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SPONSOR MESSAGE ResMed releases Boomerang software, a comprehensive patient management program to satisfy third-party payer requirements, decrease costs, and increase revenue, referrals, and efficiency. It matches patients with providers and equipment and schedules those patients for follow-ups. Print inventory projection reports and track eligible replacement dates, follow-ups, provider/referral lists, and compliance data. For more information, Call 1.800.424.0737 ext 2270, or visit us online at http://www.resmed.com/us/1010002895326.html. For more industry news, featured articles and highlights from our latest issue, please visit our website at www.homecaremag.com

Week of March 25, 2024

HEADLINE NEWS President Touts Changes to Medical Privacy Rule WASHINGTON--This Wednesday, the Bush Administration will propose pivotal changes to a controversial medical privacy law. While consumer advocates and Congressional Democrats say the changes would eviscerate the 1996 Health Insurance Portability & Accountability Act, many in the health care industry are applauding the changes, saying that the revised law strikes a good balance between patients' privacy and patients' access to effective health care. "The President believes strongly in the need for federal protections to ensure patient privacy, and the changes we are proposing today will allow us to deliver strong protections for personal medical information while improving access to care," said Tommy Thompson, secretary of the U.S. Health and Human Services Department. Written in response to more than 11,000 comments from health care industry stakeholders, the proposed changes attempt to apply what Thompson calls "common sense revisions" to rules that forbid providers from releasing patients' medical information. "For example, sick patients will not be forced to visit the pharmacy themselves to pick up prescriptions--and could send a family member or friend instead," Thompson explained. And, "doctors will be able to consult with nurses and others involved in a patient's care to ensure that they get the best care." Specifically, the Administration's proposed changes would: --Remove a rule that requires providers to obtain a patient's consent before using or releasing a patient's medical information for any reason; --Allow treatment-related conversations between doctors and other professionals involved in a patient's care, while limiting oral communications to the "minimum necessary" for treatment; --Assure parents' access to their children's medical records by deferring to state laws on the matter; --Permit providers to communicate freely with patients about treatment options, while at the same time requiring providers to obtain a patient's consent before sending the patient any marketing materials; --Reduce the number of consent forms necessary to comply with HIPAA; and --Give providers a "sample" business associate contract, to make it easier and less costly for providers to implement required privacy agreements with business associates. The first of these proposed changes is causing uproar among consumer health advocates, such as Janlori Goldman, director of the Health Privacy Project at Georgetown University in Washington. "The most devastating blow to patient privacy is the proposal to eliminate the existing requirement that patients give their consent before health care providers use or disclose a patient's health care information," she said. "A prior consent requirement is the best way to ensure that patients know how their health care information will be used or disclosed and know what their privacy rights are." Despite these concerns, many in the health care industry are encouraged by the proposed changes. The new privacy rule, "is a positive step toward eliminating regulatory burdens that impede effective and efficient patient care," said Asela Cuervo, AAHomecare's vice president of government relations. Some in the health care industry say the proposed changes do not go far enough to ensure that providers can give adequate care without fearing a lawsuit. "While these modifications will substantially improve the overall rule on medical privacy, several concerns remain," the Washington-based American Association of Health Plans said in a press release. "First, we urge the Administration to continue to work toward establishing uniformity so that confusion and inconsistency between the federal rule and the individual laws of 50 states do not complicate the ability to provide quality health care." Second, AAHP asked the president to lessen the financial and administrative burdens of HIPAA's April 14, 2003, deadline by implementing a transition schedule. After publishing the proposed changes in the Federal Register on March 27, HHS will accept public comments on the proposed changes for 30 days. To learn more about the privacy rule, go to http://www.hhs.gov/ocr/hipaa. CMS Provides Tool to Handle Appeals Backlog BALTIMORE--Almost everyone agrees that Medicare's current administrative appeals process needs reforming, but during the past month, government officials have disagreed publicly on how to implement those reforms. While the U.S. Department of Health and Human Services' Office of Inspector General urged Medicare to ask for more time to implement changes slated to go into effect in October 2002, the House Ways and Means Committee urged Medicare to implement the changes as scheduled. Despite the fact that "the current Medicare appeals system is backlogged, overwhelmed and untimely, and the problems could be exacerbated by the [impending reforms]," according to OIG, Congressional legislators said that Medicare must abide by the law. Meanwhile, the Centers for Medicare and Medicaid Services is taking a pragmatic approach to appeals backlogs. On March 20, CMS published a memorandum to help its contractors prioritize appeals cases. "Although contractors should continue to use a first-in, first-out method for processing appeals," the memorandum said, "as the year progresses it should become apparent whether a contractor will have sufficient funding to adjudicate all of the appeals submitted." As soon as contractors realize that an appeals backlog is inevitable, they should process existing cases in the following order, according to the memorandum: --Priority 1--Finalize effectuation of all ALJ decisions and Departmental Appeals Board (DAB) decisions; --Priority 2--Adjudicate all requests for telephone appeals (if applicable) in a timely and effective manner (Note: each contractor should determine whether an appeal can be resolved and adjudicated by telephone. If the appeal is considered too complex and/or significant documentation must be submitted in order to adjudicate the appeal, the contractor should forward the request for review to the written appeals section); --Priority 3--Adjudicate written reconsiderations, reviews and fair hearings from beneficiaries or their appointed beneficiary representative with or without documentation within the timeframes prescribed in the FY 2001 Budget and Performance Requirements (BPRs); --Priority 4--Adjudicate written requests for reconsiderations, reviews, and fair hearings from providers, suppliers or other appellants, including states or their third party agents, that are submitted with necessary documentation within the timeframes prescribed in the FY 2001 BPRs; --Priority 5--Adjudicate written requests for reconsiderations, reviews and fair hearings from providers, suppliers or other appellants, including tates or their third party agents, that are submitted without necessary documentation within the timeframes prescribed in the FY 2001 BPRs; --Priority 6--Prepare, assemble, and forward Part A and Part B ALJ hearing case files that contain necessary documentation within the time frames prescribed in the FY 2001 BPRs; --Priority 7--Prepare, assemble and forward Part A and Part B ALJ hearings case files that do not contain necessary documentation within the time frames prescribed in the FY 2001 BPRs; and --Priority 8--Submit agency referrals to the DAB. While the goal is to process all incoming appeals, CMS published this memorandum "in an effort to manage incoming appeals in FY 2001 with the given resources," the agency said. Also, in the interest of time and efficiency, "any incoming appeal requests submitted without necessary supporting documentation will be given secondary priority to appeal requests submitted with appropriate documentation," the memorandum concluded. To read this memorandum, go to http://www.hcfa.gov/pubforms/transmit/memos/comm_date_dsc.htm.

PROVIDER NEWS Option Care Acquires R.I. Infusion Pharmacy BANNOCKBURN, Ill.--Expanding its core infusion business into New England, Option Care has acquired Nashville, Tenn.-based American HomePatient's Providence, R.I.-based infusion pharmacy, which serves both Rhode Island and Massachusetts. "This acquisition gives Option Care a footprint in the major New England markets of Boston and Providence," according to Raj Rai, the company's and chief executive officer. Texas Judge Sentences Defunct Mobility Company HOUSTON--On Feb. 28, U.S. Attorney Richard Stephens announced the sentencing of a Dallas-area mobility company, the company's owner and one of the company's employees to fines and prison. Now defunct, Scooters-to-Go of Colleyville, Texas, along with its owner, William Brooks and an employee, Grover Poarch, pled guilty to billing Medicare for unnecessary equipment and for equipment that was more expensive than what the defendants actually provided. The judge ordered Brooks to pay $300,000 in restitution and to spend 18 months in prison. Poarch must serve 5 years probation and pay $85,000 in restitution, and the company must pay $10,000 in restitution. MANUFACTURER NEWS Viasys and Pulmonetic Systems Settle Lawsuits PALM SPRINGS, Calif.--Viasys Healthcare and Pulmonetic Systems of Colton, Calif., last week announced the settlement of mutual lawsuits regarding certain technologies and rights used in both companies' ventilators. Under the agreement, each company will have access to these technologies, and Pulmonetic Systems will pay $4 million during the next three years to Bird Products, Viasys' parent company. "We at Viasys and Bird are pleased to have these issues behind us and feel that the technologies made available by this settlement are in the best interest of both our companies and the health care industry in general," the companies said in a press release. Inverness Acquires IVC Industries WALTHAM, Mass.--Expanding its production and distribution resources, Inverness Medical Innovations--which manufactures women's health and nutritional products--has acquired IVC industries of Freehold, N.J. IVC shareholders will receive $2.50 in cash for each share of IVC common stock, according to an Inverness press release. Cardinal Health to Acquire Magellan Labs DUBLIN, Ohio--Cardinal Health has announced plans to acquire Magellan Laboratories, a contract pharmaceutical development organization with facilities in Research Triangle Park, N.C. and San Diego. Officials said the sale would be completed by spring 2002. Terms of the acquisition were undisclosed.

SPOTLIGHT State Competitive Bidding Law Saves Millions, OIG Says WASHINGTON--By implementing competitive bidding for oxygen-related durable medical equipment, Minnesota's Medicaid program saved millions of dollars in 1998, according to a recent government audit. Minnesota's state plan covers not only oxygen purchased in volume but also 17 oxygen-related medical supplies and items, requiring that Minnesota Medicaid should pay the lowest of the following reimbursement rates for all oxygen-related DME: --The submitted charge, --Medicare's fee schedule amount, or --An amount determined using a different methodology. In examining 125,021 of the state's paid Medicaid claims, the U.S. Department of Health and Human Services Department's Office of Inspector General found very few overpayments, totaling only $2,200. Alternately, "the state has achieved significant savings (millions of dollars) by obtaining competitive bids and setting the Medicaid allowable rates for oxygen-related DME at amounts much less than the Medicare allowable rates," OIG said. Due to these substantial savings, OIG has decided not to seek recovery for the "insignificant" overpayments the audit found. Nonetheless, OIG recommended that Minnesota set lower rates for certain oxygen-related DME and supplies. To read the audit report, go to http://oig.hhs.gov/oas/reports/region5/50100039.htm.

SOURCES SAY COLUMBIA, S.C.--The Medicare program wouldn't be as solvent as it is today if it wasn't for the Region C durable medical equipment regional carrier, according to Palmetto GBA. Ironically, Palmetto GBA is the Region C DMERC and, according to a release, saved the federal government $663 million through its various payment safeguard activities in 2001. Specifically, Palmetto claims it saved $112.3 million in the Medicare Secondary Payer program, $279.9 million through its medical review of claims, $75 million through its Benefit Integrity [anti-fraud] Unit, and $196.7 million through provider audits. The DMERC was complimentary to health care providers, however. "The majority of Medicare providers are honest and effective in their delivery of health care to American seniors. Palmetto GBA is committed to our mission to provide high quality service while at the same time striving to protect the Medicare trust funds," said Sue Pearcy, vice president of the Medicare Integrity Program. WASHINGTON--Lisa Getson, senior vice president, business development/clinical services, for Costa Mesa, Calif.-based Apria Healthcare, testified before the Senate Finance Committee about the costs associated with providing infusion and respiratory drugs to Medicare beneficiaries. "There is no question that drug payments for home infusion and inhalation therapies subsidize other important functions and costs that are not directly reimbursed." She said, agreeing that drug costs are inflated and adding that the industry has no problem with reforming Medicare payments for outpatient drugs. However, "we are extremely concerned that such reform may occur without a corresponding change in how these other vital services and functions are covered and paid for." Getson urged the committee to include drug payment reform with any kind of coverage reform. Without payment reform, Getson said, home care providers may no longer be able to serve Medicare beneficiaries. BALTIMORE--Home medical equipment providers should be aware that the Medicare beneficiary they serve could be working as a fraud fighter for the U.S. Department of Health and Human Services' Administration on Aging. The AoA is currently accepting grant applications through May 3 for 33 Senior Medicare Patrol Projects, according to the March 19 Federal Register. According to the notice, the projects will train and use retirees as "expert resources and educators in combating health care error, fraud and abuse." The grants will be for $160,000 peryear and are limited to 27 states and the District of Columbia and Puerto Rico.

INDUSTRY BRIEFS Gentiva Health Services, Melville, N.Y., has announced that Ronald Malone, president of the Gentiva's home health division, will succeed Edward Blechschmidt as chief executive officer of the company. The change will occur upon consummation--expected in the second quarter of this year--of Gentiva's pending contract with Accredo Health, to whom Gentiva has agreed to sell its specialty pharmaceutical services business. Blechschmidt will continue to serve on the company's board of directors. The Centers for Medicare and Medicaid Services, Baltimore, has appointed Barbara Paul director of its Quality Measurement and Health Assessment Group. Paul was director of CMS' Physicians' Regulatory Issues Team since 1999. She replaces Steve Clauser, who has taken a position with the National Cancer Institute. Robert Mathews has been named vice president, finance, of San Diego-based Alaris Medical and Alaris Medical Systems. Mathews joined the company in 1996 as corporate controller. Andrew Purcell has joined Princeton, N.J.-based Novo Nordisk Pharmaceuticals as vice president of diabetes marketing. Previously, Purcell was vice president of marketing and sales for Tredegar Biotech in Richmond, Va.

IN OTHER NEWS Schenectady, N.Y.-based Trac Medical Solutions and Atlanta-based CareCentric have formed a strategic alliance to link Trac Medical's Web-based forms processing with CareCentric's software that automates order entry, billing and inventory for home medical equipment companies. Under the agreement, CareCentric will create an interface that allows data to be shared between its software and Trac Medical's secure Internet-based application for processing online certificates of medical necessity and other forms. Financial terms of the agreement were undisclosed. Quintiles Transnational, based in Research Triangle Park, N.C., and McKesson, San Francisco, have agreed to form a private joint venture that will combine the data and data-provider relationships of McKesson with the technology of Quintiles Informatics' patient-level data products business and sales force analysis capabilities. Products created by the venture, which is projected to have first-year revenue of close to $100 million, will be licensed to McKesson and Quintiles for use in their core businesses. Greg Porter, chief executive officer of Quintiles Informatics, will become CEO of the as-yet-unnamed company. Peter Castagna, president of the acute care division of McKesson Medical-Surgical, will become chief operating officer. The new company is expected to launch in the second quarter of this year. Pleasanton, Calif.-based Nellcor, a division of Tyco Healthcare, has received FDA approval for its OxiMax pulse oximetry system. The OxiMax system features an embedded digital memory chip in its sensor that contains all calibration and operating data for that sensor design. The system monitor also features digital signal processing that is designed to combat the challenges of motion and low perfusion. Essentially Women, a women's health care buying group in Oxford, Mich., will hold its second annual educational program and tradeshow, "Focus on the Future 2002," in Lisle, Ill., June 12-14. Cara Bachenheimer, an attorney who specializes in health care legislation, regulations and government relations, will be the keynote speaker. For more information, call (800) 988-4484. The Los Angeles County Department of Health Services Clinical Resource Management Program on Feb. 22 became the first disease management program to be certified through the Joint Commission on Accreditation of Healthcare Organizations' disease-specific care certification program. Los Angeles County's CRM program for pediatric asthma has reduced the need for emergency department visits and hospitalizations for children with asthma in Los Angeles.

STOCKS Tyco International, Pembroke, Bermuda, has declared a quarterly dividend of 1.25 cents per common share. Company High Low PE Ratio 3/15/02 3/22/02 Change Allied Healthcare (AHPI) 5.23 3.00 119.97 4.00 5.00 1.00 American HomePatient (AHOM.OB) 1.70 0.16 N/A 0.70 0.75 0.05 AmerisourceBergen (ABC) 72.00 42.00 31.19 70.05 69.84 (0.21) Apria Healthcare (AHG) 29.85 19.50 17.95 23.90 23.17 (.73) Cardinal Health (CAH) 77.32 56.67 34.75 69.06 70.05 0.99 CareCentric (CURA) 3.00 0.46 N/A 0.90 0.90 0.00 Chad Therapeutics (CTU) 4.35 0.69 N/A 3.83 3.40 (0.43) Coram Healthcare (CRHEQ.OB) 0.76 0.13 N/A 0.53 0.55 0.02 Gentiva Health Services (GTIV) 25.50 15.60 28.59 23.78 23.80 0.02 Invacare (IVC) 41.25 28.50 33.47 35.72 37.30 1.58 Johnson and Johnson (JNJ) 65.70 40.25 35.22 64.60 64.85 0.25 Lincare Holdings (LNCR) 34.39 22.25 22.22 26.63 27.29 0.66 Matria Healthcare (MATR) 40.00 12.25 26.80 22.82 22.70 (0.12) McKesson (MCK) 41.50 23.40 94.82 37.22 38.39 1.17 National Home Healthcare (NHHC) 19.85 6.10 13.53 11.95 12.27 0.32 Option Care (OPTN) 22.15 7.88 23.16 17.15 16.55 (0.06) Pediatric Services of America (PSAI) 14.10 4.70 17.98 11.55 11.08 (0.47) Praxair (PX) 61.11 36.50 22.22 59.98 58.38 (1.60) ResMed (RMD) 62.20 35.20 89.11 39.50 40.07 0.57 Respironics (RESP) 37.88 23.79 26.87 31.00 31.98 0.98 Transworld Healthcare (TWH) 4.83 2.21 N/A 3.76 3.98 0.22 Tyco (TYC) 60.09 22.00 12.31 33.41 33.75 0.33 Walgreen (WAG) 44.30 28.70 44.27 40.00 39.81 (0.19)

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