Is The GAO Using Fuzzy Math?
The eagerly anticipated General Accounting Office (GAO) report to Congress on the status of home health care reimbursement and the 15% cut to home health spending mandated under the Balanced Budget Amendment has drawn criticism from a most unlikely source, the Centers for Medicare & Medicaid Services (CMS).

Medicare reimbursement for home health care is fair and the 15% cut is necessary, says the report (GAO-02-663) released on May 7. But CMS points out that the data the GAO used is insufficient to determine with certainty the cost of home health care services. In addition, CMS says the GAO’s proposal to contain the losses of individual health care providers from the 15% cut with a risk-sharing program would be impossible to administer and would destroy the prospective payment system’s predictable and timely payment benefit.

It all adds up to a mixed blessing for the home health care industry. “We are disappointed that GAO would issue a report that does not reflect the industry’s true current financial standing and that uses data that do not reflect the true current costs of Medicare home health,” says Thomas Connaughton, president and CEO of the American Association for Homecare (AAHomecare), in a written statement. “We are pleased, however, that CMS has clearly revealed the flaws in the report and has so unequivocally rejected its recommendations.”

AAHomecare will try to counter the influence of the report on Capitol Hill with the CMS objections and its own Polisher Research Institute report on the 15% cut, which was released in April.

A copy of the GAO report is available online at www.gao.gov/cgi-bin/getrpt?GAO-02-663.  

Getting to Know You

Operations Manager Jordan Marsch shows Judy Berek, the administrator for CMS’s Northeast Consortium, around the Homecare Concepts warehouse. Carol D. Messick, a Region A public affairs specialist, and Pat Volk, a CMS program manager, look on.

Frustrated by Centers for Medicare & Medicaid Services (CMS) decisions that seem to be made without a full understanding of the HME business? Homecare Concepts Inc, in Farmingdale, NY, has an idea: Invite CMS officials over and give them a chance to get to know you.

Thomas Ryan, president and CEO of Homecare Concepts and chair of the Region A Council, used the occasion of a council meeting to ask Judy Berek, the administrator for CMS’ Northeast Consortium, to visit his company. It took a few months to set up, but in April, Berek, Carol D. Messick, a Region A public affairs specialist, and Pat Volk, a CMS program manager, stopped by for a 3-hour visit.

“The visit was informative for them and I thought very positive,” Ryan says. People in Berek’s position unfortunately often see bad companies that are doing illegal things, he adds. This visit gave her a chance to see what a good company is like.

Messick, who met with key Homecare Concepts personel and toured the facility, seconds that opinion. “It was an excellent opportunity to not only hear but to see first hand the issues suppliers deal with in their day to day work,” she says. “We were very impressed with the company’s commitment to customer service. This visit was very much in line with CMS’ overall goal of opening up the lines of communication and working with providers and suppliers to improve the Medicare program for the ultimate purpose of improving the quality of service for beneficiaries. It was time well spent and we thoroughly enjoyed the visit.”

Legislative/Regulatory News

CMS to Share Data with Social Security Administration
In the April 16 Federal Register, the Centers for Medicare & Medicaid Services (CMS) released a proposal to exchange information with the US Social Security Administration (SSA) to verify identification data that providers submit when enrolling in the Medicare process. CMS and SSA would share files with the name, social security number, and date of birth of all Medicare providers.

CMS Withdraws Upgrade Provision
In the May 1 Federal Register, the Centers for Medicare & Medicaid Services (CMS) withdrew the April 27, 2000, payment for upgraded DME proposed rule, which was based on a discretionary provision of the Balanced Budget Act (BBA) of 1997. CMS found the rule unnecessary because it recently implemented the Advance Beneficiary Notice (ABN) process for suppliers to bill on an assignment basis for upgraded DME.

CMS Simplifies Compliance
To make keeping up with changes in its regulations and instructions easier, the Centers for Medicare & Medicaid Services (CMS) will issue change notices on a quarterly basis. On April 22, CMS released the first edition of the Quarterly Provider Update: The One Source for National Medicare Provider Information. CMS will publish future issues on the first business day of each quarter, and each issue will include all regulations CMS published in the previous quarter and those slated for the following quarter. The Provider Update will also contain nonregulatory changes to Medicare and Medicaid, such as manual instructions and program memoranda. The publication is available on the CMS Web site at http://www.cms.hhs.gov/providerupdate.

Senate to Review Bill to Increase Medicaid Funding
The United States Senate is considering legislation that will provide temporary Medicaid budget relief to cash-strapped states. Senators Jay Rockefeller (D-WVa) and Gordon Smith (R-Ore) recently introduced Senate bill 2110, a measure to up the federal medical assistance percentage by 1.5% for 3 years for each state and deliver an additional 1.5% to states with high unemployment. Backers of the bill hope to enable states to better withstand the budget constraints that often place the nation’s senior population in jeopardy.

GAO Supports Altering “Homebound” Definition
Expanding Medicare’s “homebound” definition to include adult day care will not greatly impact additional costs to the program, says the General Accounting Office (GAO) in an April 26 report. According to the GAO, since few beneficiaries would require this additional care, Medicare costs will not be significantly altered. Current guidelines remove benefits from patients who take part in activities outside the home, especially for nonmedical reasons, but these GAO findings may create more options for “homebound” patients.

News in Brief

Essentially Women Sponsors Event
Essentially Women™, Oxford, Mich, a buying group for women’s health care products, will host Focus on the Future 2002, its second annual education program and trade show, in Lisle, Ill, from June 12 to June 14. The session will offer business management and development tips, as well as presentations by industry experts such as Cara Bachenheimer, JD, a partner with Epstein Becker and Green PC, Washington, DC, who will deliver an industry update. For more information, call (800) 988-4484 or email melissa@essentiallywomen.com.

Hoffman Named VGM Vice President
The VGM Group, Waterloo, Iowa, has promoted Tim Hoffman to vice president of manufacturer contracting. VGM is a member service organization for HME providers, and Hoffman will contract with participating manufacturers for both Van G. Miller & Associates and Homecare Providers Co-op.

PSA to Acquire MedLink Division
Pediatric Services of America (PSA), Norcross, Ga, has signed an agreement to acquire the assets of the southern Florida-based skilled pediatric home care division of The MedLink Group. PSA would acquire facilities in Miami, Plantation, Stuart, and West Palm Beach. PSA expects the sale to close by the end of June.

International Trade Fair Achieves Success
The first annual Telemedicine & Telecare International Trade Fair, held in Luxembourg on April 10 to 12, concluded with satisfied exhibitors and attendees. More than 600 participants from 58 countries joined 36 exhibitors from 13 countries to do business, share ideas, and witness various telemedicine solutions. Parallel educational sessions featuring 42 speakers from 26 countries addressed projects and experiences in other countries and specific solutions in a variety of medical disciplines.

O2 Science to Serve 5,000 More Patients
O2 Science, Tempe, Ariz, a regional provider of respiratory services and home health care products, has acquired Health N Home, Phoenix, a subsidiary of Albertsons Inc. With this purchase, O2 Science acquires close to 5,000 respiratory patients not covered under Medicare. O2 Science has opened new locations in Tucson, Ariz; Long Beach and Santa Clara, Calif; and Kansas City, Kan. The purchase is in keeping with the company’s growth strategy, which has included several recent acquisitions and expansion efforts.

Barnhill and Fuller Join The MED Group
The MED Group, Lubbock, Tex, has hired Christy Barnhill as the coordinator of special services and Dick Fuller as director of technical services. Fuller and Barnhill will work together to improve the company’s Certified Repair Center program, which provides technician training, testing, certification, and marketing and operations modules.

Gentiva Adds Vacuum Wound Therapy
Gentiva Health Services, Melville, NY, a leading provider of home health care and specialty pharmaceutical services, has begun providing Vacuum Assisted Closure (V.A.C.®) therapy to patients with nonhealing wounds.

According to the developers, V.A.C. therapy units, manufactured by KCI USA Inc, San Antonio, often succeed even on wounds that previously resisted multiple medical interventions.

DependiCare Billing Celebrates 5-Year Anniversary
In 1995 DependiCare, a home respiratory therapy and HME company headquartered in Broadview, Ill, had a real problem, says Roger Miller, its president. Days sales outstanding (DSO) was at 105 days and growing. Cash collections were barely keeping up with business growth. Reimbursement staff turnover was at an unacceptable level.

To get things back on track, in August 1996 the company hired Carmen Davies, an experienced reimbursement manager and made plans to set up a stand-alone billing center in Rockford, Ill.

It worked, Miller says. Today, billing staff turnover is minimal, DSO now stands at 59 days for billed accounts, and the collection rate exceeds 97% of revenue. In addition, DependiCare has acquired locations in Sycamore and Elgin, Ill.

“Looking back, the creation of the billing center has been one of the most effective decisions we have made at DependiCare,” Miller says.