Bidding redirects wheelchair market

Wednesday, July 24, 2013

As it has with several other HME categories, it appears that competitive bidding is causing mobility providers to re-think and re-engineer wheelchair sales. For bid winners, wheelchair provision is, for all intents and purposes, a nonprofit venture. Those excluded from Medicare are seeking opportunities in the commercial realm, mobility manufacturers say.

Either way, competitive bidding is permanently altering a category that has long been the mainstay of the HME business.

“If a provider won the bid for this category, their focus has shifted to acquisition cost only,” said Lawrence de la Haba, senior vice president of business development for Atlanta-based Graham-Field Health Products. “For those providers that did not win the bid, they are focusing on areas outside of the Medicare-dependent business. This may be the retail sale of transport chairs, a renewed interest in the rehabilitation wheelchair market or the institutional market for wheelchairs.”

For instance, GF’s Everest & Jennings nameplate is promoting a new line of manual wheelchairs targeted to the hospital and clinic market, where quality and features differentiate the product, de la Haba said.

“While the volume is not as high as the homecare market, this segment remains profitable,” he said.

Another effective sales tactic is offering customers a choice of colored upholstery on specific wheelchair models, de la Haba said.

E & J also introduced a line of cushions that offer skin protection and positioning by reducing surface pressure.

“Our objective with these products is to address the specific needs of users through features and add-on products that will allow providers to sell into new markets or to sell more to their existing customers,” he said.

Ryan Sweeney, business manager of standard wheelchairs for Elyria, Ohio-based Invacare, has seen some growth in retail, both online and in-store, for manual chairs due to competitive bidding.

“Providers often view short-term wheelchairs as standard wheelchairs, and, in the new Medicare world, unprofitable,” he said. “These chairs, however, can be customized to the medical needs of their Medicare customers. Before providers make the shift to retail, they should make sure they are maximizing their current ‘low-active’ wheelchair opportunities. Accessories like anti-tippers, adjustable-height arms, and cushions and backs, are all billable and can deliver significant patient benefits. Ordering these accessories on chair, with the backs/arms etc. pre-installed can help enhance profit, operational efficiencies and, most important, patient care.”

While manual chairs are showing retail potential, de la Haba concedes that mobility packages that include bath safety products and hospital beds can be a tough sell.

“The opportunity we do see is that family members are willing to upgrade and supplement these products for their loved ones,” he said. “Once the family member realizes their relative needs a wheelchair, they may go out and purchase a new cushion or even a better lightweight chair.”

DEMO power

When Round 2 of competitive bidding begins in earnest, about half of the country will be subject to the program, “which means the other half will not be,” says Paul Komishock, general manager of government affairs for Exeter, Pa.-based Pride Mobility Products and Quantum Rehab.

“What this program has forced bid winners to do in the face of the severe reductions in payment amounts is to look to create business efficiencies and run as lean a business as possible,” he said.

The power mobility device demonstration program, which which requires prior authorizations in seven states, has so far been an effective tool in qualifying patients for power chairs, increasing efficiencies.

There have been calls from the industry to expand the PMD demonstration program and Komishock supports that effort.

“Expanding the program judiciously would go a long way in helping not only CMS, but the industry to deal with pressing problems,” he said. “For example, the increased amount of audit activity that has besieged the industry would be presumably lessened significantly since Medicare would be reviewing medical documentation before a claim was actually submitted. That would essentially eliminate the need for any back-end review.”

Working together

Despite the obstacles created by competitive bidding, manufacturers insist that the products themselves are the most important factor in the mobility market’s future success.

“First and foremost, manufacturers need to continue developing products that are innovative while remaining cost effective,” said Jay Brislin, vice president of Quantum Rehab. “Products need to be more versatile, adjustable and durable, and have higher performance levels that meet the needs of individuals. These products should also provide overall exceptional value that includes more than just lower initial acquisition costs.”

Products need to be high quality and should be backed by comprehensive support from the manufacturer for sales, service, marketing and reimbursement services, Brislin said.

“Providers who are willing to employ new and creative marketing strategies to drive consumer awareness on a consistent basis also drive more traffic to their showroom and, ultimately, more sales,” he said. “Successful providers are those who implement marketing strategies to communicate with and capitalize on potential and repeat customers who have a newly established or existing HME need.”