The Scoop on Scooters

HME providers from coast to coast are feeling the pain of lower reimbursements from Medicare and facing the prospect of even more cuts with competitive bidding again on the horizon. The climate has been tough on the scooter business, although shrinking margins have not slowed the pace of innovation among manufacturers. These suppliers see opportunities for HME providers in Advance Beneficiary Notice (ABN) upgrades or cash sales to a growing, and sometimes more affluent, baby boomer population.

“I'm somewhat jaded against Medicare reimbursements for scooters,” says Mike Serhan, executive vice president, Drive Medical Design and Manufacturing. “Medicare has made it very difficult. It's not really as profitable, especially after all the hurdles you have to go through.”

However, he adds, “The scooter market is going to grow one way or another. If you restrict [your sales] to government reimbursements, you are doing your business a disservice. If your business is efficient, you might be able to make thin margins [from Medicare], but it's very difficult.”

“Scooters have always been on the lower end of the reimbursement scale, which will only be exacerbated by competitive bidding,” agrees Cy Corgan, national sales director, Retail Mobility, Pride Mobility Products. “This doesn't mean that there won't be a market for scooters. In fact, the market should expand greatly. The bottom line is that providers should stock a basic version in each Group 1 code and add scooters to their inventory based on clientele and market.”

Terry Preston, vice president of sales for Leisure-Lift, warns against compromising quality to meet Medicare's low payment level or to promote cash sales. “Low-margin products such as travel scooters can overwhelm a dealer's service resources if it is a poor-quality product. Return to quality is an avenue to overall profitability if you consider the cost of servicing the product as well. You may not be making enough margin on inexpensive products to pay for the service costs.”

According to Les Brandeis, director of sales, Merits Health Products, “it is up to the manufacturer to help design scooters that can be sold in a retail environment. This would mean more portable or travel-type scooters, which all of us make but each one offers different features.

“At present, the market has enough of these. It will be up to market trends to see how we will either redesign them or stay the same. Manufacturers can help by offering a very competitive scooter at a good market price.”