HME News

AUG 2019

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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Providers HME NEWS / AUGUST 2019 / WWW.HMENEWS.COM 13 WALTHAM, Mass. – Focus Respiratory, a wholly owned subsidiary of Great Elm DME, has acquired the respiratory assets of Omaha, Neb.-based Midwest Respiratory Care in an all-cash transaction valued at about $6.25 million. The price tag is 4.6x MRC's EBITDA, less capital expenditures for the 12 months ended April 30, 2019. "We believe there is a significant oppor- tunity to make additional acquisitions in existing and adjacent geographies," said Peter A. Reed, CEO of Great Elm Capital, parent company of Great Elm DME. "With the acquisition of Midwest Respiratory, we have now scaled our platform in the Mid- west to complement our existing platforms in Arizona and the Pacific Northwest. The acquisition also meaningfully diversifies our service offering and payer base in this region, as well as supplements our compa- ny-wide organic growth." Great Elm Capital partnered with Mesa, Ariz.-based Valley Healthcare Group to acquire Portland, Ore.-based Northwest Medical, combining the two companies, last year. The MRC acquisition expands Great Elm's geographic reach in the Midwest beyond its existing presence in Omaha, adding locations in Lincoln, Neb., Fort MONEYLINE Great Elm DME expands Madison, Iowa, and Lenexa, Kan. It also presents potential cost synergies, includ- ing combining corporate offices in Omaha, implementing best practices in billing and collection, and purchasing rental equipment. MRC will focus its business on providing DME to hospice customers. RMS BUYS MED CITY MOBILITY MINNEAPOLIS – Reliable Medical Supply has made its first acquisition since taking on an outside investor last year: Med City Mobility. Med City, founded in 2000, has locations in Austin, Faribault and Rochester, Minn., providing complex rehab technology and HME. "When we decided to launch an aggres- sive growth plan in late 2018, we targeted companies who share the same patient- centric attitude that has led to RMS's suc- cess," said Debra Kalk, CEO of RMS. "By partnering with Med City, I am confident we can continue to improve care solutions across Minnesota." Last November, RMS announced a recap- italization of its equity by Seven Hills Capi- tal, a Chicago-based "operator-centric" pri- vate equity firm. RMS also provides complex rehab and HME, as well as respiratory products. HME and VGM have pulled out all the stops to educate providers to "bid smart," offering in-person educational summits, webcasts and a competitive bidding website, www. dmecbpeducation.com, all of which pro- viders say they have taken full advantage of in recent months. "We went to the VGM summit in Char- lotte," said Andrew Trammell, president of Carolina's HME in Charlotte, N.C. "We got a great grasp on the mechanics of the new system. The more people that understand how this works, the better off we'll all be." One game changer for providers: bid calculators, which both CMS and industry stakeholders have created to help provid- ers navigate lead-item pricing. "It's an absolute must to use that thing," said Craig Rae, owner of Penrod Medical Equipment in Salisbury, N.C. "If you don't, you are headed for disaster and probably disaster for the industry." The bid window is open from July 16 to Sept. 28. Providers landed across the spectrum as to when they planned to sub- mit their bids. "I like to wait for a rainy Saturday and then spend several hours in the office," Rae said. "Because of the calculator, it will take me one-tenth of the time, because I don't have to go through all of the items, comparing costs and looking at all the vendors." Provider Chris Rice says he's been "on top of things" since the final rule on Round 2021 was released in November. "I'll have a bid in as soon as the window opens," said Rice, CEO of Diamond Respiratory Services in Riverside, Calif. "But I'll keep the bid open and probably continue to modify it and tweak it up until the bid window closes." HME to no avail. "We're a fairly small company," he said. "We really don't know what to do. We are considering dropping Tricare." Laura Williard, vice president of payer relations for AAHomecare, recommends pro- viders file a formal grievance with Humana, which has 30 days to respond. If they don't get a response, they should summarize their issues and send it by mail to the Defense Health Agency, which oversees the Tricare contract. "We've filed multiple letters of concern with the agency and we are asking that providers start making these complaints," she said. "Maybe this will get a little more attention for this issue and they will fix the claims processing. I think that's really where the issues are." Provider Chris Smythe says things have improved somewhat since his accounts receivables with Tricare hit an all-time high in November 2018. "We've been able to work with them to reduce that by close to 50%," said Smith, vice president at Tycon Medical, which has loca- tions in Norfolk and Portsmouth, Va. "We are still having some specific issues and get- ting strange requests to provide CMNs for patients that already have the CMN in the system." HME I think they are very well-positioned," he said. A spokesman for DFB said the company couldn't comment ahead of the deal closing some time in the fourth quarter. HME to fill a script or exchange oxygen tanks." The market is also a way for the family- owned Barnes Healthcare, which offers oxygen, CPAP and non- invasive ventilation ser- vices, pharmacy, enteral nutrition and disease management, to stand out from the competi- tion, says Sardina. " O t h e r p h a r m a c i e s like Walgreens would never allow somebody onto their property to do this," she said. The FARMacy market is simply another way to help patients manage their health, says Sardina. "We have a lot of patients with chron- ic disease and nutrition is a big part of that," she said. "Even if you don't have a chronic disease, nutrition plays a huge role in prevention and at Barnes we are all about that. One of our chairman's quotes is 'I'll know I'm successful when I have no patients any more.'" HME TRICARE C O N T I N U E D F R O M P R E V I O U S PA G E PROVIDERS PREP TO SUBMIT BIDS C O N T I N U E D F R O M P R E V I O U S PA G E BARNES C O N T I N U E D F R O M P R E V I O U S PA G E ADAPTHEALTH C O N T I N U E D F R O M P R E V I O U S PA G E "What we focus at on at Barnes is our patients being healthy and that includes food." Peppers from the FARMacy. A. Trammell Craig Rae Empowering a New Generation of HME Providers AAHomecare is proud to lead advocacy, lobbying, and payment reform efforts for home medical equipment providers, manufacturers, and other stakeholders in our industry at the national and local levels. Our efforts include engaging Congress, federal agencies, and state Medicaid authorities to support sustainable reimbursement rates and reign in unncecessary regulations. Find your voice through AAHomecare membership, and help us advance the value of today's HME provider across the healthcare industry. Find Your Voice www.aahomecare.org Join Today! Together we can succeed. Contact Michael Nicol, AAHomecare's senior director of membership, at 202-372-0749, to explore how the Association can help you succeed. Analysis Advocacy Support

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