Home Health & Hospice Week

Industry Notes:

ALJ TRANSFER TO HHS COULD LIMIT ACCESS, GAO WARNS

Video hearings not necessarily an adequate substitute for in-person hearings, report says.

Home care providers aren't the only ones worrying about administrative law judges' transfer to the Department of Health and Human Services.

HHS' plan to take the ALJs over from the Social Security Administration by Oct. 1 is still riddled with problems, the General Accounting Office says in a report released Aug. 1. Chief amongst them: video teleconferencing instead of in-person hearings.

HHS will have only four Medicare appeals hearing offices compared to the 141 maintained by the SSA and plans to rely heavily on video conferencing. However, HHS hasn't shown that appellants find video conferencing "an adequate substitute for in-person hearings." The agency also faces a "complex logistical task" in arranging for the many video hearings.

Other problems with the transfer include tight timeframes to hire and train ALJs and operational difficulties, the GAO says in the report requested by Senate Finance Committee Chair Charles Grassley (R-IA) and ranking member Max Baucus (D-MT).

"We need to stay on top of the transfer process to make sure the current failures by [HHS] do not continue," Grassley says in a release.

"Based on today's GAO report, I remain concerned about HHS' new Medicare appeals process," Baucus says in the release. "Many of the issues with the process remain unresolved, which effectively denies Medicare beneficiaries access to judges and due process."

The GAO report is at
www.gao.gov/new.items/d05703r.pdf. 

  • Almost Family Inc.is selling off its adult day care business and focusing solely on home care. The Louisville, KY-based company is selling its 19 medical day care locations to Active Services Inc. for $13.6 million in cash and assumption of $1.4 million in debt, it says in a release.

    Following the pending transaction, Almost Family will consist of its Caretenders Medicare operations with current annual revenue of $43 million and its personal care unit with $35 million in annual revenues. The company, operating in Florida, Kentucky, Ohio, Connecticut, Massachusetts and Alabama, plans to use cash and credit to finance home care acquisitions in Florida and other states, it says.

    "Our next milestone is to take the company past the $100 million mark in home health care revenues," CEO William B. Yarmuth says in the release.
     
  • Amedisys Inc. earnings continue to grow. The Baton Rouge, LA-based powerhouse has announced income of $7.9 million on revenues of $80.1 million for the quarter ended June 30, compared to a $5.0 million profit on $56.9 million in revenues for the same period in 2004. The regional chain estimates revenues of $495 million and patient admission growth of 15 to 20 percent in 2006.

    Amedisys, which recently finalized the acquisition of 66-location Housecall Medical Resources Inc., also has purchased HHA NCARE Inc. in Newport News and Chesapeake, VA. The company paid $1.5 million in cash and a $700,000 note for the agency with $3 million in annual revenues, Amedisys says.
     
     
  • With profits on the slide, Invacare Corp. has announced job cuts. The Elyria, OH-based durable medical equipment maker recently reported net earnings for the second quarter of $12.9 million compared to $18 million for the same period last year. Invacare blamed increasing freight costs and reimbursement cuts for the decline. To reduce costs, the company plans to eliminate 230 jobs, close four facilities and outsource more work to China.
     
  • Medicare cuts are taking a toll on Lincare Holdings Inc. The Clearwater, FL-based respiratory provider reported net income of $50.1 million on revenue of $315.2 million for the quarter ended June 30. That compares to last year's second quarter income of $67.4 million on steady revenue.

    Lincare blamed the earnings on Medicare reimbursement cuts, which it estimates reduced revenues in the first half of 2005 by $83.4 million.
     
     
  • Two major for-profit hospice chains saw mixed earnings for the quarter ended June 30. Odyssey Healthcare Inc. has reported net income of $7.3 million on revenues of $93.2 million for the quarter, down from a $9.3 million profit on $86.8 million in revenues for the same quarter last year.

    Dallas-based Odyssey has acquired a hospice in Huntsville, AL and a hospice in Los Angeles, serving about 50 patients each, the company says.

    VistaCare Inc. has reported net income of $0.9 million on revenues of $57.5 million for the quarter, but that's up from a $1.8 million loss on $48.1 million in revenues for the same period last year. Scotts-dale, AZ-based VistaCare expects an accrual of $6 million for the year for Medicare cap exposure, it says.
     
     
  • VNA-TIP HomeCare has purchased the home health and hospice divisions of Carlinville Area Hospital for undisclosed terms, the St. Louis Business Journal reports. The Alton, IL-based agency now has 16 offices in southern Illinois and Eastern Missouri. 
     
  • Things are looking brighter for The Scooter Store. Business at the privately owned New Braunfels, TX-based supplier of mobility assistive equipment is up 19 percent over the first quarter, and business from private payers is up 50 percent over the first quarter, the New Braunfels Herald-Zeitung reports.

    That's partly due to federal insurance programs paying claims that are the subject of federal lawsuits alleging fraud - lawsuits that have led the company to sue the government in return (see Eli's HCW, Vol. XIV, No. 18).

    The U.S. Department of Justice last month amended its original counterclaim in the Medicare lawsuit TSS filed against the Department of Health & Human Services. "Given the weakness of the original counterclaim, it is no surprise that the government would request the opportunity to amend," the company said in a statement. TSS has denied any wrongdoing.
     
     
  • Vermont home health agency Professional Nurses Service Inc. has won its battle to crack into the state's Certificate of Need system. John Crowley, Vermont commissioner of the Department of Banking, Insurance, Securities and Health Care Administration, granted Winooski-based PNS a CON Aug. 1, reports the Associated Press.

    The ruling for for-profit PNS goes against the non-profit, 12-member Vermont Assembly of Home Health Agencies. VAHHA failed to disprove an earlier finding of unmet home care need in the state, AP says.