Top power mobility providers make cuts

Sunday, November 26, 2006

WASHINGTON - Two of the largest providers of power mobility devices have laid off--or are thinking about laying off--a small part of their workforce due, in part, to CMS's massive overhaul of the PMD benefit this year.

Sarasota, Fla.-based Hoveround recently eliminated 66 of roughly 630 positions. Vice President Calvin Cole attributed the cuts to the company's annual end-of-the-year restructuring, but also to Medicare's increased documentation requirements and decreased reimbursement.

"We're doing what CMS wants us to do--becoming more efficient," Cole said. "We're still committed to working with Medicare to provide a quality product and a high level of service to its beneficiaries."

New Braunfels, Texas-based The Scooter Store believes it will "lose some valuable employees" due to the PMD changes, said Mark Leita, director of public affairs, but the company's still not sure how many of its 1,200 employees it will have to let go.

"I can't say whether it will be five or 150 employees," he said. "It's too early to tell. We're still looking at every possible way to eliminate costs from our business before we start a head count."

Providers like The Scooter Store also hope further revisions to the new pricing, especially for Group 2 PMDs, will help temper any layoffs or changes they may have to make. New pricing for the wheelchairs and scooters in that group--which comprises mostly geriatric or consumer mobility--represents a 27% cut.

"If it becomes a 20% cut, that's more sustainable," Leita said.

In addition to layoffs, The Scooter Store is considering making changes to its employee health insurance and retirement plans.

Irvine, Calif.-based Source One Medical has no plans to lay off employees, largely due to the company's decision to diversify into home oxygen and sleep, said Dennis Kline, president. The company does plan to limit its PMD product and service offerings.

"The patient will get the cheapest chair available--no exceptions," Kline said. "If a beneficiary wants an option or upgrade that Medicare doesn't pay for, he'll be responsible for paying for it. We're also farming out service to a third-party company."

South Daytona, Fla.-based Mobility Products Unlimited has no "major" layoffs or changes planned, said Michael Lops, general counsel.

"We're fine-tuning all the time, but most of our changes have already occurred," he said.

In October 2006, Mobility Products reduced its workforce by 20% due to CMS's decision to replace CMNs with physician prescriptions and medical records (See HME News February 2006).