NEW BRAUNFELS, Texas--The Scooter Store announced last week that it is laying off 200 employees, citing Medicare's recent reimbursement cuts for power mobility devices.

CMS' new fee schedule, originally issued Oct. 2, was met with an outcry from rehab industry stakeholders. CMS subsequently increased payments for some power wheelchairs and has since made other revisions to the schedule (see HomeCare Monday, Nov. 20). However, The Scooter Store said that this isn't enough.

"Unfortunately, the Nov. 15 implementation date arrived, and despite some very slight adjustments, the fees were still drastically reduced to unrealistic levels," founder and CEO Doug Harrison said in a statement issued Friday. "While CMS has verbally committed to fixing these errors, the power mobility industry has yet to see any movement. We remain optimistic that these changes will provide some relief in the near future."

According to the statement, under the new fee schedule CMS is now paying 28 percent less for power wheelchairs and 38 percent less for scooters.

"Medicare claims the cuts are in response to utilization spiraling out of control," Harrison said. "The reality is that utilization of the Medicare mobility benefit has dropped almost 30 percent since 2003 and is 10 percent (12,000 units per year) below Medicare's own estimate of appropriate utilization. Additionally, Medicare's methodology for calculating the price cut still incorporates numerous errors and does not reflect today's market price for power mobility devices."

While the provider took other steps to reduce costs before deciding to cut jobs, "we still found it necessary to reduce the workforce so that The Scooter Store can continue operating," Harrison continued.

"It pains me that 200 men and women and their families are being negatively impacted, largely because the government doesn't have a system to accurately determine what the proper Medicare pricing should be for power wheelchairs and scooters," Harrison said, adding that the company's employees, "as well as the Medicare beneficiaries who will also be hurt by these cuts, deserve that much from Washington."