Scooter Store layoffs follow in wake of Round 2 announcement

Friday, February 15, 2013

NEW BRAUNFELS, Texas – Despite budgeting for the impact of Round 2 of competitive bidding, steeper-than-expected rate reductions have forced The Scooter Store to cut 150 more jobs.

“While we regret having to make these changes, we want the company and all its employees to be successful in the long run,” company spokesman Tim Zipp told HME News. “This action better aligns our costs to the new realities within the durable medical equipment category and will allow us to effectively accelerate the company’s new vision of helping seniors age gracefully at home.”

Round 2 single payment amounts for standard (power and manual) wheelchairs, scooters and related accessories saw an average reduction of 36%. For K0823, one of The Scooter Store’s main products, the cut was even steeper: nearly 50%. The amounts were announced Jan. 30.

The layoffs, announced Feb. 8, affected about 100 employees at the company’s headquarters with the rest at distribution centers across the country. Affected employees will be offered severance packages, Zipp said. The Scooter Store now employs approximately 1,800 people. It’s not the first time in recent months that The Scooter Store has had to lay off employees. In September, the provider let go 220 staffers across all of its divisions.

In addition to reimbursement cuts, The Scooter Store says new policies, including a PMD demo requiring prior authorizations in seven states, have caused cash flow issues in all areas of the business.

“(We) need to reduce our cost structure (because of) the full implementation of the pilot program for prior authorization of power mobility devices—which covers about half of the people needing power mobility products nationally—and the continued review of claims, which are ultimately paid throughout a lengthy appeals process, but significantly slows down payments to the company,” said Zipp.