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On the Editor's Desk

by: Liz Beaulieu - Friday, December 11, 2015

I’ve never fielded as many calls from private equity, investment and consulting firms as I have in the past two weeks. Ask Managing Editor Theresa Flaherty.

What do they all want to know?

Mainly, how many HME providers were there before competitive bidding, how many are there now and how many will there be after Medicare expands pricing from the program to non-bid areas?

Put another way, how much has the HME market consolidated in the past five years, since the program was first launched, and will it continue to consolidate after said expansion?

They also want to know: What percent of the market do the nationals have wrapped up, and what’s the makeup of the remaining market? Is it mostly regional- or mom-and-pop-sized companies?

Theresa and I have been wondering, why now?

Medicare’s plans to expand pricing from the program to non-bid areas is a timely and obvious reason. But I don’t seem to recall the expansion in Round 2 resulting in this many phone calls from outside interests, and that involved expanding the program to every large metro area.

The other timely and obvious reason: Lincare signing an agreement to buy American HomePatient, witling down the number of national players from four to three.

Theresa happened to be on the phone with some industry analysts to report on the Lincare news, and I heard her ask at least one of them why these private equity, investment and consulting firms would be so interested in the HME market right now.

The analyst said, in nutshell, that the demographics of the aging population are so attractive that when the nationals make a big move like this (the last such move was probably Linde buying Lincare for $4.6 billion in 2012), eyes tend to drift once again toward our small sector of the healthcare industry.

by: Liz Beaulieu - Wednesday, December 2, 2015

Managing Editor Theresa will attest that I’ve been trying to write a blog for a few days now. Sometimes it comes easy; sometimes it doesn’t.

If you’re Theresa, you don’t force these things. But I have a to-do list that’s getting longer and a new conference to avoid programming (ahem), so each day this week, at lunch, I’ve come back to writing this blog.

One of my go-to blogs in these situations is a list of the most read stories for the most recent year, but I already did that in September. (I must have been really desperate then; who does a year-in-review when there are still three months left in the year?)

But what about the most read blogs of the year? I haven’t done that yet and since it’s December I feel it’s a more than valid topic.

Each of the three of us here at HME News tries to blog once per week. Over the course of a year, that’s 156 blogs. That’s a pretty good pool to dive into.

So here are the top blogs from each of the three of us for 2015:

From Editor Liz: “Significant shuffling in the top 10 list of Medicare providers.” Everyone loves to know what the nationals are up to and this list is one way to find out. Lincare, Apria Healthcare and American HomePatient are all here, but not Rotech Healthcare. Of the providers on the list this year compared to last year, Apria saw the biggest drop in allowed charges ($304 million in 2013 and $247 million in 2014), and Zoll Services (defibrillators, catheters and vents) was the biggest mover (No. 11 in 2013 and No. 6 in 2014).

Close second: “CMS’s bull’s eye on vents.”

From Managing Editor Theresa: “57 channels and a CPAP machine.” Is the humble CPAP becoming mainstream? Yes, Theresa argues in this blog mixing HME and popular culture, like only she can do.

From Associate Editor Tracy Orzel: “Could a loner be an HME provider?” Tracy, who enjoys her alone time (this must be why she disappears from her desk every day for half an hour), explores whether the majority of HME providers are introverts or extroverts.

UPDATE: As it turns out, that blog from Tracy isn't from Tracy, but from her predecessor's predecessor (Thank you HME News website and Google Analytics). The most read blog actually written by Tracy is "Breaking: Quantum Rehab reveals newest hire." In this blog, she writes about the dog that stole the spotlight in Pride Mobility's booth at Medtrade this year.

by: Liz Beaulieu - Friday, November 20, 2015

Theresa just emailed me, “We are certainly going to have fresh stuff for the next Moneyline.”

Moneyline is an email blast we send out each month with the most “business-y” stories from the past 30 days. “Business-y” is our formal term for stories that deal with mergers and acquisitions, financial results, etc.

In case you’re not keeping track like us, there have been a number of M&A stories this week.

OptumRx, the pharmacy services business owned by Optum, has acquired AxelaCare, a provider of home infusion services.

C.R. Bard, a manufacturer of medical devices for vascular, urology, oncology and surgical special fields, has acquired Liberator Medical, a provider of home medical supplies, including catheters, ostomy, diabetes and mastectomy.

Last week, ResMed acquired Maribo Medical, a distributor of sleep-disordered breathing medical devices and accessories in Denmark; and Integrated Home Care Investors and its leader Jorge Pereda, the former CEO of All-Med Services of Florida, bought the assets of Univita Health.

In a move that’s a little outside our scope, but also of interest, McKesson Ventures, the venture capital arm of McKesson, announced recently that it has provided funding to ClearCare, a homecare tech startup that provides paperless care management software. It’s the first time McKesson Ventures has directly invested in home care.

Apparently, I’m all about themes lately, because in a number of these stories, I couldn’t help but notice that they’re about outside players “buying” their way into the home. OptumRx with AxelaCare, C.R. Bard with Liberator Medical.

Say what you will about what could be concerning dynamics in some of these cases (a manufacturer buying a provider?), it speaks volumes about where the movers and shakers see more care taking place in the future—in the home.

I also spoke with healthcare attorney Elizabeth Hogue this week for a story about Medicare’s proposed changes to the discharge planning process at hospitals. The changes include regular re-evaluation of the patient’s conditions.

“What CMS wants is a collaboration between acute and post-acute care, not a one-time referral,” she said. “The only way they’re going to be able to do this is with really right relationships with all types of homecare providers.”

by: Liz Beaulieu - Friday, November 13, 2015

There was an interesting theme in recent conference calls by Invacare and Inogen to discuss financial results: a new focus on sales.

Due to a consent decree with the U.S. Food and Drug Administration that has limited Invacare’s ability to manufacture and sell products for close to four years now, sales haven’t been a big focus. The big focus: lifting the decree.

Enter Matt Monaghan, who took over the company in April. Since then, sales have been a big focus of the past two conference calls. Invacare hasn’t shared much in the way of specifics, but it has shared that it’s investing in sales (and new product development) and in training its sales team to be “specialists” vs. “generalists,” especial for complex rehab products.

Efforts to lift the consent decree are still humming away in the background, of course, but as Lara Mahoney, director of investor relations and corporate communications, told me recently, “We’re not waiting (until the decree is lifted). We’re making investments today.”

That’s a change of tune, and a good one.

Unfortunately, this change of tune has meant Invacare has had to adjust its workforce in other areas, but without a top gun sales team—consent decree or no consent decree—there is no company.

Inogen, which isn’t tangled in a consent decree but which is about to get hit with a reimbursement cut next year when CMS rolls out competitive bidding nationwide, also has a new focus on sales. Again, the company hasn’t shared much in the way of specifics, but it shared in this week's conference call (See the HME Newswire on Monday) that it hired sales reps in the third quarter.

CEO Ray Huggenberger said that the company wanted to make the investment in sales when times are good, to set the company up for 2016, when times won’t be bad but not as good. The reimbursement cut will hit the company’s rentals business, so the new focus on sales will help to shore up its direct-to-consumer business.

The lesson here: Invest in sales when times are bad; invest in sales when times are good. Plain and simple, always invest in sales.

by: Liz Beaulieu - Wednesday, October 28, 2015

I don’t know if you’ve had time to devour Show Daily 2 and I know you haven’t seen Show Daily 3 yet (we’re working on it right now in a secret room off one of the show entrances), so I thought I might share with you some gems from the issues.

You’re not alone

This year more than ever I realized that, while Medtrade has some excellent education, a lot of what attendees crave from the event is the opportunity to talk to each other.

When I hounded Jerri McLamb for our Question of the Day on Tuesday, she said, “To be in an audit class and to hear that other providers are going through the same thing is huge.”

Tara Ellington told Managing Editor Theresa Flaherty about competitive bidding coming to rural areas in 2016, “It’s super important for us to talk to people who have been dealing with it and gaining insight from that.”

Power of patients

We’ve heard time and time again of the importance of involving patients in the industry’s advocacy efforts. But what about their every day businesses?

A physician who was on a panel talking about the difficultly of getting documentation for power mobility devices said, “I would encourage you to give the (documentation) back to the patient or caregiver and say, ‘Take this to your doctor.’ When the patient starts complaining, that gets our attention.”

Eminently quotable

And here are just a few of my favorite quotes from the issues:

“It looks good, feels good, feels different. People seem less cautious and more optimistic. They are dealing with this bidding thing and figuring it out,” Kevin Gaffney, Medtrade

“Even if your business is doing well, it could be doing better,” Miriam Lieber, Lieber Consulting

“No one is going to make the RACs go away. What you can do is make it go away for your company,” Wayne van Halem, van Halem Group

“You need to know what a product is, what it does and what that means. Disease management is not just about the product anymore,” Cheryl Needham, Philips Respironics

by: Liz Beaulieu - Wednesday, October 21, 2015

The last time I saw Van Miller was at the AAHomecare Washington Legislative Conference in May.

It was the first day of the event and things didn’t really get started until noon, but there was Miller in the lobby with CFO Mike Mallaro doing what he did best, working the crowd, shaking hands and patting backs, and even offering this reporter and another attendee water.

It turned out that, although the official legislative visits didn’t start until the next day, Miller and the rest of the crew from VGM had already been to the Hill and back that morning.

I’ll be honest: I’ve never said much more than, “Hello, how are you,” to Miller in my nearly 10 years at HME News.

But I have seen him at plenty of Legislative Conferences and Medtrades and Heartland Conferences, and to be at these events is to know Miller in an important way.

At these events and others, Miller defined the phrase, work hard, play hard.

On how he worked hard, see above.

On how he played hard—a Medtrade wouldn’t be a Medtrade without a themed party hosted by VGM, and a Heartland Conference wouldn’t be a Heartland Conference without a pig roast and fireworks.

Miller was a man who had our collective backs and showed us a good time to boot.

I suspect next week will be the HME industry’s first Medtrade without Miller in a long, long time. He won’t be there physically, but he will be there in spirit, and we owe it to ourselves to do what he always did, work hard but play a little while we’re at it.

by: Liz Beaulieu - Tuesday, October 13, 2015

I talked about technology with the head of a large visiting nurse organization last week.

By large, I mean 2,000 employees and a $175 million budget.

When I asked this exec about how he’s looking to technology to improve care and reduce costs, he called the organization “serial piloters.”

What they’ve been doing is testing out a handful of telehealth, remote patient monitoring and self-care technologies to determine their strengths and weaknesses for their particular business. The conclusion: “We’ve gained a fair amount of confidence that there’s real opportunity to provide better care at lower cost with the thoughtful use of technology.”

The organization is now developing a strategic plan on how to integrate certain technologies into their usual care in the near future.

And, oh, how to pay for them.

One of the more interesting things about my conversation with this exec was that he acknowledged that Medicare reimbursement for most of these technologies is a false hope. The last thing Medicare wants to do, he says, is set up new codes and new fee schedules when it’s trying to move forward with value-based reimbursement.

The exec says some of these technologies will have to be considered operational expenses—much like the hardware and software that helps you run your business. “They’re tools that we purchase because they help us succeed.”

But he’s also exploring two other avenues to help pay for them: fundraising (as a nonprofit, the organization has received pledges of support) and self-pay (“There will also be an opportunity for more of a retail play where we charge families for certain technology based services,” he said).

I hope you find this conversation as enlightening as I did. In a market, like HME, that has so long relied on Medicare reimbursement for its livelihood and a market that has failed to embrace new technologies because of the lack of reimbursement associated with it, this is the stark truth.

You implement technologies because they help you succeed. You don’t do it because Medicare will pay you for it.

You also get creative to pay for them.

“There’s no fairy dust,” the exec said. “It’s hard work.”

by: Liz Beaulieu - Wednesday, September 23, 2015

There was significant shuffling in the bottom half of the top 10 list of Medicare providers for 2014.

The top half, No. 1 to No. 5, was rock solid, with Lincare, Accredo Health Group, Apria Healthcare, Lincare Pharmacy Services and Walgreens holding steady.

Two of these providers, Accredo Health Group (specialty pharmacy) and Lincare Pharmacy Services, saw an increase in allowed charges from 2013 to 2014.

Accredo Health: $416 million to $472 million

Lincare Pharmacy Services: $226 million to $237 million

Of the three other providers in the top half, Apria Healthcare saw the biggest drop in allowed charges, from about $304 million in 2013 to $247 million in 2014.

The bottom half of the top 10, as I said, is another story.

Zoll Services (defibrillators, catheters and vents) was the biggest mover, rising from No. 11 in 2013 to No. 6 in 2014 with about $142 million in allowed charges. The other providers moving in a positive direction: Hanger Prosthetics from No. 10 to No. 9 and Coram Alternate Site Services (bought by CVS from Apria Healthcare in 2013) from No. 13 to No. 10.

Rounding out the top 10 were KCI USA, which moved from No. 6 to No. 7, and Arriva Medical (diabetes supplies), which moved from No. 7 to No. 8.

Part of the top 10 last year but not this year: Liberty Medical Supply, which was No. 9 in 2013.

See this data and more in our 2015 State of the Industry Report published in December.

by: Liz Beaulieu - Friday, September 18, 2015

I wrote a wrap up of our HME News Business Summit for the HME Newswire that hits email boxes on Monday, but there was so much more. So much.

So here are some quotables from the event:

Much of the data being collected by hospitals and health systems right now is what speaker Fletcher Lance of North Highland Company calls unstructured data. Not being collected: unstructured data like doctor chart notes. There are “fortunes to be made” for whoever puts the two together to tell the patient story, he said.

Data isn’t just good for patient outcomes, it’s good for business, said speaker Tim Murphy of Philips Respironics. One of the big questions on the provider’s mind should be: “How can data optimize my profits?” he said. Murphy advised providers to know the whole “journey cost” of each patient. “We don’t lack data,” he said. “It’s determining which are meaningful.”

Speaker Jim Hollingshead of ResMed had three pieces of advice for providers considering a more connected business model for sleep therapy: 1.) adopt devices with connected capabilities, 2.) centralize your compliance function, and 3.) market what you’re doing to referral sources.

This was a first at the Summit: Speaker Dave Gilbert of Evermind shared a poem, Chorus of Cells from “Poems from the Pond” by Peggy Freydburg, who died earlier this year at 107, to illuminate how seniors feel about health care and technology. Gilbert also had a prediction for providers on who’s going to pay for telematics in health care: equipment manufacturers.

One of the biggest takeaways from a panel of disrupters talking about doing things differently: look at the HME industry as if you weren’t in the HME industry. Of panelist Dan Afrasiabi, who took over Geneva Woods Pharmacy four years ago and has been “scrambling the eggs” ever since, panelist Dan DeSimone said, “He’s a true leader.” DeSimone explained that those entrenched in the HME industry are used caring for patients, not leading employees.

If you didn’t make it this year, keep an eye on in the spring for details on the 2016 event. We do know this: It will take place Sept. 18-20 at the Francis Marion Hotel in Charleston, S.C.

by: Liz Beaulieu - Friday, September 11, 2015

It’s Friday, which means it's Newswire day. I could stop there, but we’re also pasting up the October issue (the pre-show issue for Medtrade!) and it’s the prelude to the HME News Business Summit on Sunday (there’s still time to register!).

In other words, we’re busy around here at HME News world headquarters.

So with that, here’s a quick but interesting post on the most read stories on our website so far this year, from Jan. 1 to Aug. 31.

‘Chaos’ erupts as Univita loses contracts

MIRAMAR, Fla. – Less than a year after it took over the Florida Medicaid market, Univita Health has lost all of its contracts.

Bidding bill clears another huge hurdle

WASHINGTON – The U.S. House of Representatives on Monday sided with the HME industry and passed a bill that would reform the competitive bidding program.

Company seeks to offer ‘exit strategy’

SHELBYVILLE, Ala. – There’s a new buyer on the horizon with ambitious plans to roll up DME companies, but it has a very tight focus.

Lincare joins Rotech, AeroCare on M&A trail

CLEARWATER, Fla. – Lincare keeps things close to the vest, but the provider is rumored to be on the acquisition trail.

Submit a bid in the Round 2 re-compete? ‘Why bother?’

YARMOUTH, Maine – It turns out the top strategy for many HME providers in Round 2 competitive bidding areas isn’t whether or not to bid higher or lower as part of the re-compete, but not to bid at all.

Feds raid Med-Care Diabetic

BOCA RATON, Fla. – An attorney for a mail-order contract supplier that was raided by the FBI last week says the company has “nothing to hide.”

Being a contract supplier: Has it been worth it?

YARMOUTH, Maine – With the bid window for the Round 2 re-compete drawing to a close later this month, those who accepted contracts in Round 2 are reflecting on whether or not it has been worth it.

‘Providers will be less conservative’ in Round 2

YARMOUTH, Maine – A new rule that allows HME providers to carve up their competitive bidding contracts could make for more aggressive bidding in the Round 2 re-compete, industry attorneys say.

Insurance giants merge: Providers brace for lower rates, increased competition

YARMOUTH, Maine – A recent flurry of mergers and acquisitions between national health insurance companies has HME providers on edge.

CMS could move soon on face-to-face requirement

WASHINGTON – A new bill in the House of Representatives paves the way for CMS to start enforcing the face-to-face requirement.