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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).


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


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:

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

For E1390:

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?

by: Liz Beaulieu - Tuesday, October 16, 2018

For a number of reasons, I didn’t attend Medtrade last fall (husband at must-attend leadership retreat, leaving me single parenting it) or the HME News Business Summit last fall or this fall (medical emergency from hell, hurricane from hell), so it was great to see so many of you in person this week at Medtrade.

I’m talking about you Gary Sheehan of Cape Medical Supply, Joel and Josh Marx of Medical Service Co., Mike Bailey of Handi Medical Supply, Patty Mastandrea and John Sphon of MedCare Equipment, and more!

On Monday, I sat in on a number of sessions that were part of Medtrade’s competitive bidding track, including Jeff Baird’s session on the “gap period”—that 18 to 24 months when any Medicare-enrolled provider can provide DMEPOS to Medicare beneficiaries. There were a good number of questions, a sign providers are really digging into what’s best for their business. One attendee, a current contract provider, asked Baird if they could drop their Medicare business on Jan. 1, 2019, when the any willing provider provision is set to go into effect. “You have an absolute right” to do that, he told her. It’s almost as if a hush fell over the crowd.

On Tuesday, I spend the morning on the show floor, talking with mostly exhibitors. Some of the things I learned:

  • 3B Medical’s Alex Lucio says the company has sold out of its Lumin Bullet, a device that cleans CPAP hoses, even though it hasn’t even started production yet. The company expects to make the device available in December. Why is it resonating so much with providers? Two reasons: First, it’s an easier sell to CPAP users at $99 retail than a Lumin CPAP Cleaner at $249 retail; second, “Dealers are hungry for more cash items, in general,” Lucio said. “The Lumin line is outselling anything else we sell.” 3B was also talking up its first portable oxygen concentrator, the Aer, at Medtrade. It plans to make that available in January.
  • Ron Richard, who has been a presence in the HME industry at a number of companies, is back on the scene at Medtrade this year with a new company called AirAvant Medical, which makes the Bongo Rx, a small device that goes in each nostril and creates back pressure when users exhale. The company is positioning the Bongo Rx as a retail product that needs a prescription, and it was at the show to build a dealer network to provide the product to users. It envisions them selling the devices in a four pack, one each for 90 days. The company plans to release the results of a clinical trial in January that compares the device to CPAP devices and shows that it meets all AASM guidelines for mild to moderate sleep apnea.

More faces to see and more stories to hear tomorrow, including from Pride Mobility and Quantum, Apacheta, The Compliance Team, Brightree and more.

But first, another hour on the show floor, and then the Stand Up for Homecare Reception. See you there!

by: Liz Beaulieu - Tuesday, September 25, 2018

Fall always makes me think of the end of the year, and the end of the year always makes me wonder about the most read stories of the year.

I just pulled that data for Jan. 1, 2018, through today, Sept. 25, 2018, which represents roughly three-quarters of the year, and the top 10 most read stories are listed below.

As you can see, the list is dominated by competitive bidding news, and it has been a roller coaster year for the program. We wrote about—and you read about in earnest—everything from HHS’s proposal to roll out a bid process for rural areas (not just bid-influenced pricing, but an actual bid process) to CMS’s proposal later in the year to pause the program while it makes substantive changes.

We knew that Seema Verma’s acknowledgement that there are flaws with said bid program—the first time a CMS official has acknowledged as much, stakeholders say—was going to attract a lot of hits. Thanks again to Theresa for staying past 5 p.m. to listen to the conference call and file this important story.

In the wake of CMS’s proposal to pause the program and implement an any-willing provider provision, a whole new set of questions cropped up and we sought answers in a number of follow-up stories, including “Any willing provider? It’s not a unanimous decision” and “Expect shifts to Medicare’s provider base, poll respondents say.”

Now that I’ve pulled this data, it makes me think of how it will change in the next three months. I can guarantee you that one story we haven’t written yet will knock one of these stories off the list: In November, stakeholders expect CMS to publish a final rule with final bid changes.

Stay tuned.

CMS upends competitive bidding
Agency pauses program with plans to implement significant changes, including some that stem from industry recommendations
WASHINGTON – All Medicare-enrolled HME providers are back in business starting Jan. 1, 2019.

CMS’s Seema Verma: Current bid structure ‘not sustainable’
WASHINGTON – CMS Administrator Seema Verma says she wants to “modernize” the agency’s long-standing competitive bidding program for DMEPOS by instituting market-oriented reforms.

Amazon wants to disrupt health care, including DME, report says
BOSTON – DME is one of five possible points of entry for Amazon to dominate the healthcare market, according to a new report from global management consulting firm L.E.K. Consulting.

Proposed rule: Current bid contracts won’t be extended
Rule also proposes adjustments to fee schedule methodology, establish separate payment class for oxygen
WASHINGTON – A proposed rule released today seeks to make changes to the Medicare fee schedule and the competitive bidding program.

Embattled Arriva Medical closes
CORAL SPRINGS and BOCA RATON, Fla. – Arriva Medical is closing its facility in Coral Springs and laying off 142 employees, the Sun Sentinel reports.

CMS adds templates for RADs, PAPs and vents
Of the three, RADs top the improper payment rate at 63%
WASHINGTON – CMS unveiled the first drafts of clinical templates for respiratory-related items at a Special Open Door Forum April 19.

Stakeholders ‘aghast’ at bid proposal
 ‘We’ve already stripped the benefit and I don’t think there’s any more savings to be had’
WASHINGTON – Industry stakeholders say they are as surprised as anyone by a proposal to expand Medicare’s competitive bidding program to rural areas.

CMS rule falls far short of bid relief
 ‘We have to go back to Congress and tell them, you have to fix it’
WASHINGTON – The long-anticipated interim final rule landed with a thud last week, when it became apparent that it offered little in the way of bid relief, say industry stakeholders.

Any willing provider? It’s not a unanimous decision
YARMOUTH, Maine – Reaction among providers to CMS’s any willing provider provision run the gamut—with some feeling disbelief, some contemplating new opportunities, and some discounting the idea outright.

Expect shifts to Medicare’s provider base, poll respondents say
60% of non-contract suppliers, 33% of contract suppliers say they’re out
YARMOUTH, Maine – The majority of non-contract suppliers who responded to a recent HME Newspoll (60%) say they won’t try to pick up Medicare business starting Jan. 1, 2019.

by: Liz Beaulieu - Wednesday, August 29, 2018

This probably says it all: In this year’s State of the Industry Report, for our data on Medicare utilization for 2017, we decided to change the name of the column “2017 Growth” to “2017 Change.” Why? Because for several years now, the allowed charges for the majority of codes have been decreasing year over year, not increasing.

Take CPAP devices. There is an increasing, not decreasing, number of people who are being diagnosed and treated for obstructive sleep apnea, right, with awareness efforts at what I’d guess are all-time highs (thanks to everyone from the CPAP manufacturers to John Goodman’s character on Roseanne)?

Well, the allowed charges for E601 decreased about 15% in 2017 to $136.4 million.

  • Oxygen concentrators (E1390): down about 31%
  • Power wheelchair, Group 2 standard, Captain’s chair (K0823): down about 27%
  • Hospital bed, semi-electric with mattress (E0260): down about 28% (although, without mattress: up about 53%)

So what are those products that saw “growth” in 2017?

Portable oxygen concentrators, for one. The allowed charges for E1392 increased about 5% in 2017 to about $35.3 million.

Outside of POCs, supplies, in general, seem to be a product category that’s seeing growth year over year.

  • Disposable canister for pump (A7000): up about 7%
  • Tubing used with suction pump (A7002): up about 4%
  • Replacement nasal cushion (A7032): up about 3%
  • Replacement nasal pillows (A7033): up about 5.5%
  • Cushioned headrest (E0955): up about 16%
  • Tubing with heating element (A4604): up about 25%

There are a few other codes that, like cushioned headrests and tubing, saw double-digit “growth” in 2017, including:

  • EF blenderized foods (B4149): up about 24%
  • Custom fabricated wheelchair back cushion (E2617): up about 20%
  • Power wheelchair, Group 3 standard, Captain’s chair (K0849): up about 20%
  • Ultralight wheelchair (K0005): up about 24%
  • Dry pressure mattress (E0184): up about 44%

You’d think with the aging baby boomers that we’d see some more consistent, marginal increases in utilization across the board starting right about now. Actually, with the oldest baby boomers starting to turn 65 back in 2011, we should be in the thick of it.

See these numbers and more in December, when we publish the State of the Industry Report online.

by: Liz Beaulieu - Wednesday, August 1, 2018

The list of top 100 suppliers of DMEPOS by amount allowed for 2017 is in.

The top five looks like this:

Lincare, $539, 604, 080
Accredo Health Group, $475,577,257
Lincare Pharmacy Services, $277,122,027
Walgreen, $215,880, 876
Zoll Services, $212,308, 306

The top five for 2016 looked like this:

Lincare, $651,783, 993
Accredo Health Group, $482,764,158
Lincare Pharmacy Services, $290,162,919
Apria Healthcare, $224, 300, 906
Zoll Services, $204, 036, 809

So once again, we have Lincare at No. 1, albeit with an about 17% reduction in amount allowed; Accredo Health Group at No. 2, with about a 1.5% increase; and Lincare Pharmacy Services at No. 3, with an about 4.5% reduction.

A notable change from 2016 to 2017: Apria Healthcare drops out of the top five for 2017, while Walgreen moves in. Apria moved to No. 6 in 2017, with $200,648,591 in amount allowed. Walgreen had been No. 6 in 2016, with $182,037,356 amount allowed.

Apria wasn’t the only provider to drop one or more spots from 2016 to 2017. Coram Alternate Site Services dropped from No. 8 to No. 11; KCI USA dropped from No. 10 to No. 23; and Arriva Medical, which was No. 12 in 2016, didn’t make the list at all in 2017. The embattled Arriva, as you know, closed for good in 2017.

But other providers moved up one or more spots in 2017, including United Seating and Mobility (No. 16 to No. 12), 180 Medical (No. 14 to No. 9), Byram Healthcare Centers (No. 13 to No. 10), and Liberator Medical (No. 19 to No. 14).

Other providers that made the top 100:

No. 18, Option Care, $57,766,599
No. 22, National Seating and Mobility, $51,158,113
No. 24, Verus Healthcare, $45,476,878
No. 26, American HomePatient, $43,311,284
No. 38, Norco, $25,849,469
No. 46, Super Care, $21,648,832
No. 50, Binson’s, $19,658,545
No. 56, Inogen, $17,495,682
No. 57, Hoveround, $17,161,379
No. 58 Aeroflow, $16,275, 277

Check out our State of the Industry Report in December for a more complete list.

by: Liz Beaulieu - Friday, July 27, 2018

Innovation: a new method, idea, product.

You’ll find all that and more in this year’s educational lineup for the HME News Business Summit.

A new method: A hybrid business model that gives both manufacturers and providers skin in the game, yet tweaks their roles to maximize cost-savings.

A new idea: A healthcare continuum that places the patient at the center of care where they are most often, in the home.

A new product: A growing group of patient engagement tools that serve the dual purpose of improving your business and patient care.

Visiting speaker Jacob Warren, a rural healthcare expert, believes innovation, in the form of technologies like remote patient monitoring and mHealth, is the key to not only taking good care of patients in rural areas, but also fueling successful businesses in those areas.

As is the Summit way, we’ve also put M&A front and center, with The Braff Group providing a market outlook and a panel of providers making the case for why they’re buying.

Additionally, we’ll be putting industry icons Jeff Baird and Cara Bachenheimer in the hot seat to answers all your questions—and we’re guessing most of them will be competitive-bidding related.

Finally, speaker Justin Racine will be taking on the elephant in the room: Amazon.

The Summit will show you how you can inject innovation into your business today. Please consider joining us!

by: Liz Beaulieu - Thursday, June 28, 2018

The data’s starting to trickle in for this year’s State of the Industry Report (keep an eye out for it online in December!) and at least one of piece of data isn’t looking so bad.

Here is the breakdown of the number of HME companies by how much they billed Medicare for DMEPOS in 2017:

<$300K:                 80,291

$300K to $1M:        3,877

$1M to $3M:           1,093

$3M to $10M:          202

>$10M:                  54

In 2016, the data looked like this:

<$300K:                 81,286

$300K to $1M:        3,679

$1M to $3M:           921

$3M to $10M:         152

>$10M:                  55

As you can see, the number of HME companies that are really small and really big decreased (though only by 1 for the >$10M companies), but the number of companies that are in the middle increased, with the biggest increase for the $300K to $1M companies.

That the biggest increase is in the $300K to $1M companies is a little surprising, considering all the consolidating going on in the HME industry. It’s hard to make the current Medicare climate work when you’re that small, but maybe these companies are hyper-specialized?

These increases follow a steady decline in the number of HME companies, pretty much across the board, since 2011, when Medicare kicked off its competitive bidding program.

Let’s take the $3M to $10M companies as an example:

2011: 209

2012: 229

2013: 184

2014: 173

2015: 172

2016: 152

2017: 202

So for these companies, we actually see a bump in 2012, after Round 1 of competitive bidding, but starting in 2013, when the program spread to substantially more areas, it was downhill from there until 2017.

In fact, when you look at this seven-year spread, $3M to $10M companies are actually nearly back to their 2011 levels.

Stay tuned—there’s more where this came from.

by: Liz Beaulieu - Friday, May 18, 2018

Ever since the interim final rule was published in the Federal Register last week, there has been a cloud of disappointment hanging over the HME industry.

But for those of you who took the time to read the IFR in full, you’ll find some interesting language from CMS acknowledging issues with the competitive bidding program and the agency’s ability to monitor the program’s impact on access.

If you didn’t take the time to read the IFR in full, AAHomecare provided a CliffsNotes version in its “Wednesday in Washington” email bulletin this week.

Here is CMS, in its own words:

·      Given the rapid changes in health care delivery that may disproportionately impact rural and more isolated geographic areas, we are concerned that the continued decline of the fees and the number of suppliers in such areas may exacerbate the already emergent access concerns faced by beneficiaries.

·      Our monitoring data, by its very nature, would not alert us to the present and imminent threats to beneficiary access that stakeholders have raised in recent months. If CMS continues to pay the fully adjusted payment rates in rural and non-contiguous areas, it could further jeopardize the infrastructure of suppliers that beneficiaries rely on for access to necessary items and services in remote areas of the country.

·      Also, as noted earlier, our systematic claims monitoring only looks backward in time and may not detect rapidly emerging trends, particularly in isolated or rural areas. We also referenced the GAO’s acknowledgement that there are challenges associated with monitoring the CBP.

·      We recognize that reduced access to DME may put beneficiaries at risk of poor health outcomes or increase the length of hospital stays.

·      Given the strong stakeholder concern about the continued viability of many DMEPOS suppliers, coupled with the Cures Act mandate to consider additional information material to setting fee schedule adjustments, it would be unwise to continue with the fully adjusted fee schedule rates in the vulnerable rural and non-contiguous areas for 7 months. Any adverse impacts on beneficiary health outcomes, or on small businesses exiting the market, could be irreversible.

This is a big deal, as a number of stakeholders have told me, because to date, CMS has portrayed the program with nothing other than rose-colored glasses.

Tom Ryan at AAHomecare: “Some of the words they used to express concern are the exact words we’ve used. They’re aware of the real-time crisis that is beginning to become apparent. It’s a first.”

Cara Bachenheimer at Invacare: “This is a huge step forward. There are many, many more steps forward that need to be made, but this is a huge step forward.”

But this big deal poses a big question: What will CMS do now?

In a press release at the time of the release of the IFR, CMS said it is “continuing to engage with stakeholders” and it “intends to undertake subsequent notice-and-comment rulemaking to address the rates for DME and enteral nutrition furnished in 2019 and beyond.”

Words are great, but now let’s see some action.

by: Liz Beaulieu - Wednesday, May 2, 2018

Among the moments at the National CRT Leadership & Advocacy Conference that drew the loudest round of applause was a story told by Michele Gunn.

Gunn, who participated in a panel on “Running a CRT company in a DME world,” is an ATP/CRTS for Browning’s Health Care and an at-large director at NRRTS.

Here’s an edited version of her story:

There’s this perception that providers suck, that we don’t know what we’re doing, that we’re incompetent, that it takes forever to get something done.I think the opposite is true: If you’re still in business, you’ve figured out a way to survive.


I was working with a pediatric client on a chair and the dad says he’d also like a stroller. In Florida, they’ll pay for one mobility device every five years. He says, we have a trust fund that will pay for the stroller; we just need a denial.

Our office does their magic—all the steps needed to get this done. We get an approval for the chair and a denial for the stroller. He gives me the caseworker’s name for the trust fund and asks me to send the stroller quote and denial. I call her (to follow up) and she says the dad has the check for the stroller and to give him a call.

I call the dad and he says, you guys charge a lot more for the stroller than what I see online. I say, well yeah, I met you at a clinic; I spent a lot of time with you. He says, thanks but no thanks, I’ll go out on my own.

Later, I deliver the chair; it looks great, he’s happy. I’m picking up my bags to leave and he says, since you’re here can you set up the stroller, (which is still in a box).

The me 10 years ago would have put down my bag and dug into that box; the me now said, sir, I’m not going to open that box. (But) if you need help with the chair, I’m happy to help you. It took a lot to do that and I didn’t feel good about it. I don’t like to burn bridges or make people unhappy. He never contacted us once about the chair.

One day, I was at the children’s pediatric hospital, and I was called on to help with seating for a patient, and there was the dad. He said, you left my house two years ago and never came back.

I tried to play it off with humor, saying I would have been happy to provide service for the chair, but I don’t do drive-bys; that’s illegal and creepy. He didn’t smile.

His daughter’s surgery went great. There was a lot of correction—it added four inches of length to her torso.

There was a flurry of activity (to adjust her chair and seating, as a result of the surgey) and it was all done in front of the client, the dad.

I was on my way out the door and I heard him say, wait a minute. He held out his hand and shook it.

I thought then, we’re all good.

by: Liz Beaulieu - Monday, April 23, 2018

During a round of many calls last week, I spoke with someone who attended Medtrade Spring last month who spoke with someone else in-the-know about Medicare’s competitive bidding program. They discussed the question everyone wants answered: What. Will. Happen. Next?

Quick review: CMS on Jan. 31, 2017, announced its plans to consolidate all future rounds of competitive bidding into Round 2019, then on Feb. 7, 2017, the agency took it all back, saying it wanted to give the new administration the chance to review the program.

Since then, as the latter unnamed person above said, “It’s been crickets.”

One could argue that this won’t be the industry’s or the CBIC’s first rodeo with competitive bidding and, therefore, they don’t need the usual 16-month window to complete the process.

But as we stand today, April 23, it’s a little more than eight months from the conceived start date of Round 2019 on Jan. 1. Eight months, or exactly half the usual window.

And still crickets.

One has to think that CMS is feeling the weight of the current contracts for Round 1 2017, Round 2 re-compete and national mail-order program for diabetes supplies, which are all set to expire Dec. 31, 2018.

Industry stakeholders have suggested that CMS might extend the current contracts by, say, six months, to buy itself more time. Yes, this seems logical, and yes, this could end up being what happens.

But it may not be the fail-safe backup plan that CMS thinks it is.

I got an email from a provider earlier this month, asking a very good question: “I am a competitive bid winner for respiratory but am wondering if I have to extend my contract if I don’t want to?”

Currently, if a contract provider goes out of business or a contract provider is terminated, CMS offers the contract to the next provider in line. Presumably, that’s what they’d also try to do in the case above.

Still, it’s a great question, and if a good number of contract providers like the provider above refuse to re-up, the answer could get real messy real quick.