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Georgie Blackburn
Georgie Blackburn is vice president of government relations and legislative affairs for Blackburn’s in Tarentum, Pa.

Editor’s note: The following is an excerpt from Blackburn’s membership address at the PAMS Annual Meeting in May.

The toughest obstacle our industry has encountered over my three-plus decades in this business is CMS’s bid program. In his book, “Good to Great,” Jim Collins wrote that all good organizations have two goals in common: they preserve their core values and they stimulate progress. Competitive bidding impedes both goals!

Our business is based in the Round 1 MSA. This has been a LONG fight! There was never a decision regarding whether we’d bid, but there was also an overriding feeling that while we were attempting to participate, the program had to be fought.

In 2007, when the program was being unveiled, it became very clear that unless our industry and our business voiced its concerns we’d passively be consumed by its detrimental design. That year, my job changed from compliance director to government relations—which gave me a voice for Blackburn’s.

It was the culmination of more than three decades of working with DME, as an ATS, rehab manager and compliance director, that gave me specifics I could discuss. It was time to speak up and speak out!

Blackburn’s has been a member of HIDA, then NAMES, which has become AAHomecare, for years. 

We knew our national association would be working on getting the bid program stopped, but how were they to do this without the help of providers? The Pennsylvania Association of Medical Suppliers (PAMS) had really ignited my fire on issues. During my chairmanship of the board in 2006, PA Medical Assistance tried to initiate a new program called selective contracting, jump starting the bid program that Medicare was about to initiate. The board, our members and then new Executive Director John Shirvinsky successfully met with the secretary in regional meetings, we got our beneficiaries to speak out, and eventually we shut that down. To this date, it has not resurfaced. Poor policy could be stopped in its tracks—it was an epiphany.

I’ve had other epiphanies these last six years fighting the bid program, and they are like snapshots in my mind.

Lesson #1: There really is power in voice!

When the methodology behind competitive bidding was unveiled, complex rehab mobility products were included. Rehab had been my life at Blackburn’s for more than 20 years; I knew the complex rehab patient’s needs and the time involved with specifying the right product for functionality.

I could not conceive of drafting bids that included complex rehab patients when each patient was different, required an inordinate amount of time to arrive at the right product, required analysis of the home environment, required a clinical evaluation team approach, and required fine-tuning even after delivery on an ongoing basis.

At an AAHomecare fundraiser in Washington, D.C., for Republican Sen. Arlen Specter in 2007, I was seated beside him. I had just finished my term as board president at PAMS and was recruited to serve on AAHomecare’s executive board of directors.

AAHomecare felt it advantageous to seat me beside the senator so I could speak about the bid program from a Pennsylvania perspective of a business in Round 1. I was hesitant—this was new to me.

Many colleagues voiced their concerns that morning and as he stood and looked down at me, I finally raised my hand and said:

“Senator, our business is within the Round 1 CBA and I don’t know how in God’s name we can devise a bid for a complex rehab patient—each and every patient is different. Rehab products should not be included in the bid program.”

That statement for some reason resonated with the senator and as he joined the large group assembled for his joint address following the breakfast fundraiser, he shouted out, “Where’s Georgie…Is Georgie here?” I was stuffing a donut in my mouth in the corner because I hadn’t been able to eat seated beside him and choked on it as I raised my arm.

He said, “There she is…Georgie just told me why the bid program is not good for rehab patients and I will do all I can to get to the bottom of this.”

And he did!

AAHomecare scheduled a followup meeting in the senator’s office with then Acting Administrator Kerry Weems and I was asked to speak on behalf of providers regarding rehab patients. By the time Weems left, he identified a rehab patient with Christopher Reeves and even shared a story about his best friend who had ALS and was deteriorating.

I won’t say that meeting directly affected the removal of complex rehab from competitive bidding, but I know it helped. Sen. Specter had assured Weems knew about the rehab patient.

Lesson #2: Legislators do listen to constituent concerns and take them to heart!

Dale Carnegie said, “Speak about those things you know if you want to be heard!” I was psyched! If Sen. Specter felt what I said made sense, maybe others would, too!

I contacted each and every representative in our marketing area and one legislative director, Erik Komandant for Democratic Rep. Jason Altmire, called me to better understand my email regarding the problems I saw with competitive bidding. Rep. Altmire was chairman of the House Small Business Subcommittee. He told me that the congressman was going to hold a hearing and asked if I would write a synopsis as testimony. John Shirvinsky also wrote on behalf of PAMS.
He was selected to speak at the hearing and AAH asked if I would speak on behalf of small providers everywhere.

It was an honor and my personal introduction to Rep. Altmire. It also was the first hearing held on competitive bidding and the effect on providers in Round 1. I invited Rep. Altmire for a site visit, even though our business was directly represented at the time by Rep. John Murtha. He accepted. To drive publicity, I invited the local newspaper and the University of Pittsburgh‘s fundraising director, who was interested in our advocacy work, as well as key managers on our staff.

The congressman spent three hours with us, toured our facility, watched how a Group 3 chair was integrated with custom seating and positioning, and reviewed drive controls.

A good give-and-take roundtable followed where we discussed the level of patients we serviced, the illogical inclusion of complex rehab patients in the mix for Medicare’s new program and our opposition to the program as designed. I asked him how he would start to formulate a bid. He said he couldn’t because every rehab patient was different. From that point forward, we had a champion against the bid program.

Rep. Altmire had a healthcare background, having worked for UPMC prior to winning his seat in the House. He believed that health care should not be auctioned to the lowest bidder, that quality of care would suffer. He also understood the importance of accreditation, compliance, community presence.

He was in his first of three terms about to run for his second. He assured me upon leaving our site visit that he would work to stop the program.

Lesson #3: Commit the time, energy and finances necessary to plant a seed—then watch it grow!

In 2008, our industry successfully delayed Round 1. And it was due to champions like Rep. Altmire, who willingly spoke out to gain support against the program.
In fact, he was one of the speakers supporting the delay on the House floor the day of the vote!

I had received a personal call from Komendant, Rep. Altlmire’s legislative director earlier that day. He had told me not to hold my breath—what I was asking for, to delay the program, was a stretch. Later, he called elated, saying he couldn’t believe what had happened and to congratulate our industry! PAMS awarded Rep. Altmire the “Legislator of the Year Award.”

Our industry was promised improvements with that delay. But, Round 1 was rolled out by President Obama shortly after he took office his first term. We had hoped many important changes would be made, but it remained much the same. We were so disappointed.

Another hearing on the bid program was held in 2009, and I again testified on behalf of AAHomecare and small providers in rural areas. I was surprised when Rep. Altmire came in to personally introduce me. He spoke about his site visit and the services our firm provides 24 hours a day, our commitment to our patients. He shared how we’ve been a part of our community for almost 75 years. 

He really did know us! I realized that a relationship was forming.

He had helped our industry in the past, and I wanted to make sure this savvy champion stayed in Congress and hosted a fundraiser, first in Tarentum, then twice in Pittsburgh over the years. AAHomecare, Pride Mobility Products, Invacare and many other industry leaders co-hosted the events and traveled in to be there in person. Many of my PAMS colleagues were on hand to support him and he was elated at the turnout.

It reinforced his commitment to our industry and to our cause.

The House changed to a Republican majority and another friend and loyal supporter, Rep. G.T. Thompson, emerged. Rep. Thompson had a clinical healthcare background and also responded very positively to my concerns about the program in our initial meeting during his first term. He and his legislative director, Matt Brennen, were go-getters—they wanted the bid program stopped.

Jay Witter, Seth Johnson, Cara Bachenheimer and our own John Shirvinsky became my mentors. I continued to ask legislators for help, but my mentors taught me how to put that in the context of what could be done. In a bi-partisan move, Rep. Thompson and Rep. Altmire introduced a bill to stop competitive bidding.  We got a significant number of names on the bill, but at the end of the congressional year, we all knew it wouldn’t go anywhere unless we had a substitute plan and that didn’t surface until last year with the development of the market-pricing program (MPP).

Importantly, Reps. Thompson and Altmire’s bill served as a placeholder for MPP, keeping the negative and illogical aspects of competitive bidding alive until a replacement program would be adopted. Rep. Thompson was given the PAMS 2011 “Legislator of the Year Award!”

Lesson #4: In politics, redistricting can hugely affect relationships

In the last election, Rep. Altmire lost his seat. He was a centrist voter, had never missed a vote in all the years he was in office, and voted against the Affordable Care Act—he voted according to what his constituents wanted. I believe it came back to haunt him within his own party. A victim of redistricting, he and Rep. Mark Critz battled in the primary. Rep. Altmire lost. Poor turnout in his region was blamed. The unions also had backed the Affordable Care Act and he didn’t. He thought it was too costly and inefficient. Regardless of the reason, we lost one of the best champions we have ever had.

Then Rep. Critz lost to Rep. Keith Rothfus—a Republican. I have begun the educational process—again. We’re currently in the midst of scheduling a site visit, but we already have his support as a co-sponsor on H.R. 1717.

Lesson #5: Backing good people in Congress is a good business decision. Building new relationships—a necessity!

The challenge to develop relationships and educate on issues is ongoing. People may change, but our issues remain. Fundraising is a key way to do build relationships. Mal Mixon, chairman of the board of Invacare, told me last year that he was having a fundraiser at his home for House Speaker John Boehner and I said I’d love to meet the speaker. Mal’s response was, “Do you have $50,000?” His fundraisers and mine are very different! But both serve a purpose!

Chuck and I, and Ron and Jo Jean have supported and hosted many fundraisers for legislators in our service area and for industry champions since 2007. It enhances the bridge building.

Since 2007, our legislators have challenged us to come up with a replacement methodology for competitive bidding. I wanted and our industry wanted competitive bidding to just go away—it was hard to swallow the fact that a pay-for was required. Our champions knew they couldn’t stop the program without an eventual replacement.

Do you recall how the industry became incensed at the 9.5% cut to achieve the delay in 2008? Now we are facing 45% cuts in DME in Round 2 and we’ve been living with an average 36% average DME cut in Round 1 in Pittsburgh since 2011! Our situation is serious.

LESSON #6 – The answer eventually surfaces. Stay positive!

In April, H.R. 1717, “The Market Pricing Program Act of 2013,” was introduced by Republican Rep. Tom Price of Georgia, a physician, and Rep. John Larson of Connecticut. They are colleagues of our own Rep. Mike Kelly, the PAMS 2013 Homecare Champion. All sit on the powerful House Ways and Means Committee. MPP levels the playing field; it allows us to stay in the game!

With Round 1 already out of the gate since 2011; with CMS propaganda stating there aren’t any significant issues or complaints; and with Round 2 ready to begin July 1, battle lines are drawn.

Here’s the challenge: We must garner legislative support for MPP! We must do that with data. We must do it quickly! The lack of transparency in this program must be challenged; the outrageous low-balled discounting must be dissected. CMS must be made accountable for ignoring the recommendations of 244 auction experts as we struggle to keep our firms thriving and continue to service patients.

We need hearings to question CMS’s assertions about the success of the program. We need to challenge CMS’s award procedure—who got in, who didn’t and why? What are the financial qualifications—they’ve never been shared! Why were awards given to non-licensed companies in various states? How were capacity estimations determined? What is the formula for establishing financial credibility of award winners?

As of July 1, 91 more CBAs will be involved. Chances are Round 2 will involve your business like it has involved Blackburn’s the past three years in Round 1.
I know how hard our national association and key manufacturers and their lobbyists have worked to get the bid program stopped. I know how hard state associations have worked and are working under the tutelage of John Shirvinsky to amass data to share with legislators.

This is NOT the time to claim fatigue! This is NOT the time to feel dejected! This is NOT the time to criticize! This is NOT the time to let someone else do your talking! This is NOT the time to back down and succumb to CMS propaganda about 45% savings and a promise of improved quality care! This is the time to come together and speak with one voice.

I know perseverance wins. Let me share a very personal story.

Early in 2010, I got a call from Rep. Altmire’s chief of staff, Sharon Werner, inviting me to attend the First Ladies Luncheon with Mrs. Altmire. She explained this was an annual event for congressional spouses; the congressman’s wife took one constituent a year. The staff had a vote, and I was the constituent! I was so honored!

The night before, there was a reception in the Library of Congress. Rep. Altmire personally took me through the books of Thomas Jefferson, which reside there. We viewed letters of first ladies ranging from Mrs. Adams to Mrs. Bush—history could be traced in their handwriting.

The next day was magical, seeing and hearing the first lady speak, witnessing in person the Navy band, the gorgeous luncheon, the tenor from Le Miserable crooning “Bring Him Home.”

During the drive home, I received a tearful call from my son that his wife, our 29-year-old daughter in law, Alison, had a biopsy done that day. The doctor quickly called them back into his office to explain they were facing Stage IV breast cancer, with metastasis to the lymphatic system. The doctor was very, very sorry. Their boys were 2 years and 9 months old. A troublesome lump thought to be a gland for three lingering months finally had been biopsied at their insistence and the news was bad—the very worst. Alison’s prognosis was not good.

That day is engrained in my memory—from surreal highs to incomparable lows.

My point is this: That evening, April 28, 2010, Alison told me she would survive despite the odds. The numbers given by her doctor meant nothing to her!

Two years later, Alison was honored as the cancer Survivor of the Year for West Virginia University Health System, speaking to 350 clinicians from around the country on the power of a positive outlook and carefully individualized patient care! Today, her six-month PET scans still remain clear, the next is this month. The boys are now 5 and 3, and thriving! They have a family life!

To us, it’s a miracle, but not to her. She believed she could beat cancer and did whatever it took from three bouts of chemo to multiple surgeries to radiation to more surgery to make that reality!

She never gave up. She never gave in! Her confidence was contagious!

LESSON #7: I learned from Alison to achieve any goal, we must believe we can!

I believe success is found at the intersection of challenge and opportunity! Friends, we are at that intersection! Some say our odds are not good at getting MPP passed! I say there are no odds—only data! We will never know what we can accomplish unless we try! Now is the time to contact our legislators, be relentless, be tenacious, and be passionate. The illogical data from Round 2 is powerful proof.

Let’s WIN with facts. Let’s educate together! Let’s beat CMS at their propaganda game.

AAHomecare’s Washington Legislative Conference is May 22-23 in Washington, D.C. Be there. It’s our time to shine!

Georgie Blackburn is vice president of government relations and legislative affairs for Blackburn’s in Tarentum, Pa.

Patrick Naeger
Executive vice president at Healthcare Equipment & Supply Co.

Editor’s note: This is an email that provider Patrick Naeger sent to the office of Sen. Claire McCaskill, D-Mo, following the congressional hearing to review provider business practices and Medicare audits. McCaskill leads the Subcommittee on Financial & Contracting Oversight, which held the hearing.

After watching the hearing yesterday I am a bit frustrated. Clearly, the one thing missing was the DME provider. While the hearing did not shed a good light on the industry, as a whole, it did bring attention to the bad providers who are illegally soliciting Medicare beneficiaries. In that regard, I can assure you, that the overwhelming majority of providers are on the senator’s side and we want to help fight the fraud and we have solution. All of us want the bad ones gone!

Clearly there was some frustration on the part of the senators. It seemed no one from CMS did a very good job providing quantifiable answers so that any of the senators could wrap their heads around the issues of fraud, improper payments and the alphabet soup of contracted auditors. I know how they feel—this is my world and I understand this frustration because these are the folks we deal with daily! Clearly by their own testimony, they provided profound evidence that the system is broken and I am glad the senators saw this first hand. In fact, after hearing Dr. Peter Budetti's exchange with Sen. Johnson, I expect to see the good doctor on Dancing With The Stars next season. While the answers, or lack thereof, were comical, this was no laughing matter.

Furthermore, the statement Mr. Laurence Wilson made to Sen. Tammy Baldwin's concerns about the effect of competitive bidding on rural providers was blatantly misleading at best. Mr. Wilson stated, "The program doesn’t affect areas other than metropolitan areas and surrounding suburban area at this point, so true rural areas are not affected by competitive bidding" In fact, I have a letter that was sent to Marilyn Tavenner, acting CMS Administrator at the time, from Sen. McCaskill asking that they look at the St. Louis CBA and give consideration to rural counties like Washington and Crawford. Mr. Jonathan Blum, deputy administrator, made a visit to Washington County at the request of Rep. Emerson to see and hear firsthand how rural Washington County really is. Washington County only has one hospital. In fact, this hospital enjoys the designation of a rural hospital because it serves a rural community. Washington County, Mo. has 33 people per square mile. This is not urban or suburban by any definition. In fact nine out of the 15 counties in the St. Louis CBA have less than 100 people per square mile. In St. Louis, there could be more oxygen patients per square mile than people per square mile in Crawford County.

Furthermore to show how bad competitive bidding really is and to Sen. Baldwin's point, the only two locally owned independent full line DME providers in Washington County who have invested in brick-and-mortar operations did not get bids. And one of them is ME! Mr. Wilson may paint this picture that all is OK but he is wrong again. The only thing left after bidding out the 10 most costly product categories are crumbs! While I applaud Sen. McCaskill for going after those who are illegally soliciting seniors, we must be mindful not to throw the baby out with the bath water.

Home care is the cure, in my opinion, for keeping Medicare costs down. Home care is the most affordable, most economically feasible solution. Ten thousand baby boomers are retiring every day and the demand for products and services has never been greater, and will continue that way for the next two decades. Now is not the time to eliminate those who are most capable of providing this affordable care to our seniors. Competitive bidding in its current form will destroy the DME industry. The industry has a plan we just need to be heard.

I think this committee could do great work to ensure seniors have the services they will need available to them. In fact, I would ask this committee to have a hearing on how the competitive bid rates were determined. It seems no one can get an answer from CMS and I believe Sen. McCaskill, through her committee, could get this done. While this should be a very easy endeavor it has become impossible. The bids were made, they were open, they were validated and awarded. All notices are out and the bid amounts were announced, but somehow no one—and I mean not even members of Congress—can see how the bids were determined, yet Mr. Wilson is touting how well this is working and will continue to work. While we are told these numbers come from actual suppliers, CMS will not let the sun shine in, unlike in every other government bid opportunity. The providers who will see their businesses destroyed deserve to see why. Furthermore as I understand it, the competitive bidding law was written to expressly exclude any opportunity for administrative or judicial review—surely that can't settle well with any lawmaker and especially with Sen. McCaskill. Obviously, there is more to come and I plan on bringing it to you next month during my visit to Washington.

In the meantime, my offer is still on the table as it has been for several years now. I would love to show the senator firsthand the day-to-day operations of a three-generation DME company. She or any staff is welcome to come and spend as much time as they like. In addition, for any additional hearings she might have looking into the DME realm, I am more than happy to offer my services and give my perspective based on 25 years of experience. Please share this letter with the senator. I hope to hear from you soon about how the senator feels regarding my point of view. Like the good doctor from Chesterfield, Mo., who inspired this past hearing I hope my concerns and experience shared, here, inspire her, as well.

Patrick Naeger is executive vice president at Healthcare Equipment & Supply Co.

Editor's note: The following is in response to a recent article written by the Associated Press and picked up by news outlets across the country.

We are very disappointed in the AP’s reporting on a recent story about power scooters sales and believe that a correction, or at a minimum, a clarification is warranted. The story, which has appeared in media outlets worldwide, contains incomplete and misleading information in two specific areas. We strongly believe that if left uncorrected the perceptions created could do irreparable harm to the manufacturers and providers of power mobility equipment.
In the first instance, the story talks about “a nearly $1 billion U.S. market for power wheelchairs and scooters.” While the need for power mobility devices, which include both power wheelchairs and scooters, has increased, Medicare expenditures have decreased significantly. In 2006—the year of highest spending on power mobility—Medicare spent just over $1.1 billion on these items. In contrast, Medicare spent only $397 million on power mobility in 2011. The story then makes references to Medicare, leaving a strong impression on readers that Medicare is paying for scooters that are unnecessary and that taxpayer dollars are being misused. However, that is far from the truth. In fact, utilization records from the Centers for Medicare & Medicaid Services (CMS) clearly show that scooters account for a mere two percent of all power mobility devices received by Medicare patients.
Secondly, the story says, “Government inspectors say up to 80 percent of the scooters and power wheelchairs Medicare buys go to people who don't meet the requirements.” This statement comes from a July 2011 report from the U.S. Department of Health and Human Services Office of Inspector General (OIG). The OIG took the liberty of including “claims that lacked sufficient documentation” in the same category with those that they say didn’t meet medical necessity requirements. Perhaps they were chasing headlines, because combining these two very different conditions badly overstated the facts. A close reading of the OIG report reveals that medical necessity was actually only questioned on nine percent of the claims for power mobility devices that were reviewed in 2007. Of that nine percent, seven percent simply needed a different type of power wheelchair, while only two percent needed a less expensive piece of equipment. The 80 percent figure is clearly tainted.

Furthermore, many claims do not meet requirements because the CMS documentation system is subjective, haphazard, and inconsistent. Through AAHomecare, the industry has been working to address the documentation error rate:
·         developed a clinical medical template with the help of providers and physicians that outlines all the mandated requirements established in CMS’ coverage policy;
·         encouraged CMS to provide additional education to physicians and providers on documentation and coverage requirements; and
·         supported and lobbied for an effective and efficient prior authorization program to fix documentation errors prior to CMS paying claims.
The recent OIG report on the CMS handling of surety bonds should alert the media and Capitol Hill to the management lapses at CMS that are impacting Medicare beneficiaries and DME providers. The AP story has done a disservice to Medicare beneficiaries, as well as the DME providers who are dedicated to assisting some of the most vulnerable people in our society. We call on the AP to correct the public record, and provide more comprehensive reporting in the future.

Tyler Wilson is the president of AAHomecare.

Discussion leads to change to ‘disruptive’ automated audit in Jurisdiction C

MiraVista, in collaboration with providers of Group 3 products, successfully initiated discussions with the Jurisdiction C RAC, Connolly Healthcare, to secure modifications to a disruptive automated review. The implications of the exercise should bring hope to all suppliers that auditing contractors can be rational and make responsive changes when merited.

Providers of Group 3 air-fluidized beds in Jurisdiction C started getting bombarded with automated recoupments from Connolly Healthcare in December, and they could not figure out why the claims were being recouped without development.

When researching a RAC audit, the first step is to visit the RAC website and locate the CMS-approved audit issues. We discovered that the web sites post a shortened version of the audit issues, and with automated reviews providers do not get development letters that contain the full version of the audit issue direct from the RAC. Therefore, they do not get an opportunity to view the full description of the audit logic. Attempts to figure out the true root of the audit logic were elusive until a dialogue began with senior RAC officials.

Connolly officials directed us to a very helpful, but widely unknown resource. Connolly has a Provider Portal in place that provides access to audit activity for a given provider.  This portal is the only place where providers can find the detailed description of auditing logic on automated reviews.  If you service Jurisdiction C beneficiaries, you can log in yourself and view the provider-specific data the RAC maintains for your company using your PTAN, State, and a CCN that has been pulled for RAC review by visiting the following link:  When you log into the portal, you can see the history of all the claims audited by this contractor, dollar amounts, service dates, status of the review, and a detailed rationale for the edit. This data can also be exported to Excel.  Through the portal, providers can see other detailed elements, such as the maximum number of complex reviews the RAC can pull for your company in a 45-day period (as this is provider-specific; limited to 10% of your annual volume of claims submission in a year).

Upon viewing the detailed rationale, we discovered that the claims were being recouped based on a provision in the LCD that requires the use of a Group 2 support surface 30 days prior to initiation of therapy with a Group 3 bed. We dug in a little bit deeper and researched claims from the audited sample and found that most fell into two categories: 1) either the patient had a Group 2 in their history that had capped out and was no longer actively billing, or 2) the patient obtained a Group 2 from another insurer. In all cases, the patients had used a Group 2 support surface prior to the Group 3, but the problem was that none of the claims had a payment for a Group 2 immediately before the first service date for the Group 3.

Connolly was receptive to meeting with us to discuss our concerns that the logic structure was targeting too broad a sample. There are a number of logical reasons that there will be no payment history immediately preceding the Group 3 delivery. In our dialogue with Connolly, we pointed out that many patients will be on Group 2 therapy for extended periods of time prior to initiation of Group 3 therapy. The Group 2 products are capped rentals and they convert to purchases after 13 months of rental. Connolly officials actively listened to our concerns and agreed the logic should be modified. As a result, the audit was converted from a fully automated review to a semi-automated review.  Connolly additionally modified the logic so that if it finds any history of a Group 2 in the data they have available, the claim will not be targeted for recoupment or further review.  However, when these provisions cannot be established, the claims will be developed for a complex review/response from the provider to prove the patient had used the Group 2 prior to the Group 3. This is a huge win for providers in this product space!

We are very pleased to report that the logic has already been corrected as of our March conversation and will not affect claims going forward. However, any appeals in the works for previously targeted claims will have to be resolved through normal channels. Separate from this audit issue, Connolly has another complex review that is targeting Group 3 claims for development and this audit will require providers to establish documentation that fully complies with all aspects of the LCD to support medical necessity. When claims are developed for complex review, providers are given 45 days to send in a response to the request.

Audits aren’t going anywhere, and in the course of an increasing number of audits, mistakes will be made by contractors and providers alike. The key take-away here is that it is possible to establish a reasonable dialogue with contractors. These dialogues can lead to a meaningful modification of audits with unintended consequences.

Andrea Stark is a reimbursement expert for MiraVista in Columbia, S.C.

Editor's note: This is one of three letters to the editor about competitive bidding that will appear in the April issue.

The overwhelming question that came to everyone's mind after the latest single payment amounts (SPAs) were released for Round 2 of competitive bidding was: "What do we do now?" Pundits and providers alike were shocked that the SPAs came in so low. Most of us across the country believe that these bid amounts simply can't be accurate and are arguably unsustainable. Surely, this isn't real.

Well, guess what? The SPAs are real regardless of whether or not they are accurate. After conferring with industry experts and providers throughout the U.S., the prevailing sentiment is that we have to work harder to convince Congress that this program is fatally flawed and will unceremoniously crash under the weight of suicide bids by desperate providers. But I propose that may not be the case. 

For too long we have prognosticated to members of Congress that, if allowed to continue, the competitive bid program would wreak havoc on the home healthcare system. And what have been the results? A delay that cost the industry a reimbursement cut of 9.5%, a re-bid of Round 1 with worse SPAs than the original Round 1, the creation of the MPP program that nobody really wants, and now a devastating Round 2. Well, perhaps it is time to let Armageddon occur. If we so vehemently believe what we are saying about an impending crash then why don't we stop asking to replace it and start saying to Congress: "We've done all we can to stop this, the blood is now on your hands." 

This approach offers more hope than any other course of action. First, contracted suppliers will get what they ask for:  contracts. Now they can figure out what to do with them. Certainly, the rates aren't sustainable and service and product availability will have to be forsaken. This is bad for Medicare beneficiaries. They won't get their equipment in a timely manner, if at all, and will be forced to pay cash for it from providers who don't have contracts. This is good for all the remaining non-contracted providers, as they will be in high demand. 

And what is bad for Medicare beneficiaries will not be welcomed by members of Congress. As news starts percolating of long delays and beneficiaries paying cash instead of receiving the great savings they were promised, Congress will have to realize it made a tremendous mistake. They will invite us back to the table to discuss a solution that we may not want to listen to. The idea that somehow our industry must "pay for" a solution suggests that we are somehow at fault for the current problem. Well, we are not. You don't see the American Medical Association (AMA) offering up "pay fors" to push off the “doc fix” every year, do you? They simply state the facts and say, “It's on you, Congress.” Congress acknowledges this and every year they push off the “doc fix” until the next year. 

If I were to offer our industry a bold plan of action going forward, it would be this: Stop pushing MPP and start saying, "We can no longer be held responsible. We tried and nobody listened. Now face the music."

Come July 1st, with the help of state associations, I would run full-page ads in every competitive bid area every week asking Medicare beneficiaries to call their congressmen if they are unhappy with the equipment and service Medicare is providing them. List the representatives and senators in the ads and their phone numbers. 

Forget about going forward with MPP and start talking about full repeal of competitive bidding. Offer instead to work with CMS to find new payment allowables and payment modalities that benefit all of us—Medicare, beneficiaries and providers. Many state associations have been very successful in this approach with Medicaid. It can also work for Medicare.

We shouldn't look at Round 2 as the end of the world. Conversely, we should look at it as a new beginning. A beginning that clears us of this train wreck and places us back in control of our collective businesses. We offer a lot more than we take from society and now society will find out how valuable this truly is. 


A top priority for the complex rehab industry in the new year and new Congress will be the reintroduction of the legislation “Ensuring Access to Quality Complex Rehabilitation Act,” which strives to create a separate benefit category for complex rehab technology. In last year’s Congress, this legislation garnered 38 co-sponsors, which provides a good foundation for the industry to build additional support and, ultimately, to get it passed into law.

The first task early this year will be to get the legislation reintroduced in the new Congress, so the advocacy efforts can begin in earnest. We all know as providers, clinicians, consumers, and manufacturers why a separate benefit is important, but how do we effectively convey that message to our legislators?

As a life-long complex rehab technology user myself, as well as a mobility industry veteran and advocate, I've learned that legislation isn't about papers, but people. It’s not just a bill, sitting on Capitol Hill, as School House Rock coined; rather, it’s a people effort, face-to-face meetings and engaged conversation that help legislators begin to understand why a specific bill isn't just a bill, but is truly a personal responsibility to pass into legislation. It’s really about making the subject personal in a way that legislators can relate with and are compelled to act upon.

Fortunately, when it comes to complex rehab technology, it’s truly among the easiest of legislative subjects to personalize because it’s about just that, people. The message that we need to convey to policymakers is that complex rehab technology isn’t an abstract, disassociated fiscal matter, but one that affects the quality of life of millions with severe disabilities and, ultimately impacts society. It is precisely that conversation, in real terms, face-to-face—of how protecting access to complex rehab technology serves both the individual and society—that must be communicated by each of us with legislators.

The fact is, policymakers of all sorts—from our elected officials, to their staffs, to the government bureaucrats managing daily operations for the Medicare program—are real people, with little to no disability experience. A wheelchair to many is four wheels and a seat, with no understanding of the vast array of technology and individual needs. I’ve been on Capitol Hill with well-intended industry advocates using terms like “foam-in-place seating” and have seen legislators completely baffled by the lingo, eyes glazed over. Therefore, for starters, in our advocacy roles, we need to have patience with policymakers, recognizing that they don’t know complex rehab technology, and we must start with the basic fundamentals.

The fundamentals go back to people. We must educate legislators about precisely who uses complex rehab technology. I know that sounds obvious, but too often in our meetings, we jump right to technology, forgetting that legislators may not be aware of those with disabilities overall. A first-person account is truly priceless, where, for example, policymakers can see my cerebral palsy in-person, and it’s unmistakable where the physicality comes in. However, every industry advocate should have a compelling story to share about one with a disability. It’s so vital to put a real face on the subject.

Next, legislators need to know not just what complex rehab technology is, but what it allows. The medical need may be evident; yet, quality-of-life is compelling. Explaining to legislators how complex rehab technology allows one with a severe disability to pursue education, career, family and community is a powerful tool. “Imagine if you awoke this morning, and you didn’t have the ability to leave your home. Imagine if you didn’t have the mobility needed to get to college, to get to work, to attend your child’s soccer games or school plays—where would your quality of life land?” These are the realities that must be shared. Legislators must feel the effect the legislation at hand has on real people, in a very empathetic context.

Lastly, let us never forget to end by explaining the ultimate result; complex rehab technology takes individuals from being on the system, to saving the government money, to actually increasing tax revenue. Provide those in need with the right seating technologies and it’s estimated to save $11 billion annually in health care. Even more, provide someone with the right mobility technology to achieve a bachelor’s degree, and he or she statistically goes from government beneficiary to mainstream employment—that is, a taxpayer. Yes, these are astounding fiscal outcomes, but they’re also even more meaningful quality-of-life outcomes.

Mark Smith is the consumer research and market outreach manager for Pride Mobility Products Corporation, and founding editor of Mark can be reached at

Our first goal as business owners or managers is to bring clear thinking to our companies. Every day, ideas and decisions come from our desks that result in hundreds of ideas and decisions from the professionals in our organizations. As an owner or manager, how do we know if we are thinking clearly about our day-to-day decisions? 

I am always interested in hearing what other business leaders are thinking and doing. I read books and articles. I engage business mentors and friends who are successful. Day to day, I rely on an honest relationship with my partner and my operations manager. Success for our team is a daily struggle to defeat the demons that pop up from our routines and slowly shifting focus. 

The areas I have been interested in lately break down loosely into 4 areas: people, motivation, skills and technology. All of these ideas may not be practical for your business model, but they can stimulate your thinking, which is always a good thing.

People: work together

How your people work together is critical to the success of your organization. Building processes that encourage communication is the key. The most efficient path is not always the direct path to success. For example, review is a work process not an after-event. Working in teams multiplies brainpower, improves quality and saves time. Staff members are each other’s best teachers. Their work is so inter-related that peer groups or work teams that constructively review each other as a normal part of the process can predict or solve problems effectively.  Encouraging peer groups and mentor relationships strengthens your staff and better processes will result.

Motivation: hire for attributes, then give free reign

People are motivated differently. It is difficult to institutionalize a plan that motivates your professional staff in a manner that promotes sustainable growth. Consider a hard stop for profit in your process as an alternative for profit-based incentive pay. When hard stop for profit within a small team structure is standard procedure, then everyone will get with the program or they will have a great deal of frustration working with their team. Look for ways to promote the factors that ensure long-term sustainability and growth. Timeliness is our focus. We grade on the scale of how quick we can execute a quality plan of care. Reducing the time between intake and billing is how we determine if we are healthy. For me, hiring for these attributes and then giving my best people the reigns created the desired organizational culture.

Skills: dominate as niche experts

Developing and growing your business is tough work. Usually we think of adding more folks or a bigger territory. Consider developing areas of expertise and growing your business to dominate niche areas. Grow sales and define yourself as a professional/medical entity rather than a wheelchair store. For example, develop a pediatric acumen. Pediatric seating has a bad rap. “It is not profitable,” “The follow up and rework is a killer,” etc. If you train and develop the professional staff to support the business profitably and properly, pediatrics can be a steady addition to your company’s bottom line. Children and their families are repeat customers and have great loyalty if you handle them with a medical/professional orientation. Another growth idea is to develop a complex shapes practice. Molded seating can be profitable, when you take the time to develop the correct model, train the right professional staff and use the correct product for this type of practice. 

Technology: go full bore

Technology and administrative control through that technology are now a way of life. This discipline has kept us alive through the dark days. Technology is very helpful to those companies that embrace it and decide to develop a comprehensive plan. That plan can be phased in over a couple of years but it is difficult to be half paper and half electronic, and really reap the benefit of the technology. We went paperless. Going paperless required discipline to really define our process and get everyone on board. Just a warning: Paperless does not mean no more filing. Success and saving time with a paperless process really depends on how you measure it. We found that our computer screens are now our desktops and had to go to dual, high quality monitors so our professional staff could work quickly with the imaged documents. We did not plan for that cost but are happy with the results.

These are all areas that I have been working on in the last year. What are your areas of expertise? Where do you need to strengthen your skills? Iron sharpens Iron and until I am ready to quit the fight I will always be looking out for a better way to do the work we all love.

Jim Noland, SMS/ATP,CRTS, is the founder of Presque Isle Medical Technologies and Conduit Technology, the parent company of the web-based documentation tool LMN Builder and the forth coming cloud-based clinical documentation tool Conduit Office. Reach him at

Andrea Stark
reimbursement consultant, Mira Vista

Gaining insight into the procedures that are most commonly denied by payers and evaluating the reason codes that accompany the denials can help suppliers modify their clinical documentation and billing practices to prevent denials, reduce claims rework, and improve their cash flow.

Below are the top five most commonly denied procedures for HME and DME suppliers during the time period between May 28, 2012, and Aug. 27, 2012. The data was compiled from the RemitDATA database that houses 25% of all national outpatient remittances.

•    E0431 — Portable gaseous oxygen system, rental; includes portable container, regulatory, flowmeter, humidifier, cannula or mask, and tubing
•    E1390 — Oxygen concentrator, single delivery port, capable of delivering 85 percent or greater oxygen concentration at the prescribed flow rate
•    A4253 — Blood glucose test or reagent strips for home blood glucose monitor, per 50 strips
•    A4259 — Lancets, per box of 100
•    E0601 — Continuous airway pressure (CPAP) device

Additionally, below are the top five most common denial reason codes, as compiled by RemitDATA during the same time period:

•    CO-50 — These are non-covered services because this is not deemed a "medical necessity" by the payer
•    CO-18 — Duplicate claim/service
•    CO-176 — Prescription is not current
•    CO-109 — Claim not covered by this payer/contractor
•    CO-A1 — Claim/services denied

An obvious trend emerges when evaluating the top five most commonly denied procedures. The procedures fall into three categories:

1.    Oxygen-related equipment
2.    Diabetes-related supplies
3.    CPAP equipment

Oxygen-related equipment

Both Recovery Audit Contractors (RACs) and Medicare Administrative Contractors (MACs) are taking a more critical look at oxygen-related procedure claims for various reasons. Topping the list of denial reason codes is failing to meet medical necessity criteria (reason code CO-50), which is often cited as the reason for E0431 or E1390 code denials. Organizations that do not have properly completed certificates of medical necessity for these codes will fail medical necessity claim edits.

Other common issues that cause denials for E0431 and E1390 codes include:

•    Being unresponsive to an audit request from a contractor, or not responding by the deadline
•    Face-to-face notes between providers and patients may not be detailed enough
•    Recertification of patient oxygen use is required each year, and failing to recertify will result in a claim denial (reason code CO-176)

Diabetes-related supplies

Perhaps the biggest issue causing claim denials for diabetes-related supplies is duplicate claims and overutilization. Diabetes patients who change suppliers, or reorder supplies, before they are eligible for more supplies, may result in a claim denial with a reason code of “CO-18 — Duplicate claim/service.” Fortunately, the DME MAC in Jurisdiction C has implemented an interactive voice response (IVR) system that allows providers to call and receive information about when patients are eligible for more supplies. Other MACs are considering the addition of this capability within their jurisdictions.

Another issue causing claim denials for diabetes-related supplies is failing to meet medical necessity criteria. In many situations, a modifier indicating whether the patient is or is not using insulin was excluded from the claim, which causes the denial.

CPAP equipment

With CPAP products, there are several situations that may cause denials, including:

•    A duplicate claim/service code (CO-18) can result when patients receive new CPAP equipment before they are eligible, or when there are payment backlogs where prior payments are not posted, or prior medical necessity denials are not appealed timely.
•    Medical necessity denials (CO-50) often occur when providers do not verify that the patient has an ongoing need for the CPAP equipment. Additionally, missing modifiers may cause medical necessity denials.

Other denial reason codes

Reason code “CO-109 — Claim not covered by this payer/contractor” can occur for many reasons, which providers must determine by evaluating the accompanying remark codes. In many situations, the denial is the result of missing supplemental patient information, such as the patient's permanent address, or when a patient’s coverage has changed and they are in a skilled nursing facility or have opted out of Medicare fee for service.

Like reason code CO-109, reason code “CO-A1 — Claim/service denied” must be investigated by evaluating accompanying remark codes to resolve the issue.

Evaluating denials and reason codes

HME companies that take the time to evaluate their denials and reason codes have an opportunity to prevent future situations that may result in denials. Avoiding these situations helps organizations improve their efficiency and cash flow, making the effort a worthwhile investment.

Mike Mallaro
CFO and chief information officer of The VGM Group

Blockbuster Video got outflanked by competitors who found a way to give customers cheaper, more convenient movie rentals. Reading is thriving, yet bookseller Borders died after narrowly defining its business as physical books sold from stores. Kodak forgot it was selling the preservation of memories, not film. Technology made booking travel easy, squeezing out travel agents who didn’t provide value-added insight and trust. 

These are just a few of the many cases of recent business failures driven by inability or unwillingness to change. Change is messy, chaotic and uncomfortable. But it marches on, unstoppable and inevitable. Are you a dealer of oxygen concentrators and bent metal? Or are you a healthcare professional offering people effective solutions to their healthcare needs outside of institutions?

Healthcare needs of the frail elderly and people with chronic health conditions are growing exponentially. The aging of America, an obesity epidemic, broader insurance coverage, new technology and excessive spending on the institutionalization of the aged are all driving huge increases for solutions that you are, or could be, providing. There are 2 million people on oxygen today, double the number from 1998, and that number will double again over the next 10 years. There has been a staggering growth in power mobility users during the past decade, driven by greater consumer awareness. Smart money expects that growth to continue.  One in three people over 55 suffers from chronic pain. More than 30 million Americans suffer from sleep apnea, but have never been tested or treated. One-third of seniors live in their homes, alone. Most of those homes desperately need modifications to be safe and comfortable, given the limitations of the aging resident. Hospitals face daunting new mandates to keep people at home and avoid re-admission. Advancing technology is exploding onto the scene with breakthroughs ranging from nutraceuticals to pain relief to remote monitoring. Organizations providing quality healthcare solutions that improve quality of life and can be executed at a cost less than the value provided will win.

We must also deal with other, perhaps stark, realities. Traditional payers are going to pay less for each unit of health care. With or without competitive bidding, reimbursement rates are going down significantly. Insurers are concentrating their power at a frightening pace, which is bad for all of us. Inadequate business fundamentals are plaguing many healthcare operations, including HME providers. We must get better at standardizing processes, learning and building on best practices, investing in important technology and professionalizing. Government regulation will continue to stifle our work. None of these obstacles are easy, but neither are they insurmountable.  Looking backward is hazardous. A changing world and a changing healthcare marketplace require us to look forward. The pace of change requires us to do it sooner rather than later.

Some companies recognize change, and figure out how they can use it to their advantage. Others see the coming trends, and fight to keep things the same. They see change as a threat to their business. Still others sit back and wait until they’re absolutely sure the trend will stick around before jumping on board. As a result, they’re constantly playing catch-up. Are you reimagining your products, services, and business model to gain your share of the future? Are you building a growth plan for emerging opportunities? Are you networking to find best practices and better ideas? Are you making the changes required of a serious business in changing times? This relevant quote by futurist Alvin Toffler is applicable: “Illiteracy will not be defined by those who cannot read and write, but by those who cannot learn and relearn.” Standing still is deadly.

Starbucks prices its coffee, arguably a commodity product, for twice what competitors do, and wins anyway. Apple solves problems, ones people didn’t even know they had until Apple showed them the better way. Kohl’s is a retail star; it wins in a trendy business using un-trendy, superior execution of business fundamentals. You see it’s not just failures around us. Successes are everywhere. 

The future is bright for many of us in this business. But make no mistake; it is a future that is different from the past. Change happens. Winners adapt, adjust business plans, seize on opportunities that emerge. We are part of a segment that is growing and will be much bigger in 10 years than it is today. Do you want to join Starbucks, Apple and Kohl’s, or would you prefer to go the way of Borders, Kodak and Blockbuster?

Rob Brandt

Medicare has finally released utilization records for Round 1 of its bidding program in home medical equipment and it did not take a Freedom of Information Act request or act of Congress to attain the records. Ironically, Medicare has included the 2011 allowable units, with a corresponding list of HCPCS codes, as part of the Round 1 recompete worksheets.

AMEPA has compared some of the most common codes to the 2008 utilization records published in the Round 1 rebid worksheets and it is easy to understand why Medicare ignored requests from bid design experts, congressmen and senators.

As a contracted supplier in oxygen I was forced to close my business because I could not afford to supply as many oxygen tanks that a beneficiary needed for less than $22 per month. The utilization records verifies this, because in 2008, 112,795 portable oxygen units and post-36-month refills were allowed in Miami and under the bidding program in 2011 that number was reduced to only 56,057. That is a reduction of more than 50%.

Unfortunately, this is not the only item or area where the bidding program has reduced patient utilization. In Miami, the only area to have support surfaces as a bid category, alternating pressure mattresses dropped from 932 allowed units in 2008 to only 248 units under the bidding program in 2011. That is a reduction of more than 73%. The other main HCPCS code in the support surface category is E0372, powered air overlay for a mattress. That item had 42 allowed units in 2008 reduced to 22 in 2011. The two items make up more than 96% of the support surface category.

It certainly did not help that Miami was part of a Region C prepayment review on alternating pressure mattresses that was initiated after the bidding program began. But how could the CBIC believe that a supplier could cut their reimbursement in half and still provide monthly ongoing documentation proving that a bed bound patient still has multiple decubitis ulcers on their backside. That is an operating cost that an inexperienced company would not have known or probably cared about before bidding—not to mention the sunk cost of discarding an alternating pressure mattress after only a month's use by a bed-bound patient.

Other standout utilization drops in Miami were from commonly used items where "bona fid" bid rules were clearly ignored. These include B4154 enteral formulas, which dropped more than 40% from 3.5 million 100-calorie units allowed in 2008 to less than 2.1 million 100-calorie units in 2011.

E0470 respiratory assist devices dropped 38.8% from 469 allowed units to 287. CPAP chin straps also saw a major decline from 2,676 allowed units in 2008 to 1,426 allowed units in 2011. These are relatively inexpensive items but who can purchase a chin strap, package it, ship it, collect documentation and bill it for the Miami reimbursement of $9.85. It should be no surprise the utilization dropped over 46%, but ask any board certified sleep or critical care doctor if a chin strap is an important accessory in respiratory therapy.

Walkers had the highest drops in utilization. The failure of the "bona fid bid" rule, requiring suppliers to not have rates below cost of goods and operating expenses, is apparent in many HCPCS item codes in all Round 1 areas. However, the most obvious are in the highly demanded walkers and power wheelchair batteries.

Folding and rigid walkers without wheels are among two of the top three walkers in the 17-item walker category. Nationally, compared to 2008, the utilization for the E0135 folding walker dropped an average of 56.7%. The worst cases were in Cincinnati where there were 822 walkers allowed in 2008 compared to 260 allowed under the bidding program in 2011.

In Miami the utilization dropped more than 54% and it was easy for me to understand. My office was located about a mile from the most prominent hospitals in north Miami-Dade County. Before the bid program stared we delivered at least three walkers a day to patients being discharged from Aventura Hospital. After the program began the hospital discharge planners could not find any contracted suppliers willing to deliver walkers so patients could be discharged.

As the general manager, I had to repeatedly tell case managers and families to purchase a walker at Walgreens a few blocks from the hospital for $79.95, because no "bid winner" would go through the process of providing it for $49.50 ($39.60 if they did not have secondary insurance). The beneficiaries and families understood that contracted walker providers could not collect the documentation, deliver the walker, set the walker height to the patient, train the patient how to use it, bill Medicare, wait a month to be paid, and pray that the patient actually leaves the hospital that day and not the next so the supplier would not refund the possible reimbursement back to Medicare because of a potential RAC audit sometime in the next three years for only $49.50.

They easily understood that if the nation's largest pharmacy chain was selling it for $79.99, then how could a supplier do the aforementioned for 40% less? Perhaps this is where those 54,000 "inquires" came from that Medicare received the first three months of the program.

The other code for E0141 rigid walker was even worse, as the utilization dropped nationally 65.1%. The highest drop was in Dallas, 110 allowed units in 2008 compared to only 2 (yes two) in 2011. Cincinnati had 76 allowed units reduced to only one, and that beneficiary probably does not know how lucky they are.

Rob Brandt works with the Accredited Medical Equipment Providers of America (AMEPA). Reach him at