TwinMed Caring for You As You Care for Others

Submitted By: Apoorva Shetty 2011196 Dikshit Jain 2011018 Naman Gupta 2011220 Saikumar Thoraiyur 2011052 Vinayak Sridhar 2011183

Case Facts
In 1990, Steve Rechnitz launched a latex glove business in his dorm room at Telsha college, a Chicago-based Jewish preparatory school. Taken the first big lot of 15 million gloves financed by Rechnitzs friends father. In 1993, Rechnitz and his partner formed a corporation called Latex Exchange. In 1994, Steve Rechnitz formed a separate entity called Latex Depot Depot added disposable diapers to its latex glove business. By 1996, Latex Depot had grown into a $3 million business. In 1996, Shlomo Rechnitz buy out Steves partner business. In 1997, TwinMed came into existence due to investments offered by Latex Depots Customer In 2001, Changing their Business Strategy After Regulation Change. In 2004, Completed buyout from BS Investor In 2008, Revenue generated from Eternal Segment was USD 1 Million. In 2009, Medicare discontinued Reimbursements for investigation purposes.

Before Regulatory Change

TwinMed Business Model

TwinMed having 15% margins compared to 40% margins noted by US industry standards.
Problem Statement
Low Volume which in turn meant little buying power with manufacturers

Options
Increase their volume to extract favorable pricing from manufacturers and find the way to increase their customers list. Limit the number of brands, i.e. one brand per product (Making TwinMed a larger account of those limiting brand)

No caps of Reimbursements, the most heavily Medicare-dependent nursing homes were not compelled by lower cost.

Obstacles Road Blockers

In 2009 Medicare freeze TwinMed accounts. Nebraska based subcontractor halted all Enternal reimbursement claims until the enteral supply to the concerned patients was validated.

Predicament -> Continue Or Not to Continue the business in Enternal Segment

Constraints The audit can take several years. Cutting the supplies to nursing homes is just like getting out from Enternal Segment and give an edge to the competitors. Humanitarian grounds TwinMeds business line of credit from GMAC was also tapped out.

Recommendations
Explain the Situation to Higher Authorities of Medicare and try to Convince them to accelerate the Audit Process. Convince Medicare Team to keep reimbursing the claims and if in case of any discrepancy, they can penalize TwinMed recovering the Actual Costs and other charges.

File petition for Trial Courts to accelerate the process

Take the Support of Nursing Homes ( Customers) and Existing Enternal Patient base to put pressure on Medicare to accelerate the process. Explain the situation to Bank Higher Authorities and convince them to increase the Line of Credit temporarily. Look for other sources of Funding, i.e. FPO - Follow on Public Offering. Increase Product Line for Targeted Segments (65+) such as Respiratory Therapy, Ostomy, Urology and Durable Medical Equipment & Furnishings

Thank You