Deutsche Bank's sniffing around the HME industry, trying to dig up information on providers

Deutsche Bank, one of the largest banks in the world, is up to something.
Check out this phone conversation I had this morning with Darren Lehrich, a bank official.
- Hello, this is Darren.
- Darren. Hi. My name is Mike Moran, and I'm an editor at HME News. We're a business publication that covers the HME industry.
- Yes.
- An HME provider recently forwarded me a letter that I think you are sending out to folks to get a sense of what they plan to do in the Round One rebid.
- Ah, okay.
- I was wondering if I could ask you a couple of questions about the letter.
- Um, I'd prefer not to comment.
- No comment?
- Yeah. I'd prefer not to comment.
- Okay. That's fine, then. That is all I wanted to check on.
- Okay. Thank you. Bye.
- Okay. Thanks, Darren. Bye.

The tone of the conversation was a little odd. Darren  sounded like he'd been caught doing something wrong. You'd think a guy who goes around asking for important company information (see below) might be a tad more open. Of course, Deutsche Bank has a market cap of about $26 billion and is probably investigating some potential big deal, which, naturally, it does not want to discuss.

As one provider who received the survey told me: "I suppose it follows the thought of "if you don't ask you don't get" but it's asking for some very private information considering that round 2 is nearing. Needless to say, I'm not completing it."

I'm going to poke around a little bit on this to see what I can find out, but in the meantime, here's Darren's letter and survey.

February 9, 2010
Dear Branch Manager,

My name is Darren Lehrich and I am an investment analyst at Deutsche Bank. In my capacity here at Deutsche Bank, I carry out industry research on the health care sector, and I pay particular attention to the respiratory services industry.

In an effort to gain a better perspective on the upcoming Round One DMEPOS Competitive Bidding roll-out, we would like to enlist your help to complete at brief "two minute" survey. The survey includes basic information about your branch, as well as your perspectives on the bid pricing for specific DMEPOS codes for Round One.

We respect your privacy and therefore all of the individual responses will be kept confidential and will not be divulged, except as aggregated responses.

We appreciate your time in filling out this survey. We have included a $2 bill for this "two minute survey" and a self-addressed stamped envelope for you to return the completed survey to us. We would be happy to email the final results of the survey to you; simply fill out the email address section at the end of the survey. If you have any questions, please contact me at (212) 250-2629 or Darren.Lehrich@db.com.

Thank you!
Darren Lehrich
Managing Director

The survey then asks the following 14 questions:

1. Position at branch?
Branch Manager; sales/marketing staff; clinical staff; other.

2. Number of active patients serviced by branch:
0-100; 101-200; 201-300; 301-400; 401-500; 500+

3. Ownership structure of branch:
For-profit; Not-for-profit

4. Branches corporate structure/affiliation?
Chain (national or regional); Hospital/Health system; independently owned

5. City and state of operation

6 Has your branch submitted bids in CMS's DMEPOS Competitive Bidding Round 1 Rebid?
Yes; No.

7. What were your bids for the following codes in the most recent Re-Bid?
E1390 Oxygen Concentrator
E0431 Portable Gaseous Oxygen System
K0738 Portable Gaseous Oxygen System, Rental
E0443 Portable Oxygen Contents (1 months supply)
E0601 CPAP Device
E0470 Respiratory Assist Device, Bi-Level
A7034 Nasal Interface
E0562 Humidifier, Heated
07030 Full Face Mask

8. Did your branch submit bids in CMS's prior (2008) Round 1
Yes; No

9. If your branch participated in the Re-bid and prior (2008) Round 1, was your Re-bid amount higher or lower for the following codes vs. the Original Round 1, and by how much?
E1390 Oxygen Concentrator
E0431 Portable Gaseous Oxygen System
K0738 Portable Gaseous Oxygen System, Rental
E0443 Portable Oxygen Contents (1 months supply)
E0601 CPAP Device
E0470 Respiratory Assist Device, Bi-Level
A7034 Nasal Interface
E0562 Humidifier, Heated
07030 Full Face Mask

10. If your bids are not selected in Round 1 Competitive bidding, what will be the most likely strategy for your branch?
- Run-off existing business and wind-down.
- Acquire a competitor that was a successful bidder
- Attempt to sell your business
- Relocate to a different market in your state
- Don't know/other

11. Do you think it likely that Congress will delay Competitive bidding for a second time?
Yes; No

12, What is your branch's expected revenue growth in 2010?
Less than 0%
1%-2%
3%-4%
5%-6%
7%+

12. Do you foresee more or less competition in your market during 2010?
More; Less; Same

13. What was your branch's 2009 EBITDA margin?
Negative; between 0% and 5%; between 5% and 10%; between 10% and 15%; greater than 15%

14. If you would like a copy of our final report, please fill in your email address.

— Mike Moran