In brief: KCI sells to 3M, senators introduce accessories bill

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Friday, May 3, 2019

SAN ANTONIO and NEW YORK – A consortium of funds led by Apax Partners has entered into a definitive agreement to sell Acelity and its KCI subsidiaries worldwide to 3M for about $6.725 billion.

KCI markets a broad range of negative pressure wound therapy, specialty surgical and advanced wound care dress products in about 90 countries.

“Today, KCI embarks upon a new era,” said R. Andrew Eckert, CEO of Acelity. “Backed by the resources and expertise of 3M, KCI will be able to offer clinicians and patients even more compelling solutions designed to speed health and improve outcomes.”

3M, a company once best known for its office supplies like Post-it notes, has expanded into healthcare products like adhesives and tapes, hand hygiene, patient monitoring and surgical solutions.

Apax, which led the $6 billion acquisition of KCI in 2011, says it has worked with the company’s leadership to transform the business by, among other things, executing a number of strategic mergers and acquisitions, including buying Crawford Healthcare in 2018 and selling non-core businesses like Therapeutic Support Systems in 2012.

It hasn’t been all smooth sailing, however: KCI closed a service center in North Carolina earlier this year, laid off employees in May of last year and has fought Medicare over competitive bidding contracts for NPWT pumps.

Additionally, Medicare paid KCI $24.4 million for E2402 in 2017, down significantly from $48.2 million in 2016 and $77.2 million in 2015, according to the HME Databank.

The deal is expected to close in the second half of 2019, subject to customary closing conditions and regulatory approvals.

Senators introduce accessories bill

WASHINGTON – Sens. Bob Casey, D-Pa., and Rob Portman, R-Ohio, on April 29 introduced a bill to provide relief for complex rehab wheelchairs and accessories, according to NCART.

S. 1223 would exempt complex rehab manual and power wheelchairs and any wheelchair accessory, cushion or back when furnished in connection with a wheelchair from Medicare competitive bidding pricing. Casey and Portman introduced a similar bill in the last congressional session.

Earlier in April, Reps. John Larson, D-Conn., and Lee Zeldin, R-N.Y., introduced H.R. 2293, a bill to suspend bid pricing for accessories for complex rehab manual wheelchairs for 18 months and to permanently exempt complex rehab manual wheelchairs from the program. 

Complex rehab stakeholders met in Washington, D.C., last week to lobby members of Congress to pass the bills.

“The timing is perfect,” said Don Clayback, executive director of NCART, in a bulletin to members.

Late last year, H.R. 7217, a larger bill that included accessories language, stalled in the Senate at the 11th hour. The bill had passed in the House 400-11.

In 2017, CMS decided it would not apply bid pricing to accessories for complex rehab power wheelchairs, but the agency didn’t extend that decision to accessories for complex rehab manual wheelchairs.

Barb Stockert to receive advocate award

WASHINGTON – AAHomecare has named Barb Stockert as the recipient of the 2019 AAHomecare/Mal Mixon Legislative Advocate Award.

Stockert, a longtime member of the State Leaders and HME/RT councils at AHomecare, is being recognized for her grassroots efforts across the western U.S., including assisting with the Grassroots Accountability Project, for which she is contact for more than 20 congressional offices.

Stockert has served as the North Dakota co-state chairperson for MAMES since 2004 and has served on its board of directors. Her resume also includes involvement with NRRTS, Big Sky AMES and PAMES, and as the administrator for the Region D DAC.

"Barb is always there for us. She never quits," said Mike Calcaterra, Northern Zone vice president for NORCO, Inc. "She has been a big part in keeping Big Sky AMES going. Barb is a tireless advocate for our industry." 

The award will be presented at AAHomecare’s Washington Legislative Conference on May 22.

Past winners of the award include Doug Coleman and George Kucka.

AAH confirms dates for expanded PA program

WASHINGTON – CMS will add seven codes for complex rehab power mobility devices to the National Prior Authorization Program on July 21, AAHomecare has confirmed. It will add five codes for support surfaces for four states (California, Indiana, New Jersey and North Carolina) on July 21 and nationally on Oct. 21, the association has also confirmed. Although it generally supports the PA program, AAHomecare says it is concerned about the impact on timely access to care for Medicare beneficiaries needing support surfaces and it has reached out to CMS about those concerns. Under the PA program, CMS has 10 business days to make an initial decision and two business days to make an expedited decision in certain situations. There are currently 45 codes included in the PA program. In all, CMS has a “master list” of 135 codes potentially subject to prior authorizations.

People news: James Russell, Ashley Plauché, David Chandler

AAHomecare’s board of directors has appointed James Russell, vice president and owner of URS Medical, to fill a vacant seat created by the departure of Randy Carson. Russell co-founded URS Medical in 2004 and has helped to grow the company to provide a wide range of products and services, including enteral and urological supplies and breast pumps, to more than 1,300 patients throughout Texas. He currently sits on advisory boards or councils for AAHomecare, VGM Group, Independence Medical, Baylor Scott and White Health, and the Texas Health & Human Services…AAHomecare will transition Ashley Plauché to the new role of manager of member and public relations. In addition to her continued leadership with councils and industry grassroots advocacy efforts, she will now develop platforms that deepen member engagement, expand networking opportunities and bolster prospecting. She will also advance association efforts with branding, marketing and communications, and special projects…AAHomecare’s Director of Payer Relations David Chandler has been tapped to serve on the board of directors for the Alabama Durable Medical Equipment Association. “The board decided to ask for a representative from AAHomecare to join our board as an advisor and liaison,” said Mike Hamilton, executive director of ADMEA. “Having worked with David as the chair of the Jurisdiction C Council, we are well aware of his expertise and are looking forward to having him join us.” The board has its first meeting on May 7.

Reduction in providers up to 37%

WASHINGTON – There are about 6,143 unique providers and 9,195 traditional locations as of January 2019, a 37% and 35% reduction, respectively, since the inception of Medicare’s competitive bidding program, AAHomecare reports. There has been about a 3% decrease in both providers and locations since the association’s last quarterly report in October. Click here for an updated tracking sheet.

BioScrip reports revenue growth

DENVER – BioScrip reported revenues of $179 million for the first quarter of 2019, an increase of 6.2% over the first quarter of 2018. Net loss from continuing operations was $10.3 million vs. $13 million. Adjusted EBITDA was $7.1 million, up 25.6%, despite a bad debt expense increase of $4.5 million. “This is the third consecutive quarter of comparable net revenue growth for BioScrip, and we are confident this trend will continue,” said Daniel Greenleaf, president and CEO. BioScrip’s merger with Option Care, announced in March, is proceeding as planned, Greenleaf said. “We remain incredibly enthusiastic about the strategic and financial virtues of this combination,” he said.

CMS to hold bid webcasts

WASHINGTON – CMS will host three webcasts to educate providers on the key components of Round 2021. They are: May 14, Bid Surety Bond and Lead Item Pricing; May 21, Preparing and Submitting Financial Documents; and May 28, Registering and Submitting a Bid. All webcasts are from 3 p.m. to 4 p.m. EST. Questions may be submitted during the webcast, or in advance to cbic.admin@palmettogba.com with “Webcast Question” in the subject line. Register for the first webcast here. Registration for the other two will be announced at a later date.

3B’s Lumin Bullet gets design nod

WINTER HAVEN, Fla. – 3B Medical’s Lumin Bullet has been selected as a finalist in the home care products segment of the 21st Annual Medical Design Excellence Awards competition. The Lumin Bullet uses high-powered germicidal ultraviolet light to disinfect medical devices. The MDEA competition recognizes significant achievements that improve the quality of healthcare delivery and accessibility. “3B Medical is honored to be recognized by the MDEA judges,” said Alex Lucio, CEO of 3B Medical. “The Lumin Bullet has exceeded our expectations for sales and we continue increasing production to meet consumer demand.”

Tandem reports sales increase

SAN DIEGO – Tandem Diabetes Care reported sales increased to $66 million for the first quarter of 2019, a 142% increase over the same time period last year. Pump shipments increased from 4,444 to 14,732 during the same period, an increase of 232%. Gross profit was $33.4 million vs. $11.4 million. “Our explosive growth in the first quarter was driven by strong domestic demand for the t:slim X2 insulin pump,” said John Sheridan, president and CEO. “We believe the high interest in our Basal-IQ technology, our expanding international sales efforts and our robust product pipeline will continue to drive the company’s positive momentum in 2019.” Net loss was $23 million, including a $12.7 million non-cash charge for the change in fair value of certain outstanding warrants. Operating expenses were $44.4 million

DME owner sentenced in Medicaid fraud case

MCALLEN, Texas – Anna Ramirez-Ambriz, owner of Compassionate Medical Supply in Edinburg, Texas, has been sentenced to 78 months in jail and ordered to pay more than $3 million in restitution for allegedly fraudulently billing Texas Medicaid for incontinence supplies. From 2007 through 2013, Ramirez-Ambriz allegedly billed the Medicaid program for higher quantities and more costly incontinence supplies than were actually delivered to more than 100 recipients. As a result, Texas Medicaid suffered a loss of $3.1 million.

iBOT readies for relaunch

MANCHESTER, N.H. – Mobius Mobility is in the process of re-launching the iBOT Personal Mobility Device, an electric wheelchair that can climb stairs, according to the Union Leader. The company is moving into a building here owned by Dean Kamen, who worked with Johnson & Johnson to develop the iBOT 20 years ago, to assemble the devices and train customers on how to use them. In addition to climbing stairs, the iBOT allows users to sit up to make eye contract with others, making it a good fit for people with spinal cord injuries, multiple sclerosis and early ALS. The big obstacle back when the iBOT was first launched in 2003: the $29,000 price tag. “We’re trying to make it as affordable as possible,” Lucas Merrow, who is helping Kamen with the re-launch, told the newspaper.

Belluscura reaches fundraising goal for POC

PLANO, Texas – Belluscura has reached its fundraising goal for its portable oxygen concentrator, the X-PLO2R. The company, part of the portfolio of Tekcapital Plc, a U.K. intellectual property investment group, has raised 500,000 pounds. “We are delighted to see that Belluscura has reached its crowdfunding target of 500,000 pounds to help complete the regulatory clearance and launch of their new X-PLOR portable oxygen concentrator later this year,” said Dr. Clifford Gross, chairman of Tekcapital. “The fundraise was conducted at a pre-money valuation of 5 million pounds, a 50% uplift over the valuation Tekcapital listed for Belluscura in its 2018 Annual Accounts. The directors believe that Belluscura’s new device will help to improve the quality of life and reduce treatment cost for individuals suffering from COPD.” Tekcapital, which owns about 25% of the share capital of Belluscura, had a minority participation in the round.

Medicaid roundup: Changes in North Dakota, South Dakota

The North Dakota House of Representatives and Senate have passed H.B. 1115, a bill that prevents the Medicaid program from requiring “prior authorization, additional documentation not required by Medicare or additional prescription requirements of DME and supplies to process a claim for Medicaid-eligible individuals who are also eligible for Medicare if any item has been paid by Medicare, unless the item is not covered by Medicaid,” according to MAMES. The legislature passed the bill after providers voiced concerns over the documentation requirements for Medicaid claims when Medicare is the primary payer…South Dakota’s Department of Social Services, Division of Medical Services, has announced that effective July 1 all incontinence supplies, including those through home and community based services waiver, will be routed through the Medicaid program as part of the DME and supplies benefit, according to MAMES. The announcement provides details on eligible individuals, service limits, codes included, reimbursement, physician order and CMN, and other bill details.