Rehab's 'on pins and needles'

Wednesday, October 31, 2007

YARMOUTH, Maine - As documentation and pricing changes for power mobility devices continue to tighten their grip, several smaller providers have told HME News that they've closed their doors or put their businesses up for sale. Others continue to downsize.
One rehab provider with "several hundred accounts" shuttered his business last month after 25 years. He cited Medicare's 27% cut, on average, to PMD reimbursement and its trickle-down effect on Medicaid reimbursement as reasons for his decision. Earlier this year, he attempted to diversify his business by adding home oxygen therapy, negative pressure wound therapy and other products, but it wasn't enough.
"It was the continual change," said the provider, who asked to remain anonymous. "Every change they made had a impact on us on some level, and none of it was ever positive. I tried to remain optimistic all these years, but I'm starting to think things are going to get a lot worse before they get better. It's not until people can't get services anymore that they'll realize they've gone too far."
A New Hampshire provider who relies on Medicare for 60% of his revenues put his business up for sale in September.
"Dealing with Medicare is a nightmare," said Bernie Hamann, who owns Lakeside Mobility, a four-person operation in Rochester. "We're not willing to play the game anymore."
Lakeside Mobility also diversified its business before throwing in the towel. In the past two years, its stair lift business grew 15%. But the specter of national competitive bidding and mandatory accreditation was too much weight on the provider's small shoulders.
"How difficult was it going to be for a company my size to compete with a $30-million company?" Hamann said. "Who has all the buying power?"
If Lakeside Mobility fails to sell, Hamann said he would hold on to the business but transition it to a cash-only operation.
While industry sources agreed rehab providers are in a tenuous position, few reported widespread closings or sales. Most providers continue to tinker with their business models in the hopes of finding some way to take what Medicare has given them and make it work.
"There are a lot of discussions going on out there," said Don Clayback, who heads up The MED Group's National Rehab Network. "Providers are asking themselves, 'Where do we want to focus?' At the same time, they want to work with CMS to stabilize pricing and clarify documentation."
One provider believes more and more rehab providers, like Hamann, are considering shunning all insurances.
"There's one guy in town who accepts cash only--no Medicare, nothing," said Scott Scobey, president of Low Country Mobility in Savannah, Ga. "He just doesn't want to fool with it anymore. He'll even partner up with a bank to help people get financing for their equipment."
Mobility Dynamics still counts on Medicaid and Medicare for the bulk of its revenues, and it doesn't see that changing any time soon. Still, the provider recently consolidated its two branches into one location in Cleburne, Texas. Mobility Dynamics also did away with walk-in repairs for wheelchairs; it's appointments only from now on.
"All of rehab is on pins and needles," said President Tom Hafford.