Middling Power Wheelchair Market Requires Patience
Optimism for the 2012 power chair market is in short supply these days, with most manufacturers admitting to flat or down sales with little more than a third of the year to go. The relatively poor sales performance can be traced primarily to Medicare competitive bidding and capped rental.
Mike Wahrmund, director of marketing in the Power Mobility Division at Drive Medical, believes those factors are forcing smaller providers out of the industry; a trend that has also affected overall sales.
“Power wheelchairs are no longer a purchase option,” Wahrmund says. “They are now solely rental items. Providers who used to get the full reimbursement amount for power chairs in one fell swoop are now seeing that payment broken out over 13 months. That is hurting their cash flow.”
Julie Jackson, director of the Mobility and Seating Business Unit at Invacare, has seen flat sales for Group 2 power chairs, and she anticipates much of the same, at least in the foreseeable future. “We saw a vast change in the market in 2011 with the introduction of the capped rental market in Group 2 as well as the first nine metropolitan statistical areas of national competitive bidding,” she says. “We fully expect to continue to see changes within this market later this year with the prepayment review, as well as the next round of national competitive bidding in 2013.”
According to Paul Komishock, general manager of Government Affairs at Pride Mobility—of which Quantum Rehab is a division—Medicare, Medicaid and private insurance can still be reliable payers for power chairs if the obstacles can be navigated. “While many states have looked to reduce Medicaid funding as a whole,” he says, “the good news with this payer and private insurance is they have clear criteria for determining coverage of a power wheelchair.”
“Providers are seeing their operating costs increase due to checking on patients and picking up the equipment when necessary,” adds Joe Chesna, national sales director at Pride Mobility. “Providers can offset this is by providing a quality product. Manufacturers that are looking to partner with providers in the capped rental landscape are making products that are able to withstand a reasonable amount of use and can be easily refurbished and serviced.”
Power Chairs or Scooters?
Power chairs are usually based on medical necessity for patients with diagnosed medical conditions that affect mobility, while scooters are still more of an option for people who don’t get around as well as they once did.
It’s rare for doctors to prescribe scooters, so these items remain in the retail mode. For providers struggling with power chair reimbursement, Wahrmund does not hesitate to advise a strategy switch. “If Medicare changes have affected our providers’ power wheelchair business, we encourage them to move into the scooter business,” he says, “because those are cash items and they are receiving a good full payment right from the start.”
For patients who eventually end up with a power chair, accompanying accessories can provide another sales opportunity. Ramps and lifts are not for dabblers, but those who make the effort can establish a thriving secondary market. “Providers should discuss the benefits of a ramp or lift with every power wheelchair they sell,” Chesna says. “These are essential items for any patient using a power wheelchair. A ramp can be used for improved accessibility, and a lift can be used for transportation. These are cash sale items, and a great way to improve profitability and cash flow while enhancing the client’s overall lifestyle.”