HME News

OCT 2018

HME News is the monthly business newspaper for home medical equipment providers. This controlled circulation publication reaches 17,100 home medical equipment services providers, including traditional HME dealers & suppliers, hospital- and pharmacy-o

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■ Aeroflow's goal is to acquire more patients, achieve scale, says Andrew Amoth. See story page 16. M&A: What will be impact of bid changes . . . . . . . . . . . . 14 Inc . list loses luster among HME providers . . . . . . . . . . . 14 Lincare acquires 'gem' with J&L Medical . . . . . . . . . . . . . 14 AZ MediQuip gives back . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Pat Clifford thinks there will be more of a wait-and-see approach, especially considering CMS still needs to finalize its plans for longer-term changes like using a clearing price to set payment amounts for the next round of bidding. "Unless the paradigm real- ly changes, the rates still aren't great," said Clifford, managing director, home medical equip- ment, for The Braff Group. "Wait and see—that's the way the indus- try has rolled the last few years and through the iterations of com- petitive bidding." Reimbursement might be low, but at least with the bid program in place for years now, it's also stable, Clifford says. "Profit and loss statements have been some- what predictable of late, so I think buyers would 14 hme news / october 2018 / By Theresa Flaher T y, Managing e ditor NEW YORK – Every year around this time, HME News usual- ly gets a small flurry of press releases from HME providers who have landed on Inc. Mag- azine's annual 5000 list of the fastest growing privately held companies in the U.S. This year: crickets. A quick, highly unscientific perusal of the 375 healthcare companies on this year's list confirmed t h e n o t a b l e a b s e n c e o f s e v e r a l p a s t winners. Where, we w o n d e r e d , were such list s t a l w a rt s a s Cape Medical Supply, Caroli- na's Home Medical Equipment, Aeroflow Healthcare and Home Oxygen Company? Had growth leveled off? Has the list lost its luster? Both, it turns out. Home Oxygen Company hasn't submitted for the last two years, says Todd Usher, co- founder of the Modesto, Calif.- based provider. "We were in fact flat or a lit- tle behind because of the rural rollout (of competitive bid- ding)," he said. "This year, we are growing; however, we are having trouble seeing the value in such a list to our company." Placing on the list gives com- panies recognition, marketing opportunities and good old bragging rights. By T. Flaher T y, Managing e ditor MIDDLEBURY, Conn. – When Lin- care bought J&L Medical Ser- vices, it got a "gem," says one industry analyst. J&L Medical, a provider of home respiratory and sleep therapy equipment and sup- plies, serves patients from seven locations throughout Connecticut and south- w e s t e r n M a s s a c h u s e t t s . The company, named "Best Home Respiratory Provider" by HME News in 2007, was founded by John Loyer and Lynn Tata Plummer in 2003. By Theresa Flaher T y, Managing e ditor I T ' S STILL early, but CMS's proposed changes to the competitive bidding program could renew M&A activity, analysts say. In the short term, the agency wants to imple- ment an any willing provider provision when the current bid contracts expire, allowing any Medi- care-enrolled provider to serve beneficiaries while it overhauls the program. "Now that you don't have these handcuffs on, you can go out and grow organically or through acquisitions," said Brad Smith, managing director and partner at Vertess. "That will increase market competition and drive more demand." Unfortunately, there's still the problem of low reimbursement. While providers who have been shut out of the Medicare program can get back in on Jan. 1, they will do so at the current fee schedule amounts. M&A: What will be impact of bid changes? Lincare buys J&L's scale "John focused and did a real- ly good job in the area of sleep," said Jonathan Sadock, manag- i n g p a r t n e r / CEO of Para- gon Ventures, which advised J&L Medical on the transac- tion. "He built enough scale b e h i n d i t t o really make a difference in that marketplace. Lincare really got a gem with J&L." Terms of the deal between J&L Medical and Lincare were not disclosed, but Lincare will maintain J&L Medical's cur- rent locations and most of its staff, according to a press release. For his part, Loyer credited his employees for the compa- ny's success over the years. "I am very proud to have worked with the best team who share a common goal: delivering equipment and services in a caring, compe- tent and professional man- ner," said Loyer, CEO, in the release. J&L Medical's success Inc. list loses luster for providers 'Most fun I've had all year' When a July monsoon brought a tree down on the Oso family home, 76-year-old Ellen Oso, partially paralyzed from a stroke, was impaled though the leg while in her bed. Local news Channel 3's Surprise Squad reached out to AZ MediQuip offering to pay for half the cost of a fully- electric hospital bed to surprise her upon her release from rehab. Mark Nicotera, president of AZ MediQuip, was on hand to describe the bed's features when it was delivered. "While I was grateful for the opportunity to work with the Channel 3 Surprise Squad, when Ms. Oso came home and we introduced her to her new bed, well, this is the most fun I've had all year," Nicotera told HME News. "Just a great experience." I N C . 5 0 0 0 L I S t S E E p A g E 1 6 J & L M E d I C A L S E E p A g E 2 9 a N a LY s t s S E E p A g E 1 6 moneyline 'The private equity world really likes the demographics of the HME space,' says Pat Clifford of The Braff Group J . Sadock Don Davis Brad Smith Providers Briefs Lincare pays $5.25 m to resolve allegations CLE a RW at ER, Fla. – Lincare has paid $5.25 mil- lion to resolve allegations that it violated the federal False Claims Act and the Anti-Kick- back Statute by offering illegal price reduc- tions to Medicare beneficiaries, according to the U.S. Attorney's Office for the Southern District of Illinois. The government alleged that, from 2011 to 2017, Lincare attempted to gain a competitive advantage in the mar- ket by unlawfully waiving or reducing co- insurance, co-payments and deductibles for beneficiaries who participated in a Medicare Advantage Plan operated through a private insurer. The allegations were first brought to light in a 2015 whistleblower lawsuit filed by Brian Thomas, a former billing supervisor at Lincare, who will receive $918,750 from the settlement proceeds. Valley h ealthcare, n orthwest m edical merge RENO, Nev. – Great Elm Capital Group has partnered with Mesa, Ariz.-based Valley Healthcare Group to acquire Portland, Ore.- based Northwest Medical and combine the two companies. The deal creates a lead- ing regional provider of sleep and respira- tory equipment and services across Arizona, Nebraska, Washington, Oregon and Alaska serving about 70,000 patients annually, ac- cording to a press release. "With Great Elm's support, we believe that we will continue to grow organically, as well as be an acquirer of choice for other sleep and respiratory focused businesses that share our com- mitment to high-quality patient care," said Ron Evans, co-founder and CEO of Valley Healthcare. c itizens finds stolen hme for sale on e b ay BOLIV a R, Mo. – Citizens Memorial Healthcare has terminated an employee after he alleg- edly stole home medical equipment from the company and listed it for sale on eBay, ac- cording to the Bolivar Herald Free Press. The director of CMH's HME division contacted the Bolivar Police Department to report that three Trilogy 100 vents, which cost $9,000 each, were allegedly stolen and listed for sale on eBay under an account registered to employee Joseph Gambino. Gambino, who faces a class C felony charge in Polk County Circuit Court, had 401 items related to medi- cal equipment listed on his eBay account, the newspaper reported. s hort takes: m edical s ervice c o., c are c entrix Cleveland-based Medical Service Co. has been named a 2018 NorthCoast 99 winner. Winners represent the best workplaces in northeast Ohio. It's the seventh time the pro- vider has been recognized…Leslie Norwalk has been elected to CareCentrix's board of directors. Norwalk has more than two de- cades worth of healthcare experience, in- cluding serving as Acting CMS Administrator during the Bush Administration.

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