7/31/2019 Twin Med Case

1/6

TwinMed

Submitted By:

Apoorva Shetty 2011196

Dikshit Jain 2011018

Naman Gupta 2011220

Saikumar Thoraiyur 2011052

Vinayak Sridhar 2011183

7/31/2019 Twin Med Case

2/6

In 1990, Steve Rechnitz launched a latex glove business in his dorm room at Telsha college, aChicago-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 intoa $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.

Case Facts

7/31/2019 Twin Med Case

3/6

Before Regulatory Change

TwinMed Business Model

TwinMed having 15% margins compared to 40% margins noted by US industrystandards.

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 toincrease their customers list.

Limit the number of brands, i.e. one brand per product (Making TwinMed a larger account ofthose limiting brand)

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

7/31/2019 Twin Med Case

4/6

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 EnternalSegment and give an edge to the competitors.

Humanitarian grounds

TwinMeds business line of credit from GMAC was also tapped out.

Obstacles Road Blockers

7/31/2019 Twin Med Case

5/6

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 anydiscrepancy, they can penalize TwinMed recovering the Actual Costs and othercharges.

File petition for Trial Courts to accelerate the process

Take the Support of Nursing Homes ( Customers) and Existing Enternal Patient baseto put pressure on Medicare to accelerate the process.

Explain the situation to Bank Higher Authorities and convince them to increase theLine 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

Recommendations

7/31/2019 Twin Med Case

6/6

Thank You