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by: Liz Beaulieu - Friday, July 27, 2018

Innovation: a new method, idea, product.

You’ll find all that and more in this year’s educational lineup for the HME News Business Summit.

A new method: A hybrid business model that gives both manufacturers and providers skin in the game, yet tweaks their roles to maximize cost-savings.

A new idea: A healthcare continuum that places the patient at the center of care where they are most often, in the home.

A new product: A growing group of patient engagement tools that serve the dual purpose of improving your business and patient care.

Visiting speaker Jacob Warren, a rural healthcare expert, believes innovation, in the form of technologies like remote patient monitoring and mHealth, is the key to not only taking good care of patients in rural areas, but also fueling successful businesses in those areas.

As is the Summit way, we’ve also put M&A front and center, with The Braff Group providing a market outlook and a panel of providers making the case for why they’re buying.

Additionally, we’ll be putting industry icons Jeff Baird and Cara Bachenheimer in the hot seat to answers all your questions—and we’re guessing most of them will be competitive-bidding related.

Finally, speaker Justin Racine will be taking on the elephant in the room: Amazon.

The Summit will show you how you can inject innovation into your business today. Please consider joining us!

by: Liz Beaulieu - Thursday, June 28, 2018

The data’s starting to trickle in for this year’s State of the Industry Report (keep an eye out for it online in December!) and at least one of piece of data isn’t looking so bad.

Here is the breakdown of the number of HME companies by how much they billed Medicare for DMEPOS in 2017:

<$300K:                 80,291

$300K to $1M:        3,877

$1M to $3M:           1,093

$3M to $10M:          202

>$10M:                  54

In 2016, the data looked like this:

<$300K:                 81,286

$300K to $1M:        3,679

$1M to $3M:           921

$3M to $10M:         152

>$10M:                  55

As you can see, the number of HME companies that are really small and really big decreased (though only by 1 for the >$10M companies), but the number of companies that are in the middle increased, with the biggest increase for the $300K to $1M companies.

That the biggest increase is in the $300K to $1M companies is a little surprising, considering all the consolidating going on in the HME industry. It’s hard to make the current Medicare climate work when you’re that small, but maybe these companies are hyper-specialized?

These increases follow a steady decline in the number of HME companies, pretty much across the board, since 2011, when Medicare kicked off its competitive bidding program.

Let’s take the $3M to $10M companies as an example:

2011: 209

2012: 229

2013: 184

2014: 173

2015: 172

2016: 152

2017: 202

So for these companies, we actually see a bump in 2012, after Round 1 of competitive bidding, but starting in 2013, when the program spread to substantially more areas, it was downhill from there until 2017.

In fact, when you look at this seven-year spread, $3M to $10M companies are actually nearly back to their 2011 levels.

Stay tuned—there’s more where this came from.

by: Liz Beaulieu - Friday, May 18, 2018

Ever since the interim final rule was published in the Federal Register last week, there has been a cloud of disappointment hanging over the HME industry.

But for those of you who took the time to read the IFR in full, you’ll find some interesting language from CMS acknowledging issues with the competitive bidding program and the agency’s ability to monitor the program’s impact on access.

If you didn’t take the time to read the IFR in full, AAHomecare provided a CliffsNotes version in its “Wednesday in Washington” email bulletin this week.

Here is CMS, in its own words:

·      Given the rapid changes in health care delivery that may disproportionately impact rural and more isolated geographic areas, we are concerned that the continued decline of the fees and the number of suppliers in such areas may exacerbate the already emergent access concerns faced by beneficiaries.

·      Our monitoring data, by its very nature, would not alert us to the present and imminent threats to beneficiary access that stakeholders have raised in recent months. If CMS continues to pay the fully adjusted payment rates in rural and non-contiguous areas, it could further jeopardize the infrastructure of suppliers that beneficiaries rely on for access to necessary items and services in remote areas of the country.

·      Also, as noted earlier, our systematic claims monitoring only looks backward in time and may not detect rapidly emerging trends, particularly in isolated or rural areas. We also referenced the GAO’s acknowledgement that there are challenges associated with monitoring the CBP.

·      We recognize that reduced access to DME may put beneficiaries at risk of poor health outcomes or increase the length of hospital stays.

·      Given the strong stakeholder concern about the continued viability of many DMEPOS suppliers, coupled with the Cures Act mandate to consider additional information material to setting fee schedule adjustments, it would be unwise to continue with the fully adjusted fee schedule rates in the vulnerable rural and non-contiguous areas for 7 months. Any adverse impacts on beneficiary health outcomes, or on small businesses exiting the market, could be irreversible.

This is a big deal, as a number of stakeholders have told me, because to date, CMS has portrayed the program with nothing other than rose-colored glasses.

Tom Ryan at AAHomecare: “Some of the words they used to express concern are the exact words we’ve used. They’re aware of the real-time crisis that is beginning to become apparent. It’s a first.”

Cara Bachenheimer at Invacare: “This is a huge step forward. There are many, many more steps forward that need to be made, but this is a huge step forward.”

But this big deal poses a big question: What will CMS do now?

In a press release at the time of the release of the IFR, CMS said it is “continuing to engage with stakeholders” and it “intends to undertake subsequent notice-and-comment rulemaking to address the rates for DME and enteral nutrition furnished in 2019 and beyond.”

Words are great, but now let’s see some action.

by: Liz Beaulieu - Wednesday, May 2, 2018

Among the moments at the National CRT Leadership & Advocacy Conference that drew the loudest round of applause was a story told by Michele Gunn.

Gunn, who participated in a panel on “Running a CRT company in a DME world,” is an ATP/CRTS for Browning’s Health Care and an at-large director at NRRTS.

Here’s an edited version of her story:

There’s this perception that providers suck, that we don’t know what we’re doing, that we’re incompetent, that it takes forever to get something done.I think the opposite is true: If you’re still in business, you’ve figured out a way to survive.


I was working with a pediatric client on a chair and the dad says he’d also like a stroller. In Florida, they’ll pay for one mobility device every five years. He says, we have a trust fund that will pay for the stroller; we just need a denial.

Our office does their magic—all the steps needed to get this done. We get an approval for the chair and a denial for the stroller. He gives me the caseworker’s name for the trust fund and asks me to send the stroller quote and denial. I call her (to follow up) and she says the dad has the check for the stroller and to give him a call.

I call the dad and he says, you guys charge a lot more for the stroller than what I see online. I say, well yeah, I met you at a clinic; I spent a lot of time with you. He says, thanks but no thanks, I’ll go out on my own.

Later, I deliver the chair; it looks great, he’s happy. I’m picking up my bags to leave and he says, since you’re here can you set up the stroller, (which is still in a box).

The me 10 years ago would have put down my bag and dug into that box; the me now said, sir, I’m not going to open that box. (But) if you need help with the chair, I’m happy to help you. It took a lot to do that and I didn’t feel good about it. I don’t like to burn bridges or make people unhappy. He never contacted us once about the chair.

One day, I was at the children’s pediatric hospital, and I was called on to help with seating for a patient, and there was the dad. He said, you left my house two years ago and never came back.

I tried to play it off with humor, saying I would have been happy to provide service for the chair, but I don’t do drive-bys; that’s illegal and creepy. He didn’t smile.

His daughter’s surgery went great. There was a lot of correction—it added four inches of length to her torso.

There was a flurry of activity (to adjust her chair and seating, as a result of the surgey) and it was all done in front of the client, the dad.

I was on my way out the door and I heard him say, wait a minute. He held out his hand and shook it.

I thought then, we’re all good.

by: Liz Beaulieu - Monday, April 23, 2018

During a round of many calls last week, I spoke with someone who attended Medtrade Spring last month who spoke with someone else in-the-know about Medicare’s competitive bidding program. They discussed the question everyone wants answered: What. Will. Happen. Next?

Quick review: CMS on Jan. 31, 2017, announced its plans to consolidate all future rounds of competitive bidding into Round 2019, then on Feb. 7, 2017, the agency took it all back, saying it wanted to give the new administration the chance to review the program.

Since then, as the latter unnamed person above said, “It’s been crickets.”

One could argue that this won’t be the industry’s or the CBIC’s first rodeo with competitive bidding and, therefore, they don’t need the usual 16-month window to complete the process.

But as we stand today, April 23, it’s a little more than eight months from the conceived start date of Round 2019 on Jan. 1. Eight months, or exactly half the usual window.

And still crickets.

One has to think that CMS is feeling the weight of the current contracts for Round 1 2017, Round 2 re-compete and national mail-order program for diabetes supplies, which are all set to expire Dec. 31, 2018.

Industry stakeholders have suggested that CMS might extend the current contracts by, say, six months, to buy itself more time. Yes, this seems logical, and yes, this could end up being what happens.

But it may not be the fail-safe backup plan that CMS thinks it is.

I got an email from a provider earlier this month, asking a very good question: “I am a competitive bid winner for respiratory but am wondering if I have to extend my contract if I don’t want to?”

Currently, if a contract provider goes out of business or a contract provider is terminated, CMS offers the contract to the next provider in line. Presumably, that’s what they’d also try to do in the case above.

Still, it’s a great question, and if a good number of contract providers like the provider above refuse to re-up, the answer could get real messy real quick.

by: Liz Beaulieu - Wednesday, April 4, 2018

It’s always disappointing when the HME industry’s efforts to get relief from Medicare’s competitive bidding program fail to cross the finish line. But this last time around, when H.R. 4229 failed to make the cut in a recently passed omnibus bill, it was particularly disappointing.

In the weeks leading up to the vote on the omnibus bill, I received emails from several providers asking, do you think it will happen? After the vote, the “ask” became, do you think it will ever happen?

I offered summaries of stories we’ve written chronicling the industry’s efforts, which I’m sure wasn’t anything they didn’t already know, but was the only tangible thing I could offer. That, and my shared frustration.

Following the vote on the omnibus bill, I also got a fax from a provider titled “A sad ending to a 23-year career.” The reimbursement cuts, coupled with draconian audits, has led the provider to “throw in the towel, like so many of my colleagues.”

The fax, from Juli Shogan, RN and owner of Wound Solutions, reads in full:

“I am in my 23rd year of working in the DME industry. Tonight marks the most discouraged I have ever been. One would think that after 23 years in the industry, being a registered nurse, building relationships, and providing the best customer service possible, the job would get easier—not harder.

Because of the recent and drastic Medicare cuts, I had no choice but to lay off the technician that I had employed for the previous 10 years. Now, at age 55, I am back to delivering, cleaning, repairing and servicing equipment. In addition to marketing and running the company on a day-to-day business.

I am well aware of the qualifying criteria for the products I carry. I wouldn’t pay for, deliver and spend time billing if the patients didn’t fit said criteria. I collect correct forms from physicians, along with supporting documentation. I deliver equipment to Medicare patients and cross my fingers that they w ill pay. I get one denial after another for reasons that make no sense. They deny for reasons that simply are not true and I have documentation to prove so.

I am finally throwing in the towel, like so many other of my colleagues. And, who will ultimately pay? The patients! There will soon be no companies left willing to roll the dice and hope they get paid a 65% reduced rate for buying, delivering and servicing much cheaper version of equipment because that is all they can afford to possibly make a measly profit.

Once upon a time, I was willing to jump through Medicare’s hoops, follow 27 standards and pay to be accredited because I was being adequately compensated. It is no longer worth the pit in my stomach that I feel each time I open an envelope to a denial, an unfavorable reconsideration, or a low reimbursement rate.

I hope all the money that Medicare is saving is benefitting someone? I know it has not been any benefit to those of us who provide equipment. I know that patients are not benefitting from receiving much ‘cheaper’ equipment since that is all we can afford to deliver.

This industry is in crisis. I have held on as long as I could afford to. I had hoped that some help would come my way. Things just keep getting worse with no relief in sight. I have to break the news to my local customers that one more company is bowing out. But I can’t continue to ‘donate’ my time it takes to deliver equipment and to ‘donate’ the disposables that I deliver and get denied on that I can’t ever collect.

So much for the mistaken notion of building a business and putting in the hard work early on to reap the rewards on the back side. This industry has never been so hard. I am working twice as hard for less than half the money.”

Multiply Juli’s situation by what … thousands? There are no words.

by: Liz Beaulieu - Friday, March 9, 2018

During my monthly cartoon meetings with Theresa, I’ve suggested a few times now, a cartoon wherein Rep. Cathy McMorris Rodgers, R-Wash., is depicted as Superwoman (the old-school Superwoman, the one with full sleeves and a red cape).The logo across her chest would read CMR, as AAHomecare and other industry stakeholders have begun calling her (if there’s an industry that likes its acronyms, it’s HME).

As anyone who knows Theresa knows, Theresa can be a tough crowd and she’s always shot my idea down, probably because she thinks it’s too cheesy.

But it’s not hard to envision CMR as Superwoman, especially to the HME industry. Let’s take a look, shall we, at what I’m sure is only a sample of what she has done for our little niche of health care:

  • Most recently, she spearheaded a congressional sign-on letter supported by 56 of her peers asking the Appropriations Committee to include provisions of H.R. 4229 into budget legislation.
  • Speaking of H.R. 4229, she spearheaded that, too.
  • With the industry working on bid relief through not only H.R. 4229 but also an interim final rule, she stepped in there, too, spearheading another sign-on letter, this one pressuring the Office of Management and Budget to finalize the IFR.
  • Leaving no stone unturned, she also recently organized a congressional staff briefing for AAHomecare and the American Thoracic Society, so they could share their research on the negative effects on the impact of competitive bidding.


Outside of HME, a visit to CMR’s website shows she’s also passionate about other healthcare-related issues, particularly related to veterans. She has introduced bills that would provide veterans access to their medical records at all times and direct Veterans Affairs to establish Alzheimer’s disease research, education and clinical centers.

You probably already know she sits on the influential House Energy and Commerce Committee and its Health Subcommittee, but you may not already know (unless you’re Ryan, Gallagher or Bachenheimer) that she’s chairwoman of the House Republican Conference, making her the fourth highest ranking Republican in the House and the highest-ranking woman in Congress.

The highest-ranking woman in Congress? That’s who I want behind me.

I still like the idea of CMR as Superwoman. But I also like cheese.

by: Liz Beaulieu - Friday, February 16, 2018

Some eagle eyes on twitter (I’m looking at you Woody O’Neal) noticed that the August data for our Medicare Market Marker looked like it climbed Mount Everest.

For those uninitiated, the marker tracks the number of allowed Medicare beneficiaries for five of the most popular DME products: oxygen concentrator, semi-electric hospital bed, CPAP, standard wheelchair and power wheelchair.

For oxygen concentrator, for example, the trajectory of the number of bennies looked something like this for the three most recent reporting periods:

June: 218,411
July: 290,574
August: 321,652

O’Neal commented that his own business ramped up fairly dramatically in the same time period, too.

Grasping at straws, he suggested the spike was related to the DMERCs pulling back on audits related to advanced determination of coverage.

I emailed my sources at the PDAC (the Pricing, Data Analysis and Coding Contractor), where we get the data for the marker, as well as for our HME Databank, and they responded thusly:

“Excellence question, Liz. (That means excellent question, O'Neal). I’m not sure of all the factors that may have affected the counts, but one may be due to a large number of claims adjustments as a result of the 21st Century Cures Act.”

The Cures Act, as you’ll recall, required CMS to retroactively delay a second round of reimbursement cuts that went into effect in non-competitive bidding areas on July 1, 2016, until Jan. 1, 2017, allowing HME providers to essentially recoup six months worth of reimbursement.

“P.S.,” my sources continued, “you probably noticed that on the report for September the count of beneficiaries allowed decreased substantially.”

There you have it.

by: Liz Beaulieu - Friday, January 26, 2018

I emailed Theresa on Thursday morning to say I was taking a breather from the March issue that day to work on the educational program for the HME New Business Summit. Yup, it must be nearly February.

I start allowing the thought of the Summit to enter my frontal lobe (that’s the one responsible for “high-level mental functions,” or so my Google search just told me) some time in January, and by Feb. 1, it’s go-time. By April 1, the panic attacks start setting in (joking, not joking).

So beware, in the next few months: This is when every story idea I get, every person I talk to, every article I read turns into a potential session for the Summit.

Case in point: I was talking to Robert Wilkins, the CEO of SoClean, on Thursday for a story about the company’s recent investment from DW Healthcare Partners. I had no idea of the company’s origins. Apparently, Wilkins was helping to run a company that made machines that cleaned DVDs and Blu-rays for Blockbuster when that industry started going downhill. “We saw that it wasn’t long in the tooth,” he said.

But Wilkins, who has had a hand in running 11 startups, mostly in the tech industry, felt the company was the perfect incubator—it had pick and pack, it had engineering, it had design, it had customer service. So he challenged the company to come up with different business ideas, and they came up with 15. The one that stuck: a business making CPAP cleaning and sanitizing devices.

Wilkins said he didn’t even know what a CPAP device was at the time, but when he started looking into the market, it was eye-opening.

“How big the market was, how pervasive of a problem cleaning the equipment is,” he said. “I thought, ‘There’s a true need for this.’”

As I was listening to Wilkins talk (and please do check out the story on SoClean in an upcoming HME Newswire and the March issue of HME News), I couldn’t help but think, what a great story of reinvention and redemption. You know who needs stories about reinvention and redemption? HME providers.

I also spoke with Katherine Royster, the executive vice president of business development for Classic SleepCare, on Thursday. She said Classic SleepCare was ready to close its doors when a Hail Mary decision to offshore its back-office operations to nurses in the Philippines not only saved the company but also spurred a new company, HealthScope Services Division, to offer the same services to other sleep providers. Did I mention they have private investment behind the idea?

Good stuff, right? It just may be coming to a Summit near you…well, if you live in Georgia, because the Summit will be in Savannah this year (At the DeSoto, I hear, though Rick Rector is still keeping that close to the vest for now).

If you don’t live in Georgia, don’t let that stop you from coming to the Summit. Come one, come all, and stay tuned.

by: Liz Beaulieu - Friday, January 5, 2018

The print issues of HME News are on their way to your mailboxes (if not already there), but I wanted to call your attention to page 22. Here you will find, as you do every month, The Braff Group M&A Insider. This graph and accompanying analysis are always interesting, but I found this most recent graph and accompany analysis of particular interest.

The two key takeaways from the The Braff Group’s latest contribution: 1.) M&A activity for the HME industry in the third quarter topped out at 18 transactions, its highest output since the second quarter of 2014; and 2.) that activity spanned multiple product categories (really, just respiratory and complex rehab, but in the past it has been more focused on niches like home infusion or supplies).

M&A activity has long been a harbinger of the health of the HME industry, especially when equity investors are involved (which they were in the third quarter), so this is a good sign. “You might even characterize the climate as robust,” The Braff Group said in its analysis.

Now that Medicare’s competitive bidding pricing has gone nationwide, “there is little room for substantial additional cuts,” The Braff Group points out.

Well, for Medicare, anyway. We all know eyes have turned to Medicaid (which is in the ugly position of having to implement a provision from the 21st Century Cures Act that essentially gives it no choice but to adopt bid-influenced Medicare pricing) and managed care organizations (which are ginning up their own cost-reduction schemes in the form of preferred partnerships with large distributors, or just run-of-the-mill*, across-the-board reimbursement cuts).

But as much as everyone talks about payer diversification and cash retail, Medicare is still the biggest game in town for a large number of providers, so let’s focus on this “good sign,” shall we?

Speaking of M&A, Managing Editor Theresa Flaherty caught up with the latest hire at Vertess, Eric Hymes, for our upcoming February issue. Hymes brought up another reason why M&A activity, even for HME, might be more free-flowing in the year ahead.

“They slashed the levy that companies are paying on repatriated earnings, so there’s going to be a movement of cash back to the U.S. I think it’s going to trigger a buying spree and we are going to see that in the healthcare segment.”

These days, I’ll take good signs where I can get them.