deaconess Billings Clinic, and pulmonary and critical care physician at the Billings Clinic. IN OTHER NEWS The Washington-based Health Privacy Project, part of Georgetown University's Institute for Health Care Research and Policy, has released revised summaries of the health privacy statutes of eight more states: Delaware, Georgia, Hawaii, Illinois, Iowa, Kansas, New Hampshire and Oklahoma. The Project released summaries for nine other states last month. All 17 summaries are available at http://www.healthprivacy.org. The U.S. Department of Transportation has issued updated information about airport security measures that affect airline passengers with diabetes who carry diabetic supplies. Recommendations from the U.S. DOT's Transportation Security Administration include making sure empty syringes are accompanied by insulin and notifying airport security screeners if a patient is wearing an insulin pump. A complete list of recommendations from the TSA is available at http://www.tsa.dot.gov. Alameda, Calif.-based Therasense has joined the Juvenile Diabetes Research Foundation to distribute a "Diabetes Teen Pak" to teenagers recently diagnosed with diabetes. The Teen Pak includes a shoulder bag, a free blood glucose meter starter kit from Therasense, a book, a video, a cookbook and other educational information. The Teen Paks will be distributed nationwide through JDRF and other organizations that work with diabetic teens. For more information, go to http://www.jdrf.org.

STOCKS Investment firm JP Morgan has downgraded Pembroke, Bermuda-based Tyco from a "buy" to a "market performer" rating. Abbott Laboratories, Abbott Park, Ill., has declared a quarterly common dividend of 23.5 cents per share, payable Aug. 15, 2002, to shareholders of record on July 15, 2002. Company High Low PE Ratio 5/31/02 6/7/02 Change Abbott Laboratories 58.00 44.01 26.80 47.50 45.36 (2.14) Allied Healthcare (AHPI) 5.30 3.00 150.00 5.09 4.75 (0.34) American HomePatient (AHOM.OB) 1.70 0.30 N/A 0.37 0.30 (0.07) AmerisourceBergen (ABC) 79.70 52.12 30.38 77.09 78.64 1.55 Apria Healthcare (AHG) 29.85 19.50 16.18 23.67 22.74 (0.93) Cardinal Health (CAH) 77.32 60.30 26.71 66.46 63.89 (2.57) CareCentric (CURA) 3.00 0.40 N/A 0.60 0.50 (0.10) Chad Therapeutics (CTU) 4.35 1.57 30.00 3.10 3.30 0.20 Coram Healthcare (CRHEQ.OB) 0.79 0.13 N/A 0.72 0.67 (0.05) Gentiva Health Services (GTIV) 27.55 15.60 27.60 25.55 25.16 (0.39) Invacare (IVC) 41.25 28.50 31.25 37.76 35.79 (2.03) Johnson and Johnson (JNJ) 65.89 48.95 30.44 61.35 58.31 (3.04) Lincare Holdings (LNCR) 34.39 22.25 21.65 29.68 29.76 0.08 Matria Healthcare (MATR) 40.00 14.75 22.40 21.75 17.26 (3.99) McKesson (MCK) 42.09 30.40 25.38 37.50 36.57 (0.93) National Home Healthcare (NHHC) 18.90 6.00 14.89 13.75 12.94 (0.81) Option Care (OPTN) 17.72 8.76 21.39 13.00 14.09 1.09 Pediatric Services of America (PSAI) 14.10 4.70 9.24 8.35 7.10 (1.25) Praxair (PX) 61.11 36.50 20.30 56.00 54.15 (1.85) ResMed (RMD) 62.20 24.30 23.30 27.45 27.46 0.01 Respironics (RESP) 37.88 23.79 26.74 34.78 34.48 (0.30) Transworld Healthcare (TWH) 6.80 2.30 N/A 6.02 5.41 (0.61) Tyco (TYC) 60.09 14.40 5.39 21.95 10.10 (11.85) Walgreen (WAG) 42.40 28.70 40.41 38.26 37.28 (1.98)

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