HME News

APR 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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Medicare Market Marker The eSolutions Denial Tracker SOURCE: ESOLUTIONS the eSolutions denial tracker is an index of the percentage of Medicare and commercial claims rejected on a monthly basis. The most recent month's data repre- sents an analysis of approximately 1,141,652 Medicare claims and 3,607,390 commercial claims adjudicated between February 1, 2018, and Febuary 31, 2018. The index is a categorized and weighted analysis of claims fi led by eSolutions customers. HMENEWS.COM 5/17 6/17 8/17 11/17 2/17 2/18 1/18 9/17 7/17 10/17 12/17 3/17 4/17 Most viewed stories in February 1. Stakeholders 'aghast' at bid proposal 2. CMS upends oxygen CMN 3. Round 2019 'Unfeasible if CMS sticks to business as usual' 4. Spending bill includes DME-related provisions 5. Invacare sums up 2017, sizes up 2018 6. Stakeholders unrelenting on IFR 7. Home Oxygen Services, Philips partner on 'virtual' model *The Medicare Market Marker provides a monthly look at the number of Medicare benefi ciaries for whom the four MACs have allowed a claims payment. SOURCE: PDAC (number of allowed benefi ciaries) E 1 3 9 0 : O X Y G E N C O N C E N T R A T O R E 0 2 6 0 : S E M I - E L E C T R I C H O S P I T A L B E D (number of allowed benefi ciaries) E 0 6 0 1 : C P A P (number of allowed benefi ciaries) K 0 0 0 1 : S T A N D A R D W H E E L C H A I R (number of allowed benefi ciaries) (number of allowed benefi ciaries) K 0 8 2 3 : P O W E R W H E E L C H A I R * * HME NEWS POLL HMEDATABANK.COM The HME DataBank has the latest Medicare reimbursement data for the top 1,000 HME providers nationally in 103 key product cat- egories, as well as for all of the products in the NCB program. You can determine your market share, look for new product opportu- nities and check out your competition using the latest available Medicare data. Go to to learn more. data! data! **We are now tracking K0823 claims with certain modifi ers (NU, UE or RR/KH) to better refl ect the actual number of new allowed benefi ciaries under the 13-month capped rental. 12/16 9/17 8/17 10/17 11/16 1/17 2/17 6/17 7/17 3/17 4/17 5/17 "I don't think it will be a hot year, but I purchased a DME and may expand." —Anonymous. "With the uncertain- lty in reimbursement, I don't see much M&A action, except for com- panies needing to exit because they are los- ing money." —Anonymous "Who's left to buy or sell?" —Dave Anderson, Anderson's Medical Products, Terre Haute, Ind. 119,583 Region D 104,546 Region B 76,205 Region A 28,721 Region C 17,036 Region A 7,161 Region D Region B 14,196 Region B 58,129 Region D 73,367 Region C 113,074 Region A 47,845 327 Region B Region D 276 910 Region C Region A 139 46,876 Region C 18,359 Region B 15,754 Region D 19,560 Region A Month Percent denied Source: The Braff Group, 412-833-5733. The Braff Group M&A Insider Rehab (20.8, 18.5) DME (16.2, 15.7) Respiratory (13.1, 10.4) 12/16 9/17 8/17 10/17 11/16 1/17 2/17 6/17 7/17 3/17 4/17 5/17 12/16 9/17 8/17 10/17 11/16 1/17 2/17 6/17 7/17 3/17 4/17 5/17 12/16 9/17 8/17 10/17 11/16 1/17 2/17 6/17 7/17 3/17 4/17 5/17 NewsPoll based on 43 respondents. 215,020 Region C HME NEWS / APRIL 2018 / WWW.HMENEWS.COM Databank Do you agree that 2018 will be a hot year for M&A in the DME industry? This month we examine debt capacity trends for transactions in the lower middle market, defi ned here as those with a total economic value of $10 million to $250 million. Generally, as the economy has improved, lenders have been loosening their credit limits, closing out above 4x earnings before interest, taxes, depreciation and amortization (EBITDA) in 2017 for the fi rst time in fi ve years. Perhaps most notable is what we are seeing at the smallest end of the market—that is, deals between $10 million to $25 million. Rarely do we see debt capacity at these lev- els get much beyond 3x. But according to GF Data, borrowing limits for these sized transactions jumped appreciably from 2016 to 2017, cross- ing into 4x territory. This bodes well for sellers as greater access to credit can support higher valuations. 23 12/16 9/17 8/17 10/17 11/16 1/17 2/17 6/17 7/17 3/17 4/17 5/17 Do you plan on buying or selling a company this year?

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