Providers: PMD cuts will cripple wheelchair technology

Thursday, November 30, 2006

By most accounts, CMS's upcoming reimbursement cuts to power wheelchairs will prompt a race to the bottom of the technology barrel for most rehab suppliers, according to comments in November's HME NewsPoll.
"We will have to provide the cheapest product possible to every single patient," said Lisa Hovey-King of Freedom Medical in Fayetteville, Ga. "Beneficiaries are going to have to pay out-of-pocket for every additional feature above rock-bottom."
About 375 suppliers responded to the NewsPoll, with 39.4% saying they'd cope with the changes by supplying cheaper equipment; 19.4% planning to quit the PMD business; 12.9% vowing to cease doing business with Medicare; and another 11.6% planning to cease business altogether. The remaining 16.7% replied "other."
Other coping strategies include staff reductions, salary reductions, service reductions, increased use of the ABN (advanced beneficiary notice) and some semblance of collectivization.
"Until we all join forces together, there will always be a provider that decides to provide the items without the intense service and quality that high-end rehab providers do," wrote Jim Clore of Pat Grimes, Inc. in Fredericksburg, Va.
Some believe that coping is not really an option.
"How does any business 'cope' with a 40% reduction?" countered Carol Gilligan of Health Aid of Ohio. "Who is CMS kidding? No industry can sustain that kind of a cut."
Frustration, indignation and anger characterized the tone of many letters. Some blamed the scooter suppliers who advertise on television and the manufacturers who supply them as the cause of these burdensome cuts.
"They have been like pigs at the trough and now it's going empty," said D. Rexford Maxey of Penn-York Medical Supplies in Binghamton, N.Y.
While many say they'll stop doing business with Medicare, if not altogether, the knee-jerk gambit looks like a move toward cheaper equipment. Gone, say providers, will be all the new technology. Gone will be a range of power chair options. Gone will be quality.
Either, "we go out of business or sell a cheap piece of junk chair," said Brandon Bliss of Orbit Medical in Chicago. But junk chairs may be a boon for one survival strategist. With more inferior product on the market, this supplier predicts a greater demand for service work.
"Our current revenues are about 75% PMD sales and 25% repairs to PMD," wrote Rick Perrotta of Network Medical Supply in Charlotte, N.C. "Our plan is to aggressively increase repair revenues to end up with a new business model that is 50% PMD sales and 50% repairs."
Another creative coping strategy may be to network with high-end car dealers, wrote John Velekkakan of AHRC-Monroe Oxygen in Rochester, N.Y.
"They may be able to direct customers who have cash to pay and not worry about the insurances," he said.
Otherwise, the usual coping strategies are being dusted off: salary and staffing reductions. One anonymous rehab supplier said his company has already discharged every non-essential staff-person and cut salaries by 25% while the company looks for lower cost product.
"How will I cope? I am forced to consider abandoning the well being of my patients to look for other employment opportunities," said the supplier.
Though some say they'll abandon Medicare, others say they'll embrace Medicare all the more since private payers are likely to readjust their fee schedules downward in response to Medicare's reimbursement slide.