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Home Health & Hospice Week

Industry Notes:

Medicare Cuts Power Wheelchair Spending By 33%

Published on Thu Aug 26, 2004

Are you one of the many suppliers caught in the crossfire?

The Medicare cuts to power wheelchair spending are going deeper than ever intended, and beneficiaries and suppliers will pay the price.
 
So argues the Power Mobility Coalition, which says Medicare spending on power mobility products in 2004 will drop "a drastic 33 percent ... compared to 2003 levels." And 2004 spending, which PMC estimates will be $740 million, will be $100 million less than even 2002 levels. Expenditures for 2003 were $1.13 billion.
 
PMC generated its estimate using data pulled from the Statistical Analysis Durable Medical Equip-ment Regional Carriers (SADMERC), it says.
 
The Centers for Medicare & Medicaid Services "and its regional contractors are using the context of fraud and abuse to harm a great many needy beneficiaries and legitimate suppliers instead of enforcing laws that aim directly at those who are committing fraud," PMC executive director Erik Sokol charges in a release.

 

  • For-profit hospice chain VistaCare Inc. is facing numerous shareholder lawsuits after announcing it would take a $6.2 million reserve for Medicare cap overages and a $1.8 million overall loss for the quarter ended June 30 (see Eli's HCW, Vol. XIII, No. 29, p. 231). The suits charge the Scottsdale, AZ-based company with securities fraud.
     
    The company and its top execs "caused VistaCare's shares to trade at artificially inflated levels through the issuance of false and misleading financial statements," says San Diego law firm Lerach Cough-lin Stoia Geller Rudman & Robbins, one of the firms filing suits on behalf of shareholders.  An 18 percent drop in VistaCare's stock price after the reserve announcement sparked the suits, which were filed in Arizona federal court.
     
    VistaCare did not respond to a request for comment.

     

  • Sen. John Ensign (R-NV) is going to bat for DME and respiratory companies. In a recent letter to CMS, Ensign called for a "meaningful" dispensing fee for inhalation therapy to cover costs to providers, reports the American Association for Homecare. CMS recently announced a 90 percent cut to respiratory drug payment rates, but said it would consider increasing the dispensing fee for the drugs (see Eli's HCW, Vol. XIII, No. 28, p. 218).
     
    Ensign also called for CMS to carefully study the impending price reductions for DME items based on the Federal Employees Health Benefits Program (FEHBP), AAH says.

     

  • Home health agencies reporting disputes with other HHAs over beneficiary transfers have a bit more red tape to deal with at regional home health intermediary Cahaba GBA. Agencies Cahaba serves used to be able to simply report problems to customer service representatives over the phone, but now HHAs must fill out a required form to get help, the RHHI explains in its August newsletter to providers.
     
    And if you fail to fill out the form in full and mail or fax it in, it "will be returned to you to be completed and resubmitted," Cahaba warns. The notice and link to the new form are at     www.iamedicare.com/provider/newsroom/newslines/080104.pdf.

     

  • Disease management company Pediatric Services of America Inc. is on the hunt for a new CEO, says the Marietta, GA-based company with 120 offices in 22 states. CEO Joseph Sansone has retired, and PSAI Chairman Edward Wissing is stepping in to fill the role until the company appoints a successor. Wissing was CEO of American HomePatient Inc. from 1984 to 1998.
     
    The company reported sagging profit figures for the quarter ended June 30, although revenues were up. PSAI recorded net income of $1.0 million on revenues of $58.4 million, compared with a $1.3 million profit on $54.1 million in revenues for the same period in 2003.
     
    "Lack of revenue growth in our respiratory therapy equipment and services segment" is part of the problem, Wissing says in a release.

     

  • Amedisys Inc.'s stock price slid 12 percent to $25.91 per share in the days after the company announced it would make a public offering of 2 million shares of its common stock. The Baton Rouge, LA-based regional chain plans to use the proceeds "for general corporate purposes, including potential acquisitions," it says in a release.

     

  • Orlando, FL-based Rotech Healthcare Inc. has inked a 60-month agreement with Trac Medical Solutions Inc. to use its electronic certificate of medical necessity product, Trac says. The software also allows providers to process electronic written orders.
     
    Rotech, with its 500 locations, processes "several million" CMNs and orders annually, Trac says.

     

  • Louisville, KY-based Almost Family Inc. plans to push its home care business line, aiming to open four to six new visiting nursing locations in the next three quarters. The company's revenues for skilled nursing care at home grew 10 percent to $8.1 million in the six months ended June 30, compared to the same period in 2004, Almost Family says.
     
    The company's adult day care business line didn't fare as well, with a nearly 10 percent decrease in revenues to $5.9 million. Overall the company reported net income of $696,000 in the six months, down from $728,000 in the same period last year.

     

  • Hospice market consolidation continues, this time in Florida. The Hospice of the Treasure Coast and Hospice of Martin & St. Lucie will merge, following a unanimous vote from the organizations' boards of directors Aug. 20, reports the Palm Beach Post.
     
    The combined hospice organization will serve patients in Martin, St. Lucie and Okeechobee counties. Stuart-based Hospice of Martin & St. Lucie brings 170 full- and part-time employees, 204 patients and two inpatient facilities to the mix, while Fort Pierce-based Hospice of the Treasure Coast has 115 employees, 112 patients and one residential facility, the paper says.
     
    The combined organizations will be able to save money on overhead expenses like marketing and health insurance, execs said.

     

  • For-profit hospice chain Odyssey Health-care Inc. is expanding into Minnesota through its Fargo, ND office, reports the Associated Press. The Fargo office, which has served about 25 patients since its opening last year, will serve patients in the Minnesota counties of Clay, Becker, Norman, Otter Tail and Wilkin - within about a 55-mile radius of Fargo.

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