Scoot Over

Just over the past few years, the landscape of the scooter market has shifted significantly as retail sales grow and Medicare sales dwindle.

“It is a challenging environment when it comes to reimbursement,” says Cy Corgan, national sales director of retail mobility for Pride Mobility Products. “With baby boomers they have the money, they have the disposable income, and we see it going more toward the retail environment.”

The scooter market is an area of home medical equipment that has been hit especially hard by Medicare changes, making it extremely challenging for providers to rely solely on government and insurance reimbursements.

Even though the 2005 National Coverage Determination gave a boost to the market because it led to doctors prescribing more scooters than power wheelchairs, today it is increasingly difficult for providers to remain profitable in the Medicare market, manufacturers say.

New power mobility device coding released at the end of 2006 significantly cut Medicare reimbursement for scooters, causing many providers to exit the market altogether. And for providers in competitive bidding areas, there is even less profit to be made from Medicare customers.

“It's tight. The products aren't cheap to manufacture and the margins just keep getting eaten away at. Everyone has different margins they have to make just to cover their overhead and operating expenses, and by the time you go through that there isn't much left,” says John Koster, associate products manager for Invacare.

DuWayne Kramer, president of Leisure-Lift, agrees. “I don't see many dealers doing a lot of good in Medicare Group 1 scooters. There's just no money there to make a living,” he says. “Unless you're doing something that's really special, it's difficult to justify the effort you can put into scooters when you can get a lot more money doing wheelchairs.”

But the bright side of this shifting market is that it gives enterprising providers an opportunity to increase cash sales without dealing with the hassles of Medicare paperwork, experts say. It also gives manufacturers the opportunity to develop more innovative — and often more expensive — products that providers can profit from.