PWC rules send provider into tailspin
DAYTONA BEACH, Fla. - Anticipating that CMS's new power mobility rule would wreak havoc on its bottom line, one of the largest providers of power wheelchairs in the country reduced its workforce by 20% in early October .
By January, Mobility Products Unlimited, which ranks second behind The Scooter Store in K0011 sales, reported the number of mobility devices provided in October and November was cut by more than half. The reason: new documentation requirements.
"We probably saw a 60% to 65% decline in business overnight," said Mike Cawood, one of the provider's directors of operations.
CMS's interim final rule (IFR) went into effect Oct. 25. The rule, which has since been stalled (See related story), replaced CMNs with prescriptions and physician notes for power wheelchairs and scooters. It also required physicians to conduct face-to-face exams and supply providers with documentation within 30 days.
Business dropped because, even though Mobility Products implemented the rule several weeks before Oct. 25, it still had to switch gears on orders that were already moving through its system before the deadline, Cawood said.
"Because there was no grace period that would take into account the thousands of patients who had invested four to six weeks into the old process, we had to start over," he said.
(CMS did offer relief in November when it determined devices that physicians signed for before Oct. 25 but providers didn't deliver until after Oct. 25 didn't have to meet the requirements of the rule. "Too little too late," Cawood said.)
The rule also prompted Mobility Products to tone down its sales and marketing efforts, including a referral team that called on doc's office, decreasing new business opportunities, Cawood said.
New Braunfels, Texas-based The Scooter Store, the largest provider of power wheelchairs, also saw a reduction in the number of power mobility devices provided in November and December. The reason: it took twice as long to meet the new documentation requirements, said Daniel Gibbens, executive vide president of marketing.
But by the end of 2005, The Scooter Store's "business flow" returned to pre-Oct. 25 levels, he said.
Because of the drop in business, Mobility Products has been able to make do with fewer employees. The provider currently employs about 230 at a 60,000-square-foot facility.
The layoff affected customer service representatives, home mobility consultants and outside sales representatives.