Home Health & Hospice Week

Board will consider alternate strategies to enhance value.

The worsening Medicare reimbursement environment has contributed to Highland Capital Management's offer to buy Brentwood, TN-based American HomePatient Inc.

Dallas, TX-based Highland, an American HomePatient stockholder, has become increasingly disappointed with the company's performance and sees challenges ahead for the company, reports the Nashville Business Journal.

American HomePatient has confirmed that its board of directors received a proposal to acquire all of the company's outstanding shares for $3.40 per share in cash from Highland, according to a release.

"While we remain focused on executing our operating strategy for the company, our board of directors has been and continues to be willing to consider alternative strategies to enhance stockholder value," Joseph Furlong, American HomePatient CEO, says in the release

American HomePatient has 265 centers in 34 states. Its product and service offerings include respiratory services, infusion therapy, parenteral and enteral nutrition, and home medical equipment.

• Gentiva Health Services Inc. has missed analysts' earnings estimates for the quarter ended Jan. 1. Melville, NY-based Gentiva reported net income of $6.3 million on revenues of $222.0 million, compared to a $6.9 million profit on $225.5 million in revenues for the same period in the previous year.

The decline was due in part to reduced business for Gentiva's managed care division, CareCentrix, the company says in a release. Gentiva announced last year that its contract with insurer CIGNA Healthcare was scaled back.

The earnings figures also include $3.6 million in revenue that came from a $5.5 million favorable decision from the Provider Reimbursement Review Board, the national home nursing giant notes.

Gentiva also has closed its previously announ-ced blockbuster acquisition of The Healthfield Group Inc. for $454 million in cash and stock. The acquisition of Healthfield, which has 130 locations primarily in southeastern states, will bring Gentiva's annual revenues to more than $1.1 billion, the company notes.

"Gentiva has also become one of the nation's top 10 hospice providers" through the purchase, the company says. Healthfield also includes durable medical and respiratory equipment services and infusion therapy services.

• The home care industry may see legislative conditions improve when House Ways and Means Committee Chair Bill Thomas (R-CA) retires after this session--or things could just get worse. Thomas, who has been a strong supporter of copays for home health agency services and competitive bidding for DME, has announced he won't seek reelection when his term expires this fall.

But Thomas' replacement--either Republican or Democrat--next session could push even harsher Medicare payment policies for home care providers, experts observe. One best-case scenario might be for House Ways and Means Health Subcommittee Chair Nancy Johnson (R-CT) to succeed Thomas. Johnson, who replaced Thomas as the subcommittee chair, has supported home care-friendly policies in the past.

• The Medicare Payment Advisory Commission isn't done with home care recommendations yet this year. In addition to the 2007 rate freeze endorsed in its March 1 report to Congress, MedPAC is considering recommending process measures for HHAs in its June report, according to the Commission's March 9 meeting agenda.

MedPAC is also researching hospice payment policy and reform, the agenda indicates.

• Your carrier or intermediary should take the necessary steps to pay up when an administrative law judge rules in your favor. But the contractor should not review the ALJ decision to see if the Centers for Medicare & Medicaid Services should overturn it, according to Transmittal 862, dated Feb. 17.

• Don't be surprised if your final HHA claims are holding, regional home health intermediary regional home health intermediary United Govern-ment Services warns in a recent Web site posting.

"Home health final claims that are sent to the Common Working File, beginning with the March 6, 2006, system cycle, will suspend with reason codes E6101 or E51#6," RHHI Cahaba GBA also explains in a message to providers. "We anticipate a resolution soon. Until the issue is resolved, the home health final claims, with reason codes E6101 or E51#6, will be held in status/location S MPRIC."

After the problem is resolved, the intermediary will release the claims to process normally. The temporary hold doesn't affect low utilization payment adjustment (LUPA) claims or requests for anticipated payment (RAPs).

• CMS has approved the Accreditation Commission for Health Care Inc. as a deemed status accrediting authority for HHAs through 2009, the agency says in the Feb. 24 Federal Register. "We have determined that ACHC's requirements for HHAs meet or exceed our requirements," CMS says.

ACHC also will apply to CMS for recognition as a national deemed status accreditation program for home medical equipment suppliers. The Raleigh, NC-based accreditor plans later in the year to submit its application to accredit suppliers seeking to participate in the Medicare or Medicaid programs, it says in a release.

• Meanwhile, the Joint Commission on Accreditation of Healthcare Organizations has revised its eligibility definition for HME services to include CMS quality standards.

The changes will align the organization with CMS requirements, JCAHO recently announced in its Homecare Bulletin. The eligibility changes will put JCAHO in sync with the Medicare Modernization Act of 2003, which requires all suppliers that bill under Medicare Part B to adhere to the quality standards.

• Albuquerque, NM-based Heritage Home Healthcare has acquired the home care division of Centrum Healthcare of Arizona for undisclosed terms. Heritage, which has four offices in New Mexico and one in Phoenix, will expand to three new Arizona markets with the acquisition, reports the New Mexico Business Weekly.

• Arcadia Resources Inc.'s revenues are up, but it's still in the red. The Southfield, MI-based provider of home care, staffing, and HME reported a loss of $813,000 on revenues of $33.3 million for the quarter ended Dec. 31, 2005, compared to net loss of $718,000 on $28.1 million in revenues for the same period in 2004.

Arcadia attributed the increase in revenues to assimilating and integrating 16 acquisitions since June 30, 2004 coupled with internal growth of 12 percent for the quarter and 15 percent for the three quarters ended Dec. 31, 2005. The company has completed two additional acquisitions since Dec. 31, 2005.