Home Health & Hospice Week

A big chunk of respiratory and durable medical equipment business may be up for grabs now that Apria Healthcare Group Inc. has pulled out of a contract with Gentiva Health Services' CareCentrix division. Gentiva's managed care division now is selecting home care providers to fulfill its contracts regionally rather than nationally, the Melville, NY-based home health giant says in a release. Lake Forest, CA-based DME giant Apria says it's not renewing the contract, which expired Dec. 31, 2003, because of an "inability of the parties to reach an agreement on contract terms for 2004 and beyond." The move will reduce Apria's 2004 revenue growth rate to the 5 to 7 percent range, the company says in a statement. Both companies say they will work closely together to ensure continuity of care for existing patients who are transferred to other providers. Analysts at investment firm Jeffries & Co. said "we applaud [Apria] management's decision to exit from this contract," which was worth about $45 million in annual revenues. "The profitability characteristics of the proposed contract were unacceptable," they judged. And Jeffries urged Gentiva management to give "serious thought to diversifying its revenue base either through new managed care contracts or through an expansion of its Medicare business." Some Medicare contractors got a taste of their own medicine when the HHS Office of Inspector General audited them for valid costs recently. The funds expended and reported to the Centers for Medicare & Medicaid Services by regional home health intermediary United Government Services in March 2003 passed muster, but the OIG did find some minor problems at the intermediary. "UGS misclassified certain reported amounts and did not always deposit cash receipts timely due to isolated internal control weaknesses," the OIG says in a summary of the report (A-01-03-00521). Meanwhile, the OIG found $370,602 of direct costs reported by DME regional carrier Cigna from 1996 to 2001 were unallowable, and $30.7 million of indirect costs were "considered unsupported and set aside for adjudication" by CMS (A-04-02-02022). Tennessee home health agencies finally are seeing results from two lawsuits filed against the state's TennCare Bureau, which administers Medicaid. TennCare beneficiaries have received a letter explaining that they are entitled to medically necessary home care, reports the Tennessee Association for Home Care. "If you need home health care for a medical reason, TennCare pays for as much as you need. They keep paying as long as you need it," says the TennCare letter. Among other allegations, the lawsuits charged that TennCare prevented beneficiaries from receiving home care in order to push them into skilled nursing facilities, which were paid for out of a separate fund. The plaintiffs in the lawsuits and their attorney Gordon Bonnyman settled the [...]