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by: Mike Moran - Friday, January 14, 2011

Here's an interesting competitive bidding story:

I got a call yesterday from a provider who was upset that Cleveland Clinic Respiratory Therapy at Home, which initially did not win a Round 1 rebid in the Cleveland CBA, was belatedly awarded a bid by CMS. In a letter to staff dated Dec. 20, the company stated: "Great News! At noon today, we received word from CMS that we were unjustly denied a winning status and were granted as bid winners for Oxygen and Enteral. Simply put, we can continue to accept all Medicare oxygen patients after December 31 as a winning bidder."

Some providers reportedly are upset about this, that some funny business occurred that let the clinic snag a bid. As far as I can tell, that is not the case. CMS announced the winning bidders Nov. 3, and all losing providers had until Nov. 19 to question CMS about why they lost the bid. That's apparently what happened here.

It the letter, the company stated: "We had been informed that the reason we were denied was not due to our bid price, but due to the Clinic's overall low credit rating. Although our bond rating is one of the highest you can obtain, they did not consider that when making their decision. Because of our ability to purchase large amounts of equipment at a time and our high bond rating, we appealed the decision."

I think that is the end of this story, but now I'm curious: How many providers who were denied a bid appealed and ultimately received a bid.

I'm going to contact CMS and see if I can find out. Stay tuned.

Mike Moran

by: Mike Moran - Tuesday, January 11, 2011

The other day in this blog, I asked the following question: "Can the industry have it both ways? Can it embrace the economists when they say the current program is greatly flawed, but give them the cold shoulder when they propose what, in their opinion, is a workable alternative?"

The answer, according to John Shirvinsky, executive director of the Pennsylvania Association of Medical Suppliers (PAMS), is "Yes."

After reading the email that John sent to me yesterday, I'm inclined to agree.

Mike Moran

Here's the email:

I realize that a lot of people are tempted to hit the panic button on competitive bidding now that Round 1 has gone live.  But allow me the opportunity to encourage everyone that all is not lost yet and that now is exactly the time to redouble our wildly successful efforts to outright repeal this very bad program.  As the late British Prime Minister Margaret Thatcher cautioned President George H. W. Bush prior to the first Gulf War, "Now is not the time to go wobbly."

For those who may be rolling their eyes at my use of "wildly successful" in the same sentence as "repeal" of competitive bidding, allow me to remind everyone of where we've been and what we've accomplished. When an economic analysis of CB was released in early 2008 and a handful of Round 1 state associations began a push to stop the program from being implemented, many dismissed the effort as quixotic--a waste of time and effort. Yet, when the program's shortcomings started to become apparent, the momentum created by this report was utilized to undo the original results and to delay the program.

In the 111th Congress, additional study by free-market economists--economists who found that the use of an auction mechanism in an existing and competitive market such as the HME industry was both counterproductive and anti-competitive--was utilized to convince 259 congressional representatives to sign on in support of an outright repeal of the poorly designed bidding scheme. That number represented an overwhelming majority of the U.S. House of Representatives and is a tally that is rarely seen in that body. Wildly successful, wouldn't you say?
Certainly, none of our efforts to highlight the obvious failings built into the CB program has had an iota of impact on CMS and the proponents of the anti-competitive bidding scheme, but that should come as a surprise to no one. Medical equipment and supplies represent the last vestige of small business entrepreneurship and true competition in U.S. healthcare. Truth be told, that is a very bad thing in the minds of the Medicare bureaucracy precisely because of the impact that so many small providers can have with the members of Congress who determine what CMS can and cannot do.

Everyone who has spent any time around the HME business understands the undeniable truth that CMS wishes to dismantle this industry. CMS views the elimination of 80% to 90% of DME companies as a very good thing, indeed. They see no downside--for them--to accomplishing this goal through the creation of regional oligopolies. We certainly should.  Agreeing to "reform" the bidding process is really a concession to the notion that there are too many participants in home medical equipment and an admission that eliminating a majority of the competitors in the HME market has no downside worth fighting over.

The question is posed, "Can [our industry] embrace the [auction] economists when they say the current program is greatly flawed, but give them the cold shoulder when they propose what, in their opinion, is a workable alternative?" The answer here is both obvious and easy: "Why not?"  We are all familiar with the phrase, "I agree with you to a point," because we all have found ourselves in the position of being partially in agreement on any number of matters. Why not ask the other side of that question? "Can we embrace the findings of the free-market economists when they say that the program is fatally flawed, but then ignore their warnings of anti-competitive results and support a redesigned bidding scheme?"

I find no conflict here whatsoever.  We need to remember that TWO schools of economic thought have weighed in on this issue--free-market economists and, more recently, economists with a specialty in designing auctions. I agree with the auction experts that the current design of the Medicare bidding plan is horribly flawed from a technical standpoint. I further agree with the free-market economists who believe that the program is fatally flawed from a practical standpoint and will needlessly result in the dismantling of an otherwise competitive industry where the competition clearly works to the benefit of the consumers of home health care.

The real question is: With whom do you agree more?

I happen to agree more with the free-market economists.  I firmly believe that any government program that forces a majority of good, solid, law-abiding business owners to lose their life's investment, to lose their livelihoods, to fire their workforces and to cease caring for their customers to be an abomination and an example of government overreach that has no place in our society.
This year I enter my fifth decade of working as a professional advocate and political strategist.  My experiences have covered a lot of ground and a lot of very big issues at all levels of government.  One thing that I have never seen in all of that time is an interest group--particularly and industry trade group--volunteer to cannibalize its own ranks.

We are all aware that the current bidding scheme is designed to eliminate 80% to 90% of HME providers from doing business with Medicare. Let's assume that a redesigned bidding program reduces that number to 70% to 80%.  Or be wildly optimistic and say than only 60% of existing providers will be eliminated. How does an industry trade group that is organized to support the best interests of an entire industry come to the conclusion that putting a majority of that industry at risk of financial ruin is a good plan?  That is bottom line that we must consider in the repeal vs. reform debate.

It is understandable that individual companies, believing that they are well positioned to prevail in the long run, may support such an industry-wide consolidation. As economists will remind us, most companies view competition as an annoyance and welcome the opportunity to corner a market. That's human nature. But when individual companies voluntarily join together in creating a trade association to represent the best interests of that entire industry, that kind of thinking needs to be checked at the door. The industry-wide trade group has no more business picking winners and losers than does the federal government.

There are a few things that we need to agree on as an industry. Competition is good. Free markets are good. Ease of entry to and exit from a market is good. Small, privately owned companies are good. Large regional companies are good. Even-larger national companies are good. We are all on the same side.

What is bad is Medicare's fatally flawed bidding program. Everybody in the DME industry (even those advocating a redesign compromise) agrees that we would be better off if CB were repealed. The only way that happens is if our industry stands up, speaks out and urges Congress to do the right thing and pass a repeal bill. Nobody else will fight this battle for us. If we choose to walk away from the repeal fight, a very busy Congress will be only too happy to oblige. Now is not the time to go wobbly.

John Shirvinsky
Executive Director
Pennsylvania Association of Medical Suppliers

by: Mike Moran - Friday, January 7, 2011

There's a lot of outrage these days about competitive bidding, about how messed up the program is and how bad it is for providers and beneficiaries. Despite these complaints and the industry's continuing efforts to repeal the program, not everyone believes those efforts are the wisest use of time and resources. I received an email recently from one such person, and I've included it below.

This person believes that competitive bidding is here to stay. The best course of action, he says, is to stop trying to repeal it and work to reform it. No doubt, this is an unpopular position to many, but I think he makes some good points. Many people in the industry like to point to the 167 economists who consider the current bidding program a terrible failure. But these same people, when asked if they would accept a bidding program that eliminated the current flaws--a program like economist Peter Cramton has proposed—typically look like a deer in the headlights. My question is this: Can the industry have it both ways? Can it embrace the economists when they say the current program is greatly flawed, but give them the cold shoulder when they propose what, in their opinion, is a workable alternative?

As I see it, the industry has four options (feel free to add your own). It can continue to push for repeal of competitive bidding. It can push to reform the program. It can let Round 1 run its course and let the chips fall where they will. (If all out disaster doesn't occur, what then?) Or it can suggest an alternative. With the clock already ticking on Round 2, this important strategic decision can't be made soon enough.

Mike Moran

Now here's the letter:

Despite years of effort by the industry to derail competitive bidding, the flawed program has been implemented in the first nine markets. And implementation of the program will begin in an additional 91 markets in the next six months. Some in the HME industry predict the program will fail in the first nine markets. Unfortunately, I believe those people are wrong.

No doubt, beneficiaries will be impacted by the program. Some will be impacted more than others. But collectively the contracted suppliers will do just enough to allow CMS to claim success. Let's not kid ourselves: Did we collectively delight every beneficiary every time before competitive bidding? Why do three of the 30 Supplier Standards address beneficiary complaint resolution (#13, 19, & 20)?

As much as it pains me, it is time for the industry to drop the banner of "repeal" competitive bidding and pick up the banner of "reform." Changing banners is not the same as waving the white flag. The leaders at AAHomecare, VGM, Invacare and other industry organizations and manufacturers need to hear that the industry is behind reform so they can dedicate their resources to reforming the competitive bidding program in an open and forthright manner. The leaders of those organizations cannot and will not take action until they are confident their membership and customers will not abandon them if they push for reform.

Economist Peter Cramton, Ph.D., is a credible and independent voice about the flaws in the competitive bidding program. He is also a leading expert in auction design. He has developed the framework of an auction design that addresses many of the flaws in the current competitive  bidding program. His design will also achieve significant cost savings for the Medicare program. He has invited the industry and CMS to talk with him or other auction experts to finalize a new design. Efficient suppliers will prosper under a well designed auction system.

Repeal has fallen on deaf ears for years at CMS and Congress. Isn't it time the entire industry throws its weight behind a program like Dr. Cramton's that will result in a sustainable program for beneficiaries, suppliers and CMS? Good business is making change before change gets crammed down your throat. The leaders at your associations and manufacturers need to hear that you support reform before competitive bidding is crammed down the throats of beneficiaries and suppliers in the next 91 markets.

Scott Lloyd
Co-Founder & President
Extrakare LLC

by: Mike Moran - Thursday, January 6, 2011

I've talked to a lot of people this week about various HME issues, and here's the quote I like the best, mostly because it addresses one of my pet peeves:

"We've been trying to get the industry to stop thinking that when someone turns 65 they don't have any money. We need providers to ask them to pay for some things. But also lets not assume that once they turn 65 that they also become idiots."

I'll keep this person anonymous because this was part of an aside conversation we digressed into. But I've often wondered this myself. Why do so many HME providers let Medicare beneficiaries slide when it comes to collecting co-pays? And why do so many HME providers talk about seniors as if they are all infantile and need tons of service?

Sure, there are some low-come seniors out there, and others aren't too mentally sharp, but these folks do not represent the majority.

It may require some tough love, but  when it comes to HME these days, more seniors are going to have to pay their fair share, and when possible, rely less on providers for service.

That's the new reality, and if you are a provider who has not bought into that, you are in for a rough ride.

Mike Moran

by: Mike Moran - Thursday, December 30, 2010

Everywhere I turned this week,  people were talking about competitive bidding, but you won't hear a peep out of me. Not today.

A provider sent me an email a few days ago that included the following paragraph about competitive bidding:

"Despite years of effort by the industry to derail competitive bidding, the flawed program has been implemented in the first nine markets. And implementation of the program will begin in an additional 91 markets in the next six months. Some in the HME industry predict the program will fail in the first nine markets. Unfortunately, I believe those people are wrong."

Here! Here! Good for you, old chap. You may have a point. But I absolutely refuse to comment, and you'll find out why soon enough. But no matter. Like I said, plenty of people want to talk about competitive bidding.

You sound skeptical. You want more proof? Okay. I just had a phone call with another provider who told me:

"It's time that this blows up in their lap. Unfortunately, there are a whole bunch of colleagues that are saying goodbye to employees today, and there are a lot of patients who will be shuffled around and abused, but unfortunately now the proof is in the pudding. When it falls apart and explodes in their face, CMS is going to say, 'You guys were telling the truth.'"

I love the truth. The truth sets us free. But a delicate soul accused me recently of writing things of "poor taste." Another scolded: "You are not very funny at all, mister!" That is not why I refuse to talk about competitive bidding today. I am not gun shy. But really, who needs me when just a while ago someone told HME News Editor Liz Beaulieu that with competitive bidding "CMS has turned the industry into a nightmare."

I hate nightmares. I wish everyone sweet dreams.

But I can't talk about competitive bidding today.

I've got a sore throat.

Have a very Happy New Year.

Mike Moran

by: Mike Moran - Friday, December 17, 2010

When I arrived at work this morning, I found this email awaiting me in my in-box:

Apologies for having to reach out to you like this, but I made a quick trip to  London,United Kingdom and had my bag stolen from me with my passport and credit cards in it. The  embassy is willing to help by letting me fly without my passport, I just have to pay for a ticket  and settle Hotel bills. Unfortunately for me, I can't have access to funds without my credit  card, I've made contact with my bank but they need more time to come up with a new one. I was  thinking of asking you to lend me some quick funds that I can give back as soon as I get in. I  really need to be on the next available flight.

I can forward you details on how you can get the funds to me.

I await your response.


Judith Owens

Now I have absolutely no idea who Judith Owens is, and I suspected that this was some kind of a scam. But just in case, I checked our editorial database. Nope. No Judith Owens there. I looked at her email address: Hmmm. I called up my web browser (Safari) and typed in and then Again, nothing. I was grasping at straws, but I wondered if this person could somehow be associated, legally or illegally, with a sleep provider. Of course this is a scam, I said to myself. No one sends a total stranger an email, asking for a large amount of money. I was a little surprised that this email did not go directly into my junk mail with all those ridiculous offers for "male enhancements" and Russian mail order brides. Somehow it slipped through. Normally, at this point, I would have deleted the email and moved on to something productive. But instead I emailed Judith back. How far would this person go? I wondered.

OMG. This is terrible. How much money do you need and where do I send it.

She's never going to write back, I thought, and started going through my to-do list for the day. A few minutes latter, my email tinged. I looked up. It was Judith!

Thanks. Please I need about $1000. Please send it via western union transfer, it is the fastest way I can receive the funds as I hope to fly out tonight. See details for transfer
Receiver: Judith Owens
City: London
Country: United Kingdom

Please send me the western union mtcn number so I can receive funds here. Thanks

Judith Owens is probably some guy with a beard and bad breath, I thought. I decided to spice things up a little and wrote:


I got it. Would it be okay if I sent $1500 instead of $1000, just so you'll
have some spending money on the trip home? Let me know because I'll have to
clear that with my wife first?

Keep a stiff upper lip! Help is on the way!


I was a bit pleased with myself. The "stiff upper lift" line sounded kind of British, which was appropriate when corresponding with someone desperately trying to leave England and return to the United States.  Judith emailed back:

Go ahead.

Go a-freaking-head? Is that it? How boring. I replied:

Great. Do you have instructions on how to use Western Union. I've never used
it before. What do I do?

She wrote:
Visit to fine the nearest WU agent.

I typed in the web address.  It worked. Oh, you clever, clever crook. I snickered, and thought: I wonder what you'll have to say about this:


Bad news. My wife said I cannot send you the money. She said it's Christmas
and that we need that money to buy our kids and family presents. What should
I do? I really want to help you!


To this, Judith wrote:

Please I will refund as soon as I get home.

I could sense pleading in her response.

My final email:

Sorry. I can't do it. My wife would kill me. Good luck!

That was it. Judith did not send another email.

I know that this 20 minute exchange with Judith was not the most productive use of my work day.  But even now, as I'm about to go home for the weekend,  I can't help but wonder: Judith, who are you?

Mike Moran

by: Mike Moran - Monday, December 6, 2010

It can be a hard, cruel world out there, especially if you are old, overweight or, sometimes, a guy named Moran.

I got a call last week from Mike Kruse, a reporter with the St. Petersburg Times. Turns out a man on a moped crashed into a man driving a power wheelchair. Kruse had all kinds of questions for me: How big is the scooter market? How big is the power chair market? And on and on. I kind of enjoyed it. Usually, I'm the one asking questions so to have the tables turned was fun.

Here's what Kruse quoted me saying in the story he wrote:

"We're going to see more and more people riding around in scooters and wheelchairs because we're going to see more and more old people who can't walk and more and more heavy people who can't walk."

I think that is accurate.

Well, fast forward to this afternoon. I couldn't find the link to the newspaper story so I Googled myself. The first link to the story lead me to Wonkette, a website that specializes in satire. Wonkette spoofed the Times story under the headline: "In A Troubled Economy, Scooter Manufacturing Is The Only Successful Industry."

Reading the comments on this site made me realize that satire and empathy are often mutually exclusive.

I e-mailed the Wonkette link to a co-worker.

She emailed back: I love how out of that entire, long article, it was your name that got
picked up. Personally, I'd take offense at the morons who are confusing "moran" with

I don't care too much about that. These people are idiots. But if this is my 15 minutes of fame I'm going to be pissed.

Mike Moran

by: Mike Moran - Wednesday, December 1, 2010

It's that time of year again: Time to apply for an HME Excellence Award.

If you have never applied for an HME Excellence Award, you should do so this year. In the competitive HME market (a market that is getting more and more competitive), a company needs every advantage. You need to outshine the competition--you need to differentiate your company--and an HME Excellence Award will help you do that. This award provides third-party validation that your company is doing it right.

If you have an HME Excellence award under your belt and your competitors do not, you've got a legitimate and significant advantage. You can be sure that referral sources will notice.

The HME Excellence Awards seek to identify the nation's premier providers of home medical equipment, home respiratory therapy and rehab supplies. The awards include three categories: Best HME Provider, Best Home Respiratory Provider and Best Rehab Technology Provider. In each category, there is a winner, first runner-up and second runner-up.

The one-page application form is easy to fill out, although finalists will be required to submit additional information.

Judges evaluate company performance in the following categories: financial, community involvement, staffing and quality control.

All company information remains confidential.

As they say, by nominating your company, you've got nothing to lose and everything to gain. That's true if you are a Round 1 bidding winner, loser or a company gearing up for Round 2. These days you need an edge, and that's what an Excellence Award provides.

The deadline for this year's nominations is January 15, 2011.

Mike Moran

by: Mike Moran - Wednesday, November 24, 2010

It's the day before Thanksgiving so I don't want to tee off on anyone—at least not excessively. But really, what's up with some seniors out there? They are giving the "Greatest Generation" a bad name.

I say this after reading through a recent HME News Poll. According to this poll, an overwhelming majority of providers—92%—report that their customers are having more trouble paying out of pocket this year than last year. That makes sense. Most seniors are on fixed incomes and with the economy not being all that great, they are losing income, say providers who answered the poll.

I've got no problem with these seniors. Times are tough.

The seniors I've got a problem with are those who try to get away without paying. Many providers who responded to the poll said that once a customer has the equipment, it can be difficult to collect the money owed.

As one provider said: "They figure you won't take it away."

That's just not right. If you have to choose between eating and paying your co-pay, that's one thing. But if a senior opts not to pay just to get away with not paying, that stinks. People like that are losers; someone needs to explain to them the difference between entitlement programs and a sense of entitlement.

Mike Moran

by: Mike Moran - Monday, November 22, 2010

After Mal Mixon suffered a mild stroke last spring, many in the HME industry wondered if he'd ever return as Invacare's CEO. During a conference call last month to discuss the company's latest financial results, Invacare officials said Mixon would decide his future role with the company by year's end. This morning, the company issued a release, stating that Gerald Blouch, who has served as interim CEO during Mixon's recovery, has been permanently promoted to CEO. Mixon will continue in his role as chairman of the board.

Here's Invacare's release on the transition:

ELYRIA, Ohio – Invacare Corporation today announced that Gerald B. Blouch was named President & Chief Executive Officer effective January 1, 2011, after serving as interim Chief Executive Officer since April 30,2010. A. Malachi Mixon, III, will continue to be actively engaged with the Company as Chairman of the Board where he will focus on government relations, strategic issues and research and product innovation.

“I was fortunate when Gerry joined Invacare 20 years ago. He has demonstrated outstanding leadership qualities throughout his career at Invacare, especially over the past few months as interim chief executive officer. This promotion is well deserved for the outstanding job Gerry has done in managing the business operations of the Company. Gerry has the Board’s and my full confidence in his role as CEO,” commented Mal Mixon.

One of Blouch’s key initiatives as chief executive officer will be the ongoing transformation of Invacare from regionally focused business units into an agile global enterprise that delivers a single brand promise, innovative products, services and clinical solutions through a platform that enables Invacare’s customers to meet the needs of patients throughout the continuum of care in a superior way. Blouch’s previous role has been reorganized into four key, global functional units – commercial operations, supply chain, product development and engineering – which will be managed by four senior vice presidents reporting to him.

Blouch joined Invacare in 1990 as the Company’s first chief financial officer. In 1994, he became chief operating officer and was responsible for the operations of all domestic and international business units. He was named president and a director of the Company in 1996.

Prior to joining Invacare, Blouch held the position of executive vice president and chief financial officer of Inacomp Computer Centers, Inc. in Troy, Michigan. From 1974 to 1985, he held several positions with The Sherwin Williams Company including president and general manager of Sherwin Williams Canada. He is a board member on the Comprehensive Healthcare of Ohio, Inc. (Elyria Memorial Hospital) Board and is an Executive Advisor on the CresCor Board. Blouch received his B.A. from Bowling Green University and an M.A. from The Ohio State University.