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Week of June 3, 2024

HEADLINE NEWS Standard Employer Numbers to Simplify Claims Processing, CMS Says BALTIMORE--Soon, everyone will be on the same page when identifying employers during health care transactions, the Centers for Medicare and Medicaid Services said last week. On May 31, CMS published a final rule in the Federal Register, requiring all health care providers to use a standard list of U.S. Internal Revenue Service employer identification numbers, or EINs, when filing health care claims. Until now, providers and health plans may have used different numbers to describe the same employer, thus confusing the claims-review process and causing payment delays. The new EIN system "will make health insurance transactions easier and more efficient, not just for Medicare but for other federal health programs and the private health insurance industry, as well as those who provide the nation's health care." said Tom Scully, CMS' administrator. Another step toward implementing the massive Health Insurance Portability and Accountability Act of 1996, this rule is one of several provisions outlined in HIPAA's Administrative Simplification section. Kelly Pickens, an attorney with the Health Law Center in Greenville, S.C., predicts the rule not only will simplify health care transactions but also speed them along. "It will make a significant difference in timing," which follows HIPAA's overarching theme of administrative simplification, she said. Frost Predicts Steady Growth for Ostomy Market SAN ANTONIO--There were 800,000 ostomy patients in the United States in 2000, and that number will grow at an annual rate of approximately 3 percent, according to a recent article from the market research firm Frost and Sullivan. Doctors are diagnosing diseased colons, rectums and bladders earlier, meaning the number of ostomy procedures conducted annually also will continue to increase, the article said. While health insurance providers cover most ostomy appliances, reimbursement policies differ from plan to plan, Frost's researchers found. Additionally, because private health insurance providers tend to follow Medicare's lead when making coverage decisions, "any changes in Medicare policies regarding ostomy appliances have an effect on the overall market," the article said. Distribution channels for ostomy supplies include chain drugstores, independent pharmacies, hospital pharmacies, retail pharmacies, medical specialty stores and mail order, the article continued. Most ostomy patients--especially elderly patients and patients with busy schedules--prefer to order supplies from the comfort of their homes, the researchers added.

PROVIDER NEWS U.S. Attorney Announces 36-Count Kickback Indictment PHILADELPHIA--Three former employees of King of Prussia, Pa.-based Home Health Corporation of America allegedly carried out a massive, two-year kickback scheme that included rental payments for offices the company did not use, according to a recent indictment from the U.S. Attorney for the Eastern District of Pennsylvania. The alleged scheme, which took place from September 1995 to December 1997, also included payments for wallpaper and carpeting installed in doctors' offices, interest-free loans with open-ended payback schedules, and consulting fees. All totaled, defendants Bruce Feldman, who was president of HHCA until 1998, James Swiniuch, the company's former chief financial officer, and Joseph Cannavo allegedly spent almost $110,000 to entice Philadelphia doctors to send Medicare business to HHCA. In addition to arranging kickbacks, Cannavo, a former salesman for HHCA, forged an imprisoned doctor's signature on 115 certificates of medical necessity, and filed claims totaling $28,935 using the forged CMNs, the U.S. Attorney alleged. If convicted, the defendants could receive a maximum sentence of 175 years in prison and a fine of $8.25 million. Pennsylvania Provider Charged With Paying Kickback PHILADELPHIA--On May 16, the U.S. Attorney for the Eastern District of Pennsylvania charged Emmanuel Servillas, a home medical equipment provider in Abington, Pa., with paying a kickback to obtain Medicare business. The charge concerns one incident that allegedly took place on April 21, 1999. If convicted, Servillas could receive a maximum sentence of five years in prison and a fine of $250,000. MANUFACTURER NEWS Respironics Acquires Japanese Respiratory Provider PITTSBURGH--Respironics has acquired a controlling interest in Tokyo, Japan-based Fuji RC Co., Ltd., a provider of home care and hospital respiratory services, agreeing to purchase all of Fuji's outstanding shares by Dec. 31, 2002. The base cash purchase price for all of the outstanding shares is approximately $12 million, with provisions for additional payments based on Fuji's operating performance during the next four years. In addition, Respironics will assume approximately $11 million in net indebtedness. "Respironics views Japan as one of the key emerging markets in sleep. We look forward to serving this market with the combined resources of our two organizations," said James Liken, president and chief executive officer of Respironics. "Over the next several years, we believe the Japanese market will hold significant potential for the products and programs that Respironics offers." Respironics expects that the acquisition will add approximately $15 to $18 million to its annual revenues, after eliminating the impact of inter-company sales, and be modestly accretive to earnings per share, adding approximately $0.01 per share in the second half of fiscal year 2003. Tyco Chairman and CEO Resigns EXETER, N.H., and PEMBROKE, Bermuda--Citing personal reasons, Dennis Kozlowski, chairman and chief executive officer of Tyco International, has resigned, according to a company press release issued this morning. John Fort will serve as interim CEO until the company finds a permanent replacement for Kozlowski. Fort served as chairman and CEO of Tyco from 1982 until 1992, according to the release. Since 1992, Fort has been a member of the company's board of directors. The news of Kozlowski's resignation comes on the heels of a report in today's New York Times that Kozlowski is the subject of a criminal investigation, suspected of avoiding New York State sales taxes. Langer to Acquire Bi-Op LONG ISLAND, N.Y.--Langer, a custom orthotics manufacturer, has announced plans to purchase Bi-Op, a Canadian company that manufactures foot- and gait-related biomechanical products, according to a Langer press release. Andrew Meyers, Langer's president and chief executive officer, said Bi-Op's production facility will allow Langer to manufacture in Canada, a market that accounts for 15 percent of Langer's international sales. Raynold Henry, the founder of Bi-Op, will remain with Langer in a senior management position, according to the company. Financial terms of the transaction were undisclosed.

SOURCES SAY WASHINGTON--In written remarks to the U.S. House Committee on Small Business, Brian Seeley--president of Seeley Medical in Ormond Beach, Fla., and a member of the Power Mobility Coalition's board of directors--described the burdens that Medicare places on small mobility equipment providers. "Suppliers of power mobility equipment and services, and other health care providers that serve Medicare beneficiaries, spend much of their time and effort interpreting and complying with Medicare's complex regulatory and procedural requirements," Seeley said. "In addition to dealing with Medicare laws and regulations, PMC members must also deal directly with the durable medical equipment regional carriers, the entities that are charged with administering payment on behalf of CMS," he said. "Unfortunately, the DMERCs have used this authority to create new policies, often in direct contrast to existing policy published by CMS." Seeley's letter went on to describe three contradictory DMERC policies, including the inconsistent applications of the certificate of medical necessity policy, the audit process and the claims-reopening process. WASHINGTON--While more beneficiaries than ever are using Medicare's preventive services, the numbers vary widely, the U.S. General Accounting Office reported recently. "Although national rates provide an overall picture of current use, they mask the substantial differences in how seniors living in different states use some services," the report said. "For example, the national breast cancer screening rate for Medicare beneficiaries was 75 percent in 1999, but rates for individual states ranged from a low of 66 percent to a high of 86 percent. Individual states also ranged from 27 percent to 46 percent in the extent to which beneficiaries are receiving a colonoscopy or sigmoidoscopy for cancer screening." The report also noted that, while most beneficiaries use some type of preventive service, few beneficiaries receive multiple services. WASHINGTON--Millions of U.S. seniors are providing home care to a disabled friend or family member, according to a recent report from the American Association of Retired Persons, titled Beyond 50: A Report to the Nation on Trends in Health Security. "About one in five Americans age 50 and older say they or their spouse helps a disabled relative or friend with everyday activities," the report said. "Caregivers age 50-plus average more than 20 hours of care per week. More than half provide this care for five years or more." The report is available at http://www.aarp.org/beyond50/. BALTIMORE--Medicaid's home- and community-based service waivers can cover some of the costs of moving a beneficiary from a health care facility back to the home, the Centers for Medicare and Medicaid Services said in a letter to state officials last month. While these waivers may not be used to pay beneficiaries' rent, "states may pay the reasonable costs of community transition services, including some or all of the following components: security deposits that are required to obtain a lease on an apartment or home; essential furnishings and moving expenses required to occupy and use a community domicile; set-up fees or deposits for utility or service access; and health and safety assurances, such as pest eradication, allergen control or one-time cleaning prior to occupancy."

INDUSTRY BRIEFS The Roho Group, Belleville, Ill., has promoted Tom Hartmann to vice president of North American medical sales, in charge of coordinating medical sales in Canada, the United States and Mexico. Previously the vice president of medical sales in Roho's international division, Hartmann has worked at Roho since 1977. The Accreditation Commission for Health Care, Raleigh, N.C., has appointed Brenda Pisone to its board of commissioners. Pisone is director of national accounts and preferred providers for Aventis Behring, a drug manufacturer based in King of Prussia, Pa. Expanding its sales and marketing staff, Therasense, Alameda, Calif., has hired Shawna Gvazdauskas as vice president of sales and has retained Tae Andrews, formerly vice president of sales and marketing, as vice president of marketing. 3M's Salt Lake City-based Health Information Systems division has hired Mark Kramer as manager of the company's care innovation/home health systems business unit. Most recently the vice president of Retail Technologies' professional services group, Kramer has more than 16 years of experience in information technology management positions. IN OTHER NEWS Milpitas, Calif.-based LifeScan has issued new troubleshooting instructions regarding the operation of its One Touch Ultra and Induo blood glucose meters. The new instructions can be found at http://www.lifescan.com/company/press/ultra_er4_letter.html. HealthNow NY, Buffalo, N.Y., the Region A durable medical equipment regional carrier, has issued a clarification on the billing requirements for maintenance and servicing of capped rental items. Providers must not submit claims for maintenance and servicing until all claims for rental have been paid and six months have passed from the end of the final paid rental month, the DMERC said in a statement. For more information, go to http://www.healthnowny.com. Knueppel Healthcare Services, Milwaukee, has received the Provider of the Year award from the Wisconsin Association of Medical Equipment Services. Also, Cindy Ciardo, director of operations at Knueppel Healthcare, received the Outstanding Contribution Award for Exceptional Service for her service to the WAMES organization. Conshohocken, Pa.-based Viasys Healthcare has received Food and Drug Administration 510(k) clearance to market its Orion continuous positive airway pressure device. San Diego-based Mobility Inc. has entered into an agreement with St. Louis-based group purchasing organization AmeriNet whereby AmeriNet members can purchase products from Mobility Inc.'s AirLift line of toileting systems. Austin, Texas-based Encore Medical has signed a two-year agreement with Allegiance Healthcare whereby Allegiance will distribute Encore's line of orthopedic soft goods.

STOCKS The board of directors of San Francisco-based McKesson has declared a regular dividend of six cents per share of its common stock, payable July 1, 2002, to shareholders of record on June 10, 2002. The board of directors of Invacare, Elyria, Ohio, has declared dividends of 1.25 cents per share of its common stock, and 1.14 cents per share of its Class B common stock, payable July 15, 2002, to shareholders of record on July 1, 2002. Company High Low PE Ratio 5/24/02 5/31/02 Change Abbott Laboratories 58.00 44.05 27.99 --- 47.50 --- Allied Healthcare (AHPI) 5.30 3.00 170.00 --- 5.09 --- American HomePatient (AHOM.OB) 1.70 0.29 N/A --- 0.37 --- AmerisourceBergen (ABC) 79.70 52.12 31.45 --- 77.09 --- Apria Healthcare (AHG) 29.85 19.50 16.90 --- 23.67 --- Cardinal Health (CAH) 77.32 60.30 28.46 --- 66.46 --- CareCentric (CURA) 3.00 0.40 N/A --- 0.60 --- Chad Therapeutics (CTU) 4.35 1.57 N/A --- 3.10 --- Coram Healthcare (CRHEQ.OB) 0.79 0.13 N/A --- 0.72 --- Gentiva Health Services (GTIV) 27.55 15.60 29.19 --- 25.55 --- Invacare (IVC) 41.25 28.50 33.57 --- 37.76 --- Johnson and Johnson (JNJ) 65.89 48.20 31.80 --- 61.35 --- Lincare Holdings (LNCR) 34.39 22.25 22.11 --- 29.68 --- Matria Healthcare (MATR) 40.00 14.75 26.86 --- 21.75 --- McKesson (MCK) 42.09 30.40 25.53 --- 37.50 --- National Home Healthcare (NHHC) 18.90 5.86 14.83 --- 13.75 --- Option Care (OPTN) 17.72 8.76 21.31 --- 13.00 --- Pediatric Services of America (PSAI) 14.10 4.70 11.45 --- 8.35 --- Praxair (PX) 61.11 36.50 20.97 --- 56.00 --- ResMed (RMD) 62.20 27.26 26.08 --- 27.45 --- Respironics (RESP) 37.88 23.79 27.66 --- 34.78 --- Transworld Healthcare (TWH) 6.80 2.30 N/A --- 6.02 --- Tyco (TYC) 60.09 15.25 7.93 --- 21.95 --- Walgreen (WAG) 42.40 28.70 41.00 --- 38.26 ---

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