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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.


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.

by: Liz Beaulieu - Wednesday, January 6, 2016

All eyes were on the big guns—Drive Medical, Invacare, Inogen and ResMed—in 2015.

Or so it would appear, according to the five most read vendor stories for the year.

Drive Medical took the No. 1 spot with its acquisition of DeVilbiss Healthcare. This deal culminated a busy 2015 for Drive: It had already made a handful of other deals throughout the year. With DeVilbiss and some of the other acquisitions it has made in the rehab market, Drive is clearly trying to up its clinical game. That’s also what happens when you pick up a guy like Joseph Lewarski and make him global vice president of respiratory & sleep.

Speaking of Lewarski, it wouldn’t be a list of most read vendor stories without a story about Invacare, his former employer. It’s just too bad the story wasn’t “Invacare lifts consent decree.” Instead, at the No. 2 spot, it’s “New product readies Invacare for comeback.” The company has been busy putting its ducks in a row for a life post-decree (receiving approval for an upgrade to its TDX line of power wheelchairs and beefing up its sales force), but until it can take that huge weight off its shoulders…well, there’s only so much it can do.

Invacare also took the No. 4 spot with “Invacare’s Monaghan takes control.” Monaghan, the newly minted president and CEO, personally headed up the company’s beleaguered North America HME business on an interim basis. Later in the year, he passed the baton to Dean Childers, who took the role of senior vice president and general manager of the North America HME and Institutional Products Group businesses. Monaghan has since also added chairman of Invacare’s board of directors to his resume.

Coming in at the No. 3 spot was Inogen (“What’s the hold up at Inogen?”). Not unlike Invacare, Inogen endured some scrutiny in 2015. It had to delay reporting its fourth quarter and year-end earnings because management discovered “certain potential accounting matters” during the first quarter of 2015. After an internal investigation, however, the company characterized the matter as minor and reported it had minimal impact on earnings (it reduced net revenue for the fourth quarter by $300,000 and net income by $100,000). Still, readers likely couldn’t resist a story about a direct-to-consumer manufacturer and five sales reps who “falsified or improperly modified sales and rental order documentation.”

ResMed took the No. 5 spot with “ResMed bets on healthcare informatics.” This has been a big push for ResMed in 2015 and likely for years to come. There’s a virtual arms race between the vendors in this space—like in no other space of HME, I think—to make devices that not only look slick but also have support tools that make it easier for HME providers and their patients to use them and keep using them. Think compliance and monitoring management systems and user-friendly apps. Where will these vendors go next?

These four companies will likely continue to make headlines in 2016, but other companies to keep an eye on include EZ-Access, which plans to make a number of additional acquisitions this spring to create a “one-stop shop” for home modifications equipment; O2 Concepts, which expects its modem-equipped portable oxygen concentrators and the data they provide to gain traction; and ROVI Mobility and Merits Health Products, which are making a run for the complex rehab market.

Stay tuned.

by: Liz Beaulieu - Monday, December 21, 2015

I started down an unsuspecting path last week when I interviewed Chris Blackmore at Merits about the company’s entrance into the complex rehab market.

I should have known this would be a bigger-than-I-realized story, given our coverage of Shoprider getting into the market in 2014 through ROVI, and our coverage in the January issue of Drive Medical shooting for a more formal presence in the market in 2016.

But it wasn’t until I talked to Chris that I started putting 2 + 2 together.

So I called Cody Verrett at ROVI to see how things were going for that new entrant in the market. “The product is going in the right direction,” he said. “We’re seeing steady increases in all the right metrics—quotes, orders and amount of product shipped per day.”

Then I called a number of others to talk about why we’re seeing all these new entrants in the market. So far, the going reasons range from the obvious (shelter from competitive bidding pricing) to the interesting (the downfall of The Scooter Store has meant an increase in the number of Group 3 wheelchairs being prescribed).

Then I got to thinking: Who has the most to lose from these new entrants in the market? A call to Quantum Rehab and Permobil may be in order.

But like Martin Szmal said, “I don’t think there’s any down side to having more competition and more selection in regard to the beneficiary, as long as they’re not me-too products and they’re bringing something new to the market.”

I need to make other calls, but keep an eye out for a story about Merits and one or two other stories in upcoming HME Newswires and the February issue.

Stay tuned.

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.