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AmMed Direct to layoff 223 employees
From: The Tennessean
Diabetic supply house plans to sell to Florida-based competitor, close shop
By Getahn Ward
Competition in the diabetic supply business led AmMed Direct LLC to give layoff notices to its 223 employees on Tuesday as it prepares to sell assets to a Florida-based competitor and then stop operating.
The deal with Arriva Medical of Coral Springs, Fla., is part of a consolidation trend in the mail-order diabetic supply business as regulatory changes create uncertainty.
Medicare, for instance, is rolling out a new competitive bidding system to determine which companies would continue to provide supplies to its beneficiaries and at what price — perhaps lower rates.
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CMS weighs in on bid data
From: HME News
BALTIMORE – No sooner had Prof. Peter Cramton released a report that showed 60% to 80% declines in Medicare claims for home medical equipment in Round 1 competitive bidding areas (CBAs), than CMS was dismissing the data.
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Health Reform Built to Fail
Editor’s Note: The WSJ’s analysis and conclusions regarding CMS’ fatally-flawed competitive bidding progam with respect to negative pressure wound therapy also apply to the other home medical equipment and related services procured under the program.
From: Wall Street Journal
How Medicare rigs competitive bidding and hurts patients.
Americans may not be familiar with the medical innovation called negative pressure wound therapy, though it has helped hundreds of thousands of patients with complex or chronic injuries like burns or diabetic ulcer complications that could never heal on their own. Now President Obama’s Medicare team is about to severely damage this field, and many others too—all in the name of reforming how the entitlement pays for care.
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A Federal Auction in Desperate Need of Reform
From: Syracuse Journal-Democrat
By Reginald Nesbitt, MD, MBA
Syracuse, Neb. —On the hit A&E cable show “Storage Wars,” competing buyers take a peek inside foreclosed self-storage lockers, guess what might be hidden inside, then bid for the salvage rights. It’s entertaining television. But it’s a terrible model for the federal government acquire life-and-death treatments for Medicare patients.
Yet that’s almost exactly what’s happening. The Centers for Medicare and Medicaid Services (CMS) is expanding its new bidding process to an advanced therapy for chronic wound healing. CMS won’t require suppliers to prove competency with the therapy. If bidding goes forward as planned, millions of public insurance beneficiaries could have their health jeopardized.
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Extension of Licensure Deadline for the Round 2 and National Mail-Order Competitions of the DMEPOS Competitive Bidding Program
From: CMS
The Centers for Medicare & Medicaid Services (CMS) is extending the licensure deadline for the Round 2 and national mail-order competitions of the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program. The original licensure deadline required suppliers to have all required state licenses on file with the National Supplier Clearinghouse (NSC) and indicated in the Provider Enrollment, Chain and Ownership System (PECOS) before submitting a bid.
NEW DEADLINE: Bidding suppliers must now ensure that copies of all applicable state licenses are RECEIVED by the NSC on or before May 1, 2012.
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Q and A: Cramton goes behind the numbers
From: HME News
By Theresa Flaherty, Managing Editor
BALTIMORE – Prof. Peter Cramton set the competitive bidding debate on fire earlier this month when he reported that the number of claims submitted for home medical equipment in Round 1 areas plunged in 2011. Cramton, an economist with the University of Maryland and an outspoken critic of the program, obtained the data through the Freedom of Information Act (FOIA). He spoke with HME News last week about some of his preliminary conclusions.HME News: Did you expect to see such a steep decline in claims in Round 1 bid areas?Peter Cramton: I would have expected some drop, but I am surprised it’s as large as it seems to be. The biggest explanation, as we learned from the auction outcome, is that the whole market was radically transformed, with the vast majority of providers being removed from the supplier list.HME: The data shows that there are claims being made by non-contract suppliers.Cramton: I suspect that is the grandfathering aspect. For most of the products, there was a period where (the beneficiaries) could continue with their existing supplier. That, to me, is cause for concern because grandfathering will end and when it does end, if they haven’t found a new supplier, that’s going to be a serious issue.HME: The data also shows an increase in negative health outcomes in bid areas vs. non-bid areas.Cramton: The point of that set of figures is to show that the sharp decline in claims, assuming that it isn’t all attributable to fraud–and I would be shocked if it was–is likely leading to a decline in utilization. The decline in utilization means there are more non-utilizers, which means there are more bad health outcomes. Those are all indicators that the program, rather than saving the taxpayers money, has a very real but hidden cost, which is that the cost simply falls in a different category within the Medicare system.HME: Why were complex rehab codes included? They weren’t in Round 1.Cramton: The FOIA request was just for the categories that were included under the program. I think what happened–I am not sure–is that some product codes within the standard and complex wheelchairs categories changed, and so it caused that anomaly.HME: Do you think CMS could spin this data to prove competitive bidding has resulted in a decline in fraud and abuse?Cramton: I don’t see how they could draw that conclusion. Driving down claims and driving out fraud is largely a separate issue. It’s not the auction itself that prevents fraud. I guess what they would argue is, absent competitive bidding, CMS was required to deal with a potentially unlimited number of suppliers that they didn’t really have the resources to check who is doing the right thing and who is not. I think it’s not so much the number of suppliers but rather the checks that you make to confirm that the services being provided are legitimate. -
VGM Gets Clarification on Credit Report Score for Competitive Bidding
From: VGM
IMPORTANT CREDIT REPORT/SCORE CLARIFICATION!!
Posted on: January 24th, 2012 by Mark HigleyMany HMEs have been expressing concern over recent fax receipts from third party consultants and others, which have been picked up by several state associations and distributed to their memberships. The issue is in regard to whether the Round 2 potential bidding companies must have a credit report dated before January 30. Somewhat directly stated — this is NOT true. A detailed explanation follows below.
But first, here is an example of the releases distributed during the past several days:
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Data from Round 1 show sharp decline in HME claims, and higher risks for death, hospitalization
From: Home Care Magazine
The American Association for Homecare reported last week that an analysis of data from Round 1 of the Competitive Bidding Program showed a sharp decline in claims for HME products in bidding areas. Data also showed a significant risk of death and hospitalization among Medicare beneficiaries not getting necessary home medical equipment.
“The startling and dramatic numbers from Round One underscore the fact that the current competitive bidding program is dangerously flawed and must be stopped,” AAHomecare reported.
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“Doc Fix” and Competitive Bidding
From: Health Insider
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Mergers and acquisitions: Will Round 2 make the big guys buy?
From: HME News
By Theresa Flaherty, Managing Editor
YARMOUTH, Maine – Competitive bidding expands to an additional 91 competitive bidding areas in Round 2, but it’s too early to tell whether national providers have their eye on acquisitions in those markets, say analysts.
“We see them putting their feet in the water a little bit, but they’re not aggressively chasing opportunities,” said Rick Glass, president of Tarpon Springs, Fla.-based Steven Richards & Associates. “And it’s not necessarily in Round 2 areas vs. not in Round 2 areas. I think to a large extent, a lot of them view it as they’ll wind up getting the business anyway.”
