What changed in this filing

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Item 1. Business

2023-03-02 compared with 2022-03-07 · 33 added, 47 removed, 260 unchanged (24% of the section changed)

1 unchanged sentence

Viemed Healthcare, Inc.

(the "Company" or "Viemed"), through its subsidiaries, is a provider of in-home durable medical equipment ("DME") and post-acute respiratory healthcare services in the United States.

The Company’s service offerings are focused on effective in-home treatment with clinical practitioners providing therapy and counseling to patients in their homes using cutting edge technology.

The Company currently serves patients in 47 states in the United States.

(the "Company" or "Viemed"), through its subsidiaries, is a provider of home medical equipment ("HME") and post-acute respiratory healthcare services in the United States.

The Company’s service offerings are focused on effective in-home treatment with clinical practitioners providing therapy and counseling to patients in their homes using cutting edge technologies.

The Company currently serves patients in all 50 states of the United States.

Viemed’s primary objective is to focus on the growth of its business and thereby solidify its position as one of the largest providers of home therapy for patients suffering from respiratory diseases that require a high level of service, with such programs being designed specifically for payors to have the ability to treat patients in the home for less total cost and with a superior quality of care.

Viemed's services include respiratory disease management, neuromuscular care, in-home sleep testing and sleep apnea treatment, oxygen therapy, and respiratory equipment rentals.

We hold a 49% equity interest in Solvet Services, LLC, an unconsolidated joint venture which provides health care support to state and federal governments.

We also hold an approximate 5% equity interest in VeruStat, Inc, a company focusing on remote patient monitoring (“RPM”).

The investment is part of an ongoing initiative to enable our salesforce to offer a new revenue source to its nationwide physician network.

RPM platforms allow physicians to bill for in-home monitoring of patients that are struggling with chronic diseases.

The VeruStat RPM solution can be placed in the home in conjunction with Viemed’s existing patient engagement platform (“Engage”).

During 2021, we formed Viemed Healthcare Staffing LLC, a healthcare staffing division.

The underlying recruiting platform is expected to support internal resource fulfillment as well as external, contractual placement of allied health and nursing professionals.

Viemed expects to use an organic growth model whereby expansion is effectuated through existing service areas as well as in new regions through a cost efficient launch that reduces location expenses.

Viemed's services include respiratory disease management, neuromuscular care, in-home sleep testing and sleep apnea treatment, oxygen therapy, respiratory equipment rentals, and healthcare staffing services.

Viemed expects to use a growth model whereby expansion is effectuated through existing service areas as well as in new regions through a cost efficient launch that reduces location expenses.

Viemed expects that it will continue to employ more respiratory therapists ("RTs") in order to assure the high service model is accomplished in the home.

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Viemed focuses on disease management and improving the quality of life for respiratory patients through clinical excellence, education and technology.

Its service offerings are based on effective home treatment with respiratory care practitioners providing therapy and counseling to patients in their homes using cutting edge technology.

Viemed also focuses on providing in-home sleep testing for sleep apnea sufferers.

Viemed is one of the largest independent non-invasive ventilator providers in the United States with a service coverage area of 47 states in the United States and prospects to grow into further territories.

Corporate History and Background

Viemed’s business, which has been operating since 2006, was acquired by Quipt Home Medical Corp., a corporation formerly known as Patient Home Monitoring Corp.

(“PHM”), in June 2015.

Viemed was incorporated under the Business Corporations Act (British Columbia) on December 14, 2016 as a wholly-owned subsidiary of PHM in order to effect the spin-out of Viemed’s business from PHM pursuant to an arrangement under the provisions of Division 5 of Part 9 of the Business Corporations Act (British Columbia).

The spin-out was completed in December 2017.

Its service offerings are based on effective home treatment with respiratory care practitioners providing therapy and counseling to patients in their homes using cutting edge technologies.

Viemed also provides in-home sleep testing for sleep apnea sufferers and health care staffing services for healthcare facilities.

Viemed is one of the largest independent non-invasive ventilator providers in the United States with a service coverage area of all 50 states of the United States and intends to continue to grow rapidly through increased market penetration.

Corporate Information

Viemed Healthcare, Inc.

is a holding company incorporated in British Columbia under the Business Corporations Act in December 2016.

The common shares of Viemed trade in the United States on the Nasdaq Capital Market under the trading symbol "VMD" and trade in Canada on the Toronto Stock Exchange (the "TSX") under the trading symbol “VMD.TO”.

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Copies of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are available free of charge through our website (www.viemed.com) as soon as reasonably practicable after we electronically file the material with, or furnish it to, the Securities and Exchange Commission.

These reports and other information

VIEMED HEALTHCARE, INC.

(Tabular amounts expressed in thousands of U.S.

Dollars, except per share amounts)

December 31, 2021 and 2020

are also available, free of charge, at www.sec.gov.

These reports and other information are also available, free of charge, at www.sec.gov.

Information contained on any website referred to in this Annual Report on Form 10-K is not part of this Annual Report on Form 10-K.

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• Home Medical Equipment :

Viemed provides respiratory and other home medical equipment solutions (primarily through monthly rental arrangements), including home ventilation (invasive and non-invasive), BiPAP (bi-level positive airway pressure) and CPAP (continuous positive airway pressure) devices, percussion vests, and other medical equipment.

Revenue derived from the rental and sale of home medical equipment represented a combined 93.8% and 98.1%, respectively, of Viemed’s 2022 and 2021 traditional revenue, excluding COVID-19 response sales and services.

Viemed provides home medical equipment through the following service programs:

VIEMED HEALTHCARE, INC.

(Tabular amounts expressed in thousands of U.S.

Dollars, except per share amounts)

December 31, 2022 and 2021

◦ Respiratory disease management , including treatment of Chronic Obstructive Pulmonary Disease (“COPD”), aims to improve quality of life and reduce hospital readmissions by using proven methodology and leading technologies, such as non-invasive ventilation (“NIV”), percussion vests, and other therapies.

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Oxygen therapy may be performed in the home or in another setting.

◦ Sleep apnea management provides related solutions and/or equipment such as Positive Airway Pressure (“PAP”), the AutoPAP (automatic continuous positive airway pressure), and BiPAP machines.

◦ Sleep apnea management provides sleep solutions and/or equipment such as Positive Airway Pressure (“PAP”), the AutoPAP (automatic continuous positive airway pressure), and BiPAP machines.

• In-home sleep testing :

Viemed provides in home sleep apnea testing services, which is an alternative to the traditional sleep lab testing environment.

These services represented 1.9% and 1.4%, respectively, of Viemed’s 2021 and 2020 traditional revenue, excluding COVID-19 response sales and services.

• Healthcare staffing :

Viemed provides healthcare staffing and recruitment services to supplement the workforce needs of third party healthcare facilities by utilizing its network of healthcare professionals.

Monthly rental revenue from ventilators represented approximately 68% and 77%, respectively, of Viemed's 2022 and 2021 traditional revenue, excluding COVID-19 response sales and services.

While Viemed plans to continue investigating and introducing new complimentary products and services and further expanding the coverage of existing products, home ventilation (both invasive and non-invasive) is expected to continue to represent the substantial majority of Viemed’s revenue.

While Viemed plans to continue investigating and introducing new complementary products and services and further expanding the coverage of existing products, home ventilation (both invasive and non-invasive) is expected to continue to represent the substantial majority of Viemed’s revenue.

Patients suffering from neuromuscular or respiratory diseases experience severe difficulty in breathing and require assistance from a ventilator to effectively move air in and out of their lungs.

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Ventilators are also included in Medicare’s Frequently & Substantially Serviced payment category and are reimbursed under the Healthcare Common Procedure Coding System (“HCPCS”) codes E0465 (invasive ventilation), E0466 (non-invasive ventilation) and E0467 (multi-function ventilation).

Viemed’s patients are served by licensed RTs in each of the 47 states where it provides its services.

Each of these RTs is a member of the American Association for Respiratory Care (“AARC”).

Viemed’s patients are served by RTs who are each licensed members of the American Association for Respiratory Care (“AARC”).

The RT licensure and AARC membership ensure that Viemed is able to provide patients with in-home respiratory care services, equipment setup, training, and on-call services with state-of-the-art clinical protocols.

Additionally, Viemed’s Chief Medical Officer, Dr.

William Frazier, is a board certified pulmonary disease specialist.

William Frazier, is a board certified pulmonary disease specialist and oversees clinical protocols.

Viemed sources hardware from vendors and pairs them with industry leading respiratory therapy.

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Viemed has historically funded patient related capital expenditures through cash generated from operations or financing through an affiliate of its primary vendors.

Additionally, Viemed patient related capital expenditures can be financed through an existing line of credit of up to $10.0 million pursuant to a loan agreement with an expiration date of May 1, 2023.

Amounts borrowed under the loan agreement will bear interest at a rate based on the WSJ prime rate plus a margin of 0.50%, with a 3.50% interest rate floor and will be secured by

VIEMED HEALTHCARE, INC.

(Tabular amounts expressed in thousands of U.S.

Dollars, except per share amounts)

December 31, 2021 and 2020

substantially all of Viemed's assets.

While Viemed currently has no immediate plans to draw on this facility, the line of credit allows flexibility in funding future operations.

Additionally, Viemed patient related capital expenditures can be financed through its existing commercial credit facilities comprised of a revolving credit facility of up to $30.0 million, a delayed draw term loan facility of up to $30 million, and an accordion feature allowing the Company to increase the size of such facilities by up to an additional $30 million, subject to certain conditions, for a total borrowing capacity of up to $90 million.

While Viemed currently has no immediate plans to draw on these facilities, the credit facilities allow flexibility in funding future operations.

Government Regulation

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and even the termination of our ability to provide services, including those provided under certain government programs such as Medicare and Medicaid.

VIEMED HEALTHCARE, INC.

(Tabular amounts expressed in thousands of U.S.

Dollars, except per share amounts)

December 31, 2022 and 2021

Centers for Medicare and Medicaid Services

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If we are found to be out of compliance with accreditation standards, our enrollment status in the Medicare program could be jeopardized, up to and including termination.

CMS also requires that all DME providers who bill the Medicare program maintain a surety bond of $50,000 per National Provider Identifier (“NPI”) number which Medicare has approved for billing privileges.

CMS also requires that all durable medical equipment ("DME") providers who bill the Medicare program maintain a surety bond of $50,000 per National Provider Identifier (“NPI”) number which Medicare has approved for billing privileges.

We obtained surety bonds before the October 2009 deadline, and such bonds automatically renew annually.

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DME MACs continue to conduct extensive pre-payment and post-payment reviews across the DME industry and have determined a wide range of error rates.

For example, error rates for continuous positive airway pressure claims are estimated to be in between 24.9% to 36.7% based on the 2021 Medicare Fee-for-Service Improper Payment Data.

DME MACs have repeatedly cited documentation insufficiencies as the primary reason for claim denials.

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In 2019, CMS included non-invasive ventilator products on the list of products subject to the competitive bidding program in Round 2021.

On March 9, 2020, CMS announced that due to the novel coronavirus ("COVID-19") pandemic, the United States President's exercise of the Defense Production Act, public concern regarding access to ventilators, and the non-invasive ventilators product category being new to the competitive bidding program, non-invasive ventilators were removed as a product category from Round 2021.

On March 9, 2020, CMS announced that due to the COVID-19 pandemic, the United States President's exercise of the Defense Production Act, public concern regarding access to ventilators, and the non-invasive ventilators product category being new to the competitive bidding program, non-invasive ventilators were removed as a product category from Round 2021.

On October 27, 2020, CMS announced that it had removed 13 of the 15 remaining product categories from Round 2021, including oxygen and PAP devices, because the payment amounts did not achieve expected savings.

The next competitive bidding round is anticipated to begin on January 1, 2024.

As a result of these announcements, we retain the ability to continue to furnish non-invasive ventilators and oxygen and PAP devices for all of our Medicare accredited areas.

However, we are uncertain if non-invasive ventilators and oxygen and PAP devices will be included in future competitive bidding programs.

The current Round 2021 contracts expire on December 31, 2023 and CMS has not announced a new round of competitive bidding.

Historically, CMS announces new rounds of competitive bidding and starts the process approximately 18 months prior to the contract start date.

We cannot predict the outcome of the competitive bidding process for contracted supplier selection or the impact of the competitive bidding process on reimbursements to our existing customers.

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The federal government may also seek civil monetary penalties for a wide variety of other conduct, including offering remuneration to influence a Medicare or Medicaid beneficiary’s selection of providers and violations of the Federal Anti-Kickback Statute.

Although we believe that we are in compliance with the Federal False Claims Act as well as the Civil Monetary Penalties Law, if we are found in violation of the same, we could be subject to various liabilities and penalties, including fines ranging from $11,665 to $23,331 for each false claim violation of the Federal False Claims Act and varying amounts based on the type of violation of the Civil Monetary Penalties Law, plus up to three times the amount of damages that the federal government sustained because of the act of that person.

Although we believe that we are in compliance with the Federal False Claims Act as well as the Civil Monetary Penalties Law, if we are found in violation of the same, we could be subject to various liabilities and penalties, including fines ranging from $13,508 to $27,018 for each false claim in violation of the Federal False Claims Act (as of 2023, and subject to annual adjustments for inflation) and varying amounts based on the type of violation of the Civil Monetary Penalties Law, plus up to three times the amount of damages that the federal government sustained because of the act of that person.

In addition, the federal government may also seek exclusion from participation in all federal healthcare programs.

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For the years ended December 31, 2022 and 2021, Viemed had no customers that accounted for 10% or more of its consolidated traditional revenue streams.

However, Viemed had COVID-19 emergency response sales from a customer that accounted for 13% of total revenue for the year ended December 31, 2020.

Viemed earns revenues by seeking reimbursement from Medicare and private health insurance companies, with the Medicare program of the United States government being the primary entity making payments.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business