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On March 13, 2020, the Trump Administration announced regulatory flexibilities to help health care providers and states to respond to and contain the spread of coronavirus. Included in the announcement was that CMS will activate blanket waivers in an effort to ease certain requirements and to prevent gaps in access.

One of these waivers is to expand telehealth services. Under this new waiver, Medicare can pay for office, hospital and other visits furnished via telehealth across the country, including in patient’s places of residence starting March 6, 2020.  A range of providers, such as doctors, nurse practitioners, clinical psychologists, and licensed clinical social workers, will be able to offer telehealth to their patients.

Medicare beneficiaries will be able to receive a specific set of services through telehealth including evaluation and management visits (common office visits), mental health counseling and preventive health screenings. This will help ensure Medicare beneficiaries, who are at a higher risk for COVID-19, are able to visit with their doctor from their home, without having to go to a doctor’s office or hospital which puts themselves and others at risk.

These telehealth encounters can occur through remote communications technologies. Some of these technologies, and the manner in which they are used by HIPAA covered health care providers, may not fully comply with the requirements of the HIPAA Rules.

On March 19, 2020, the Office of Civil Rights announced that it will exercise its enforcement discretion and will not impose penalties for noncompliance with the regulatory requirements under the HIPAA Rules against covered health care providers in connection with the good faith provision of telehealth during the COVID-19 nationwide public health emergency.

A covered health care provider that wants to use audio or video communication technology to provide telehealth to patients during the COVID-19 nationwide public health emergency can use any non-public facing remote communication product that is available to communicate with patients. OCR is exercising its enforcement discretion to not impose penalties for noncompliance with the HIPAA Rules in connection with the good faith provision of telehealth using such non-public facing audio or video communication products during the COVID-19 nationwide public health emergency. This exercise of discretion applies to telehealth provided for any reason, regardless of whether the telehealth service is related to the diagnosis and treatment of health conditions related to COVID-19.

For example, a covered health care provider in the exercise of their professional judgement may request to examine a patient exhibiting COVID- 19 symptoms, using a video chat application connecting the provider’s or patient’s phone or desktop computer in order to assess a greater number of patients while limiting the risk of infection of other persons who would be exposed from an in-person consultation. Likewise, a covered health care provider may provide similar telehealth services in the exercise of their professional judgment to assess or treat any other medical condition, even if not related to COVID-19, such as a sprained ankle, dental consultation or psychological evaluation, or other conditions.

Under this notice, covered health care providers may use popular applications that allow for video chats, including Apple FaceTime, Facebook Messenger video chat, Google Hangouts video, or Skype, to provide telehealth without risk that OCR might seek to impose a penalty for noncompliance with the HIPAA Rules related to the good faith provision of telehealth during the COVID-19 nationwide public health emergency.  Providers are encouraged to notify patients that these third-party applications potentially introduce privacy risks, and providers should enable all available encryption and privacy modes when using such applications.

Under this notice, however, Facebook Live, Twitch, TikTok, and similar video communication applications are public facing, and should not be used in the provision of telehealth by covered health care providers.

Covered health care providers that seek additional privacy protections for telehealth while using video communication products should provide such services through technology vendors that are HIPAA compliant and will enter into HIPAA business associate agreements (BAAs) in connection with the provision of their video communication products. The list below includes some vendors that represent that they provide HIPAA-compliant video communication products and that they will enter into a HIPAA BAA.

  • Skype for Business / Microsoft Teams
  • Updox
  • VSee
  • Zoom for Healthcare
  • Doxy.me
  • Google G Suite Hangouts Meet


Note: OCR has not reviewed the BAAs offered by these vendors, and this list does not constitute an endorsement, certification, or recommendation of specific technology, software, applications, or products. There may be other technology vendors that offer HIPAA-compliant video communication products that will enter into a HIPAA BAA with a covered entity. Further, OCR does not endorse any of the applications that allow for video chats listed above.

Under this notice, however, OCR will not impose penalties against covered health care providers for the lack of a BAA with video communication vendors or any other noncompliance with the HIPAA Rules that relates to the good faith provision of telehealth services during the COVID-19 nationwide public health emergency.

OCR has published a bulletin advising covered entities of further flexibilities available to them as well as obligations that remain in effect under HIPAA as they respond to crises or emergencies.

Kelly Grahovac is the general managed for The van Halem Group.

Dan Starck
chairman, Council for Quality Respiratory Care

Editor’s note: The following letter was written by Dan Starck, chairman, Council for Quality Respiratory Care, and sent to CMA Administrator Seema Verma.

I am writing on behalf of the Council for Quality Respiratory Care (CQRC) to highlight how our members—the home oxygen, sleep, and ventilation therapy suppliers and manufacturers–are prepared to help during the COVID-19 emergency when patients diagnosed with the disease have access to the equipment and supplies they need to recover. For us to fully serve these patients, however, we need your help in trying to address some of regulatory restriction that will be a barrier to caring for these patients.

1. CQRC asks CMS to cover and reimburse equipment, supplies, and services provided to patients with a confirmed COVID-19 diagnosis who have been prescribed home respiratory therapy for the condition.

Under current law, home respiratory therapy, including oxygen, BiPAP, and ventilator, are covered and reimbursed only for beneficiaries with a diagnosed chronic condition(s). A diagnosis of COVID-19 would be defined as an acute condition. To treat confirmed cases of the virus, physicians are prescribing oxygen, Bi-PAP, and ventilators. The National Academies of Medicine had suggested using home oxygen as a way to address potential hospital overflow issues in a March 5, 2020, discussion paper. The discussion paper also notes that having access to BiPAP or mechanical ventilators will be important. Given the need to quarantine COVID-19 patients,  it is likely that rather than hospitalize all infected patients, the vast majority of patients will remain at home to receive treatment as a way to ensure the availability of hospital beds for higher acuity care patients. Having access to these home respiratory therapies at home may be particularly in rural areas, as well, especially in areas hit already by shortages due to the rural health care crisis.Therefore, we ask that CMS waive the current requirement that home oxygen, BiPAP, or ventilator coverage and reimbursement for Medicare beneficiaries be limited to patients with chronic conditions and allow for the provision and reimbursement of these services if a beneficiary has a confirmed diagnosis of COVID-19 and has been prescribed the home therapy.


2. CQRC asks CMS to reduce burdensome paperwork on physicians and suppliers, by allowing the Certificate of Medical Necessity, the test results confirming diagnosis of COVID-19, and the prescription to be sufficient documentation for determining medical necessity for patients with a confirmed COVID-19 diagnosis who have been prescribed home respiratory therapy for the condition.

During this crisis (and likely into the Fall of 2020), it is important to make sure that patients who have been prescribed home respiratory therapy as a treatment for COVID-19 and quarantined to avoid further spread of the virus receive the therapy in a timely manner. It is also important that suppliers, whose personnel will be with these patients in their homes, are reimbursed in a timely manner so that they have the resources necessary to maintain an adequate stock of equipment and supplies, are able to employ infection control protocols effectively, and can provide their workforce with appropriate personal protective equipment (PPE). 

Therefore, we ask that for purposes of determining medical necessity and auditing of claims, CMS suspend the requirements for medical record review for at least home respiratory therapy when prescribed to patients confirmed to have COVID-19 and being treated with these therapies. It would seem that the current CMN, prescription for the home respiratory therapy, and confirmation of COVID-19 diagnosis are objective documentation would meet CMS’ needs for protecting against inappropriate use of the therapies. It would also be helpful during the crisis to reduce the burden on the suppliers by suspending the medical record review for home respiratory therapy when there is a properly completed CMN and prescription to avoid suppliers having to spend time chasing doctors records when they are working to treat patients during the crisis.

3. CQRC asks CMS to suspend adding non-invasive ventilators from the Round 2021 Competitive Bidding Program to protect access to this therapy.

As the Food and Drug Administration (FDA) has recognized in reaching out to manufacturers of both invasive and non-invasive ventilators to ensure that there is a sufficient supply of these pieces of medical equipment during this crisis, having access to ventilator therapy will be critically important to many patients who test positive for COVID-19. 

While we understand that the Round 2021 competitive bidding program will not take effect until Jan. 1, 2021, we are concerned that the efforts to prepare for the new rates not only in the competitive bidding areas (CBAs), but also the non-CBAs where the new rates will be applied, could result in many suppliers reducing their inventory of NIV equipment and supplies or scaling back the services they provide. In addition, reducing the number of suppliers being able to serve CBAs effective Jan. 1, 2021, may have the unintended consequence of losing bidders exiting the markets prior to that date. Even though, it is possible that the outbreak of COVID-19 may abate over the summer, it also seems likely that another significant outbreak is likely to occur in the fall and winter of 2020-21. To avoid any disruption in the supply and be prepared to meet the likely increase in demand for NIV in the home setting, we ask CMS to remove NIV from the Round 2021 competitive bidding program.

We also would like to work with CMS to make sure the competitive bidding program rollout also does not result in problems for patients who need access to home oxygen and sleep therapies for patients with COVID-19 and consider modifying the rollout, if appropriate.

4. CQRC asks CMS to extend the current blended rate in rural non-CBAs for at least home respiratory therapies in 2021 to protect access to these therapies.

While the country is correctly focused on the immediate threat of COVID-19, health care providers and suppliers are also looking ahead, as we know CMS is as well. The CDC has recently announced as the viral outbreak has evolved, being exposed to the virus will be inevitable for many Americans and many will contract it during this year or next.  

The CQRC members are also looking ahead and trying to plan.  Having a new methodology coupled with COVID-19 exposure and increasing cases could cause havoc in rural areas if more patients require home respiratory therapies to treat the virus under quarantine or near quarantine conditions. Equipping our workforce to safely engage with these patients and their families will also take more resources than anyone could have anticipated during the competitive bidding process.  Rather than risk an access issue, we encourage CMS in the current rulemaking to indicate that because of the COVID-19 emergency, it will extend the blended rate in rural non-CBAs through at least 2021 for home respiratory therapies used to treat patients infected with the virus. Taking this step now is important to allowing suppliers and manufacturers to prepare and make sure they have the equipment and supplies in place, have resources for infection control, and are able to avoid potential disruptions in supply and workforce.

5. CQRC asks CMS to prioritize the provision of personal protective equipment (PPE) for home respiratory therapy suppliers whose workforce are providing equipment and supplies to COVID-19 patients in their homes.

Even though home respiratory therapy suppliers and their employees are less exposed than some health care providers (such as those in hospital emergency departments or some physicians’ offices), we know that those employees who are delivering equipment and supplies are in the unique position of having to enter a patient’s home and set up the equipment or provide supplies.  CQRC members take seriously protecting these employees. Yet, many members of the workforce understandably are concerned about their own health as well.

Some of our members are already having problems accessing personal protective equipment (PPE).  To make sure that the home respiratory therapy workforce do not become sick and are available to assist patients who are infected, we ask that CMS help us by allowing home respiratory therapy supplies to have prioritized access to PPE.  We also ask that CMS work with suppliers of PPE to avoid the increasing demand to lead to higher costs that could create access problems as well.

Conclusion

On behalf of the CQRC, our patients, and our employees, I want to thank you for the efforts CMS is making to ensure that Medicare beneficiaries have access to the medical services they need during the COVID-19 outbreak. CQRC and our members would welcome the chance to discuss how we can help make sure that Medicare beneficiaries who need home respiratory therapies in relation to a diagnosis of COVID-19 have access to the therapies they need.  Please do not hesitate CQRC’s executive director Kathy Lester if you would like to discuss our recommendations or there is additional information we can share with you about how ground ambulance organizations are helping during this crisis. We stand ready to help CMS, the Department, and the federal government in any way we can.

—Dan Starck, chairman, Council for Quality Respiratory Care   

The recent coronavirus pandemic is a good reminder that we should be planning now for the next pandemic. And the one after that. These events are matters of “when” they will hit, not “if.”

Natural disasters—whether severe ice storms, Hurricane Katrina or pandemics—also have reminded HME providers that they are first responders and should be built in to disaster protocols.  

There’s no excuse for Americans to get caught flat-footed, since we have done plenty of thinking, planning and responding already.

In 2008, the Agency for Healthcare Research and Quality, part of the Department of Health and Human Services, convened a two-day meeting to highlight issues and resources about “Home Health Care during an Influenza Pandemic.”  The resulting 85-page report has been worth reading ever since. The participants included physicians and public health representatives from universities, HHS, the Centers for Disease Control and Prevention, the Department of Defense and county health officials, as well as home health and HME providers. I participated as the representative from the HME sector.

The assumptions were that this event would quickly overwhelm hospitals and the need to quarantine patients would be paramount. Therefore, most people infected with a severe pandemic flu virus would receive care “in the home by family members, friends and other members of the community—not by trained health care professionals.”

It was a wide-ranging conversation that explored the basic needs and the outer limits of what a catastrophic outbreak would mean, ranging from the health needs of a massive, self-quarantined population to shortages of supplies, including body bags. 

The report covers issues like role clarification locally and nationally, supplies and equipment needs, reimbursement, tests and exercises, communications, workforce concerns, telehealth and legal issues.

While the initiative focused on home health agencies, there are implications for HME providers, too. A few basic take-always:

  • The home care sector will serve as an essential component of surge capacity in a pandemic.
  • Home care must be actively involved in planning and collaboration across all health care sectors.
  • Home-based care and monitoring technologies should be considered.
  • The surge of patients will strain the home health workforce.


A 2009 survey of HME providers found that 53% had established plans for responding to a flu pandemic and 23% had stockpiled related supplies such as N95 masks. The survey, conducted by the AAHomecare, was conducted in the wake of the swine flu outbreak. How many are prepared now?

Looking at the bigger picture, preparations for dangerous pandemics should be taken seriously by everyone in every corner of our society because they will require actions wider than health care and medical workers.

In 2003, I spent two days with Toronto public health officials during the SARS outbreak (Severe Acute Respiratory Syndrome) as part of a U.S. delegation from the National League of Cities to gather lessons learned. Toronto was struck by SARS but quick and heroic actions by their public health personnel contained it and may have prevented that very deadly disease from becoming a full-blown disaster for North America.

A few take-aways from that experience are worth remembering. While geared for local officials, they are apt for home care providers, as well:

Prepare

  • Train and prepare for biological threats.
  • Review and establish clear legal powers and lines of authority to respond.
  • Develop a system for recording and tracking all related but unbudgeted costs.

Coordinate

  • Keep government offices in the loop.
  • Manage medical information about infected people.
  • Set up a mechanism to update all employees.

Communicate

  • Coordinate messages to ensure they are consistent, correct, and frequent.
  • Target communications to key constituencies and audiences.
  • Prepare for an onslaught of questions that require both medical and practical answers.


The key lesson for HME providers: You have leadership and civic roles, as well as clinical responsibilities, in a pandemic. Plan for it, be at the table and demand recognition for your role as part of the response team. Again, this is about when, not if. 

Michael Reinemer is a communications strategist in Washington, D.C. He was VP for policy and communications at AAHomecare, 2004-13.

Topic:

A New Year’s Resolution is “a promise to do something differently in the new year,” according to Merriam Webster.

For the HME industry, a few ways “to do something differently” in the new year and in the new decade, might include one or more of the following:

1) Software

Implement one or more new software initiative(s) that help you streamline the order-to-cash process. For example, mobile delivery and auto pay are software initiatives that have contributed significantly to improving cash flow for many HME providers.

2) Payer partnerships

Evaluate payer relationships to a) ensure you are being paid as delineated in your contract, b) you are constantly in communication with your contacts, c) you meet regularly to continue to show your value in keeping costs in line, and d) both parties feel the contract relationship is a good one.

3) Financial terms

Secure all financial arrangements up front, including private/self-pay, and all third-party payment that requires you to collect a co-pay. As more patients opt for managed Medicare (Medicare Advantage plans), staff will need to know when you are and are not contracted with a specific plan, etc. Further, as more patients pay cash for their products, upfront payment (and auto-pay for subsequent rental months and supply replenishment) should be a requirement. Making financial decisions prior to rendering service is a must to avoid uncollectible receivables.

4) Right people, right seats

Ensure you have the right people in the right seats on the bus. Assess your staff to be certain they are poised for changing roles within the company and industry. Having the wrong person in a position can be detrimental to an entire team and staff. Conversely, the right leader in a department can make all the difference in the success of your company. As needs change, so too will tasks and staff positions. Personnel needs today may be entirely different in a few months, especially as you ramp up for 2021’s competitive bidding round.

5) Competitive bidding

Be prepared for competitive bid results—simulate a bid awardee result, as well as a non-awardee outcome. Create a plan for either scenario and the various options. Being prepared should help you focus on your company’s strategic direction for 2021 and beyond.

6) Data to prove value

Use data and metrics to illustrate the value you add to patient care. After all, value-based care is common terminology today, if not an expectation by the payer and referral communities. Hospital readmission rates are a key measure for payers and health systems. As an HME provider, you can help reduce readmission rates and increase your overall value. Use data to show this outcome and realize that data is today’s tool for success.

7) Revenue cycle evaluation

Evaluate the order-to-cash process regularly to determine if there are ways to streamline the operational flow. Use staff to help with the analysis. Then document and train staff accordingly. Tightening internal control and expenses can make the difference between a profitable and unprofitable HME business.

8) Manage from reports

Always measure and monitor via reports to ensure you are maximizing productivity and results. For example, set goals based on average time to complete a task, such as order intake, documentation retrieval, etc. Set minimum standards and measure against them. Once you have a PAR performance level, set goals accordingly. Regular and stretch goals are a great way to motivate staff to improve performance.

9) Develop leaders

Focus on ways to build and develop leaders from under you. Once you have a leader, it is the leader’s job to train someone to take their place. A real leader is always looking to pay it forward so they can help others move up as they move up themselves.

10) Show appreciation

Celebrate the wins. Make sure staff feels appreciated for a job well done. Genuine praise for an accomplishment travels far. Make it contagious so everyone wants to receive the praise of those who already merit it. Those who don’t find favor in this will either leave or rise to the occasion.   

11) Say no

When you know a contract is not profitable, say no to the business rather than risk losing money. Stop taking poor referrals or ones that waste your time. This requires you to track your business by contract and/or by referral source.

12) Stay diversified

Stay nimble by not relying on one payer for all of your business. Conversely, with the extensive knowledge of guidelines and requirements expected by each payer, it is impossible to be everything to everybody. Too many or too few product offerings and payers make the business unsustainable.

Miriam Lieber, president, Lieber Consulting LLC is a business management consultant. She and her team offer on-site engagements to help improve operational efficiencies in the revenue cycle. They also offer remote coaching and mentoring for all levels of leadership. Miriam can be reached at miriam@lieberconsulting.com.

Colton Mason
senior vice president of Supreme Medical

Medical supply distributors and manufacturers are turning their attention to the rapidly growing field of home health care. They are also realizing something that may come as no surprise to you—it’s a really complicated field that’s undergoing a lot of change.

A group of more than 40 experts gathered in November at a Home Care Thought Leaders event in Arlington, Va., hosted by the Health Industry Distributors Association. They met to better understand the market and to strategize about how to deliver the best products for the best care in the home. I had the pleasure of moderating the event and one thing became very clear to everyone in attendance: Shipping a box to a front porch is a totally different ballgame than shipping pallets to a hospital or nursing home.

It’s about really knowing your customer—literally. Is it the patient, caregiver, payer, HME provider, or a combination of that group? It’s also about understanding that the ultimate user is the patient in their home—and they may be experiencing home care as part of an unexpected situation.

Considering the rapidly growing market with its reimbursement and policy pressures, the group of thought leaders brainstormed about how to address three key issues in getting those products to the home: product design, logistics, and sales and marketing. Here are some of their key takeaways:

Product design: Keep it simple

  1. Make it easy to use.
  2. Make it easy to unbox.
  3. Offer on-demand consumer education with instructions that aren’t clinically complex.
  4. Keep it reimbursement-friendly.
  5. Include instructions on who to call for troubleshooting.

Logistics: Make it seamless

  1. Consider the product weight. Does it require more than one person for carrying or set up?
  2. Prepare for urban versus rural delivery challenges.
  3. Offer “smart tracking” for certain items like temperature-controlled products.
  4. Educate drivers to perform a home “scan” rather than just dropping off products on the porch.
  5. Understand whether it’s important to have a required signature.

Sales and marketing: Understand your customer

  1. Connect with patients digitally.
  2. Educate yourself about likes/dislikes of the Silent Generation, baby boomers, and Gen X’ers.
  3. Understand that the Internet is the primary source of information
  4. Make reviews easily available and accessible.
  5. Offer marketing materials with a homecare focus, such as results data from homecare trials.

Colton Mason is senior vice president of Supreme Medical, a full-line medical supply distributor servicing home care providers. Mason is also the host of HME TV, an online series focused on the business success of the home medical equipment provider, which can be found on both YouTube and LinkedIn under the hashtag #HMETV. Visit suprememedical.com or view his vlog at hmetv.com.

Many Medicare beneficiaries are being enticed by celebrities on TV to select a Medicare Advantage (MA) plan over original Medicare fee for service (FSS) with all the standard benefits of Medicare at a lower out-of-pocket cost. These plans often state they provide additional benefits, such as gym memberships, transportation and eyeglasses, so how can they provide more benefits with a lower cost? Seems too good to be true, doesn’t it? How can these private, for-profit insurance companies provide more for less, pay all these celebrities to promote their insurance on TV and make a profit? While some of these plans are able to do this with the increased number of members, thus spreading the costs over a larger pool, others, from what suppliers are experiencing, are able to do this by not actually providing the same benefits as original Medicare.

When suppliers encounter a customer that has a Medicare Advantage plan, they must determine if they have to be in network if required and the coverage policies. Many plans inform their customers, as well as the suppliers, that they “follow Medicare guidelines.” Most would take this that they will cover and process claims the same as original Medicare would. However, while these plans are required at a minimum to furnish all medically necessary Medicare-covered DME (policy), they are not required to follow Medicare’s payment rules (prices, rental/purchase, modifiers, clean claim timeliness, etc). Clarification of this long standing outstanding question was recently received from CMS. So this appears to be the other way these plans can promote that they offer more for less because they can reduce the prices for DME and pay them in a different manner that saves them money (rental over purchase).  

All suppliers need to be aware of this and take this into consideration when determining if they can accept a contract/ customer with one of these MA plans. It is vital to obtain their policies and payment rules in writing prior to accepting a customer so you know what you are getting into. If they verbally say, “We follow Medicare,” ask them what that means. Ask if they follow Medicare’s policies (coverage) and payment rules and try to get this in writing prior to agreeing to provide DME to these customers.
Here is a section of the information received from CMS regarding Medicare Advantage plan requirements:

“While MA plans are required to furnish all medically necessary Medicare-covered DME, they are not required to follow original Medicare payment rules in furnishing those services. MA plans will generally furnish MA enrollees with all medically necessary DME through contracted DME suppliers. Since MA plans are capitated by CMS, the MA plan is financially responsible for furnishing all medically necessary, Medicare-covered services, which of course includes DME items and supplies. In addition to their financial and coverage responsibilities, MA plans have the ability to negotiate prices with their contracted providers and also to use utilization management tools consistent with Medicare coverage standards.”

What this means is if an MA plan determines that it is best for them to rent complex rehab power wheelchairs rather than extending the purchase option that is available to original Medicare beneficiaries, they can do that. They can negotiate reimbursement prices, as well, and from what providers are experiencing, some are also denying accessories that original Medicare allows per policy. A recent widespread example: electronics (E2377, E2311 and E2313).

Providers need to be aware of these other ways MA plans can provide more for less, while incurring the costs of all those commercials with celebrities. This other way squeezes the DME supplier and is impacting access, as more and more suppliers are saying no to contracts or customers with one of these plans.

What can you do?

First, review all contracts thoroughly and make sure it’s clear what they pay and how they pay (rental/purchase). Don’t just accept, “We follow Medicare guidelines,” because that doesn’t mean they follow Medicare’s payment rules since they are not required to per CMS. If you can’t accept what they offer, don’t. Try to negotiate a fair contract and if they won’t, don’t accept it.

Second, educate MA plan customers that you can’t accept their insurance and the reason why. They are only hearing from celebrities promoting their plans of how great they are, but not how they negatively impact their true medically necessary benefits with unsustainable prices and payment methods (13 month rental for complex rehab power wheelchairs and accessories). While the MA plan customer may be able to get a gym membership and eyeglasses, they may not be able to obtain the wheelchair they need. Educate them that they can select original Medicare FFS (switch back), if they find that the MA plan isn’t as good as the celebrities made it appear.

Please notify Medicare recipients struggling with making sense of all these plans and their sales pitches that they can call 1-800-633-4227 (1-800-Medicare) to speak to a Medicare representative for accurate unbiased information about selecting the best plan for them.

Dan Fedor is the director of reimbursement and education for U.S. Rehab, a division of VGM. Reach him at dan.fedor@vgm.com.

by: Bradley Smith - Tuesday, October 1, 2019

When AdaptHealth's plan to become a public company was announced in July, ears perked up throughout the HME industry. New IPO listings by DME providers are rare. That could change following Adapt’s IPO.

To recap, Adapt will combine with DFB Healthcare Acquisitions Corp., which is currently traded on the NASDAQ under symbols DFBH and DFBHW. Once the combination of companies is completed, it is expected that DFB will change its name to AdaptHealth Holding Corp. and remain listed on the NASDAQ under a new ticker symbol (yet to be determined). As a press release on the merger noted, this new entity intends to continue Adapt's aggressive acquisition strategy. Since 2012, the provider has acquired 56 companies with an aggregate purchase price of approximately $286 million and has identified a significant volume of potential acquisition opportunities it plans to target late this year into early 2020.

So, why is this news so significant? Compared to other industries, the number of publicly traded DME providers is below average. The DME providers that are publicly traded include well-known national companies, such as Lincare, Inogen, VieMed and Protech.

However, there is a significantly larger portion of national or regional providers that remain privately held. Many of these companies are backed by private equity. The majority, if not all, of these providers grow via a similar buy-and-build strategy that their private equity business partners accelerated. Adapt's success is greatly attributable to this strategy.

When Adapt goes public, I expect the market to respond favorably. Historically, public markets respond positively to companies that embrace a growth-through-acquisition strategy, with stock prices increasing incrementally with each successful acquisition. If this trend continues following Adapt's IPO, one can expect private equity-backed DME providers to line up at the NASDAQ, eager to cash in their chips. The most likely suspects include AeroCare, Apria, Rotech (again), Community Surgical and Shield.

Bradley Smith, ATP, CMAA is a former DME owner, and is currently a Managing Director/Partner with the international healthcare M+A firm, VERTESS.  Reach Brad directly at (817)793-3773 / bsmith@vertess.com.
 

Kathy Lester
Executive director of the Council for Quality Respiratory Care

As we head into the final stretch of bidding for Round 2021 of competitive bidding, suppliers across the country are realizing just how different the program is now compared to the past.

One question I hear a lot is: How does capacity and demand influence the payment rate that CMS sets? Since this is one of the most technical—but important!—pieces of the competitive bidding program, I’m here to break it down and help you feel more confident when you go to submit your bid.

In short, the capacity you submit in your bid can have major impacts to the competitive and noncompetitive rates for Round 2021, so it is critical to get it right. To understand how this all works, let’s explore the impact of capacity and demand in how CMS sets rates.

Why do capacity and demand matter?

Capacity is a critical component of each bidder’s bid because CMS uses it to determine the “maximum winning bid,” which is essentially the clearing price for the lead item. At the same time, CMS also uses beneficiary demand to determine the winning bid. These two numbers influence the final rate just as much as the bid you submit.  CMS then uses the maximum winning bid to set the single payment amount (SPA). Then the SPA essentially becomes the basis for the rate in non-CBAs and the SPA plus 10 % is essentially the rate for the non-CBAs defined as rural.

For bidders, thinking about cost is not enough. You must also think about your capacity. The greater your capacity, the greater role your bid amount will have in the process of setting the final SPA. When bidding, overestimating your capacity has the potential to influence payment amounts based on inaccurate information. It is the bidder’s responsibility to get the capacity number right.

In addition, beneficiary demand plays a critical role in setting SPA rates. For each lead item, CMS determines beneficiary demand based on the historic beneficiary utilization of each lead item and will increase that historical utilization by estimating the projected increase in the number of beneficiaries in the CBA and the projected increase in the utilization of the lead item in the CBA.

How does CMS define capacity?

There are two components of capacity. The first is historical capacity, using the most recent 12 months of claims data to show what your capacity was during the last year. The second part is estimated future capacity, which is the “number of lead item units that (a supplier) believe(s it) can furnish in the competitive bidding area (CBA) in one calendar year.” Unlike previous years, CMS no longer requires expansion plans from bidders.

Note that CMS will undertake a ramp up revenue review to determine if a bidder has sufficient funds to furnish the number of lead-item units it estimated for future capacity. To do so, CMS will multiply the bidders’ projected growth by the preliminary SPA then divide that number by the bidder’s actual revenue to create a percentage. If CMS finds that the bidder overestimated capacity, then CMS will reduce the capacity and additional bidders are needed.

Because capacity is used to set the SPA, CMS will then use bidders’ capacities to determine where the bidders’ capacities equal demand, starting with the lowest bid amount working up. The greater a bidder’s capacity, the fewer suppliers will be needed to establish the maximum winning bid, which will lead to a lower SPA.

How does CMS adjust bidders’ capacity?

After bids are submitted, CMS will review each bidder’s capacity amounts and may alter them. The process works like this: First, each bidder defines its estimated capacity in the bid it submits. If the bidder meets the financial threshold set by CMS, then CMS will use the greater of the bidder’s estimated capacity or historical capacity. To ensure competition between at least five bidders in each CBA for each product category, CMS will cap the bidders’ capacity at 20% of demand.

In some instances, CMS may adjust a bidder’s estimated capacity down. If a bidder has no experience in the product category or CBA, CMS will adjust the capacity down to zero. If a bidder demonstrates experience in the product category and the CBA, CMS will use the highest capacity amount (historic or estimated future capacity). And if the bidder has experience providing the product category but not in the CBA, CMS will use a formula to adjust and discount the estimated capacity.

If a bidder’s capacity is lowered and CMS determines demand for the CBA/product category has not been met, then additional bidders will be added until the capacity is meant, which will increase the SPA.

Conclusion

As you can see, capacity and demand are critical to setting rates in competitive and noncompetitive bid areas. Ultimately, it is up to bidders to ensure that all information about their capacity is accurate.

To learn more about this important process, visit the CBIC website or the industry’s education website, which also offers useful explanations, tutorials, bid calculators and more.

Kathy Lester is executive director of the Council for Quality Respiratory Care.

Don Clayback
executive director of NCART

You probably can feel it in the air. You’re sensing that this is not just any ordinary day and you’re right. Since it’s Monday, we’ll help explain that feeling. Today, Aug. 19, is the first day of National CRT Awareness Week.  

National CRT Awareness Week is being held to increase awareness of what Complex Rehab Technology (CRT) is, the important role it plays in the health and independence of children and adults with disabilities, and the need for Congress to pass pending legislation to protect CRT access.  

The focus of the week is to spread the CRT message. That CRT consists of medically necessary and individually configured manual and power wheelchairs, seating and positioning systems, and other adaptive equipment. That this specialized equipment is critical to people with significant disabilities to help manage their unique medical needs and to maximize their function, independence and access to the community. And that the proper provision and use of CRT reduces medical complications, clinical interventions, hospitalizations, institutionalizations, as well as the need for long-term care and support.

The good news is that everyone can take part. Many organizations already have their plans in place and we’re looking for others to join in. Here are some ideas for how to get involved either this week or as we move through the rest of the month:

  • Invite everyone in your organization to visit www.protectmymobility.org and send emails to Congress (or make phone calls). Include your customers, patients and others.
  • Use social media to tag your members of Congress in a post asking them to co-sponsor and pass our CRT bills.
  • Create a video of yourself or a group explaining the importance of CRT and asking others to visit www.protectmymobility.org. Be creative and share on social media.
  • Schedule a meeting with your members in their district offices and bring along other constituents to share their perspectives on CRT access.
  • If appropriate, invite your members or their staff to visit your facility so they can see how unique CRT is for themselves.


This is a key time for CRT advocates to be taking action as Congress is in recess and your members are back in your home districts. Once Members return to the Capitol in September they'll be discussing and voting on important legislation.

We want our CRT bills to be included in those conversations:

Protect Complex Rehab Wheelchairs – This is the first of our two legislative initiatives. H.R. 2293, introduced by Reps. John Larson, D-Conn., and Lee Zeldin, R-N.Y., and S. 1223, introduced by Sens. Bob Casey, D-Pa., and Rob Portman, R-Ohio, will halt inappropriate Medicare payment cuts for critical components of complex rehab manual wheelchairs and permanently exclude them from the competitive bidding program.

Create CRT Separate Benefit Category – This second legislative initiative represents needed comprehensive change. H.R. 2408, introduced by Reps. Jim Sensenbrenner, R-Wis., and Brian Higgins, D-N.Y., will establish a separate benefit category for CRT within the Medicare program to allow better access and safeguards through proper segregation and improvements in coverage, coding and supplier standards.

National CRT Awareness Week is a great opportunity to help spread the CRT message and encourage others to get involved. Use the email links, phone call guides, and other background information at www.protectmymobility.org and add your own ideas. Thanks for letting your members of Congress know their constituents at home want them to pass pending CRT legislation to protect important access for people with disabilities.

Don Clayback is executive director of NCART. Reach him at dclayback@ncart.us or 716-839-9728.

Topic:


Attention to detail is everything.
 
History is full of examples when overlooking small details led to much larger problems. From the leaning tower of Pisa, which was built on soft ground causing it to tilt, to a missing key that prevented the Titanic’s lookouts from getting binoculars to spot icebergs in the water, careful planning is critical.
 
So when it comes to Round 2021 of the Medicare Competitive Bidding Program (CBP), which opened for bidding in mid-July, bidders must pay close attention to cross their Ts and dot their Is.
 
The new bidding process is much improved from the CBP of the past. But being so different, it is vital that all suppliers who plan to submit a bid understand the new changes. As you examine how you might bid based on lead-item pricing, the clearing price rate setting, and new higher bid ceilings—among other important changes—don’t forget about the Process for Reviewing Covered Documents. 
 
To have your “covered documents” reviewed by the CBIC for completeness, bidders must submit those documents through the Connexion platform by the covered document review date deadline of Aug. 19. A covered document “means a financial, tax, or other document required to be submitted by a bidder as part of an original bid submission under a competitive acquisition program to meet the required financial standards.” For Round 2021 of the CBP, these are the tax return extract, income statement, balance sheet, statement of cash flow, and credit report with numerical credit score or rating.
 
With so many details that you need to cover, it might be easy to forget to upload one or more required financial documents into the Connexion platform. But just as even the best laid plans can fall apart due to one missing piece, so can your bid if you fail to submit all of the required financial documents that the CMS requires. The covered document review process will provide you peace of mind, knowing that your financial document submission is complete and properly submitted through the Connexion platform. Bidders should therefore make every effort to take advantage of this process.
 
Bidders who upload their covered financial documents in the Connexion platform before Aug. 19 are included in the Covered Document Review Process (CDRP). During this process, CMS will determine if any of your required financial documents are missing and will alert you within 90 days so that you may upload them. After the bid window closes on Sept. 18, only the covered documents identified and requested in a written notification from the CBIC as a result of the covered document review date (CDRD) process will be considered. Therefore, the Covered Document Review Process is a great opportunity for you to keep your Round 2021 bid on track. While the CDRP does not determine if your required financial documents are accurate, acceptable, complete, or in accordance with RFB instructions, many suppliers will find it quite useful to ensuring they submit every required piece of information.
 
We urge every supplier who plans to bid to submit all of their required documents early so that they can take advantage of this opportunity.

For more information, visit the CBIC website or the industry's education website.
 
Cara Bachenheimer leads the Government Affairs Practice at Brown & Fortunato and Kim Brummett is Vice President of Regulatory Affairs at the American Association for Homecare.

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