Cuts take a bite out of Hoveround

‘I’m surprised they’re only laying off 20’
Friday, February 7, 2014

SARASOTA, Fla. – Hoveround, citing competitive bidding cuts, recently laid off 20 workers from its headquarters here, reducing its workforce to 294.

“We’ve had to do some trimming and cutbacks, but we didn’t want to do that at the expense of customer service,” said Deb Silvers, vice president of corporate compliance. “We’re doing everything we can to make sure everything is streamlined.”

Unlike The Scooter Store, which didn’t win any contracts and closed its doors late last year, Hoveround won contracts for standard wheelchairs in 85% of Round 2 areas, and all of the Round 1 re-compete areas.

Yet, with an average reimbursement cut of 47% in Round 2, competitive bidding has had a big impact on the company, Silvers said.

As a result, Hoveround’s streamlining efforts have included a “skill-based routing” technology for inbound calls, a move that has allowed the company to reduce the size of its customer service personnel.

Other mobility providers aren’t surprised that Hoveround, even though its in the financially envious position of being both a manufacturer and provider, has had to make cuts to continue providing wheelchairs under competitive bidding.

“I don’t know how providers think they can absorb that kind of loss,” said Bruce Bayes, president of Custom Mobility in Largo, Fla.

It used to be that providers, facing cuts, could turn to manufacturers for a break on pricing, but those days are long gone, Bayes says.

“Manufacturers have been squeezed pretty hard over the years, and there just isn’t anything left to cut,” he said. 

Both Bayes and provider Angel Pardo sell consumer mobility products, but only for cash.

“I’m surprised they’re only laying off 20,” said Pardo, president of Doral, Fla.-based DMR Corp. “This might be just the beginning. It’s very, very hard to provide at the current reimbursement rates. With the cost of everything that goes into it—the paperwork, the denials and backlog for hearings—you’re almost set up for failure.”