Scooter Store lays off 200 employees

Sunday, December 3, 2006

NEW BRAUNFELS, Texas - CMS's decision to "significantly cut" reimbursement for power mobility devices has driven The Scooter Store to reduce its workforce by 200 employees, the company announced Friday.

On Nov. 15, CMS began paying 28% less for power wheelchairs and 38% less for power scooters, according to The Scooter Store.

"Medicare claims the cuts are in response to utilization spiraling out of control," CEO Doug Harrison stated in a letter. "The reality is that utilization of the Medicare mobility benefit has dropped almost 30% since 2003 and is 10% below Medicare's own estimate of appropriate utilization. Additionally, Medicare's methodology for calculating the price cut still incorporates numerous errors and does not reflect today's market price for power mobility devices."

Hoveround has also reduced its workforce by 66 employees due to the reimbursement cuts and end-of-the-year restructuring (See HME NewsWire 11/2706). In October 2005, when CMS's new documentation requirements for PMDs went into effect, Mobility Products Unlimited reduced its workforce by 20%.

The Scooter Store took other steps to reduce costs, but "in the end, we still found it necessary to reduce the workforce so that The Scooter Store can continue operating and providing" PMDs, Harrison stated.

The industry continues to work with CMS, as well as legislators, to amend PMD pricing.

"Already, we are concerned that seniors and people living with disabilities, particularly in rural areas across the country, won't have access to wheelchairs and scooters," Harrison stated.