VGM takes on Scooter Store, Pride Mobility

Sunday, April 5, 2009

WATERLOO, Iowa - The VGM Group's founder and CEO Van Miller held nothing back last month when he issued a letter that blasted The Scooter Store for engaging in business practices that have helped ignite a government backlash against the HME industry.

Miller contends that the challenges the industry now faces--added documentation costs, audit risks, surety bonds, mandatory accreditation, lobbying time, etc--"could have been avoided if just a few companies had heeded common sense and refrained from figuratively 'poking the tiger with a sharp stick.'"

The "sharp stick" is the Scooter Store's TV ad campaign, which has helped make the company the largest provider of consumer power products in the United States.

"The Scooter Store is not the only one who has done this, but they are the biggest," said Jim Walsh, president of VGM Management. "And for the same reason it works, Congress and the regulators hate it. They believe that decisions to acquire medical equipment should not be made by enticements to 'free' (equipment)."

The member-service organization mailed the letter--"Who is on your side?"--to about 2,600 HME locations and passed it out at Medtrade Spring last month.

Walsh called the letter an attempt by VGM to encourage the industry to police itself.

"We're not confident that CMS can ever regulate the industry," he said.

In his letter, Miller advises independent providers to carefully consider whether or not to do business with manufacturers who give big discounts and superior service to the Scooter Store but not to them--manufacturers who are "fighting for the other side" and helping to drive smaller independent providers out of business.

Miller specifically singles out Pride Mobility Products--the Scooter Store's primary supplier of product--for not "getting it." While some manufacturers have decided to forego business with the Scooter Store, Pride has not, Miller said.

In response to the letter, Scooter Store CEO Doug Harrison said: "I think Van Miller has been a passionate advocate for the industry the whole time I've been in it. But in this case, I think he is passionately misinformed."

Harrison said the Scooter Store works with dozens of manufacturers besides Pride, and many of these companies also work closely with VGM.

"I think it's interesting that the one Van chose to attack is not a member of his group," he said.

Kirsten Delay, Pride's senior vice president of sales management and operational planning, said that this is not a good time to be "trying to divide the industry." Instead, everyone should be working together to rescind competitive bidding and restore this year's 9.5% reimbursement to complex rehab.

Delay also said that Pride and its subsidiary, Quantum Rehab, have quality standards that all providers who want to sell their products must meet, including the Scooter Store.

"That's how we decide who to do business with," she said.