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Home Health & Hospice Week

Industry Notes:

Are Intermediary And Carrier Changes In Your Future?

Published on Mon Jan 17, 2005

CMS wants all-purpose MACs to take over claims processing.

Your days of doing business with intermediaries and carriers are numbered.

What's next: The Centers for Medicare & Medicaid Services will transform plain old fee-for-service into a "premier health plan," the agency says.

Initial plans issued to Congress Feb. 7 would allow private contractors to begin bidding for the job of Medicare Administrative Contractor (MAC) as soon as next month. Current carriers and intermediaries would be officially closed out between 2007 and 2008.

Under the plan, Part A and Part B would be integrated into one, allowing a "single point of contact" for all Medicare claims-related business, CMS says. The reform also promises a "modernized administrative IT platform" that would store and manage all Medicare data in one centralized location.

The blueprint outlines goals to minimize and prevent disruption of claims processing. CMS has said it will start transitioning the durable medical equipment regional carriers first (see Eli's HCW, Vol. XIV, No. 5). More information is at www.cms.hhs.gov/medicarereform/contractingreform/544563report_to_congress.pdf.
 
CMS will hold a special Open Door Forum on Friday, Feb. 25 to discuss planned DMERC contracting changes. Details on the forum are at www.cms.hhs.gov/opendoor/022005/dmemac.pdf. 

  • There may soon be a new regional player on the publicly traded scene. Lafayette, LA-based LHC Group, which has 64 home nursing locations and four hospices, has filed a Securities and Exchange Commission document stating its intention to launch an initial public offering "as soon as practicable." The company also operates long-term care hospitals and outpatient rehab clinics.

    LHC currently serves mostly rural markets in Louisiana, Arkansas, Mississippi and Texas and plans to expand to more rural markets in 14 contiguous states after the IPO, it says. "We have identified approximately 500 underserved rural markets in those states," the company claims in the SEC document.

    LHC will either forge strategic relationships with hospitals or buy their hospital-based agencies outright. And the company may even purchase larger home nursing operations, it says in the filing.

    LHC reports net revenues for its home care service line of $59.7 million in all of 2003, and $60.8 million for the nine months ended Sept. 30, 2004.

    One concern: Joint ventures the company has with hospitals and physicians may trigger kickback or Stark law troubles, LHC reveals.     
     
  • As of Feb. 18, CMS will consider a positive fasting beta cell autoantibody test as an acceptable diagnostic criterion for continuous subcutaneous insulin infusion pumps. The test is added as an alternative to insulinopenia per the updated C-peptide testing requirement (see Eli's HCW, Vol. XIII, No. 36).

    To read the CMS program transmittal detailing the change, which is effective for services provided on or after Dec. 17, 2004, visit     www.cms.hhs.gov/manuals/pm_trans/R27NCD.pdf. 
     
  • Crescent Capital Investments Inc. has finalized its purchase of Tender Loving Care Health Services Inc., reports the Atlanta Business Chronicle. Last March, the Atlanta-based investment firm won an auction to buy TLC out of bankruptcy from failed parent Med Diversified with an offer topping $188 million (see Eli's HCW, Vol. XIII, No. 15).

    TLC, with locations in 20 states and Washing-ton, DC, expects annual revenues of about $250 million this year, TLC CFO Willard Derr told The Daily Deal.     
     
  • The federal government's decision to cut Medicare respiratory drug rates to 80 percent of average wholesale price put a dent in Lake Forest, CA-based Apria Healthcare Group's latest earnings.

    Apria reports a 2004 net income of $114 million on revenues of $1.45 billion, compared to 2003, when the company earned $116 million on revenues of $1.38 billion. The company says the respiratory medication cuts cost it $15.2 million for the year.
     
  • Lincare Holdings Inc. has acknowledged the Federal Bureau of Investigation seized documents last month from the offices of Bane Medical Services, a Florida company recently acquired by the HME giant (see Eli's HCW, Vol. XIII, No. 5). The problems at Bane arose before the acquisition, claims a Lincare filing with the SEC.

    Clearwater, FL-based Lincare received a warning letter in December from the U.S. Food and Drug Administration regarding complaints against its pharmacy in Southaven, MS, the company says. The letter cited "serious violations" in the pharmacy's drug mixing operations. Lincare said it is working to resolve the issue.

    In addition, Lincare provides an update on the investigation launched by the U.S. Attorney's Office for the Middle District of Florida in June 2000 over the company's dealings with doctors. The company says it has cooperated in the probe and provided documents to investigators, but it also says it can't predict whether or when it will resolve the matter.

    Meanwhile, Medicare respiratory drug cuts hurt Lincare too. The company reported 2004 net income of $273.4 million on revenue of $1.27 billion. That represents a gain over the previous year, when the company's net income totaled $232.1 million. However, the respiratory cuts reduced Lincare's revenues by $14.3 million, it says.
     
  • NeighborCare Inc. reported net income of $9.7 million on revenues of $392 million in the first quarter of fiscal year 2005. That represents a gain from the year-earlier period, when the Baltimore, MD-based pharmacy/HME provider lost $14.1 million on revenues of $338.4 million.
     
  • Portland, OR-based Northwest Home Care closed its doors last month, leaving pediatric patients scrambling for life-sustaining care. Northwest, a joint venture of Oregon Health & Science University and Chartwell Diversified Services, closed abruptly Jan. 6, giving ventilator-dependent pediatric patients only a few weeks to find replacement care, reports The Oregonian.

    The agency was in "serious financial trouble" and almost didn't make its November payroll, according to the newspaper.

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