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On the Editor's Desk

by: Liz Beaulieu - Thursday, May 14, 2020

I caught up with Brad Smith, managing director and partner at Vertess, recently and he said the mergers and acquisition market for HME has been “a wild rollercoaster ride” amid the coronavirus pandemic.

First, investors and buyers charged ahead, then they paused and then they stopped, he says.

But by the end of April, Smith had a handful of deals scheduled to close in May.

Investors and buyers were charging ahead again, with the pandemic as “the new normal.”

“They like certainty, whether it’s good or bad,” Smith said, “and they navigate from there.”

But they’re not looking at HME companies the same way, he says.

Their main question: Do they offer a workaround to a challenge created by the pandemic? Does an HME company offering sleep therapy, for instance, have relationships with and get referrals from physicians who use home sleep testing vs. in-lab

This way, they’re still keeping, if not increasing, their market share, even in a pandemic.

“They all want to know what you’re doing to keep people in their homes,” Smith said.

The Braff Group details this same phenomenon in a recent report on “Health Care M&A in the Time of COVID-19.”

“Buyers will once again favor health care investments, but likely in a different manner than we’ve seen in the past,” the report states.
TBG predicts health care dollars will stream toward areas like telemedicine and telepsychology, remote patient monitoring, home diagnostic testing and bio-pharmacology.

So perhaps the bigger issue now is, not a lack of buyers, but a lack of sellers, Smith says.

“I had a big pipeline of people who were looking to sell or recap this year,” he said. “Since the pandemic hit, they’re taking more of a wait-and-see approach.”

Other takeaways from The Braff Group include:

  • Deal flow will contract—immediately, and at least for the next three to six months.
  • Credit necessary to finance deals will tighten.
  • At least some PE dry powder will be used to shore up existing portfolio.
  • Valuations are going to take a hit.
  • As buyers cautiously re-enter the market, they will once again start with comparatively smaller deals.

So what’s the good news? The Braff Group closed its report with this: “Well, it can be (good news) if you’re a well-capitalized provider and use  the disruption in the market to rescue faltering companies. This doesn’t have to be a shark-fest.  Sellers under such circumstances recognize that they aren’t going to get a  premium. But for buyers willing to pay a fair price, and equally important, give the seller’s caregivers and support staff a home, there could be extraordinary opportunity to gain an inside track on such deals, as well as do some good  for your business, the seller, their employees, the community, and you.”

by: Liz Beaulieu - Friday, March 27, 2020

I saw some back-and-forth on twitter between HME providers asking what the HME industry is like in Italy and the role it is playing in responding to the coronavirus pandemic there. So it was timely that I also saw an article in STAT about a paper published in NEJM Catalyst by a group of physicians at the Papa Giovanni XXIII Hospital in Bergamo about what they’ve learned during this pandemic, and it reads like a warning.

“Western health care systems have been built around the concept of patient-centered care, but an epidemic requires a change of perspective toward a concept of community centered care,” they write.

What’s community centered care?

“Pandemic solutions are required for the entire population, not only for hospitals,” they write. “Home care and mobile clinics avoid unnecessary movements and release pressure from hospitals. Early oxygen therapy, pulse oximeters and nutrition care can be delivered to the homes of mildly ill and convalescent patients, setting up a broad surveillance system with adequate isolation and leveraging innovative telemedicine instruments.”

Dan Starck of Apria Healthcare and the Council for Quality Respiratory Care told me last week that the HME industry stands ready to be the “pressure release valve” for acute care facilities. Oxygen therapy, pulse oximeters and nutrition care … HME providers have all that and more covered.

The Italian docs continue: “This approach would limit hospitalization to a focused target of disease severity, thereby decreasing contagion, protecting patients and health care workers, and minimizing consumption of protective equipment.”

The Italian docs concluded that this disaster could have been averted only by massive deployment of outreach services and noted, “we need a long-term plan for the next pandemic.”

That plan, they argue, is to transition away from a “more medicalized and centralized…society”

Weesie Walker of NRRTS says if there’s a silver lining in the current crisis, it’s that home care will be seen in a new way, a better way.

“I’m a very optimistic person, but this (pandemic) has been hard for me,” she said. “I just keep thinking there has to be a lesson we can learn and what I’m hopeful that lesson is, is a spotlight on the value and importance of (CRT and the HME industry). It really speaks to what we’ve been preaching for years. We have dedicated people out there, doing everything they can to still get equipment to people.”

by: Liz Beaulieu - Wednesday, February 12, 2020

I was recently a guest on Erik Mickelson’s podcast “DME Coach.” Erik asked me, “You’re a reporter; what makes your life easier, from the reporter side of things; what are you looking for from us providers?” I joked, “That the providers we call pick up the phone and talk to us?”

But it’s true. The HME industry is not so much an industry of press releases and press conferences, and so covering the industry, from our small office in Yarmouth, Maine, entails a lot of … well, calling providers and hoping they pick up the phone.

We have this tradition at HME News, going back to former editors Jim Sullivan and Mike Moran, of the “cold call corral,” when we call half a dozen providers a day for the first three days of working on a new issue. These calls are our way of having boots on the ground. They’re an opportunity to ask providers: Are you doing anything new; have you launched a new program or added a new product; what’s keeping you up at night?

Sometimes we go into these calls with a short checklist of things we want providers to weigh in on, like the most recent round of Medicare’s competitive bidding program or the most recent audit to get picked up by the RAC. But more often than not, we want you to talk, and we want to listen.

These phone calls are often what lead to our best stories, the stories HME News is known for and the stories that, often, no one else has (because, see above re: “cold call corral”).

Later in the podcast, Erik asked me, “What’s a question that I haven’t asked you that you wish I would ask you?” I asked Erik, “What do you, a provider and reader of HME News, wish we’d do differently?”

His answer: “My favorite thing that I come across when you guys do do this, are individual stories of someone who is fighting the good fight. They’re leaving the cave to go kill something and bring it home, because that’s what we’re all trying to do…Typically, if you look at a business like an Airbnb, there was a need, someone came up with an idea and they fixed it. They came up with something unique on how to build something. Those are my favorite stories. When you have a new product category and it works. I love to hear about the Smiths and the Joneses and the Johnsons. That’s my favorite part. (Everything else)—data is data, and things are what they are.”

We don’t get press releases from the Smiths, Joneses or Johnsons, so help us give you what you want. Pick up the phone. Talk. We’re ready to listen.

by: Liz Beaulieu - Wednesday, January 15, 2020

As Theresa and I put together our upcoming February issue this week, it has occurred to me that 2020 is not off to a bad start.

Just check out the front page lineup for the issue:

  • a new standard written order that replaces four other types of orders, which should result in streamlined documentation and reduced denials;
  • a pricing policy for accessories for complex rehab manual wheelchairs that has been reversed, which will result in improved rates for providers;
  • an M&A market that’s active, which will result in increased options for providers, not to mention increased attention from investors; and
  • an Invacare that’s rebounding in its 40th year in business and planning to launch more than a dozen new products this year, which will result in more diverse buying choices for providers.

Every one of these stories can be seen in a positive light.

The only thing (well, maybe not the only thing) that would make this front page better: a story on a bill passing to make permanent the 50/50 payments in rural areas and introduce 75/25 rates in non-bid, non-rural areas.

That’s still a work in progress.

And therein lies the rub with 2020: competitive bidding.

Late summer, early fall will likely be an inflection point for the industry: Will the rates for Round 2021 trend up as hoped, due to lead-item pricing and other changes to the program; or will they curve down, as they have in previous rounds?

We have five to eight months before we’ll find out.

So, in the meantime, let’s, as Miriam Lieber writes in a recent guest blog, simulate all possible outcomes: win a contract, don’t win a contract; win a contract, with higher rates; win a contract, with lower rates.

It’s a lot to unpack—start now.

Another good reason to start now: Things could get dicey in the back half of this year, with or without competitive bidding, as industry analysts point out in that story on M&A.

Who will win the presidential election?

Is there a looming recession?

As Brad Smith puts it, “Health care is not going anywhere, but what is bad for business, overall, is uncertainty.”

But let’s not get ahead of ourselves, unless it’s to simulate all possible outcomes for Round 2021. Or to talk about any of the other items on Lieber’s checklist.

Let’s talk about anything, as long as it has nothing to do with lambs.

by: Liz Beaulieu - Friday, December 6, 2019

As I was pulling the most read stories for this year, I was struck by the number of stories with unfinished business.

The No. 1 most read story was the news that Drive DeVilbiss was struggling under $600 million in debt, as reported in the Wall Street Journal. Also cracking the top 15 (see below) was a subsequent story about providers going on alert about possible changes at Drive DeVilbiss due to its debt, and a story about the company securing $35 million in new capital, as well as a reduction in cash debt service obligations. Not making the top 15, but still well read, was the news just last month that Drive DeVilbiss CEO Bob Gilligan had stepped down and Robert Size had been named the company’s new leader. With the infusion in capital, along with better rates, not to mention a new CEO, there’s a lot that may happen yet at Drive DeVilbiss in 2020.

Other manufacturers also dominated the most read stories of 2019, including Inogen entering the ventilator market with its acquisition of New Aera, a story that will have more color and context in 2020.

(A manufacturer that was surprisingly missing from the most read stories of 2019: Invacare. The company made the list last year for, along with Philips, going direct to cash-paying consumers for its portable oxygen concentrator. With its looming goal of $85 million to $105 million adjusted EBITDA run-rate by the end of next year, however, I wouldn’t be surprised if the company returns to the most read list in 2020, as it makes moves to hit its target.)

Stories about AdaptHealth’s merger and subsequent IPO also made the list of most read stories in 2019—another story, like Inogen’s, that will have more color and context in 2020. The company is actively consolidating the market, acquiring six companies since July, and expanding its product portfolio, acquiring McKesson’s supply business just last month. All eyes are on AdaptHealth, the first new public HME company in years—not just within the industry but also among investors (I got a call from one of them just this week).

But perhaps the biggest piece of unfinished business in 2019 is competitive bidding. Stories about vents and braces being added to Round 2021 and the industry’s increased education efforts, including a bid calculator, made the list of most read stories this year. I expect CMS’s plans to announce new payment amounts in the summer to be one of the most read stories, if not the No. 1 story, of 2020.

1.)   Drive struggles 600M debt
2.)   Providers cite frustration CareCentrix
3.)   Providers watch changes at Drive DeVilbiss
4.)   ResMed nears settlement of years-long investigation
5.)   Drive DeVilbiss secures additional runway
7.)   Inogen targets non-invasive vents
8.)   Bioscrip OptionCare to merge
9.)   AdaptHealth announces high profile merger
10.) Round 2021 new calculator highlights bid ceiling, comparisons
11.) Vents braces in for Round 2021
12.) Lincare has bought Southwest provider
13.) CPAP supplies OIG adding another layer of scrutiny
14.) Inogen hits bumps
15.) AdaptHealth becomes public company

by: Liz Beaulieu - Friday, November 1, 2019

Ask most anyone at Medtrade earlier this month, and they’ll tell you there was something in the air.

Sure, questions over competitive bidding loomed, but there was a feeling that, while the industry has experienced significant attrition in the past few years, those providers that remain are on solid ground, if not motivated to be on solid ground.
The data in this year’s State of the Industry Report, which will be published on our website in December, seem to reflect that perception.

First, there’s overall DME growth by category. All categories, with the exception of medical/surgical supplies, saw an increase in allowed charges from Medicare in 2018, with total allowed charges of $5.7 billion vs. $5.1 billion in 2017. Of particular note was the wheelchairs category, which saw a 10% increase in 2018 vs. 2017. In fact, when you compare 2018 data to the previous five-plus years, one might even call it a small rebound, though still far below 2012 levels ($8.1 billion), the year before competitive bidding expanded significantly in 2013.

Second, there’s the number of providers in the $3 million to $10 million range, and the number of providers in the $10 million and up range—they increased 16% and 6%, respectively, in 2018 vs. 2017. I recently talked to Bernie Lambrese, who is rebuilding his consulting business, and he said what the providers left in the market need to do is get bigger. Simple as that.

Third, there’s the list of top 100 providers of DMEPOS and their allowed charges from Medicare in 2018. While there wasn’t much jockeying in this year’s list compared to last year’s—the top four companies remained the same: Lincare, Accredo, Lincare Rx and Walgreen—there was an increase in their allowed charges in 2018. Lincare saw a 19.6% increase; Accredo, 6%; and Walgreen 7.4%. Of the top four, only Lincare Rx saw a decline, 7.4%. Beyond the top four, Apria Healthcare, in the No. 5 spot, saw a healthy 6.5% increase.

Of course, another reason for the good buzz at Medtrade: The changes to the bid program for Round 2021. Everyone hopes the industry will see increased single payment amounts when they’re released next summer, but as the saying goes, hope is not a strategy.

It’s time to act—whether it’s shifting your business model or advocating for changes on Capitol Hill or, ideally both—and the attendees at Medtrade were doing just that.

by: Liz Beaulieu - Thursday, October 10, 2019

I already wrote a story overviewing the HME News Business Summit, but here are some snapshots that, while they landed on the cutting room floor for that story, are still too important not too share.

The return of TPAs

AAHomecare’s Laura Williard hinted at the Summit that we’d be seeing a resurgence of managed care organizations using third party administrators—and not just in Florida.

And voila, just a few weeks later, Sleep Solutions in Michigan sent out an alert to its customers who are BCBS PPO members that the insurer has hired Northwood, a TPA, to manage their HME needs.

As a result of the change, Sleep Solutions warned customers that they may experience access issues (fewer HME providers can now offer products and service to these members) and they may experience reduced services (providers will be forced to re-evaluate what they offer due to reimbursement cuts).

A few years ago in Florida, you’ll recall how the now defunct Univita Health served as a TPA for 10 of the 14 plans participating in the state’s Medicaid managed care program, as well as an HME provider. Univita eventually lost the contracts and filed for bankruptcy, leaving providers in the lurch.

In response to the news in Michigan, Woody O’Neal, a provider in Alabama, commented on twitter: “Just terrible…TPAs, PBMs, all looking to do one thing…profit off the volume of transactions and add nothing to the patient experience. TPAs proliferated in the late 80s on workers compensation cases and now are in the mainstream commercial plans. Just frustrating.”

Stay tuned.

Time to stake your territory

I think everyone agrees that more health care is moving outside the walls of hospitals. How that manifests itself and how that care is paid for are the elephants in the room, but it’s going to happen. It is happening!

At the Summit, Dr. William Zafirau, who leads the Cleveland Clinic’s Center for Connected Care, which brings together all of the clinic’s home and transitional care services, talked about community paramedicine as a new model of care. He talked about how paramedics can treat in place, ideally with increased physician involvement, possibly through telemedicine, to prevent emergency department visits. He also talked about how they’re a good resource for connecting people with community resources.

He also talked about how paramedics may often need some HME—everything from walkers to nebulizers to home blood pressure monitors—to treat people in place.

The optimist in me responded to this with, hey, maybe there’s partnership potential for HME providers here; the pessimist in me responded with, providers need to stake their territory with hospitals for care outside of the hospital before it gets chipped away at by other providers.

Be warned.

Check out a video re-cap of the Summit here.

Check out photos from the Summit here.

by: Liz Beaulieu - Wednesday, September 4, 2019

During a conference call last week with the panelists for a session at the upcoming HME News Business Summit on investment and M&A in the HME industry, it wasn’t long before the elephant in the room came up: competitive bidding.

While there’s been an uptick in investors and M&A in the industry this year, everyone’s wondering what will happen in the time from CMS closing the bid window for Round 2021 on Sept. 18 and the agency announcing contract suppliers in the fall of 2020.
During that one-year gap, will investment and M&A continue, with the industry not knowing what the single payment amounts will be (CMS says we’ll know that in the summer of 2020) and who the contract suppliers will be?

Another possible wild card affecting investment and M&A: reimbursement in rural areas.

There are 50/50 blended reimbursement rates in those areas through 2020, but what happens after that? A bill in the House of Representatives seeks to make those rates permanent, but its fate is unknown. As one panelist pointed out: These rural areas have been seen as a haven from the bid program and a decent prospect for providers looking to buy. Will that go away?

But the thinking going into Round 2021 has always been that the industry has “hit bottom,” that the single payment amounts can’t go much lower than they already have, especially with a number of improvements to the program, like lead-item pricing (fingers and toes). Then there’s also likely to be a number of investments and M&A fueled by bets on which providers might come out on top come the fall of 2020.

There are a few other factors that might keep investors and M&A humming throughout the one-year gap, particularly related to non-Medicare payers. Panelists pointed out that they’re willing to pay top dollar for an HME company, even if it’s small, if they hold a contract that’s attractive.

This conversation got me to thinking about what providers at large will be doing during the one-year gap, not just related to M&A. What are your business plans for fall 2019 to fall 2020? Will you, for example, ramp up your non-Medicare business in case you don’t get contracts? Will you make changes to your business in preparation for possibly obtaining contracts?

Managing Editor Theresa Flaherty bets your answer will be “business as usual.”

You tell us.

I received an email recently that pointed out the amount of “negative” news stories in HME News. “I implore you to seek out more positive and uplifting news stories because if I dread visiting your site on a daily basis expecting doom and gloom, I promise your other readers feel the same way,” it read.

We wouldn’t be doing our jobs if we didn’t cover the legislative and regulatory developments often considered “negative” news. It’s true that competitive bidding and audits have dominated the headlines in the past few years, but for good reason, as these are important realities in the industry today that can’t be ignored.

But we look for and write stories of all kinds, and we’re now making more of a conscious effort to elevate some of the non-bid, non-audit stories that we write. While these stories may appear in our print issues, they don’t typically appear in our HME Newswire that goes out each Monday and, therefore, aren’t typically as visible on our website.

In a recent Newswire, for example, we did run a story about the supplies market fracturing (this could be considered “negative” news), but we also ran stories on an HME icon’s return to the industry (Jane Wilkinson-Bunch), a young professional in the industry working with a university to broaden their education to include HME and supplies (Justin Racine) and a provider that hosts a local farmer’s market each week to elevate its presence in the community and help with health and wellness (Barnes Healthcare).

We also launched a special HME Newspoll in July asking readers to share some positive and uplifting news with us. See some of your responses below.

We take reader feedback seriously and we’re always working to improve, so we appreciate emails like these.

And, as always, we can’t write about what we don’t know. Story tips are welcome!

According to a clinical study published in the Association of Rehabilitation Nurses journal, people with spinal cord injury live twice as long if they have two factors in place: 1. a sense of independence (I can do this) and 2. a sense of support (I don't know how to do this, but I know who to call). When HME providers invest in programs that offer fellowship and support to their customers, we have a tangible impact in helping our community live longer, healthier lives, in addition to the products we provide for their independence. That's why it's so wonderful to see HME providers actively engaged in community programs on a regular basis!
—Lisa Wells, vice president of marketing, Cure Medical, Las Vegas

Having been in this industry since 1984, I have literally been through the best and the worst of times. These are most definitely the worst of times. However, the brightest part of what we do is allowing people to return home to an often loving family and familiar environment. The appreciation for what we do is seen so often by our field technicians and therapists and all of the office staff when patients stop by or send kind notes and cards. That is why we stay. That is why we do what we do. Caring people, caring for people.

We do a lot of hospice business. Our delivery drivers frequently receive praise from our customers' families because of the care and understanding during a great time of emotional need.
I think the reimbursement staying the same in rural areas was a big positive for our company. Hopefully, the reimbursement doesn't decrease.

The HME industry works tirelessly to help patients live out the best quality of life in the most comfortable place, their own home. HME providers and advocates are reducing the total spend of health care for a patient by preventing costly episodes of emergency and extended care. This is why we are seeing wins at the state level, and ultimately, will see wins at the national level. I am confident the value of the HME industry will continue to be recognized with our efforts to demonstrate the good we do for patients. Our state providers have done a great job of inserting themselves into the legislative dealings of healthcare, and the result has been the elimination of sole-source provider agreements, inclusion of patient choice, and a better working relationship between the state, our health plans, and providers to achieve a better outcome.

For as bad as it gets for the industry with regard to reimbursement, regulation and legislation, at the end of the day we can still go home knowing that we made a difference in the lives of our patients. Even if it all ends tomorrow, we made a difference and made someone's life better!
—Mark Barch, MS, RRT RCP, president/CEO, PCMStexas, LLC Arlington, Texas

I'll start by saying that this is a difficult task. While insurance cuts make it difficult to meet patient needs in their homes, technology has advanced to a point where people who previously would be stuck in a healthcare facility can now be at home with their families. Technology advances have improved the quality of lives for our patients and I am proud to be a part of that.
—Tom Buchanan, RRT, vice president of clinical services, Brotherston Home Respiratory, Bensalem, Pa.

We are still in the business of taking care of people and I receive confirmation every day from my patients. They are so appreciative of what we do to make their lives better.

Making a difference. My father started the first DME company in our area back in 1978. He saw a need in our community and decided to do something to help. He always went above and beyond to see that people had what they needed. When I was young, people would ask what I wanted to do when I grew up, and I would say "I want to do what Daddy does." This is the only industry I know; I grew up in it. It makes it worth fighting to stay in business to know we've made a difference in someone's life. It is my honor and privilege to continue his legacy and help the people of our community.
—Susan Thompson, owner, Home Breathing Care, Beckley, W.Va.

by: Liz Beaulieu - Tuesday, July 2, 2019

Theresa and I met last week to talk about the stories we’re working on for our upcoming August issue. Except for a quick update on bid calculators (they’ve been downloaded 4,224 times since April 24!), we don’t have much in the way of competitive bidding related news. Which is, well, unusual.

Much of the focus by stakeholders in June has been on sign-on letters in the House of Representatives (180 signers!) and the Senate (38 signers!) asking CMS to drop non-invasive ventilators from the bid program. Which is technically bid news, but we were talking more about overarching bid news, like is there any movement in getting reimbursement relief for non-bid, non-rural areas? (The bill in the House that would do just that, H.R. 2771, has 31 co-sponsors right now, by the way.)

This got Theresa and I talking about possible angles on bid stories and staring us right in the face: the bid window opening on July 16. Which got us to talking about how providers are strategizing their bids. No one’s going to talk to us about what they’re bidding (nor should they), but we’re curious about:

  • How did providers decide what product categories to bid on, and what not to bid on?
  • How did they educate themselves on the changes to the program? Did they attend the industry’s “Bid Smart Summit” in June? Did they listen to any of the various webcasts offered?
  • When are they more likely to submit their bids? At the beginning, middle or end of the bid window? Is there an advantage to one or the other? I'm especially curious about this one: What's their bid style? To be proactive? To procrastinate?
  • How did they go about formulating their bids? Did they use the bid calculators? Did they develop their own spreadsheets?

Of course, the timing of the bid window is less than stellar, as provider Regina Gillespie pointed out on twitter this week (see above).

So what’s the scoop providers, other than that you’d like to be doing something else with your summer?

Email us (,, DM us on twitter (@hmeliz, @hmetheresa), call us (207-846-0600, ext 230 and 226, respectively).

Oh, and fear not, Theresa will also have an update on H.R. 2771 in the HME Newswire on July 8!