ALEXANDRIA, Va.--The American Association for Homecare released a study Wednesday that concludes CMS' recent power mobility reimbursement cuts will "trigger an exodus" of rehab providers and will ultimately cost the agency billions.

According to the study, the cuts will cause at least 1,500 wheelchair suppliers to leave the industry, costing Medicare $2.7 to $5.9 billion over the next eight years to care for beneficiaries who won't be able to get the equipment they need.

Conducted by economist Clifford L. Fry, Ph.D., of Bryan, Texas-based RRC, the study follows CMS' release last month of the new power mobility device fee schedule, which calls for cuts of more than 40 percent for some equipment (see HomeCare Monday, Oct. 9). The new fees are set to take effect Nov. 15.

The study found that there may be a 30 to 50 percent loss in PMD availability as suppliers leave the marketplace, with beneficiaries unable to provide mobility services for themselves.

While the study notes that Medicare's direct expenditures for power mobility will decline with the reimbursement cuts, it also says the cuts--from 21 percent to 41 percent--amount to price controls, with Medicare fees set below market prices for equipment the necessary services that go with it. According to the study, the cuts will ultimately increase Medicare expenditures for hospitalization, physician services, and home care services for beneficiaries who qualify for power wheelchairs but won't acquire them because the cuts will "impose massive short-run shutdowns of supplier firms."

The study recommends that CMS instead rely on market forces for provision of products and services, since "price controls will impair the functioning of market forces and decrease access to power mobility."

"The study raises legitimate questions about whether CMS had sufficiently examined the impact of their price cuts on access to power wheelchairs for the Medicare beneficiaries," Dr. Fry said. "It certainly seems that they have overlooked the impact of having 1,500 or more suppliers abruptly leave the market, and the long-term impact of paying more in health care costs for beneficiaries who don't have the power wheelchairs that they need. It is hard to argue why these cuts would be seen as good public policy."

The study is available on AAHomecare's Web site at www.aahomecare.org.