CMS Calls for Drastic PMD Cuts

Washington

CMS' new fee schedule for power mobility devices slashes reimbursement by more than 40 percent for some equipment, prompting stakeholders to warn that it will be difficult, if not impossible, for providers to remain profitable in the rehab business.

As of press time, the updated fee schedule was set to take effect Nov. 15.

“The new pricing is going to be devastating,” said Rita Hostak, vice president of government relations for Longmont, Colo.-based Sunrise Medical and president of the National Coalition for Assistive and Rehab Technology. “For a lot of suppliers it's going to mean they're not going to be able to provide product anymore.”

Hostak said many of the providers she talked to after the fee schedule was issued Oct. 2 indicated they were trying to decide whether to allow their rehab techs to continue performing evaluations.

“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 provider Jim Greatorex, president of Portland, Maine-based Black Bear Medical, adding that layoffs in the sector are likely.

Greatorex said he fears that private insurance companies, which often look to Medicare when creating their own policies and fees, will insist on similar cuts.

As an example of the drastic fee reductions, Hostak said reimbursement levels for both the Group III no-power option and single-power option wheelchairs have dropped by 32 and 34 percent, respectively.

“Those are substantial hits to an industry that didn't already have significant margins to begin with,” she said.

Particularly with regard to complex rehab products, providers' service component is expensive when it comes to time and labor, Hostak said. In addition to clinicians' evaluations, and hours involved in proper fitting and adjustment, providers also must make extensive home assessments.

The Restore Access to Mobility Partnership, a coalition of manufacturers and suppliers, noted that a supplier who has been receiving a $6,500 reimbursement from Medicare for a wheelchair needed by people with the most severe physical disabilities would only receive $3,800 after the new pricing is effective.

In an explanation accompanying the fee schedule, CMS said that from 1995 to 2003, expenditures for power wheelchairs increased by 2,705 percent, from $43 million to $1.2 billion. “In response, CMS has developed a comprehensive strategy to address timely and appropriate coding, payment and coverage of PMDs,” the agency said.