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Home Health & Hospice Week

Industry Notes:

FEDS PUSH PRIVATE FINANCING OF LONG-TERM CARE

Published on Thu Jul 28, 2005

Is it time to branch into private pay?

The time may be right to rethink your business lines if you're serving only Medicare and Medicaid patients.

Centers for Medicare & Medicaid Services Administrator Mark McClellan announced the second phase of a campaign to help states promote private long-term care financing alternatives to Medicaid on July 26.

"Medicare doesn't cover long-term care, and Medicaid cannot afford to be the nation's primary source of payment" for LTC providers, McClellan says.

The demonstration's first phase began with five states, (Arkansas, Idaho, New Jersey, Nevada and Virginia), in January 2005. CMS helped participating state governors initiate an aggressive outreach campaign to individuals from 50 to 70 years of age.

Governors sent letters and financial planning toolkits to older adults containing information about using personal savings, trusts, annuities, LTC insurance and reverse mortgages to plan for LTC needs.

The second phase will last from January to May 2006. CMS will choose 10 states competitively and contribute $2.5 million to the demonstration.

More information is at www.ltcaware.info. 

  • The competitive bidding rule for durable medical equipment is getting closer to publication. The proposed rule is currently in the clearance phase, a CMS official said during the July 20 Open Door Forum. The agency expects to publish the rule in late summer.
     
  • What's in a name? A whole lot, if you're a provider submitting claims to the Region B DMERC.

    Adminastar Federal's claims department is currently returning to suppliers an average of 200 to 300 claims a day due to the supplier failing to include the correct beneficiary information. In Box 2 of the CMS 1500 form, the supplier should be entering the beneficiary's name exactly as it appears on his or her Medicare card.

    Failure to do so will cause the claim to be deleted and returned to the supplier, the DMERC says.
     
  • Ohio is expanding one of its PACE programs. The state budget bill finalized June 30 will furnish funding for 60 more slots in the Program for All-Inclusive Care for the Elderly run by TriHealth's SeniorLink program, reports the Cincinnati Business Courier. PACE is a federally funded program that aims to keep seniors at home and out of nursing homes.

    SeniorLink centers in the Cincinnati area now serve 370 clients and have funding for 440. That will increase to 500 next year. Concordia Care in Cleveland will continue to have funding for 380 spots.
     
  • But DME suppliers are worried about proposed Medicaid changes in Ohio. The state is proposing big changes to some Medicaid rules, according to the Ohio Association of Medical Equipment Services.

    For example, Ohio plans to implement what it calls "volume purchasing" for DME - a reimbursement model that resembles national competitive bidding. The state also plans changes regarding oxygen services.
     
  • LHC Group Inc. is entering the West Vir-ginia market. The home care chain that focuses on southern rural markets plans to pay $4.5 million for Home Care Plus of Lewisburg, WV, it says in a release.

    Home Care Plus recorded annual revenues of $5.3 million in 2004, LHC says. Home Care Plus operates in five locations, reports the Associated Press. The agency derives 78 percent of revenues from Medicare and 10 percent from Medicaid.

    This acquisition, scheduled to close in the third quarter pending regulatory approval, may be the first in a string of purchases. In addition to internal growth, "we also welcome the opportunity to acquire a platform for growth like we will be doing in the Home Care Plus acquisition," LHC CEO Keith Myers says in a release. "We will continue to pursue similar opportunities in certain markets."

    LHC, which went public last month, said earlier this year in a Securities and Exchange Commission filing that it plans to expand in 14 contiguous states that contain 500 underserved markets (see Eli's HCW, Vol. XIV, No. 7).

  • The Healthfield Group Inc. in Atlanta has purchased Charlotte, NC-based Capital Health Management Group, reports the Charlotte Business Journal. CHMG operated 34 home care locations in six Southeast states with 1,000 employees.

    The prospective payment system has "attracted incredible amounts of private equity and debt equity to the industry," former CHMG CEO Todd Wiebusch told the paper. "The valuations are really good now."

    CHMG's parent company CHMG Capital decided to sell the home care chain rather than stay in the market and become an industry consolidator. "We were not comfortable going out to get a lot of debt," Wiebusch said. "We had been thrifty in our acquisitions in the past but came to the conclusion that nothing out there was going to be cheap anymore."

    CHMG Capital, which invests in other health care ventures, will continue to partner with other home care providers, according to the Journal.

    Healthfield operates home care locations in seven Southeastern states through its subsidiaries, according to its Web site.
     
  • Medicare reimbursement cuts for oxygen are choking Apria Healthcare Group Inc.'s profits. The Lake Forest, CA-based respiratory company reported net profits for the second quarter of 2005 of $22.8 million on revenues of $374.9 million. That compares to net profits of $29.1 million on revenues of $359.6 million in the same period last year.

    Meanwhile, the U.S. Department of Health & Human Services and U.S. Attorney's Office in Los Angeles are investigating Apria regarding "incomplete or inaccurate documentation supporting a portion of the company's Medicare billings" from mid-1995 through 1998, according to a statement released along with the earnings results. Discussions among the parties are ongoing, the company says.
     
  • Medical Home Products Inc. is growing. The St. Petersburg, FL-based provider of medical self-test kits and diabetic supplies recently announced that it has issued a letter of intent to acquire Strictly Diabetics Inc. of Lauderhill, FL. The purchase will boost Medical Home Products' client base and revenues and further its expansion into the Medicare and Medicaid market, says company President and CEO Paul Mathis.
     
  • Lincoln County, NC's long-running home care program will continue after all. In a 3-2 vote, the county board of commissioners reversed an earlier decision to stop funding the Lincoln County Home Health Agency, reports the Charlotte Observer. A 1,200-signature petition asked the board to reconsider (see Eli's HCW, Vol. XIV, No. 2).
     
  • Detroit-based home health agency Friends Who Care Inc. faces Medicaid fraud charges and a civil lawsuit.

    FWC allegedly submitted $895,000 worth of fraudulent claims to Medicaid, including $750,000 in services and $145,000 in mileage charges that the company couldn't substantiate in its patient files, charges state Attorney General Mike Cox. A Medicaid False Claims violation is a four-year felony and carries a maximum $50,000 fine.

    Cox's civil lawsuit against the company seeks restitution for the false Medicaid billings and more than $3.5 million in treble damages.
     
  • The American Association for Homecare has formed its committee on competitive bidding, which it prefers to call "restrictive contracting." The group will focus on the problems competitive bidding/restrictive contracting represents for small providers. Any qualified provider should be able to compete in the bid process, AAH says.

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