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On the Editor's Desk

by: Liz Beaulieu - Friday, August 26, 2016

As I look at the educational program for this year’s HME News Business Summit, I don't necessarily see sessions on how to overcome challenges.

What I do see are sessions on how to take advantage of opportunities.

The kinds of opportunities that present themselves when you become a player in the eyes of health systems because you’ve armed yourself with outcomes data.

The kinds of opportunities that present themselves when you educate yourself about new trends in healthcare delivery and health data exchange.

The kinds of opportunities that present themselves when you stop, even for just an hour, to think about why you’re resisting the flurry of change around you, and how that’s holding you back.

You spend enough time thinking about the challenges—at least eight hours a day, some days more.

At this year’s Summit, it’s our goal for you to spend a day and half thinking about opportunities.

The challenges will still be there when you return to the office. But with opportunities in your line of vision, they won’t seem as insurmountable.

We hope you'll consider joining us.

by: Liz Beaulieu - Friday, August 19, 2016

As I was writing up a story on our most recent HME Newspoll results (see Monday’s HME Newswire), I remembered some comments made by Inogen officials during the company’s recent conference call to discuss its second quarter financial results.

In our poll, we asked readers whether or not new Medicare pricing (new pricing went into effect in non-bid areas on Jan. 1 and July 1, and in Round 2 areas on July 1) has impacted third-party pricing in their state. An overwhelming majority—more than 80%—said yes.

Inogen officials back up those results.

This, from Scott Wilkinson, president and COO:

“We have also seen some private insurance payers reduce their rates for oxygen services in the second quarter of 2016 in response to the lower Medicare reimbursement rates. We do expect these private payer rates to continue to decline in alignment with the new Medicare Round 2 re-compete competitive bidding pricing. Looking ahead, in spite of these significant reimbursement changes, we believe we are well positioned to continue our total revenue growth in the oxygen therapy market with best-in-class and patient-preferred products and services with the competitive total cost of ownership.”

Ali Bauerlein, CFO and co-founder, described the impact of this piggyback pricing on Inogen’s second quarter:

“Turning to rental revenue, direct-to-consumer rental revenue in the second quarter was $9 million, representing a decline of 22.8% from the same period in the prior year, primarily due to the anticipated Medicare rental reimbursement cuts that took effect in the first quarter of 2016 and reductions in private-payer rates as they followed the decrease in Medicare rates and higher rental revenue adjustments.”

She also described the impact on the company’s full-year guidance:
“We expect additional rental revenue headwinds, due to the additional private insurance rate reductions, higher provisions for rental revenue adjustments, and lower net patient additions as we focus on sales versus new rental. We currently expect total rental revenue to decline as a percent of total revenue and decrease approximately 25% in 2016, compared to 2015.”

by: Liz Beaulieu - Wednesday, August 3, 2016

There has been a rash of companies buying other companies, as well as public companies reporting their latest financial results, in the past week, and reacting to change is a recurring theme behind all of their activity.

When I was writing up an item on Cape Medical Supply buying New England Medical Homecare, this quote from Cape Medical President and CEO Gary Sheehan jumped out at me: “As we continue to explore our strategic options for succeeding in a changing and crowded healthcare market, bringing our industry-leading sleep therapy program to one of the most populous regions of Massachusetts made a lot of sense.”

Note my emphasis on “changing and crowded healthcare market.”

When I was writing up an item on Cardinal Health’s latest financial results, this line jumped out at me: “The Cardinal Health team is well-positioned to adapt, innovate and lead during a time of great change in the healthcare industry.”

Again, my emphasis.

From Mick Farrell, CEO of ResMed, during the company’s recent conference call to discuss its latest financial results: “Well, the whole sleep industry landscape has changed fundamentally, I would say in the last 18 months, approaching 24 months, since we launched Air Solutions. And the basis of competition in the space is now changed to not be only, do the devices have to be quieter, smaller and more comfortable, but they also have to be more connected. And we think that connectivity has really changed the space.”

This from a company who has not only connected CPAP devices, but also connected vents and soon-to-be connected POCs.

From Matt Monaghan, chairman, president and CEO of Invacare, during the company’s recent conference call to discuss its latest financial results: “With the North America/HME transformation underway, we have initiated the second phase of the change, which is the enhancement of our post-acute care business affecting principally the IPG segment. Over the past quarter, we’ve begun developing our specialized post-acute care sales force with investments in clinical sales training of certain customer call points and recruitment.”

This from a company that’s taking advantage of its position as a maker of devices for the growing post-acute care market.

Seth Godin says, “The cost of being wrong is less than the cost of doing nothing.”

So, what’s change got you doing?

by: Liz Beaulieu - Tuesday, July 19, 2016

The disappointment was palpable on Friday, when word began spreading that the Senate had failed to pass a bill delaying a second round of Medicare reimbursement cuts in non-bid areas before it began its long summer recess.

I received twitter messages with swear words.

I received emails with GIFs showing a man sweating and biting his nails.

I received phone calls from business owners that can’t believe they’re expected to continue serving Medicare beneficiaries when their payments have been essentially cut in half.

As the ever-poignant Pat Naeger told the Southeast Missourian about the new payment rate of $86 per month for home oxygen therapy: “My cable bill is higher than that.”

Senators actually hightailed it out of D.C. on Thursday night, but official word didn’t come (at least to us at HME News world HQ) until noon on Friday from The VGM Group, and until 2:50 from AAHomecare.

Since the cuts already went into effect July 1, a retroactive delay was already Plan B. (Side note: How the logistics of a retroactive delay would even work are beyond me, considering CMS’s bungling of a one-year delay to a bid-related reimbursement cut to accessories for power wheelchairs).

It’s hard not to feel sorry for our HME industry.

What other industry succeeds in getting bills passed in both the House of Representatives and the Senate, but because they are different bills and because of “personality and politics,” a final bill never made it to the president’s desk to become law.

If I were a betting woman (which I’m not), I would have said a final bill was a given. The Senate even agreed to run with the House bill, which had a three-month vs. one-year delay and a non-Medicaid related pay-for.

I have a friend whose husband will get laid off from his job next week. She is stressed, but she also knows the situation is out of her control. What can you do, she says, but look forward and ask, where do we go from here?

So where do we go from here, HME industry? I’m in the process of trying to find out, amidst fielding tweets, emails and calls from justifiably angry providers.

What I know so far: a retroactive delay is still a possibility when lawmakers return to D.C. in September. Another option: a go-forward delay (a pause, if you will).

Industry stakeholders maintain that the lawmakers that passed two bills and the senators who initiated a “hotline process” for a final bill last week are in shock themselves about what happened.

“They are emboldened even more to get something substantive done in September,” said Cara Bachenheimer, senior vice president of government relations for Invacare. “The momentum was so strong, and the disappointment so great. There were a lot of lawmakers thinking, are you kidding me?”

by: Liz Beaulieu - Wednesday, July 6, 2016

If you follow me on twitter (@hmeliz), you know I gleefully announced yesterday that Associate Editor Tracy Orzel is back from her leave of absence, during which she walked the Camino de Santiago, a weeks-long walking pilgrimage across Spain.

Not only is Tracy back, she’s clear headed, she’s tan, she’s fit. Not that she wasn’t any of these things before—she knows what I mean.

During our 10:55 this morning (go here for more on that), she shared an interesting story from her trip.

One day, an older gentleman named Tim recounted the story of how, when he asked a woman for a second date, she told him he needed to answer a question first: You’re walking along and you come across a wall; what do you do?

Each of the members of her Camino crew answered the question. Their answers varied from, I’d walk around the wall, to I’d climb over the wall, to I’d blow up the wall. One member, a Brit with military experience, said he’d crouch down, brace his back against the wall and create a foothold with his hands so his mates could climb over.

The point of the question is not only to determine a person’s approach to problem solving, but also to get insight into how they view the world.

The woman who said she’d blow up the wall—Tracy characterizes her as a firecracker. The Brit with military experience—Tracy says he’s used to doing everything as part of a team.

Me, I envisioned the wall as insurmountable and had a panic attack (this may or may not have something to do with the wear and tear of having an almost two-year-old).

I thought this was a good question for HME providers to ask themselves, with the wall, of course, representing competitive bidding.

In light of yesterday’s news that the House of Representatives has passed a bill that would delay a second round of Medicare reimbursement cuts in non-bid areas, maybe you envision the wall having a hole big enough for you to walk through.

Or maybe, because there are still some devils in the details (like getting the House and Senate to agree on the length of the delay and the pay-for—all in two weeks), you envision the wall as crumbling and you’re preparing to deliver the final blow that will open it right up.

Think about it (it’s a good exercise in self exploration if anything), and while you’re at it, join me in welcoming back Tracy, who I hope is not too upset that I stole a really good blog idea.

by: Liz Beaulieu - Tuesday, June 21, 2016

I blogged last week about the significant drop in the number of allowed beneficiaries for some of the most popular DMEPOS products starting in January of 2016.

I speculated that the nosedive was due to CMS’s roll out of competitive bidding to non-bid areas and its implementation of the first of two reimbursement cuts that each amount to about 25%.

Quite a bit of conversation on twitter ensued.

A number of providers (and Managing Editor Theresa Flaherty) speculated that the nosedive also had to do with deductibles.

Per provider Chris Rice’s suggestion, I dug back in to see if the same drop that we’re seeing from December 2015 to January 2016 happened from December 2014 to January 2015. And sure enough, it did.

But not quite as much.

Using oxygen concentrators as an example, I found that the drop in the number of allowed bennies was 17.5% from December 2014 to January 2015. From December 2015 to January 2016, it was 24%.

So I definitely think this is a toxic mix of competitive bidding and deductibles sending utilization spiraling downward.

The number of allowed bennies for oxygen concentrators from January 2015 to February 2015 did bounce back a bit, from 210,735 to 223, 357, but it fell well short of December 2014, when it was 247,618.

What happened in February 2016? Stay tuned.

by: Liz Beaulieu - Tuesday, June 14, 2016

I was putting the finishing touches on our Databank page for the July issue this morning, and the updates to the Medicare Market Marker hit me like a ton of bricks.

The marker, in case you don’t know, is where we keep track of the number of allowed beneficiaries for five popular DMEPOS products: E1390 (oxygen concentrator), E0260 (semi-electric hospital bed), E0601 (CPAP), K0001 (standard wheelchair) and K0823 (power wheelchair).

We track the data using line graphs, giving you one month of new data each month, but keeping a year-long view.

For the July issue, the month of data we added was January 2016, when CMS rolled out competitive bidding to non-bid areas and implemented the first of two reimbursement cuts that each amount to about 25%.

I blogged not too long ago about the impact of the bid program on access to HME. In that blog, I used data from our HME Databank, but I was a bit limited because the most recent year for which we have data is 2014 (2015 is coming Oct. 1).

Our Medicare Market Marker is narrower (only five codes, only number of allowed beneficiaries), but more up to date.

Here’s a sneak peek at the updated graphs, which speak for themselves:

by: Liz Beaulieu - Friday, June 3, 2016

I hate to give you a checklist, and on a Friday.

But here’s where my brain is at, at the end of this short, but very long, workweek.

Have you filled out and submitted an application for this year’s HME Excellence Awards? The deadline is quickly approaching, and there’s nothing that warms my heart like a plethora of HME Excellence Awards applications to choose from. Look at last year’s smiling winners—you want to be like them!

Have you filled out and submitted this year’s HME Financial Benchmarking Survey? This one’s a little more time-intensive than the HME Excellence Awards application, but the ROI is huge. All the providers who fill out this survey get the results for free. Added bonus: Attend the HME News Business Summit, Sept. 18-20 in Charleston, S.C., and hear industry analyst Rick Glass give color to the numbers.

Speaking of the Business Summit, have you registered yet? Just this week I had a conversation with our keynote speaker, Dr. Patrick Cawley of the Medical University of South Carolina Health. You guys, this is a smart guy. You definitely want to hear what he has to say about this health system’s more aggressive approach to how it works with post-acute care providers.

Let’s see, what else?

Oh, of course, the No. 1 thing on your checklist should be contacting your members of Congress to co-sponsor bills in the House of Representatives and the Senate to delay a second round of Medicare reimbursement cuts slated for July 1. As AAHomecare’s weekly bulletin screamed this week: “Fight to get rural relief legislation passed enters final month.”

If you’re anything like me, you like a list, and you like to check things off. Now get to work (Monday is fine by me)!

by: Liz Beaulieu - Tuesday, May 24, 2016

This is what it must be like to work in the HME industry.

In the same day (today), I received an email from a provider that exemplifies all that is wrong with the HME industry, and another that exemplifies all that is right.

First the wrong.

A provider in Florida emailed me about how it received a call from a CMS rep looking for a provider to supply a hospital bed for a Medicare beneficiary in the U.S. Virgin Islands. The CMS rep said the only provider in the area had withdrawn from the program.

“He asked if we could drop ship a hospital bed, to which I responded, ‘No, we could not comply with the CMS Provider Standards by drop shipping a hospital bed,’” the provider said.

The provider says competitive bidding-influenced pricing has everything to do with this void.

“I wonder what the residents of this area will do for HME products and services?” the provider asked.

We all know, of course, that this scenario is playing out in dozens of areas across the country, non-contiguous and contiguous.

Now the good.

Another provider emailed me about how it was able to customize a wheelchair for a junior high school student, who due to his condition must remain in a prone position, that was life-changing. She’s not kidding.

“Every morning the bus driver would call the teacher five minutes before arriving to let her know they were on their way, so she could help him with the student, and there would be crying in the background,” the provider told me when I called her. “The first day the student used the new wheelchair, the teacher didn’t get a phone call. The bus driver just rolled him into the classroom and everyone was happy.”

I’ll keep both of these stories top of mind tomorrow at the AAHomecare Legislative Conference, as I listen to industry leaders and lawmakers outline their efforts to bend the curve more toward the right.

by: Liz Beaulieu - Thursday, May 19, 2016

The goal of this year’s HME News Business Summit is to change the way you see the HME industry and, more importantly, your business.

To help us do that, we’ve brought in some important “outsiders.”

Dr. Patrick Cawley is the CEO of the Medical University of South Carolina. As the person who oversees all clinical matters for the health system and its affiliates, he knows the value of outcomes. He believes you can help him do his job, and so do we.

Brain Holzer, president of a division of Highmark Health, has some tough love for you: You’re probably not on the radar of giant health insurance companies, but he believes you can be, and he’ll tell you why.

Tech experts Nick Knowlton and Jeff Gartland will give you insight into the macro healthcare trend of interoperability, and how it not only increasingly applies to you but also helps you do business better.

Healthcare attorney Ross Burris will give you an inside look at how hospitals have stared down audits and other regulatory pressures, and have become better for it.

Closer to home, our “maverick” HME providers will give you ideas for shaking up what it means to be in the HME industry with their outside-the-box takes on sleep therapy, retail and capitation.

When you look at your business in the mirror, what do you see?

With the help of these speakers, it will be the smartest business of them all.

See you Sept. 18-20 in Charleston!