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by: Mike Moran - Friday, April 23, 2010

My number one key to workplace survival is to keep a daily to-do list. Before I go home each evening, I jot down on a white legal pad everything I want to accomplish the next day. When I come in the following morning, I start working the list, crossing things off as I finish them. It keeps me moving forward. Today, the last item on my list was "dump the round-up file."

My Round-Up file is a hodge-podge of stuff that I think is interesting or noteworthy (facts, comments, opinions, etc.) but that may not quite qualify as a full-blown HME News story. I think the personal, informal nature of a blog is the perfect place to run this stuff.  So here we go.

1.    Someone sent this email to one of the big wigs around here recently: "For the third time I find myself alerting you to additional unprofessional journalistic techniques employed by your editors.  It is one thing to post stories about our company or industry on HME News.  It is quite another to refer to that posting on the Executive Editor's PERSONAL LinkedIn web page."  And that was the nice part of the email.  This person doesn't seem to understand that for better or worse (we always shoot for the better), the Internet is here to stay and will play an increasingly important role in how we report the news. It facilitates and speeds up the exchange of information. That is a good thing. To the author of this email, I also want to say this: Just because you don't agree with someone doesn't mean that person is unprofessional.

2. Peter Weill, chairman of the MIT Sloan School of Management's Center for Information Systems Research stated, "IT-savvy companies are 21% more profitable than non-IT savvy companies." This little nugget comes courtesy of Troy Venis, chief technology officer, at Brightree. "A provider's willingness to investigate and ultimately adopt new technologies will significantly contribute to his longevity in this industry," Troy said, and I agree. Technology won't lead you to the Promised Land, but it will help you get there.

3.    Team Invacare  had an impressive showing at Monday's 114th Boston Marathon.  Ernst van Dyk  won the men's race and Krige Schabort finished second.  In the women's race, Diane Roy place second and Amanda McGrory came in  third. That is awesome. Congratulations.

4.    Finally, here's something a very good HME provider told me recently: "I'm looking to diversify our company. I'm spending a lot of time figuring out the next level of assistance and positive intervention in the patient's life. I've got to look beyond our industry for solutions for that aging population that wants to stay independent." This provider is looking for HME-related business opportunities. He's trying to grow the pie. That sounds like food for thought to me.

Mike Moran

by: Mike Moran - Friday, April 16, 2010

I just spent a few minutes reviewing the results of a competitive bidding survey that HME News recently conducted with The VGM Group.  The survey's goal was to gather enough data to allow us to estimate the winning bid amounts in all eight product categories in each of the first nine competitive bidding areas (CBAs).

So far, 93 providers from the different CBAs have taken the survey. To feel comfortable that the results reasonably represent the bid averages, we need about 200 providers to take the survey. Until we achieve that critical mass or get close to it, I'm not going to release the results. But they are interesting, and I will talk about them in general terms.

First of all, the bids are all over the place. In each of the eight categories--oxygen, standard power wheelchairs, rehab (Group 2), mail order, enteral, CPAP, hospital beds and walkers--bids range from 5% below the current allowable to, on average, 40% below. Then there are bids everywhere in between.

If I eyeball the survey and throw out bids that look like obvious mistakes (a 3,000% discount for oxygen, for example), here's what I notice:

--    The smallest bid variation appears to be for hospital beds.
--    The greatest bid variation appears to be for mail-order.
--    Walkers, oxygen, hospital beds and CPAP are the most popular bid categories.
--    The fewest providers bid on rehab and mail-order.
--    About 20 providers submitted bids for all eight product categories.
--    The biggest discounts appear to be in the Miami CBA
--    The smallest discounts appear to be in Riverside and Kansas City.
--    The smallest bid below the allowable for any product category was 1.45%.

We also asked providers that if they won a bid, would they use subcontractors. A majority said no. That's interesting because some of these same providers said that if they lose a bid, they want to become a subcontractor.

So there you have. Like I said, the survey results are not definitive, and most statisticians would dismiss the sample size as being too small to draw meaningful conclusions. That's probably a good thing.

Mike Moran

PS. If you are a bidding provider in one of the first nine CBAs and haven't taken the survey and would like to, go here. Responses are anonymous.

by: Mike Moran - Wednesday, April 14, 2010

Everyone who has worked so hard to gather support for a bill designed to repeal competitive bidding deserves a big pat on the back, but there's no time for that. The bill's made impressive progress, but there's still work to be done.

The Accredited Medical Equipment Providers of America (AMEPA), sent out this email announcement this afternoon:

HR3790, Congressman Kendrick Meek's bill to repeal the DMEPOS bidding program, now has 199 co-sponsors. Including Congressman Meek, the bill has 200 supporters and only 18 more are needed for a majority in the House.

Two hundred down, 18 to go. If your congressmen have not signed onto the bill, you need to contact them ASAP and ask for their support.

Check here to see if your representative has signed on to H.R. 3790. Thank those who have already signed on, and ask for support only from those who have yet to sign onto the bill.

Let's keep the pressure on. If your legislator is not a cosponsor, please take a few minutes to do the following:

1) Look up your U.S. Representative at
- simply enter your zip code of your home and each office location to find your U.S. Congressman/woman or call 1-202-224-3121 and ask for your legislator by name or zip code.

2) Ask to speak to the Health LA for your home representatives and business representative and explain:

"I am calling to ask the congressman (congresswoman) to co-sponsor HR 3790, a bi-partisan budget neutral repeal of the flawed DMEPOS Bidding Program. This bill will give congress the same savings that the program was projected to give, without unnecessarily eliminating 90% of the local providers and without limiting a patient's access to quality products and timely services. The bid window has already closed for 9 of the largest metropolitan areas, so we need support as quickly as possible."

" The President made it clear but Congress knows, we need to preserve jobs in this nation, not destroy them, needlessly. There are hundreds of thousands of direct DME jobs at stake and a hundred thousand ancillary jobs".

Ask Questions:
"Has the congressman (congresswoman) considered HR-3790?"

"Do you think you can talk to him (her) about it today?"

Explain how important this is and follow-up:

"Thank you. The flawed DMEPOS bidding program will close my business and seriously affect the patients I serve. Can I follow up with you in a few days so I can let my employees and patients know your decision?"

Keep the momentum going. Victory is within reach.

Good luck.

Mike Moran

by: Mike Moran - Friday, April 9, 2010

Two interesting pieces of news from AAHomecare landed in my in-box this afternoon.

First: Thad Connally Is Small Business Person of Year in Bowling Green, KY
AAHomecare member and HME provider Thad Connally, III, received the 2010 Small Business Person of the Year award from the Bowling Green Area Chamber of Commerce.  Connally is president and owner of First Choice Home Medical, in Bowling Green, Kentucky.

The award is given to a community member who owns and operates a growing company with 100 or fewer employees and who is involved in the development and growth of the Bowling Green community.

Connally opened First Choice Home Medical nearly seven years ago. The business has since tripled its office space in a new location and the team of employees, which Connally refers to as the "Dream Team," has grown to 13.  Skip Wirth, director of sales and marketing for the company, attributes this growth to Connally's guiding principle: the patients always come first.

The chamber of commerce board chairman, Joe Natcher, said "Thad is an exceptional business man, and he makes a great contribution to our community."

That is a nice honor. Congratulations, Thad.

Second: AAHomecare has a bunch of new members.

Nineteen new members saw the value of joining the national association and helping to support the lobbying, research, and education opportunities available to the HME community.  The following are new members for the first quarter of 2010:
A&A Home Health Equipment, Greenville, Miss.
Abbott, Lynnfield, Mass.
Advant-Edge Pharmacy, El Paso, Texas
Advantage Diabetic & Medical Supply, Mobile, Ala.
AllState Medical Supply, Miami, Fla.
Corner Medical, Bloomington, Minn.
Eagle Eye DME, Counce, Tenn.
Elkhart General Home Medical Equipment, Elkhart, Ind.
Genesis Healthcare Services, Norcross, Ga.
James Medical Equipment, Ltd., Campbellsville, Ky.
Jim's Home Health Supplies, Lincoln, Neb.
Millennium Management Services, Long Beach, Calif.
New Passion HomeCare, Warren, Mich.
RTA Home Medical Equipment, Chadds Ford, Pa.
Southeast Mobility, Boynton Beach, Fla.
Southern Patient Care, Birmingham, Ala.
Team@Work, Fort Wayne, Ind.
Tooley Drug & HomeCare, Columbus, Neb.
Utah Medical Equipment Dealers Association, Highland, Utah

Have a great weekend.

Mike Moran

by: Mike Moran - Thursday, April 8, 2010

Earlier this week, I received and email from Karyn Estrella, the executive director of the New England Medical Equipment Dealers (NEMED) association.

Karyn started by saying: Hi Mike, I thought you might want to know about Mark.

From there followed an email she had sent out to NEMED members.

It is with sadness that we inform our members that long-time NEMED member and former NEMED board member, Mark Sheehan (Cape Medical Supply, MA) passed away last Friday after a long battle with a rare form of Squamous cell cancer.

After reading Karyn's email, I sat and thought about Mark for a few minutes. Two HME News stories came to mind.

The first ran in June 2002. Mark was going toe-to-toe with Massachusetts Medicaid, which claimed his company, Cape Medical Supply, had to fork over $247,000 in overpayments. Mark called the claim crazy and said that the state auditors working on the case could "drop dead."

This guy's got some spunk, I said to myself. I like it.

"We've been in business 25 years, but I've never seen anything quite as audacious as this," Mark continued. "I just looked at it as if these people were from a different planet and said, 'We'll fight them."'

Mark ultimately settled with the state for $14,220, but not before he spent $80,000 fighting the overpayment charge.

"It was worth every penny," he said. "I wouldn't have been able to sleep at night if I'd walked away. They were blatantly wrong."

Mark did not back down from a fight.

The second story ran about a year later. It was during the HME M&A craze that raged during the first half of the last decade, Mark was one of a number of providers who said they had no plans to sell their companies.

"I have three kids and one of them works here now," he told me in mid 2003. "We could be a mom-and-pop business forever."

For him to sell, Mark said, the offer would have to be big -- bigger, he suspected, than anyone would be willing to pay. His 26-year-old business meant more to him and his family, in terms of being able to live a certain lifestyle, than it did to potential buyers.

That was the Mark I came to know while working at HME News. If he believed in something, he'd fight for it.  He was a straight shooter and spoke his mind. It was important to him that people and institutions play fair and square. He could come off as gruff, but he also had a heart of gold. He ran a successful business and enjoyed his family.

I'm glad I got to know him a little bit, and I wish his family and friends my warmest condolences.

--    Mike Moran

by: Mike Moran - Friday, April 2, 2010

Do you know what a "dividend recapitalization is?" I didn't but I do now, and if you read a little further, you will, too. It's interesting.

This issue comes up because last week I ran into news stories involving two industry companies: Attends Healthcare, a maker of adult incontinence items, and Apria. Attends recently arranged a $98 million "dividend recap" and Apria, pending shareholders approval, will do a $500 million dividend recap.

Here's what Investopedia, an online investing dictionary, has to say about dividend recaps:

What Does Dividend Recapitalization Mean?
When a company incurs a new debt in order to pay a special dividend to private investors or shareholders. This usually involves a company owned by a private investment firm, which can authorize a dividend recapitalization as an alternative to selling its equity stake in the company.

Investopedia explains Dividend Recapitalization

The dividend recap has seen explosive growth, primarily as an avenue for private investment firms to recoup some or all of the money they used to purchase their stake in a business. It is generally not looked upon favorably by creditors or common shareholders because it reduces the credit quality of the company while only benefiting a select few

Here's another perspective that I pulled from a Dow Jones story: Under this procedure, a buyout firm's portfolio company takes on additional debt, which it then uses to pay its buyout sponsor a dividend. That allows the buyout firm to take some of the risk of its equity investment off the table, while still owning the company-a win-win situation if there ever was one.

The Attends $98 million dividend recapitalization includes a $20 million asset-based revolving credit line, and $78 million in loans. The money will be used to refinance existing debt and fund a $60 million distribution to shareholders like private-equity group KPS Capital Partners.
If Apria's $500 million dividend recap goes through, the Blackstone Group, which bought the company in 2008 for $1.6 billion, will recoup much of its $673 equity investment.

So with a dividend recap, if I'm KPS or Blackstone, I'm saying to myself: What's not to like. I get a good chunk of my equity investment back, but still get to own the company.

I wish I could have those eggs in my Easter basket.

Have a great weekend.

Mike Moran

by: Mike Moran - Thursday, April 1, 2010

I received an email from industry attorney Elizabeth Hogue yesterday that included an article she wrote on patient freedom of choice. This issue comes up from time to time, and HME providers are always very passionate about it.

When it comes to choosing an HME provider, there are no gray areas. Patients have the final say--not physicians.

I think you'll find this article very informative.

Mike Moran

Physicians and Patients' Right to Freedom of Choice

Providers are increasingly concerned that physicians may violate patients' right to  freedom of choice of providers.

First, it is important to note  that longterm care, home health, including some services provided by private  duty agencies, home medical equipment (HME) and hospice services are  provided under the supervision of physicians based upon specific orders from  them.  Because physicians supervise these types of services, they are  at risk for legal liability, along with providers and staff members, if  providers supervised by physicians do no meet applicable standards.

Consequently, physicians have a clear interest in assuring the quality of care rendered by other providers to their patients.  Physicians may, therefore, choose to designate in their orders which  providers will render services to their patients in order to help assure  quality of care and manage their risks of  liability.

Nonetheless, all providers, including physicians, are required to abide by patients' right to freedom of choice of providers. There are two (2) sources of this right that apply to physicians:

1)  All patients have  a common law right based upon court decisions to control the care provided  to them, including who renders it. Thus, when patients, regardless of payor source or type of care, voluntarily express preferences for certain  providers, their choices must be honored.

2)  Federal statutes of the Medicare and Medicaid  Programs guarantee Medicare beneficiaries and Medicaid recipients the right  to freedom of choice of providers.  (Medicaid recipients may have  waived this right, if they participate in waiver programs.)   Consequently, when Medicare patients and non-waiver Medicaid patients  voluntarily express preferences for providers, these choices must be  honored.

Consequently, physicians' orders based upon quality of care concerns for specific providers should be implemented unless patients express preferences to receive services from different  providers.

If, however, patients voluntarily express preferences or choose providers other than providers ordered by their  attending physicians, patients' choices "trump" physicians' orders and must  be honored.

Physicians may then choose whether or not they wish to supervise services and assume the risk of services provided by providers  different from those they ordered.

It is at this point that physicians and their office staff members must be especially cautious.  If they try to "strong arm" patients into receiving services from  providers physicians' prefer instead of providers chosen by patients,  consent to such services may not be voluntary. Statements by  physicians or their employees, for example, that the doctor will no longer  care for them if they do not accept services from the provider the doctor  ordered may amount to duress which invalidates any consent by patients to  such services.

Attempts to force patients to accept physicians' choices have ethical implications as well.  Patients' right to act autonomously may be compromised by the insistence of physicians or  staff members.

From a very practical point of view, physicians who are serious about quality of care and sound risk management should talk  to patients about their preferences for providers before they write orders  for specific providers.  Patients will then have an opportunity to understand physicians' preferences, to express their own choices and/or to  resolve any differences between physicians and patients.

Discharge planners/case managers who encounter instances in which physicians and their employees put inappropriate pressure on  patients to use providers chosen by physicians should carefully document  violations of patients' right to freedom of choice. Documentation should preferably be in the form of signed statements from patients. These statements should be forwarded to physicians with a letter from providers/case managers.  A word to the wise should be sufficient!

Practitioners who encounter physicians who persist in pressuring patients despite their letters and documentation from patients  may wish to report violations to both the central and regional offices of the Centers for Medicare and Medicaid Services (CMS). Such reports should include documentation from patients.

The competition among post-acute providers continues to "heat up."  The rights of patients, however, cannot be trampled despite fierce competition among  providers.

(c)Copyright,  2010.
Elizabeth E. Hogue, Esq.  All rights reserved.
No portion  of these materials may be reproduced in any form without the advance written  permission of the author.

by: Mike Moran - Tuesday, March 30, 2010

This is flattering and came out of the blue. Earlier this month HME Talk (no relation to HME News) asked its members what industry publication (HME News, Homecare Magazine or HME Business) they read the most.

Guess what? We won.

Here's what HME Talk (an online discussion board, blog, etc.) wrote a week after it posted the survey:

HME News is Tops on Survey
While hardly scientific, our survey last week asking HME Talkers which publications they read (HME News, Homecare Magazine, and HME Business), ended up with HME News as the top publication read, with almost 98% of the respondents saying they read HME News.

Homecare Magazine came in 2nd with about 68% readership, and HME Business had 53%.

Like HME Talk said, this survey was hardly scientific. I don't even know how many people took part, but this third-party survey, which we had nothing to do with, is gratifying, nonetheless.

To everyone who voted for us, thank you very much. We do not take your support for granted.

Mike Moran

by: Mike Moran - Monday, March 29, 2010

It's mission critical on the competitive bidding front, and the industry needs every single provider, consultant, manufacturers reps—all industry stakeholders—to help end this wrong-headed program once and for all.

The need is more urgent than ever.

The healthcare reform legislation signed into law last week accelerates the bidding program. It expands bidding to 21 additional metropolitan statistical areas (MSAs) and applies prices nationwide by 2016.

Nationwide means you!

How can you help? Easy. Contact your U.S. representatives (congressmen) and ask them to sponsor HR 3790, a bill to repeal competitive bidding.

I've included some links below (take your pick) with (1.) talking points that explain why competitive bidding is a bad idea; and (2)  how to contact your representative.

Currently, the bill has 184 co-sponsors, but industry leaders are shooting for 250 to 260. I know everyone is busy, but to reach the magic number, it's critical that everyone lend a hand. (For providers, it would really help if you got your patients to join this fight, too.)

We're all in this together, and that includes HME News. We're proud to say that thanks to the efforts of the New England Medical Equipment Dealers association, our two Maine representatives have signed on to co-sponsor the bill.

Together we can do this.

— Mike Moran

Below are the steps for contacting your representatives:

Check here to see if your representative has signed on to H.R. 3790. Thank those who have already signed on, and ask for support only from those who have yet to sign onto the bill.

Call the U.S. Capitol switchboard at (202) 224-3121 to speak with your representative.  You will be asked for your ZIP code and then transferred to the office of your representative.  You may also call them direct by clicking here for a list of Health LAs and phone numbers.

Ask to speak with the Health Legislative Assistant. Once you are speaking to the assistant, follow the instructions provided below:

"My name is (name) and I am a home medical equipment suppliers serving patients in your district.  I am calling to ask that the Congressman (or Congresswoman) to cosponsor H.R. 3790, which is a budget neutral
repeal of durable medical equipment competitive bidding program.

H.R. 3790 will achieve the same savings without needlessly closing 90% of medical equipment company providers, of which most are small businesses, eliminating jobs for thousands of Americans, and limiting Medicare beneficiaries' access to care.

Thank you"

If you chose to send your request via email or fax, use the following sample text.

Whether you call, fax, or email, please follow-up with a phone call in a week if they have not signed on, using the Capitol Switchboard at (202) 224-3121.

Talking Points/Studies:

Talking Points For HR 3790 Repeal

Job Loss Map

NAIMES Job Loss Graphic

AAHomecare Talking Points

VGM Talking Points

VGM Round 1 and 2 Job Loss Data

by: Mike Moran - Thursday, March 25, 2010

I had a long conversation with Joe Lewarski yesterday on how important it is for respiratory therapists to titrate patients to their oxygen delivery equipment—both conservers and concentrators. We probably talked for 30 minutes and all during that time Joe never once hinted that he was in for a big and what sounds like an exciting promotion.

The news came out today. Invacare has promoted Joe from vice
president and category manager, respiratory, Invacare Homecare to vice president of clinical affairs.

Congratulations, Joe.

This is an interesting development. Invacare plans to grow its sales by having Joe, who has tons of clinical and business experience, work more closely with the  clinical and academic medical communities.

I'll have more news on this for our May issue, but meanwhile, here's the press release Invacare issued today.

ELYRIA,  Ohio  (March  25,  2010)  -  Invacare  Corporation  (NYSE: IVC)
announced  today  that Joseph Lewarski has been promoted to vice president,
clinical  affairs.  As  Invacare  starts  to  focus on its top line growth,
expanding  the  Company's  presence  in  the  clinical and academic medical
communities   is   an  important  part  of  the  strategy.  Lewarski's  new
responsibilities will include interfacing with leading clinicians, focusing
on  clinical  applications  during  new  product  development, coordinating
clinical  research  activities,  conducting  clinical  studies and actively
participating on clinical advisory boards.

"As  Invacare  looks  to  improve  the  clinical efficacy and scientific
foundation  of  our product offerings and to expand into new markets beyond
Invacare's  traditional  product  platforms,  such  as  therapeutic support
surfaces,  it  is  important  that we build a clinical expertise to help us
navigate  and grow in these areas. We are fortunate to be able to draw from
Joe's  clinical  and academic medical experience," said Lou Slangen, senior
vice president, global business development, Invacare Corporation.

Lewarski  has  been actively working in healthcare for over 25 years and
has  been a recognized leader in the home respiratory and medical equipment
provider  community  for nearly two decades. He is a registered respiratory
therapist  and  a  Fellow  of the American Association for Respiratory Care
(AARC)  and  has  served  in  numerous  management  and leadership roles in
hospital, long-term care and homecare settings. Lewarski has published over
two  dozen  scientific  and  research  papers  in  peer  review, as well as
numerous  articles,  white papers and health care industry commentaries. He
currently  serves  on  the  AARC  board  of  directors as vice president of
external  affairs  and  is  a  past  home care section chair.  In addition,
Lewarski  currently serves on the board of the National Home Oxygen Patient
Association  (NHOPA),  is an active member of the American College of Chest
Physicians  (ACCP) and is a former board member of the American Association
for Homecare (AAH).

Invacare  is  conducting  a  search  for  Lewarski's replacement as vice
president and category manager, respiratory, Invacare Homecare.

Mike Moran