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Week of July 1, 2024

HEADLINE NEWS Competitive Bidding Passes House WASHINGTON--At 2:30 a.m. on Friday, U.S. House Republicans pushed through a Medicare prescription drug bill that includes a provision for competitive bidding for durable medical equipment. Narrowly avoiding a 9-day holiday delay, House legislators approved a combined bill, entitled "Medicare Modernization and Prescription Act of 2002," by a 221-to-208 vote. Although DME-industry advocates did not succeed in defeating the competitive bidding provision, they did succeed in telling the other side of the story, according to Tom Connaughton, president of the Alexandria, Va.-based American Association for Homecare. "AAHomecare members, consumers and coalition partners generated hundreds of communications during the past few weeks," he said, "and these were instrumental in identifying competitive bidding as a very controversial provision and in leading to the deletion of the [$40 home health copayment]." Now, AAHomecare is urging DME industry participants to turn their attention to the Senate, where Senate Majority Leader Tom Daschle, D-S.D., has indicated that lawmakers will consider Medicare legislation--including provider issues--as early as July. "Our timeline is shortened considerably, and we face an urgent situation in the Senate," Connaughton said. For its part, AAHomecare has organized a coalition of trade associations and consumer groups to fight competitive bidding in the Senate. The coalition--which includes seven medical equipment-related associations, as well as manufacturers of wound care, respiratory care, infusion, seating and positioning, power mobility, ostomy and diabetes products--met on Friday to discuss a plan of action. But grassroots participation is just as important as national lobbying, Connaughton said. "It is absolutely essential that we keep competitive bidding and [home health copayment] provisions out of any Senate bill that emerges, and this will only be possible if we [use] all our resources on a national and grassroots level." To read the "Medicare Modernization and Prescription Act of 2002," go to http://thomas.loc.gov/cgi-bin/bdquery/z?d107:HR04954:. DOJ Announces Second Largest Carrier-Fraud Settlement of All Time WASHINGTON--A former Part B Medicare carrier has agreed to pay $79 million to settle allegations that the company filed claims improperly and then covered up the mistakes, the U.S. Department of Justice announced last week. The result of a three-year investigation into events that occurred at St. Louis-based General American Life Insurance between 1984 and 1986, this settlement is the second largest amount a carrier ever has paid to settle Medicare fraud allegations, the DOJ said. The two former General American employees who uncovered the alleged fraud and filed suit against the company in 1999 under the whistleblower provision of the False Claims Act will receive 19 percent, or $14.4 million, of the $76 million settlement. In 1984, prior to implementing the alleged scheme, General American ranked 38 among Medicare carriers for overall performance, accuracy and timeliness. But after company employees allegedly deleted substandard claim files, General American soared to No. 2 in Medicare's 1986 carrier ranking. "This favorable ranking assisted General American in retaining its Medicare contract and competing for additional contracts throughout the company," the DOJ said. Government officials are hailing the settlement as proof that no one can escape health-care-fraud investigators' scrutiny. "As today's $76 million settlement illustrates, the government expects absolute integrity on the part of both government contractors and health care providers," said Janet Rehnquist, Health Human Services Inspector General. "Wrong doers should expect that, taxpayers should demand that and beneficiaries should settle for nothing less." CMS Suspends Provider Bulletin to Cut Costs BALTIMORE--After realizing that a budget shortfall could compromise vital Medicare functions, Tom Scully, administrator of the Centers for Medicare and Medicaid Services, announced plans to suspend all provider bulletin mailings for the fourth fiscal quarter of 2002. While the bulletins still will be available online, Medicare will not print and mail hard copies, a CMS spokesman told HomeCare. Instead, the agency will use the resulting $5 million to improve claims processing, he said. However, "with adequate funding through fiscal year 2003, we will resume printing during the first quarter, which begins [Oct. 1, 2002]," he added. Meanwhile, the Region D durable medical equipment regional carrier is encouraging DME providers to check the DMERC's Web site for Medicare bulletins. "The Part B Medicare Bulletin will appear on http://www.cignamedicare.com in July and September, and notifications will be made through our e-mail list server as well as at [our Web site] when publications have been posted."

PROVIDER NEWS O2 Science and Nevada Respiratory Forge Joint Venture TEMPE, Ariz.--Expanding its presence in the Las Vegas area, regional respiratory care provider O2 Science has forged a joint venture with Las Vegas-based Nevada Respiratory, the companies announced last week. "The combined resources and expertise of both Nevada Respiratory and O2 Science will create a new force in the delivery of respiratory care to the patients of Las Vegas and Pahrump," O2 Science said. Although the joint venture will operate at a new location--3107 W. Post Rd., Las Vegas--the business will retain the name Nevada Respiratory, O2 Science explained. Consultant Enters Home Care Market JOHNSON CITY, Tenn.--Craig Jeffries has established Strategic Consulting, a company that will provide business planning, strategic planning, operational and financial services to U.S. home care businesses, Jeffries announced last week. For more information, contact the company at (423) 282-9712. MANUFACTURER NEWS Leisure-Lift Opens Southeastern Distribution Center KANSAS CITY, Kan.--To provide one- or two-day delivery to customers in Florida, Alabama, Georgia and the Carolinas, Leisure-Lift last month opened a distribution center in Orlando, Fla. The company chose Orlando because "we have a bigger concentration of our own dealers there, and it is centrally located to get to Atlanta, Birmingham, [Ala.], and the Carolinas," according to Mike Wade, Leisure-Lift's national sales manager. Stocking PaceSaver scooters and Scout power chairs, the distribution center already is up-and-running, Wade said. While the center will ship to anywhere in the country, its primary focus will be providing fast service to southeastern states, Wade added. For more information, contact Leisure-Lift at (800) 255-0285.

SOURCES SAY WASHINGTON--Sen. John Breaux, D-La., chairman of the Senate Special Committee on Aging, urged Congress to consider long-term care reform as he released findings from the committee's 13 hearings on long-term care. The committee released findings summarizing government officials' analysis and the analysis of other experts who have testified before the committee on what the committee called "the nation's long-term care crisis." "Our nation is in dire need of comprehensive long-term care reform," said Sen. Breaux. "Our series of hearings illuminated the fractured way we currently address the nation's long-term care needs, costing billions of dollars for minimal benefit to American families." By 2040, the number of Americans 65 and older will more than double, causing spending for Social Security, Medicare and Medicaid to consume nearly 75 percent of all federal revenue by 2030, according to committee findings. SAN JOSE, Calif.--Although it is difficult to comprehend, there might be a greater respiratory menace to the American population than asthma. . .from a cost standpoint, anyway. According to market research firm Frost and Sullivan, chronic obstructive pulmonary disease cost the U.S. $32.8 billion in 2001, more than twice the amount incurred by asthma. COPD causes more than 13.5 million physician office visits per year, as well as more than 700,000 hospitalizations, and is expected to exceed $55 billion in treatment costs by the year 2008. According to the research firm, long-term smoking is responsible for between 80 percent and 90 percent of all COPD cases. WASHINGTON--Washing a car, mowing a lawn or raking leaves can combat older Americans' frailty, according to recent report from the U.S. Department of Health and Human Services. Such activities can prevent or delay chronic diseases such as heart disease, diabetes and high blood pressure, as well as reduce the risk of colon cancer and improve arthritis patients' and lung patients' ability to function, HHS said. "Older Americans shouldn't fall trap to the mindset that aging automatically means inactivity and limited physical ability," said Tommy Thompson, HHS secretary. "Few factors contribute so much to successful aging as regular physical activity, and it's never too late to start. Even moderate activity can make a real difference in a person's health and well-being." Few older Americans achieve the minimum recommended 30 or more minutes of physical activity on five or more days a week. About 28 percent to 34 percent of adults aged 65 to 74, and 35 percent to 44 percent of adults age 75, are inactive, meaning they report no leisure-time moderate activity. Lack of physical activity and poor diets are the major causes of an epidemic of obesity that is affecting the elderly as well as younger populations, the report added.

INDUSTRY BRIEFS Alameda, Calif.-based Therasense has appointed Arthur Autorino vice president of operations. Autorino will replace Claire Heiss, who recently announced plans to retire. Before joining Therasense, Autorino was vice president of China operations and chief representative of the Shanghai office for Murray, a manufacturer of outdoor power equipment and recreational vehicles. The Joint Commission on Accreditation of Healthcare Organizations in Oakbrook Terrace, Ill., has appointed Frances Baby to fill a new, non-voting seat on the organization's board of commissioners. Baby will join the board in July and will represent the HME sector. JCAHO also has promoted Teena Johnson-Smith to director of business operations for the organization's division of support operations. IN OTHER NEWS The Washington-based U.S. Office of Management and Budget last week approved a new Advance Beneficiary Notice form, CMS-R-131. The form replaces the model language, HCFA-R-131, that providers have used since 1988 and is available online at http://cms.hhs.gov/medicare/bni. Trac Medical, based in Schenectady, N.Y., has purchased licenses for Entrust TruePass software. The company plans to integrate this software with CareCert, its new, secure, Internet-based tool for processing certificates of medical necessity and other health care forms. Subsequently, Trac will issue digital identities to all physicians participating in CareCert's forms transactions, the company said. For more information, contact Trac at (212) 370-4500. Washington-based URAC has published a new guide, entitled The HIPAA Handbook: What Your Organization Should Know about the Electronic Transaction Standards. To order a copy of the guide, which costs $65, contact URAC at (202) 216-9010, or visit URAC's Web site at http://www.urac.org. The Zandee Group, Sarasota, Fla., has created a new division--The Medco Group--which will serve as a base of operations for the company's group marketing services. "[The Medco Group's] goal is to assist small- to medium-sized, non-competing manufacturers with their marketing efforts in the health care industry," the company said. For more information, contact Judson Branch, vice president of sales and marketing for The Zandee Group, at (941) 379-6911. The Oakbrook Terrace, Ill.-based Joint Commission on Accreditation of Healthcare Organizations' Joint Commission Resources subsidiary has released its Disease-Specific Care Certification Manual. To order the publication, which costs $55, call the customer service center at (630) 792-5800, and use the order code DSCC-01. Therasense, Alameda, Calif., has launched a Web-based diabetes management program--the FreeStyle blood glucose monitoring system. Patients and health care providers can access the program via a secure Internet site, the company said. For more information, contact Holly Kulp, vice president of professional relations and customer service, at (510) 749-5400.

STOCKS Analyst Legg Mason has rated Lincare Holdings as "buy" and has upgraded Apria Healthcare from "hold" to "buy." Wachovia Securities has downgraded Matria Healthcare from "hold" to "sell." Company High Low PE Ratio 6/21/02 6/28/02 Change Abbott Laboratories 58.00 35.25 22.54 36.13 37.65 1.52 Allied Healthcare International (TWH) 6.80 2.40 N/A 5.50 5.83 .33 Allied Healthcare Products (AHPI) 5.30 3.00 144.80 4.35 4.34 (0.01) American HomePatient (AHOM.OB) 1.70 0.25 N/A 0.35 0.25 (0.10) AmerisourceBergen (ABC) 82.85 52.12 31.11 79.19 76.00 (3.19) Apria Healthcare (AHG) 29.85 19.50 15.70 21.05 22.40 1.35 Cardinal Health (CAH) 76.65 59.45 26.69 63.60 61.41 (2.19) CareCentric (CURA) 2.96 0.40 N/A 0.58 0.52 (0.06) Chad Therapeutics (CTU) 4.35 1.90 23.91 3.10 2.65 (0.45) Coram Healthcare (CRHEQ.OB) 0.79 0.13 N/A 0.62 0.63 0.01 Gentiva Health Services (GTIV) 27.55 7.90 9.93 8.92 8.99 0.07 Invacare (IVC) 41.25 28.50 32.22 34.45 37.00 2.55 Johnson and Johnson (JNJ) 65.89 49.13 28.19 53.00 52.26 (0.74) Lincare Holdings (LNCR) 34.39 22.25 23.59 30.71 32.30 1.59 Matria Healthcare (MATR) 40.00 7.00 11.82 13.05 8.22 (4.83) McKesson (MCK) 42.09 30.40 24.55 35.75 32.70 (3.05) National Home Healthcare (NHHC) 18.90 7.76 13.32 13.05 12.25 (0.80) Option Care (OPTN) 17.72 8.76 22.95 14.40 13.74 (0.66) Pediatric Services of America (PSAI) 14.10 4.75 9.30 7.90 7.02 (0.88) Praxair (PX) 61.11 36.50 21.17 54.53 56.97 2.44 ResMed (RMD) 62.20 24.30 27.51 28.42 29.40 0.98 Respironics (RESP) 37.88 23.79 26.34 34.09 34.05 (0.04) Tyco (TYC) 60.09 8.25 4.55 13.70 13.51 (0.29) Walgreen (WAG) 40.70 28.70 40.36 38.23 38.63 0.40

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