In brief: MedPAC makes case for ramping up bid program, several DME product categories dropped from Trump tariffs

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Friday, June 22, 2018

WASHINGTON – MedPAC’s June 2018 report to Congress recommends that CMS include more DMEPOS products in the competitive bidding program as a way to improve Medicare’s payment policies and reduce fraud and abuse.

“The CBP has successfully driven down the cost of DMEPOS products for the Medicare program and beneficiaries,” the report states. “Compared with payment rates in the year before the CBP, Medicare’s payment rates for some of the highest expenditure products have fallen by an average of roughly 50%.”

At the same time, MedPAC says expenditures for products not included in the program have continued to grow, making them good candidates for competitive bidding.

“By 2015, nearly half of all Medicare expenditures on DMEPOS products were for products excluded from the CBP,” the report states. “Medicare’s payment rates for the top 10 non-CBP products in 2015 were one-third higher, on average, than private-payer rates for comparable products, and some non-CBP products continue to generate high rates of improper payments and utilization growth and to exhibit patters of potential fraud and abuse.”

MedPAC points out that CMS has the authority to include some additional products in the program, including chest wall oscillation devices, ventilators and off-the-shelf orthotics.

The commission even describes products that CMS is statutorily prohibited from including in the program, like parenteral nutrition, as “likely good candidates…because multiple suppliers furnish the products, and Medicare’s payment rates appear to be substantially higher than private-payer rates.”

In the case of parenteral nutrition, MedPAC found that Medicare’s payment rate for the highest expenditure parenteral nutrition product was 24% higher compared with private-payer rates in 2015.

MedPAC also points out that CMS’s authority to include some additional products in the program, like ostomy, tracheostomy and urological supplies, is “unclear” but worth pursuing.

Trump tariffs: Several DME product categories dropped

WASHINGTON – Efforts by AAHomecare and its manufacturer members to exempt several product categories from a 25% tariff on imported materials and products from China have partially paid off.

AAHomecare announced this week that 10 of the 48 product categories that they had targeted for exemption have been removed from an original list of 1,333.

“I’ve never seen AAHomecare leadership act so quickly and effectively under such difficult circumstances and time constraints,” said Mitchell Yoel, senior vice president, global commercial operations, at Drive DeVilbiss.  “Getting a large group of competing manufacturers together, harnessing the relevant legal and regulatory resources, and finishing the job by getting all stakeholders to do their part so that the industry could speak with one voice to our government, all in a matter of days, was both impressive and, to my knowledge, unprecedented.”

In a little more than a month, AAHomecare and manufacturer members engaged law firm King & Spaulding to draft industry comments and to serve as a clearinghouse for companies to confidentially submit information on product categories they wanted removed from the list, and to then submit comments to the U.S. Trade Representative.

John Anderson, CEO of Cure Medical, also credited the efforts of the Health Industry Distributors Association (HIDA).

“I was impressed by how quickly AAHomecare and HIDA united a coalition of DME manufacturers as a team to stop these changes,” he said. “AAHomecare leadership gathered vital information from us to help create a report on the economic impact that these tariffs would create, outlining how destructive tariffs would be for people who depend on medical devices.”

The product categories that have been removed from the list are:

• 40169915: Caps, lids, seals, stoppers and other closures, of non-cellular vulcanized rubber other than hard rubber

• 73202050: Iron or steel, helical springs (o/than suitable for motor-vehicle suspension)

• 76042910: Aluminum alloy, profiles (other than hollow profiles)

• 85079040: Parts of lead-acid storage batteries, including separators therefor

• 90183100: Syringes, with or without their needles; parts and accessories thereof

• 90183900: Catheters, cannulae and the like nesi, used in medical, surgical, dental or veterinary sciences, and parts and accessories thereof

• 90192000: Ozone, oxygen and aerosol therapy, artificial respiration or other therapeutic respiration apparatus, and parts and accessories thereof

• 90211000: Orthopedic or fracture appliances, and parts and accessories thereof

• 90213100: Artificial joints and parts and accessories

• 90262080: Instruments and apparatus, other than electrical, for measuring or checking the pressure of liquids or gases

Will HHS make changes to the Stark Law?

WASHINGTON – The Department of Health and Human Services is asking for feedback on the physician self-referral law, known as the Stark Law.

In a request for information scheduled to be published in the Federal Register on June 25, HHS asks for feedback on “how to address any undue regulatory impact and burden of the physician self-referral law.”

The agency has made the request as part of efforts “to help accelerate the transformation to a value-based system that includes care coordination.” It says removing unnecessary government obstacles to care coordination is one of its key priorities.

“Through internal discussion and input from external stakeholders, CMS has identified some aspects of the physician self-referral law as a potential barrier to coordinated care,” the RFI reads.

Specifically, HHS is requesting information in 20 different areas, including “What, if any, additional exceptions to the physician self-referral law area necessity to protect financial arrangements between HHS entities and referring physicians who participate in the same alternative payment model”; and “Please share your thoughts on the role of transparency in the context of the physician self-referral law.”

HHS noted that the RFI is a request for information, not a request for proposal.

The agency will accept comments for 60 days after the date of publication of the RFI.

AAH updates: Bidding, MedPAC, Medicaid

AAHomecare submitted two letters to Health and Human Services and CMS officials this week. The first letter detailed long-term reforms for the competitive bidding program and highlighted seven priority recommendations that the association would like to see incorporated into the next round of the program. The second letter was a response to the President’s Budget for FY2019 and identified seven proposals that would impact the HME industry, the most concerning of which being expanding the bid process to all areas of the country, including rural areas…AAHomecare is working with consumer groups like the United Spinal Association to educate and engage lawmakers to push back against recent proposals by MedPAC to add products to the competitive bidding program…AAHomecare reports that state Medicaid officials in Iowa and Rhode Island have decided to maintain current rates for DMEPOS, rather than adopt Medicare pricing. The association has now updated its Cures Scorecard, showing six states adopting Medicare pricing, 11 states planning to adopt Medicare pricing, 13 states choosing not to adopt Medicare pricing, one state adopting Medicare pricing for a limited number of codes, and 10 states still analyzing data. The association is still trying to obtain information from 10 other states.

Drive DeVilbiss ‘empowers’ customers with new website

PORT WASHINGTON, N.Y. – Drive DeVilbiss Healthcare is preparing to launch a new, state-of-the-art website this summer, the company announced June 21. With input from customers, the new site is being designed to provide faster, more efficient 24/7 account access, allowing them to take care of their own needs. “The features of our new account management dashboard will allow providers to self-service their entire Drive account online,” said Ed Link, chief marketing officer. “We want to empower our customers to take control of their business and do it their way.” The new dashboard allows customers to generate quotes, estimate delivery charges and dates, order products quickly, track shipments, pay invoices, process returns and more. The site also features an improved search function, enhanced product pages, and live chat and other technical support services.

Soleo makes list despite ‘headwinds’

MCKINNEY, Texas – Soleo Health was ranked 8th among the 50 Fastest-Growing Middle Market Companies in Dallas area by the Dallas Business Journal. Each year, the journal ranks the 50 fastest-growing companies in the Dallas-Forth Worth area with revenues of $25 million to $750 million, basing its rankings on revenue growth over a three-year period. “Soleo Health was recognized in this ranking by the Dallas Business Journal for its 69% three-year annual revenue growth rate, including 2017, which was a pivotal year for our company,” said Drew Walk, CEO. “We are extremely proud to have reached significant growth and expansion milestones last year, despite industry reimbursement-related headwinds.” In 2017, Soleo Health expanded its workforce to more than 400 employees, increased its physician referral network 33%; and grew its geographic presence with four new locations. Soleo operates 19 location in the U.S., with pharmacy licenses in 50 states.

Military exchange ramps up DME offerings

DALLAS – The Army & Air Force Exchange has increased its online assortment of DME at ShopMyExchange.com to meet growing demand. It already offers more than 200 items online, including a wide selection of braces and safety and mobility aids. It plans to increase the number of items online by 25% by the end of 2018, and more than triple that number in 2019. “The durable medical equipment shops are part of the Exchange’s commitment to keeping military communities healthy,” said Air Force Chief Master Sgt. Luis Reyes, the Exchange’s senior enlisted advisor. “Whether helping with rehab, fitness or mobility, these products are helping make our communities physically stronger.” In addition to growing its online presence, the Exchange, the U.S. Department of Defense’s largest retailer, is growing its presence in shopping malls. It already operates shops at Forts Belvoir, Bliss, and Hood; Joint Base Lewis-McChord; and Nellis Air Force Base. The number of shops is expected to nearly triple to 14 by mid-2019.

RESNA announces election results

ARLINGTON, Va. – RESNA has named a president-elect and several board members. The organization has named Maureen Linden, MS, president-elect. She has served as a board member and board secretary, and has been chairwoman of the Student Design Competition. It has also named Meghan Donahue, MS, ATP, as board secretary. She has served as a board member and has been a member of its professional and special interest groups. Additionally, RESNA has named Carmen DiGiovine, PhD, ATP/SMS, RET; Rita Stanley of Sunrise Medical; and Daniel Cochrane, MS, MA, ATP, to the board. Mary Ellen Buning, PhD, OTR/L, ATP/SMS, RESNA Fellow, begins her two-year term as president on Aug. 1, while Roger Smith, PhD, OT, FAOTA, RESNA Fellow, becomes immediate past president.

Philips named best medtech company

ANDOVER, Mass. – Royal Philips has been recognized as Best Overall MedTech Company by the 2018 MedTech Breakthrough Awards. The awards also recognized Philips SmartSleep, a wearable that aims to improve sleep quality for people who do don’t get enough sleep due to their lifestyles, as Best Sleep Monitoring Solution. "At Philips, we're are working closely with our partners to create connected solutions that can achieve seamless care, helping them to provide the quality patient care their communities expect, while delivering on our goal of improving the lives of 3 billion people a year by 2025," said Vitor Rocha, CEO of Philips North America. "Being honored by our industry peers with the MedTech Breakthrough Awards for Best Overall MedTech Company and Philips SmartSleep validates our strategy and confirms that our digital health solutions are being recognized by those who understand what is needed to move the healthcare industry forward." The MedTech Breakthrough Awards recognize companies, products and people developing innovative solutions for today's health, fitness and medical technology industries.  

MED Group launches professional services

LUBBOCK, Texas – The MED Group has launched MED Professional Services, a parallel business offering to MED GPO Services. MED Professional Services will operate as a professional services organization serving the complex rehab, sleep and HME markets. It will continue to offer a payer network, credentialing services, clinical education and clinical network programs, and marketing services. It will also offer additional services, including consulting, outcomes-based programs and CEU opportunities. “MED recognizes the importance of regularly assessing market conditions and responding in ways that create value and continue to provider clinical resources to our members and business partners,” the company stated in a press release. MED has more than 500 provider members.

Essentially Women calls for speakers

ST. PETE BEACH, Fla. – Organizers of Essentially Women’s annual conference, “FOCUS: The EW Conference,” are accepting presentation submissions from interested speakers. The conference’s education can range from mastectomy, to audits and compliance, to marketing, to professional and personal growth, to retail sales. “We are seeking thought leaders and industry experts to share their knowledge on a variety of topics relevant to women’s healthcare providers,” said Nikki Jensen, vice president of Essentially Women. This year’s conference will take place Feb. 2-4, in St. Pete Beach, Fla. More than 300 providers and manufacturer reps typically attend the conference, which, in addition to education, features networking opportunities.

VA requires firebreaks for home oxygen

WASHINGTON – The U.S. Department of Veterans Affairs has mandated the use of thermal fuses, also know as firebreaks, in all of its home oxygen patient installations. The VA last month published a “Patient Safety Alert” requiring thermal fuses to be installed on every stationary and portable oxygen concentrator used by its 85,000 patients to help prevent patient deaths and limit injuries in the event of an oxygen fire. The requirement is being phased in over six months. The VA’s 21 regional Veterans Integrated Service Network Organizations, which oversee health care for vets, will also be required to formally report fires involving home oxygen. “The decision by the VA to mandate thermal fuses in all its patients’ oxygen installations is a victory for patient safety and a major step forward in ensuring that every home oxygen patient—no matter where they are in the world—benefits from the same level of protection,” said Richard Radford, managing director of Mansfield, U.K.-based BPR Medical, developer of the Firesafe cannula valve.

NSM grows to three locations in Oregon

NASHVILLE, Tenn. – National Seating & Mobility has a new location in Roseburg, Ore., its third in the state. Acquired assets from Douglas Medical Equipment Supply, also in Roseburg, supported NSM’s expansion into the area, according to a press release. Douglas Medical will continue to provide other home healthcare products. ATP Wayne Smith will serve NSM clients in Roseburg and surrounding areas. NSM also has locations in Eugene and Portland.

Phillips Chiropractic opens DME company

DODGE CITY, Kan. – Phillips Chiropractic has opened a DME company called Phillips Durable Medical Equipment, according to the Dodge City Daily Globe. Phillips has contracted with a company out of Dallas to get custom braces within about seven days, Dr. Jammie Phillips told the newspaper. “In this area, where we kind of lack the durable medical equipment, a lot of times when the doctor needs a special ACL brace or a custom-fit brace, they were having to go to Wichita or have it ordered and have it take 30, 45 days for it to come in,” Phillips said. Measurements for the braces are taken at any of the six orthopedic surgeon offices in Garden City or the two in Dodge City, he said. Phillips held a ribbon cutting on June 13 for the new business.

Who’s the top woman in HME?

WATERLOO, Iowa – The nomination period for the 2018 HME Woman of the Year is open. Now in its third year, the award, sponsored by VGM, recognizes one woman in the industry who has made increasingly significant contributions throughout her career to her company, community and the HME industry. Last year, 38 nominations were received, with nominations representing providers, manufacturers, association execs and other professionals. Barbara Smith, CEO of Healthline Medical Equipment, took home the award at Medtrade in Atlanta last year. HME Woman of the Year nominations are open to all women, regardless of title or position, who work within the HME industry. Nominations are due by Aug. 13 and can be submitted online. The winner will be announced during a special ceremony at Medtrade, Oct. 15-17 in Atlanta.