First-month purchase option: Industry maneuvers for a delay

Thursday, July 22, 2010

WASHINGTON - The industry is working to delay a provision in the healthcare reform bill that would eliminate the first-month purchase option for standard power wheelchairs in exchange for a 1% reduction in the consumer price index-urban (CPI-U) update.

"The Complex Rehab Mobility Council (CRMC) has talked about it at great length and other providers have talked about it, as well, and we support this alternative," said Seth Johnson, vice president of government affairs for Pride Mobility Products. "The industry really needs additional time before the rental becomes mandatory."

Per the provision, currently slated to go into effect Jan. 1, 2011, CMS would space out its payments for standard power wheelchairs over 13 months, paying 15% in months one through three and 6% in months four through 13.

The delay is needed, stakeholders argue, to give providers time to adapt their business models (they're used to receiving reimbursement in one lump sum at the time of purchase) and to give the credit market time to, hopefully, loosen up (the recession and reimbursement cuts have made banks hesitant to lend money to providers, making it difficult for them to buy equipment).

"I think it's a fair trade-off," said Tim Pederson, chairman of the CRMC and CEO of WestMed Rehab in Rapid City, S.D. "It's a small enough cut that it's not going to have a major impact on the way we do business. In the past, we've had reimbursement cuts and gotten nothing in return. At least here, we're getting something."

Stakeholders are developing legislative language for a delay that they'll shop around to members of Congress. Their goal: Get it attached to one of two Medicare-related bills that Congressional leaders plan to take on before the end of the year.

"(The Senate Finance Committee and the House Ways and Means Committee) seem supportive," Johnson said. "Now it's just a matter of going out there and educating members of Congress."

Providers like Tyrrell Hunter appreciate efforts for a delay, but they don't like the idea of eliminating the first-month purchase option--period.

"When you get into the daily grind of implementing something like this, a lot of problems crop up," said Hunter, president of Majors Mobility in Tospham, Maine. "To repair and recondition and re-rent power wheelchairs, which are different and expensive, and to have the space to keep half a dozen of them around--it may sound good on paper, but it doesn't work out in the field."

Stakeholders wouldn't confirm or deny that the delay would also buy the industry time to repeal the provision.

"Hopefully, the economy will recover, and we're expecting a big shake-up in Washington this fall, so we'll evaluate the situation next year," Johnson said. "But the important thing right now is to build support for a delay."