Issue link: https://read.dmtmag.com/i/40005
News 4 HME NEWS / SEPTEMBER 2011 / WWW.HMENEWS.COM Economist drafts bid redesign plan Key points include creating collaborative, transparent process BY THERESA FLAHERTY, Managing Editor BALTIMORE – Prof. Peter Cramton upped the stakes in his crusade against competitive bidding July 17, posting an outline of his plan for redesigning the unpopular program. The 19-page "Repeal and Reform Legislation for Medi- care DME Auctions" calls for repealing Round 1; hiring an auction expert to design the auction; hiring a market monitor to oversee the design, implementation and function- ing of all competitively bid markets and products; creat- ing a collaborative, transparent process; and setting protections for beneficiaries and providers. Cramton was unavailable for comment at press time, but in an email sent to HME News and others, he wrote: "Reform of the auctions will bring ben- efits to all. Medicare beneficia- ries benefit from receiving the quality goods and services they need, Medicare providers ben- efit from being paid sustainable compet- itive prices for the quality goods and services they deliv- er…and CMS, the administering agen- cy, benefits from the numerous efficien- cies that result from conducting an effec- tive program, largely free of complaint, fraud, and corruption." But will Cramton's ideas fly with the very people he seeks to help? The HME industry has long been dead set against any sort of bidding program. "Dr. Cramton may come NewsPoll: Buyers are looking for bargains But not all providers are looking to sell BY THERESA FLAHERTY, Managing Editor YARMOUTH, Maine – It may seem hard to believe, but despite all the crises in the industry, there are buyers out there look- ing to acquire HME companies, according to a recent HME NewsPoll. Of the 146 people who responded to the poll, 58% said they had been approached by a potential buyer. "I notice there is interest in acquiring companies that are small but still have a presence in the marketplace," said Bill Armstrong, president of Ameri- can Oxygen Kompany in Centen- nial, Colo. "The companies also seem to have good reputations in this market." Just who is it that's doing the buying? Sixty-six percent of poll respondents said it was a compa- ny from outside their local mar- HME NEWS POLL ket; 16% said it was a local competitor; and 18% said it was a buyer from outside the industry. But just because buyers are looking, doesn't mean provid- ers are selling. "I was approached by a local broker that said he had a buyer from another industry," said Lori Sears, owner of Active Home Medical Supply in Lapeer, Mich. "He wouldn't give me any details about the type of business they were looking to acquire nor was he interested in actually seeing our operation, so I wouldn't agree to meet with him." BUYERS SEE PAGE 12 AMEPA held a series of educational meetings in July for HME pro- viders, like this one in San Diego, before heading off to visit the offices of lawmakers. AMEPA goes West The association hits three states and multiple bid areas BY THERESA FLAHERTY, Managing Editor M EMBERS OF AMEPA on July 28 wrapped up a two-week lob- bying trip that took them to eight Round 2 competitive bidding areas stretching from San Diego to Seattle." "We've been hammering home the fact that the pro- gram allowed inexperienced, financially bankrupt compa- nies to win bids in Round 1 and Medicare has done noth- ing to change that in Round 2," said Rob Brant, AMEPA's past president. "Some of these legislators are hearing this for the first time. They had no idea they were in Round 2." One of the offices they visit- ed: Rep. Susan Davis, D-Calif., who signed on to the bill Aug. 1. The in-district meetings were preceded by educational sessions for area HME provid- ers. A few providers traveled more than 100 miles to par- ticipate, said Brant. "These people went out of AMEPA SEE PAGE 8 up with a great system, but what are the chances that CMS would implement his plan from A to Z?" said John Gallagher, vice president of government relations for The VGM Group. "I don't think you are going to find unanimous sup- port yet." Peter Cramton However, the industry may have to accept that some sort of auction is inevitable. "I think many people are slowly beginning to real- ize there may not be any other way to set prices other than through an auction process of some kind," said Wayne Stanfield, executive director of NAIMES. "In fact, an auction process like this may provide stability. If it's effective, it would set prices at a realistic REDESIGN SEE PAGE 6 CMS defines durability Industry's initial reaction: 'We don't see a need for it' BY LIZ BEAULIEU, Editor WASHINGTON – How long should durable medical equipment last? Three years, according to CMS. In a proposed rule published in the Feder- al Register July 8, CMS floats the idea of "a 3-year minimum lifetime stan- dard for items to meet the durability criterion for DME." Currently, Medi- care policy states only this: "An item is durable if it can withstand repeat- ed use." "Our initial reaction is we don't see a need for LIFETIME SEE PAGE 16 BRIEFS CMS releases new ABN BALTIMORE – CMS officials during an Open Door Forum in July alerted HME providers of a new ABN form that they must begin using by Nov. 1, 2011. The agency has up- dated the form, but it has made no "sub- stantive changes," officials said. GAO to CMS: Use tools WASHINGTON – CMS needs to do a better job using the tools it has already imple- mented to detect fraud, according to a recent Government Accountability Office (GAO) report. CMS is using the Integrated Data Repository (IDR) and One Program Integrity (One PI) to, for example, detect duplicate claims, but the agency has not incorporated all data into IDR as planned and has not taken steps to ensure wide- spread use of One PI to enhance efforts, the GAO states. Additionally, CMS is not yet in a position to identify, measure and track benefits realized from using the sys- tems, the GAO states. CMS turns off bad edit BALTIMORE – CMS has instructed all four DME MACs to turn off the B7 edit that has caused claims to deny as if providers were not accredited. The root of the problem: An error in the supplier file information provid- ed to the DME MACs. The DME MACs will reprocess all denied claims, and suppliers don't need to take any action. No date has been set for reactivation of the edit. PFQC, AAHomecare reach out to California WATERLOO, Iowa – People for Quality Care and AAHomecare participated in an Aug. 4 webinar about competitive bidding with the California Foundation for Independent Living Centers. Discussion topics includ- ed: competitive bidding program problems from the consumer point of view, including examples of consumer impact. California has only two out of its 53 House members signed on to the bill. Officials testify on improper claims WASHINGTON – The HME industry did not escape scrutiny when a House Subcom- mittee held a hearing July 28 on improper Medicare payments. Officials from the OIG, CMS and the GAO gave testimony on what contributed to the government paying out $47.9 billion in improper payments in 2010. "Some but not all improper payments are the result of fraud," Daniel Levinson, the OIG's Inspector General told the subcom- mittee. Government officials pointed to power wheelchair claims as an area where there continue to be problems with billing incorrectly or billing for items that are not medically necessary. Short take: IVR feature CMS announced in August that providers can now obtain the total number of months paid on rented oxygen equipment from the interactive voice response (IVR) system. NCB: Redesign and West Coast lobbying trip .......... 4 A legal roundup with Jeff Baird ..................... 12 Coming soon: Face-to-face requirement ............. 15 State news: Mo., N.D., Texas, Minn. ................. 16 s Do you think managed care is the solution to your Medicare woes? Think again, says Alison Cherney. See story page 14.