Mobility Industry Predicts Dire Circumstances if Medicare Proceeds with Pay Cuts for Power Wheelchairs

October 11, 2006 - The Scooter Store announced today that the Centers for Medicare and Medicaid Services' decision to cut reimbursements by up to 41 percent for most power wheelchairs "will be devastating" for senior citizens and people living with physical impairments. And, Black Bear Medical, a leading supplier of durable medical equipment, said that the cut by Medicare will likely force lay-offs at their company, as well as other suppliers.

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Simply put, the CMS decision jeopardizes whether mobility equipment can be provided through Medicare in the future, according to The Scooter Store.

"These cuts are devastating and unwarranted," said Doug Harrison, founder and CEO of the Scooter Store, America's largest supplier of power mobility equipment.

"This is a disturbing blow to every senior citizen and person in America living with mobility impairments. We hope CMS is aware that suppliers across the country cannot afford to provide adequate power wheelchairs to Medicare beneficiaries if government reimbursements are cut by up to 41 percent."

"The bottom line is that we won't be able to service the custom wheelchair market anymore, without Medicare retracting this new fee schedule," said Jim Greatorex, president of Black Bear Medical.

"It's clear that we won't be able to supply the same products and service that we have in the past. These prices are just absurd. This policy change is motivated strictly by saving money, and does not take into effect the devastating effect it will have on the consumer, supplier or manufacture. Someone should lose their job over this."

Harrison noted that the reimbursement reduction will force many providers out of business and cause significant job losses for suppliers and manufacturers. The CMS decision creates a climate in which durable medical suppliers must shift to other products, leaving senior citizens and Americans with disabilities without a source to obtain power wheelchairs and scooters.

"What we have is a regulatory body that has been focused on restraining costs regardless of who it hurts," said Scott Meuser, CEO of Pride USA, a major manufacturer of mobility equipment.

"Now, they have gone too far. The message from these price cuts is that CMS no longer wants the most physically handicapped person in our society to have access to a power wheelchair through Medicare that will help him or her perform essential daily activities, such as grooming, preparing food and going to the bathroom. Medicare is turning their backs on the people who need help the most."

The Scooter Store also expressed concern that CMS is cutting reimbursements at the same time that it is asking suppliers to expend more resources for accreditation, certification and new quality standards. Over the past 18 months, CMS has implemented regulations that have made prescribing and providing power mobility to beneficiaries much more onerous for both physicians and suppliers.

Suppliers Raise Concerns About Scheduled Reduction in Medicare Reimbursements for Power Wheelchairs

CMS on Nov.15 under a new policy will reduce Medicare reimbursements for power wheelchairs by about 35%, a move that might "force suppliers out of business and leave severely handicapped consumers" without access to the devices, the Washington Times reports.

Medicare currently reimburses suppliers as much as $6,130 for standard power wheelchairs, but the amount will decrease to about $3,800 under the new policy. In addition, the new policy will establish a number of reimbursement codes to more accurately pay for power wheelchairs and other home medical equipment.

CMS decided to reduce Medicare reimbursements for power wheelchairs in response to a significant increase in program expenditures for the devices in recent years.

"Medicare was paying for the equipment at a much higher rate than what it was being sold for on the market, and the beneficiary was paying a higher copayment as a result," CMS spokesperson Ellen Griffith said, adding, "The payment rates are now closer to their market rate, and the beneficiaries will pay closer to what they should pay."

Cara Bachenheimer -- vice president of government affairs for Invacare, the largest U.S. manufacturer of power wheelchairs -- said, "Most suppliers do not have the kind of margins to sustain these cuts."

She added, "This new payment model does not pay higher for more complex equipment and is going to be done at the expense of beneficiary access to the equipment."

Jim Greatorex -- president of Black Bear Medical, the largest supplier of home medical equipment in the Northeast -- said, "These prices are just absurd. This policy change is motivated strictly by saving money and does not take into effect the devastating effect it will have on the consumer, supplier or manufacturer" (Lopes, Washington Times, 10/11).

"Reprinted with permission from kaisernetwork.org You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. © 2006 Advisory Board Company and Kaiser Family Foundation. All rights reserved.”

"If CMS wants to take costs out of the system, they should work with physicians and suppliers to streamline the prescription and documentation process for qualified suppliers," Harrison said. "This would allow us to charge less for our products and services."

Moreover, Harrison also noted that members of Congress should be concerned that by reducing usage of the mobility benefit, CMS will actually be costing taxpayers significantly more money. CMS says that utilization of the mobility benefit has increased by 2,700 percent over the last eight years. Studies show that the federal government has saved more than 10 billion dollars over the same time period because people with power wheelchairs and scooters are living independently, require less homecare and hospitalization, and visit hospital emergency rooms fewer times due to falls and fall related injuries. The reimbursement cuts will limit any future savings from providing mobility equipment to Medicare beneficiaries.

In total, Harrison said studies show that among people with identical ailments, those without power wheelchairs and scooters required treatment and care that cost 2 1/2 times the price of mobility equipment. Specifically, Medicare pays $14,000 more per person for beneficiaries with physical impairments who did not receive mobility equipment.

Black Bear Medical's Greatorex said the Medicare price cuts will have a far reaching impact on the industry. He said the other public and private health insurers base their reimbursements on the Medicare fee schedule. "Every power wheelchair user will be affected"

"That means all the insurance companies will insist on similar cuts," said Greatorex, who is also president of the New England Medical Equipment Dealers Association. "The price cuts won't allow us to receive enough money to pay for obtaining the wheelchair from a manufacturer, fitting the patient to the chair, servicing the chair, and doing all the documentation paperwork for the government."

The reimbursement cuts hit particularly hard at the most sophisticated mobility equipment, which is needed by people with the most severe physical handicaps. For instance, a supplier who has been receiving a $6,500 reimbursement from Medicare for one such wheelchair will only receive $3,800 after the new pricing is effective on Nov. 15.

Industry officials said the underlying problem is that as the American society ages, there has been a significant increase in demand for power wheelchairs and scooters by a population that wants to remain as independent and as mobile as possible. CMS has reported a 2,700 percent increase in utilization over the past eight years.

But over the last three years CMS has responded to the increased demand for mobility equipment with a series of policy, rule and pricing changes that appear to be aimed at restricting beneficiary access to mobility equipment, crippling the industry that supplies it, and restraining costs.

"We expect serious access issues for consumers with severe disabilities, as well as seniors with mobility impairments," said Mal Mixon, chairman and CEO of Invacare Corp., another major manufacturer.

"We have an Americans with Disabilities Act that is supposed to ensure the highest quality of life possible for people living with disabilities. Yet, this administration's payment policy for power wheelchairs will effectively prevent people with disabilities from being able to obtain the power wheelchair they need to get around in their homes, as well as in their communities."

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