Subscribe to On the Editor's Desk RSS Feed

On the Editor's Desk

by: Liz Beaulieu - Friday, June 14, 2019

This year’s HME News Business Summit kicks off on Monday, Sept. 23, about a week after the bid window closes for Round 2021. The event is in Cleveland no less, one of the original nine competitive bidding areas.

Why is this important?

What better time, than the week after a big deadline—after spending weeks, if not months, with your noses in calculators and DbidS—to pick your heads up and take in the bigger picture.

Because, while competitive bidding has been largely all-consuming for the HME industry, there’s a dizzying amount of change going on in health care, in general, and that’s just as important.

That’s a big reason why, when we built the education program for this year’s Summit, we pulled in outside experts to provide thought leadership on the industry and its role in the continuum of care.

The keynote session will be a “fireside chat” between Josh Marx of the Medical Service Company and J.B. Silvers, a leading healthcare economist. They’ll talk about many of the themes that underly the sessions in this year’s program, including vertical integration and consumerization in health care.

Attendees will also hear from Dr. William Zafirau, who heads up the Cleveland Clinic’s Center for Connected Care, a division that brings together all home and transitional care services. How does one of the most pre-eminent healthcare systems in the country view the role of home care as medicine transitions from volume to value?

Additionally, attendees will hear from Aaron Sheedy of Xealth on digitally enabling care, and Kevin Caliendo and Matthew Taylor from UBS on potential large new players in HME.

These are speakers you’ll be hard pressed to hear from, at another industry event.

They say timing is everything. On Sept. 23, it’s time to think big.

Please consider joining us!

by: Liz Beaulieu - Monday, April 29, 2019

Is there a provider that doesn’t like a good lead? As long as it’s legal? (Which, BTW, is good question as we’ve learned from “Operation Brace Yourself.”)

I remember talking to a provider once about Inogen and the provider said the amount of advertising they do almost makes up for the fact that they’re also a competitor. Inogen has arguably done the most to raise the awareness of POCs to the point where Mr. Smith goes into an HME company asking for an Inogen. It has become the Kleenex of POCs. But Mr. Smith doesn’t necessarily want to buy from Inogen; he wants to buy from a local company; and this provider is up for the task.

So I was surprised when I was talking to providers about ResMed’s new pilot program called Oxyensure and one provider told me: “I have access to patients. I don’t need them putting up a website to help me get access to patients.”

One part of www.oxyensure.com serves as a lead-generation service of sorts for HME providers. If Mr. Smith lands on the website and wants the Oxyensure POC (ResMed’s Mobi POC re-branded) and he wants to use insurance, the website will direct him to a provider in his area who can help, if that’s what he prefers. The other part of the website serves as a direct-to-consumer service for patients who want to pay cash.

This provider believes that manufacturers that offer POCs to cash paying customers—and insurance using customers, for that matter—are barking up the wrong tree.

Once more providers adopt a non-delivery model and fold in more and more POCs into their fleet, this provider says Mr. Smith is going to choose them over a website or a telephone. Every. Single. Time. Sure, the transition isn’t happening very fast, this provider acknowledges, but it’s happening.

This is the opposite of what Inogen says conference call after conference call to discuss its latest financial results. Even when its business-to-business sales are tracking ahead of its direct-to-consumer sales, it says it’s the latter they’re banking on being the leader in the long term.

Who’s right? This POC space sure is interesting— and getting more interesting.

by: Liz Beaulieu - Monday, April 8, 2019

The title of my blog is “On the editor’s desk” and, this time of year, what’s on the editor’s desk is…a lot.

Sure, there’s the usual detritus of coffee cups, water bottles, hand lotion, gum, desk planner, ear buds and post-it notes.

But there’s also more specific detritus related to a number of big projects, specifically the HME News Business Summit, the 2019 HME Financial Benchmarking Survey and the HME Excellence Awards.

Let’s start with the Summit. I’m in the throes of putting together the educational program for this year’s Summit, Sept. 22-24 in Cleveland (there are no hurricanes in Cleveland, right?), and it’s coming together nicely, but it’s far from complete. I’ve signed up a doc from the Cleveland Clinic (on how it’s prioritizing care in the home) and I’m hoping to sign up a healthcare economist from Case Western Reserve University (on anything from the larger paradigm shifts in health care to the role of post-acute care in the value chain). I’m also chasing sessions on managed care organizations (trends in contracting and payment models); large, new entrants in health care (hello Amazon, CVS and others); and M&A and investment opportunities (with valuations up and with uncertainties in 2020, this is the year to give it your full consideration). My goal is to have the educational program complete by June 1—keep an eye out for it at www.hmesummit.com.

For the Benchmarking Survey, we’re pleased to be partnering with the VGM Group again this year. The link to the survey is now live, and you’ll be seeing us and VGM promoting the survey and asking you to complete it for the next few months. In fact, we’re going to nag and bug, because it’s that important. We got a nice bump in the number of providers who completed the survey last year, but the more providers who complete the survey, the more robust and valuable the data is. This survey is the only thing like it for the HME industry, so help us help you and complete the survey. Mark Higley at VGM says he’s going to tell providers he won’t answer any questions from providers about Round 2021 until they’ve completed the survey. He’s joking, of course, but you get the idea. The survey is open until July 17, but don’t put off until tomorrow what you can do today. Did I mention that we’ll be doing two raffles for providers who complete the survey: a free registration to the Summit in September, and a free registration to the VGM Heartland Conference in June?

For the HME Excellence Awards, we’ve made a change this year: We’ll be picking one “Provider of the Year” instead of first, second and third place winners. I can say, on behalf of myself, Publisher Rick Rector and judges Jonathan Sadock, Miriam Leiber and Lisa Wells, that this is one of our more fun projects. We’re always floored by the quality of the providers who submit applications for this award—we just wish there were more of you. We’re providing incentives for you for this, too: We’ll be doing a raffle for a free registration to the HME Databank, and we’ll be giving the “Provider of the Year” two free registrations to the Summit. The deadline to submit an application is June 4.

Hop on it y’all!

by: Liz Beaulieu - Monday, March 11, 2019

It certainly caught the attention of HME providers when CVS announced that CPAP masks would be among the products offered in three new HealthHub concept stores in the Houston area.

In a CNBC story online, there was even a picture of the CPAP masks featured in the stores, namely the ResMed AirFit series.

From what I can tell, providers have a steely resolve in the face of the announcement. Providers are still the ones providing CPAP devices and, therefore, they’re the ones with established relationships with users. They’re also, largely, the ones making sure that users remain compliant and, therefore, are the link to being able to continue their therapies.

They’re also feeling like they’ve been here before.

And they have. Way back in 2012, Philips Respironics had a pilot project with Kroger to provide the company’s masks, with prescriptions, through some of the grocery store’s pharmacies.

(What came of that pilot project? I’ve made inquiries to Philips.)

There’s one fear, however, that providers had about Kroger and they still have today about CVS. Might users be tempted to just pay cash for their supplies from a CVS, especially if they’re happy with their current mask and if they have a high deductible insurance plan?

And if CVS is successful with supplies, what makes anyone think they’ll stop there?

This is essentially the thinking of provider Andrew Trammell, who spoke with Managing Editor Theresa Flaherty for a story on the announcement.

“If you have been using the same CPAP mask for a long time, you really don’t need a whole lot of interaction,” he said. “I think CVS could absolutely be a threat.”

Of course, providers always have threats, whether it’s CVS or the growing number of online providers of not only CPAP supplies but also the devices themselves!

We're running a poll asking providers whether or not the announcement concerns them. Right now, the majority say yes, but the majority also say they think their customers will keep coming back to them. The biggest reason: their expertise.

“Unless CVS plans to employ knowledgeable personnel like an RRT to handle what is usually the No. 1 complaint of CPAP users (mask issues), I believe they’ll soon learn DME companies specialize in this type of service,” wrote in one respondent. “However, a move such as this will temporarily impact the DME world until patients figure this out.”

by: Liz Beaulieu - Thursday, January 31, 2019

CMS this week has made much ado about its new “What’s Covered” app that allows beneficiaries to see whether Medicare covers a specific medical item or service, which of course includes HME.

The launch of the app paralleled the agency’s CMS Quality Conference, or #CMSQualCon19 as it’s known on twitter. CMS’s coverage of the event on the social media platform has included photos of attendees, including these patient advocates, giving the app a whirl.

The initial reaction to the app by those in the HME industry has been, well, tepid. The gist of their reaction: The app doesn’t go nearly far enough.

Here’s one industry stakeholder: “If you put oxygen into the app, it essentially says the doctor needs to order it. Yet we have a 20-page coverage determination document, a Program Integrity Manual, etc., for oxygen, and that’s what they have in the app?”

Of course, the app is meant for bennies, so there’s a delicate balance, I’m sure, between enough information, making the app usable; and too much info, making it unusable.

But as some providers pointed out on twitter: It’d sure be helpful if the app included more information on pricing.

Here’s provider Gary Sheehan explaining this on twitter, via a hypothetical conversation with a bennie:

Patient: Why do I have this bill? My (pick one) doctor/insurance company/neighbor/goldfish told me it was covered?
(For the purposes of this blog, we could add the “What’s Covered” app to the list? My app told me it was covered!)
Rep: It is covered, but you have a $3,000…
Patient: If it’s covered, why do I have a bill? I pay $900 a month for this policy…everything is covered.”

It turns out that, while the app does have cost information (for oxygen, it includes information on the 20% co-pay, 36-month cap, competitive bidding program, grandfathering), it’s missing one crucial piece of information: what Medicare pays suppliers for equipment and services.

Sheehan again on twitter: “It’s an essential determinant of out-of-pocket expenses, yes. And if that’s too complicated, what does that say about the fee schedules?”

Woody O’Neal chimed in on twitter, too: “Specific costs could be achieved by clicking the product and then entering bennie zip code, and a pretty accurate estimate of cost would be easy. My staff performs these functions every day in Brightree, so I know the technology for price estimates exists.”

To give CMS the benefit of the doubt, perhaps, as Sheehan pointed out, this is only version 1.0 of the app and, perhaps, future versions of the app will include additional information.

If so, CMS, when you’re ready, I know a few people you can talk to.

by: Liz Beaulieu - Thursday, January 17, 2019

I know January is supposed to be a time of the-slate-has-been-wiped-clean optimism, but I’ve read a number of things in the first few weeks of 2019 that have left me feeling, well, despondent.

The first thing I read was a letter from my health insurer informing me of a new program called “Reduce My Costs.” Apparently, if I need one of a handful of outpatient, non-emergency tests or procedures (bone density study, radiology, ultrasound, lab work, mammogram, PT/OT, infusion therapy), I can call a nurse that works for my insurer to compare the cost of having these tests/procedures done with different providers in my area. If I choose to get care from the “lower-cost provider,” I will receive a cash reward. “The reward is in addition to money you save by using a lower-cost provider,” the letter reads.

The second thing I read was a story from Kaiser Health News about GoFundMe crediting medical expenses for about one-third of the $5 billion the company has raised in the past nine years that it has been in business. GoFundMe features a whopping 250,000-plus medical campaigns each year, according to the story.

The third thing was a story from CNBC about Apple being in talks with Medicare Advantage plans to bring its watch to at-risk seniors. “Health experts” tell CNBC the move makes sense since it could prevent pricey doctor or hospital visits. Apple has already signed a deal with Aetna and United Healthcare to subsidize the cost of watches.

In 10 years, what will we think of a healthcare system that features:

  • Health insurers providing incentives to members to try and control where they get their care.
  • Healthcare bills so astronomical that they have made crowdsourcing a fourth-party payer.
  • Health insurers incentivizing members to use technology to track their health, when they dis-incentivize them from accessing life-sustaining equipment like oxygen concentrators and ventilators.


I could just chalk this all up to seasonal affective disorder (we’re in Maine, don’t forget, and about to get up to 30 inches of snow on Sunday), but I think not.

It’s only January, so there is that. Let’s hope the news gets better in the next 11 months.

by: Liz Beaulieu - Friday, December 14, 2018

It just occurred to me and Theresa this week, as we were pasting up the January issue (yes, in addition to writing 98% of all the stories that appear in the issue, we also lay it out using InDesign!), that 2019 is the 25th year that HME News has been in print.

25 big ones.

Theresa and I have been working at HME News since 2005 and 2004, respectively, so in other words, about half of the publication’s life.

Looking at the front page of HME News way back in 1995 is quite a trip. Remember when HME manufacturers had high-profile spokesmen, including Don Shula for “Pridehealth” in this issue? I also remember Arnold Palmer for Invacare.

Most of the other news and companies on this front page predate me—except for Sunrise, of course—but there are a number of themes that remain relevant today: mergers and acquisitions, managed care, licensure, etc.

I started down this memory lane, because I wanted to know if we have printed cartoons in our Edit Spread section from the beginning and it turns out we have. And cartoons by the same cartoonist no less: Steve Meyers, based right here in Maine.

The cartoon for that first issue in 1995 concerned audits. No one has to “remember” those; they’re still very much a problem.

I wanted to know if we’ve printed cartoons from the beginning, because one way Theresa and I would like to mark our 25th year of publishing is re-printing five of our favorite cartoons over the years. We already know one of them will be the cartoon of HME providers at a Christmas party, all wearing ugly sweaters, one of which reads: shrinking reimbursement. The little doc in that cartoon says, “Don we now our not-so-gay apparel.” It still cracks me up.

Maybe we’ll even have a contest soliciting cartoon concepts from you, our readers, and have Steve ink it up for an issue next year. What do you think? Are Theresa and I the only ones who are crazy for these cartoons (though, let me tell you, they’re easier to come up with some months than others)?

I think we’re kicking off our 25th year of publishing with a pretty good cartoon in the January issue. Enjoy this sneak peek.

by: Liz Beaulieu - Wednesday, November 28, 2018

“We believe we’re on the cusp of another 2012,” said Dexter Braff during a webcast today on the M&A outlook for HME.

What happened in 2012?

The number of HME deals jumped to 107, up from 71 in 2011 and 59 in 2010. The number of private equity deals also jumped, to 10, up from four in 2011 and 2010.

2012 was also one year after CMS kicked off its competitive bidding program in the country’s largest cities.

Putting two and two together: Investors thought, after the first round of bidding, that reimbursement wouldn’t go any lower, so they pressed on the gas on deals.

“They thought they knew where the space was headed and that reimbursement wouldn’t go down from where the first round settled,” Braff said.

Investors, as we know, were wrong. Subsequent rounds of bidding resulted in lower and lower reimbursement, and deal activity suffered. There were 68 deals in 2013, 61 deals in 2014, 47 deals in 2015 and 40 deals in 2016. There were four private equity deals in 2013, five in 2014 and 2015, and three in 2016.

“There was a significant retreat,” Braff said. “They saw that in subsequent rounds there were new bottoms to be found.”

So why are we on the cusp of another 2012, when deal activity was at a 10-year high?

With CMS’s plans to pause the bid program for two years, in 2019-2020, and to implement significant changes in 2021 that could actually increase reimbursement, investors are talking about HME again.

“There’s been a lot of chatter,” Braff said.

There was also an article “out of the blue” in a private equity publication in October titled: “Durable medical equipment: once shunned, now new opportunity for PE.”

“We don’t know if there’ll be (a surge in deal activity), but if you made a bet that there would be, it wouldn’t be a stupid bet,” Braff said.

You know, you can still register to watch/listen to a digital recording of the webcast here!

by: Liz Beaulieu - Friday, November 16, 2018

To help determine the focus of a recent webcast with Andrea Stark, we surveyed HME providers on an upcoming two-year gap period in Medicare’s competitive bidding program.

Before sharing the results of the survey, which surprised me, let’s talk about who took the survey. The majority of the 89 respondents, about 69%, said they were non-contracted providers. The remaining, about 32%, said they were contracted providers.

We then asked them which of the following scenarios was of most interest to them:

  • Servicing a competitive bid area during the transition
  • Exiting a competitive bid area during the transition
  • Submitting a bid in the next 24 months


The majority of respondents, about 59%, said they were most interested in servicing a competitive bid area during the transition, and about 24% said they were most interested in submitting a bid in the next 24 months.

The smallest percentage of respondents, about 17%, said they were most interested in exiting a competitive bid area during the transition.

To review: So you have mostly non-contracted providers mostly interested in servicing a competitive bid area during the transition. Put another way: Providers who have been locked out of the program for the past few years want back in.

This surprised me. When I was at Medtrade last month, in a session with Jeff Baird about the gap period, there were a lot of questions from not only contracted providers looking to exit some or all of their Medicare business but also non-contracted providers looking for reasons and rationale to stay out of it.

The stories that we’ve written so far about this show an industry fairly divided about how to operate during the gap period, when an any willing provider provision will allow any Medicare-enrolled provider to supply beneficiaries with DMEPOS. In “Expect shifts to Medicare’s provider base,” we reported that the majority of non-contracted providers, about 60%, won’t try to pick up Medicare business on Jan. 1, but the majority of contracted providers, about 67%, say they will continue to do business with Medicare.

In “Any willing provider? It’s not a unanimous decision,” we wrote about how the initial reaction of providers on the gap period and the any willing provider provision ran the gamut.

When I talked to providers at Medtrade, before the final rule had come out, no one could tell me definitively what their strategy was going to be post-Jan. 1. That supports a belief by Stark and Jeff Baird that providers won’t be making any “knee-jerk” reactions.

So we’re preparing for some wait-and-see in January, but as we get deeper into the first quarter, it will be interesting to see how this all shakes out.

Hold on. It could be a bumpy ride.

There seems to be an uptick in outsider interest in the POC market in the past few months, and it’s no wonder with Inogen’s off-the-charts financials, and Philips and Invacare dipping their toes into direct-to-consumer business models.

Whenever I’m listening to a conference call on Inogen’s most recent financial results, an analyst almost always asks CEO Scott Wilkinson about POC adoption, mainly: When will we see it take off? And Wilkinson always says the company doesn’t expect to see a “hockey stick” growth curve in adoption. More like, slow and steady.

I looked at what Medicare paid for POCs (E1392) over a 10-year period, from 2008 to 2017, using our HME databank. What I found: While the amount Medicare paid for POCs has been slow and steady from 2014-17—and for one year, 2016, a bit bumpy—when you look at the past 10 years, payments have increased a whopping 821.05% (thanks to a particularly active 2008-13).

2017:26,521,201
2016:25,369,608
2015:25,900,993
2014:23,888,362
2013:22,706,968
2012:17,895,957
2011:12,366,372
2010:8,607,453
2009:5,184,240
2008:2,879,445

When you look at the same 10-year period for stationary oxygen concentrators (E1390), Medicare payments decreased 78.27%.

2017:425,142,708
2016:620,708,743
2015:903,973,456
2014:908,279,821
2013:1,063,635,721
2012:1,225,553,358
2011:1,357,953,903
2010:1,404,413,286
2009:1,379,142,846
2008:1,956,407,246

Now, one must take into consideration the reduction in reimbursement that spread to significantly more competitive bidding areas on July 1, 2013 (Round 2) and again on Jan. 1, 2016 (national rollout). So perhaps a look at the number of Medicare beneficiaries is more fitting/telling?

For E1392:
2017:144,213
2016:128,748
2015:118,005
2014:106,763
2013:97,434
2012:76,406
2011:54,872
2010:36,478
2009:23,686
2008:13,147

That’s a whopping 1,007.69% increase in the number of Medicare bennies over 10 years.

For E1390:
2017:1,229,770
2016:1,296,213
2015:1,340,951
2014:1,389,739
2013:1,453,982
2012:1,515,990
2011:1,578,755
2010:1,592,902
2009:1,598,701
2008:1,626,872

That’s a 24.41% decrease in bennies.

A caveat: The bid program has likely impacted access to both POCs and stationary oxygen concentrators, slowing down increases for the former and speeding up decreases for the latter.

I’m interested to hear what you think. What are your take-aways?

Pages