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On the Editor's Desk

by: Liz Beaulieu - Thursday, April 7, 2016

We’re a day or so into our most recent Newspoll question:

In general, have you accepted the majority of the contracts that you’ve been offered by Medicare as part of the competitive bidding program?

So far, with more than 60 respondents tallying their votes, the results are almost 50/50 yes/no, with a slight edge to no.

Parsing through the submitted comments to the open-ended question to the poll (share why you have or haven’t accepted contracts and how you’ve been able to make that work for your business), I’ve noticed some pretty interesting themes:

*A number of HME companies that are part of a hospital or health system responded how in previous rounds of the competitive bidding program they were not offered or did not accept contracts and it significantly slowed down the discharge process, resulting in longer lengths of stay. It also increased the chance of re-admission because often more than one provider was required for discharge. One of these companies said it was more aggressive with its bids in the Round 2 re-compete as a result. “While the margins are thin, the outcomes will counter the risk associated with fragmented providers,” the provider wrote.

*A number of HME companies responded that they were picky about the contracts that they accept. One of those companies wrote:

“We did not receive any contract offer in the previous round but were able to preserve our profitability due to our payer mix and by diversifying into other product lines, which allowed us to maintain our staffing levels. This round, we received contract offers in all three CBAs but not in all contract categories. We declined half of the contracts due to price (all contract offers were at rates that were less than what we bid) and a lack of contract category synergy. We also factored in the audits that would surely follow. The ones we accepted were at numbers, we believe, are workable for our business plan. For the rest, Medicare can look for some other sucker. We're stupid but we're not that stupid.”

*A number of HME companies are defiant about the bid program. One company wrote: “We were very nervous about declining the contracts, but business is good. I will not allow my reputation of service and quality products be threatened by low reimbursement.”

Check an upcoming HME Newswire for the final results and full story.

by: Liz Beaulieu - Wednesday, March 30, 2016

I heard from a reader in the wake of CMS releasing the new payment amounts for the Round 2 re-compete.

The reader wondered if there was a Freedom of Information Act request that someone (anyone!) could file to find out who submitted low bids, whether or not they accepted them, and if they did, were they able to successfully serve patients at those amounts.

The reader wrote:

“I’m beside myself with the belief that other providers have bid even lower than the first time in Round 2. I cannot imagine that someone who is responsible for not just their own family, but those families of employees that work for them, saying that the ROI on these types of bid amounts they are placing is going to work. This is just about as simple as 2 + 2 math to see it is not. I just wanted to see if that was even a viable option to get information that is being withheld.”

Unfortunately, it is not. Mark Higley at VGM backed me up on this one, saying, “You cannot receive by FOIA (or by lawsuit for that matter!!!) the bid submission data.”

So much for transparency.

I thought it was interesting that this reader began the email with:

“Hope you are doing well, since the release of the Round 2 re-compete has come for payments. I’m sure you are hearing a lot, so here is mine.”

Actually, reader, you’re the only provider who has reached out to me since the news came out.

Now, I don’t take that to mean this reader was the only reader who has been throwing his or her hands up over the new payment amounts. Far from it. You’re all just too busy hot-lining your representatives and senators to email me.

Right?

by: Liz Beaulieu - Thursday, March 17, 2016

We hosted the Home Health Technology Summit earlier this week in New Orleans, and I had the event in the back of my mind when I was reading a New York Times article yesterday about South by Southwest, an “annual festival of tech, music, film, barbeque and tacos,” according to the newspaper. But mostly, tech.

If you’re not familiar with the Technology Summit—we gathered a group of C-level execs in home care (home health, hospice, visiting nurse and HME) to examine the opportunities that technology creates in reducing costs, increasing efficiency and improving care.

One of the major take-aways from the event, as you’ll see in my wrap up in the HME Newswire on Monday, is the “behavior change”—thanks for the term Bob Barker of Philips Respironics—needed to successfully implement and leverage technology in businesses.

In essence, if you don’t have the right frame of mind (that the lack of specific reimbursement coverage for these technologies, for example, won’t hold you back), forget about learning what’s out there, what it can do and how it can transform your business and the way you care for patients.

The author of the Times article wrote: “This year, SXSW, as the festival is known, feels like a story of how the tech ethos has escaped the bounds of hardware and software. Tech is turning into a culture and style, one that has spread into foods and clothing, and all other kinds of nonelectric goods. Tech has become a lifestyle brand.”

Tech may be a lifestyle brand at SXSW and increasingly in our daily lives (one stat from the Technology Summit: 40% of Americans don’t even have landlines anymore), but I’d argue it’s stagnating in many businesses, especially in home care. There are still companies out there with offices with file cabinets and fax machines.

Speakers were almost shouting from the front of the room: Technology needs to be a culture and style in your businesses.

Dr. Steven Landers of the VNA Health Group called the problem “a leadership challenge.”

Jim Reilly of Connect America challenged attendees to do like GM leaders once did and “put your business out of business”—meaning stop doing things the way you've always done them and start new.

If, as Jeremy Malecha of ResMed said, “Post-acute care is the Internet of the 90s,” hold on, because all of this is going to change very, very fast.

by: Liz Beaulieu - Wednesday, March 2, 2016

Tim Purpura, the publisher of our sister publication, Security Systems News, has started gathering all company employees in our production department for a five-minute meeting at 10:55 each day.

In the event that you lose track of time, Tim’s advertising coordinator, Cath Daggett, travels the halls of our little cubeland dinging a bell to remind everyone.

To keep the meeting limited to five minutes, Tim sets the timer on his iPhone.

The purpose of the meeting: Share something positive about your work (a story that has gotten so many hits on the web, an account representative who has sold so many ads), share a motivational quote (a recent contribution of mine: “Nothing great was ever achieved without enthusiasm,” something I’m light on some days), share an interesting word (today’s: williwaw—it’s windy up here in Maine)…you get the idea.

Although our meetings are, at least right now, much less formal, the inspiration behind them is a recent article in Inc. Magazine titled “This Study Says Stop Working and Do This at 11 a.m. Every Day.”

Managing Editor Theresa Flaherty will attest that I dislike meetings (how productive are they most of the time?) and I dislike warm-and-fuzzy meetings even more. Theresa can’t make fun of me for this because she feels the same, probably more strongly. In fact, she hasn’t showed up for one of these meetings yet. Associate Editor Tracy Orzel, on the other hand, is often the first person to show up. In this morning’s meeting, Tim even let her lead.

We’ve had these meetings for a couple of weeks now, and I have to admit, I’m a believer (I’m also, since Justin Bieber’s new album dropped, a Bieleber – I don’t even know who I am anymore).

If nothing else, these meetings are a great exercise in reflecting on what you’re doing at work and finding out what’s going right. And five minutes is the perfect length for a meeting, IMHO (Did I just use a text abbreviation in a work blog? Sigh).

All of this got me to thinking about the rites and rituals that you have incorporated into your businesses.

We write a lot about reducing costs, increasing efficiency and other goals of running an HME business, but these more personal touches of management and leadership can have just as much of an impact. When your employees are focused on the positive and feel energized (I’m not kidding: Every meeting ends in a huddle), it can only help you reduce costs, increase efficiency and tick off every other goal you have for your business.

So what are you doing tomorrow at 10:55?

by: Liz Beaulieu - Wednesday, February 24, 2016

It’s been interesting to see the headlines this week related to the news that ResMed plans to buy Brightree for $800 million

Here’s a sampling:

ResMed, the software company?

Is ResMed’s $800M health IT buy a pivot away from devices?

ResMed announces blockbuster $1.1 billion US acquisition

ResMed takes out Brightree for $800M

The news has been covered well beyond our HME industry, from the mainstream press (the San Diego Union-Tribune in ResMed’s hometown in the U.S. and the Sydney Morning Herald in its hometown globally), from trade publications in other industries (Home Health Care News), from the financial press (Dow Jones, StreetInsider).

If Lincare hadn’t recently bought American HomePatient, I’d say it’s been a very long time since the HME industry got this kind of attention.

Even though we knew Brightree was shopping for a buyer, I’m not sure we were expecting ResMed to be in line with an offer. Maybe a larger provider of health IT solutions trying to round out its offerings to include HME, home health and hospice, especially with the attention on post-acute care, like a Cerner or Epic? But ResMed?

Based on the questions from analysts during a conference call this week to discuss the details of the acquisition, we were in good company.

But after ResMed officials connected a few dots, a vision began to take shape.

With the roles and responsibilities of different types of healthcare providers continuing to meld (hospitals being responsible for what goes on outside of their four walls for one), seeing a manufacturer of respiratory equipment that values connected health care buying a vendor of business management and clinical software applications doesn’t seem that far fetched.

There’s also the very real and tangible benefits of Brightree’s $113 million in revenues and 80%-plus recurring revenues in 2015, and its customer base outside of HME, in home health and hospice.

It will be very interesting to see how this deal, once it’s closed, plays out.

One thing’s for sure: ResMed, you have our attention.

by: Liz Beaulieu - Friday, February 19, 2016

This week has been full of surprises, and not-so surprises.

In the surprising category, am I the only one who didn’t know that CMS had set up an online portal to communicate about contract offers for the Round 2 and national mail-order re-compete? It was just the other week that a provider and I were joking about him annoying his staff by asking them every day what was in the mail. There will be no mail; just online notification! Hello, Connexion.

Speaking of contract offers, also in the surprising category is the fact that CMS hasn’t announced the single payment amounts yet. (Though, since I’m writing this on a Friday, by the time you read this, this could be no longer be the case.) For the first Round 2 in 2013, CMS announced the payment amounts Jan. 30, and it’s already Feb. 19. Many of us thought CMS would announce the amounts Feb. 12, the Friday before a long weekend, but no. As far as we know, the agency still plans to announce the amounts “winter 2016” and announce contract suppliers “spring 2016.” One provider wrote me last week:

I was with you thinking CMS would release the SPAs last Friday. This is getting ridiculous. How are we to properly analyze the numbers, when the turnaround to contract acceptance has been shortened so much?! #throwinginthetowel

(In another nod that technology is invading every part of my life: the hashtag.)

The last item in the surprising category: Invacare’s decision to offer $130 million in senior notes. There’s a significant amount of buzz about what might be behind this move: Is the company lining itself up to make a significant investment (in a product, in an acquisition?); is it buying shares from Mal Mixon and the late J.B. Richey, so they don’t have to deal with the open market; or does it just need the cash? Also, did you happen to see the trading volume for Invacare this week?

In the not-so surprising category, VGM has named Mike Mallaro as its new CEO, succeeding the late Van Miller. All of us at HME News have the greatest regard for Mr. Mallaro and have no doubt he’s one of the smartest guys in a room of smart guys over there.

Have a great weekend, and don’t forget to register for and log on to Connexion.

by: Liz Beaulieu - Wednesday, February 3, 2016

I’ve fielded a number of calls in the weeks following a story about Merits Health Products entering the complex rehab market and a follow-up story looking at why we’ve seen two new entrants into this market in as many years (Merits, and Shoprider through ROVI Mobility).

I got a call this week from an industry stakeholder who raised a good point about what’s missing from the second story.

It’s true that complex rehab is an attractive market because it has been left largely untouched by Medicare’s competitive bidding.

It’s also true that complex rehab is an attractive market because Medicare still pays for complex rehab products, unlike consumer mobility products, in the first month.

There are very good reasons why this is the case, including that complex rehab products require evaluation, configuration, fitting, adjustment or programming to meet the patient’s needs, and to maximize his or her function and independence (that’s right from NCART).

But this stakeholder pointed out that the market for complex rehab is not attractive because it’s growing. That’s because it’s not growing.

Unlike other HME, complex rehab is not driven by the aging baby boomer population—rather, it’s driven by people with significant disabilities and medical conditions—and, therefore, isn’t growing at the same fantastical rate.

Overall, the number of Medicare beneficiaries who have received complex rehab wheelchairs (all of Group 3, K0848-K0864) has actually decreased to about 14,100 in 2014, according to this stakeholder.

Why is this such an important point? Well, when Medicare sees a market that’s “growing,” it tends to put it under a microscope and we all know nothing good comes from that, especially when stakeholders have fought long and hard to protect these sorely needed products and services.

Point taken.

by: Liz Beaulieu - Friday, January 29, 2016

It was my turn this Tuesday to write up some briefs for the Also Noted section of our website. (In case you don’t know already, we update this section with news almost every day—check it out while you eat your lunch!)

In the queue to write up was CMS’s recently released instructions on how to bill for accessories for complex power wheelchairs.

Accessories for complex power wheelchairs got a reprieve from the wrath of competitive bidding last year when lawmakers wisely passed a bill delaying for one year CMS’s plans to adjust pricing for this product category using pricing from the program. (The idea: The delay gives lawmakers and industry stakeholders sorely needed time to work on a more permanent fix.)

Surely, I thought, these instructions were just a technicality and would merely outline how CMS planned to carry out the new law.

Think again.

Instead, they outlined how CMS plans to fly in the face of the law and carry on with its original plan to pay for accessories for complex power wheelchairs using adjusted pricing, at least until July 1, 2016, at which point it says it can process the claims at the original rate, like they were supposed to as of Jan. 1 per the law.

What?

No one argues, including stakeholders, that it won’t take CMS time to make the changes to its claims processing system to carry out the law. (Though, little old me wonders, how big of a change is it really, when you’re just being asked to do what you’ve always been doing before you decided to change what you were doing). But six months? Really?

While I was writing up this brief for the Also Noted section, I kept walking over to Associate Editor Tracy’s cube to ask, “Do I have this right?” I was hoping our mobility and complex rehab guru would set me straight with some insider knowledge I didn’t have.

Sadly, not.

Speaking of Tracy, she’ll have a story that includes industry reaction for our HME Newswire on Monday. Be sure to check it out.

by: Liz Beaulieu - Wednesday, January 20, 2016

How many of you HME providers find yourselves interacting more with caregivers than the actual users of your equipment and services? Do you know what these caregivers, who aren’t growing in numbers fast enough, need most?

That’s what I was thinking about as I was reading AARP’s recently released report “Caregiving Innovation Frontiers: A universal need, a growing opportunity—leveraging technology to transform the future.”

Here’s how AARP sets the stage for its report, which it put together with help from Park Associates: It says there were 40 million Americans in 2014 providing unpaid care to people who are older, disabled or otherwise in need of assistance. By 2020, the number of caregivers will only increase to 45 million, but the number of people expected to need assistance will balloon to 117 million.

How do we bridge that gap? Technology, AARP and Park Associates argue. They see six “areas of opportunity” for technology to help caregivers do their jobs.

The area that has the most to do with our little neck of the healthcare world: health and safety awareness. AARP and Park Associates define this area as health vital alerts, diet and nutrition, medication management, personal safety monitoring and telehealth.

Do you currently use/do business in any of these areas? You might want to look into it, if you don’t.

AARP and Park Associates forecast that caregiver out-of-pocket spending on health and safety awareness technology will hit $4.3 billion by 2020. The total market, including out-of-pocket spending plus reimbursement from private and public insurers and business-to-business spending, will hit $20.3 billion.

I don’t have to tell you that’s a good chunk of change.

The beauty of this opportunity: There doesn’t appear to be anyone who has quite laid claim to it. There are technology vendors that sell direct to consumers, but that are realizing they might be better off with a dealer channel. There are security companies that are already in the home and think it makes sense for them to enter the market, but they’re wondering how many synergies there are between what they do and home care.

In other words, there’s plenty of opportunity for a motivated and determined HME provider to be the hero for the caregivers who sorely need help doing their jobs.

I leave you with this:

#1 How often do you consider the caregiver as a target market for your equipment and services?

#2 Do you offer the technologies they need to help them do their jobs?

We’ll be hosting the Home Health Technology Summit in New Orleans in March to introduce HME providers and other homecare providers to technologies that can help them reduce costs, improve care and generate revenues for their businesses today. I urge you to consider it.

by: Liz Beaulieu - Monday, January 11, 2016

The February issue that we kick out the door later this week is the pre-show issue for Medtrade Spring. The March issue that we’ll be working on next week: the show issue.

Didn’t we just turn the page to 2016? Why are we already talking about the March issue and Medtrade Spring? Ah, the perils of print publishing, which requires you to work months ahead of time.

We’ll have Q&As with speakers in the March issue to drum up interest in the educational program at Medtrade Spring. The three speakers we focused on are giving presentations on outcomes, disease management programs for COPD and M&A activity.

What do they all have in common? Numbers.

Dewey Roof of Life H2H and Katherine Royster of Philips Respironics argue that HME providers need to have data in their pockets that show what they’re doing is improving care, which keeps patients out of hospitals, which reduces overall healthcare spend, etc., etc., etc.

Roof builds on that familiar rhetoric by saying: “Readmissions is the hot number, but a growing one is extended length of stay. Every hour spent in a hospital means they have to staff a hospital, so anywhere an HME provider can help facilitate a discharge, you can help them save money.”

Royster challenges providers to step up their game by saying: “They can expand their use of data. For example, risk-scoring algorithms make it possible for HMEs to identify potentially noncompliant patients and connect with RTs and patient support staff to adjust treatment as needed.”

The message: Just collecting data won’t cut it anymore. You have to collect more data and you have to do more with it.

Bradley Smith of Vertess looks at the importance of numbers from another perspective, saying, “There are two different camps, those who don’t currently have economies of scale and those who do. If you’re under the threshold of sustainability, in terms of revenue, you most likely need to merge with someone else to grow. On the other side of the equation, if you’re big enough, you can grow more efficiently and inexpensively by acquisitions.”

Smith doesn’t mince words: For the numbers to work in your favor, you must grow, whether you’re a small company or a big company.

Read the March issue for the full interviews.

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