The power wheelchair market this year has been a confounding blend of success and foreboding. Representatives from six manufacturers characterize sales as "good" and "growing" in 2010, and all agree that market demographics infused with baby boomers who are going to need mobility equipment point to growing demand.
Most of the foreboding is linked to CMS' unwavering mission to press ahead with January 2011 plans to roll out the competitive bidding juggernaut. New bid prices in the first nine cities have been roundly criticized, and the program's ripple effects are the subject of rampant speculation.
"My biggest concern is the train is on its track and it has quite a bit of speed right now," laments Pride Mobility Products' Seth Johnson, vice president of government affairs. "I'm not sure how successful we are going to be in stopping Round 1, but that is our focus. We are also concerned about the expansion of the program beginning early next year in 91 more areas."
The disconnect between Congress and HME providers stems from a fundamental disagreement over what constitutes actual value in a power chair transaction.
"Providers offer a variety of services to clients that many times go unnoticed by funding sources," says Julie Jackson, director of power mobility and seating products for Invacare. "Working closely with therapists to properly identify clients' needs, providing product trials and evaluations, ordering the product, navigating order forms, educating and fitting clients and delivering/servicing the product are all examples."
First-Month Purchase Option
Another point of concern is Section 3136 of the Affordable Care Act, which eliminates the first-month purchase option for standard power wheelchairs, replacing it with a mandatory 13-month rental that will also become effective Jan. 1, 2011. At presss time, a "Dear Colleague" letter distributed in the House of Representatives urged support for a 1-year delay, and a similar document had been circulated in the Senate.
Both letters are part of an effort to delay implementation of the purchase option provision for a year in a budget-neutral manner. "The industry is well positioned right now to get this 1-year delay included in 'must pass' legislation when Congress comes back in mid-November," says Johnson. "The best vehicle is a Medicare package … to avert the physician payment reduction that is scheduled for Dec. 1 to the tune of 20 percent unless Congress takes action." Another possibility, he notes, are appropriations bills that Congress is going to have to take action on to keep the government operating beyond the first week in December.
"If the month-one purchase option is eliminated as CMS would like, most providers will be forced out of that business," adds Miriam Lieber, president of Lieber Consulting. "Rather, [the standard PWC] is going to become a private pay-cash sale item provided with an Advance Beneficiary Notice. As profit margins continue to shrink, it is also clear that rehab providers, like other HME providers, will endure more market consolidation."
The Next Big Thing — or Not?
The familiar tandem of quality and durability continue to drive the power chair market, but Dan Critchfield, associate product manager, power mobility, Sunrise Medical, also believes reimbursement worries have affected the introduction of new technology. "There is not a demand for innovation because of cost concerns," says Critchfield. "Most of today's products are becoming more and more similar and not distinctive."
That said, Critchfield notes some innovation is necessary to improve the consumer's mobility. "Batteries are a great example," he says.
"The automotive industry has made huge strides to improve battery technology. Power wheelchairs could benefit from it, but there is no reimbursement for this technology. Changes could be made to increase the allowable for an alternative battery technology that would last the life — 5 years — of the power chair. There would be no need to replace batteries every year. Chairs could be lighter, more maneuverable, transportable, and provide lower seat heights."
Mark Schmeler, PhD, OTR/L, ATP, agrees that while innovation has flourished over the last two decades, the current technology climate is "drying up a little bit" thanks to those "cost concerns." To illustrate the situation, he points to the Segway and iBot, two technologies that ultimately fizzled in the DME industry. "They failed because we failed to recognize universal design — products that are mainstream but also help people with disabilities," explains Schmeler, assistant professor in the Department of Rehabilitation Science & Technology at the University of Pittsburgh.
"And I'll point the finger at Medicare," he says. "If you look at something like the Segway, a lot of funding sources will never realize that universal design concept. If I am a manufacturer, I am going to make sure I keep my products within DME so that they don't become mainstream, because if they do, insurance is not going to pay for it."
Despite the pricing pressures, Leisure-Lift President DuWayne Kramer says he hopes the market resists the urge to downgrade workmanship. "The market has already gone into chairs that I would consider poor quality," says Kramer, whose company builds both bariatric and standard PWCs in the United States.
"The standards for what they are paying for in the government are so poor that some equipment makers have gone back 20 or 30 years to the bad old days of poor quality products that were dangerous for people to ride. We build many bariatric products where we can maintain good quality and build it under our control — instead of shipping manufacturing out to somebody offshore."
Complex Rehab
The specialized realm of complex rehab technology (CRT) is not under the umbrella of competitive bidding, but it does not belong to its own distinct category — yet. Led by an industry steering committee guided by the National Coalition for Assistive and Rehab Technology, professionals in the sector are working to make that a reality. By building a case through deliberate steps, NCART Executive Director Don Clayback hopes CMS will see fit to create a separate benefit for complex rehab outside of the broad category of DME.
In late September, the group released a lengthy proposal outlining the reasons for a separate benefit. According to Clayback, the group's five objectives include: 1) clearer and more consistent coverage policies; 2) stronger and more enforceable supplier standards; 3) formal recognition of product-related services and costs; 4) payment stability; and 5) improved coverage and payment system that can serve as a model for Medicaid and other payers.
Proponents explain that complex rehab products and associated services generally require individual evaluation, configuration, fitting or programming. "This type of specialization gets lost in the broader categories," says Clayback. "We need to determine how CRT is coded, what are the coverage criteria, and how are items paid for as far as the fee schedule."
As of press time, the group was hoping to get legislation for the separate benefit introduced in the early part of 2011.
With a sole focus on Group 3 and higher power chairs, officials at Permobil are watching the effort with particular interest. The manufacturer has been growing steadily each year, and Amy Meyer, PT, ATP, pediatric and standing specialist, says she appreciates the push, particularly in rescinding Medicare's controversial "in-the-home" restriction. Meyer believes the time has come for a broader interpretation.
"The NCD has been interpreted such that CRT is exclusively for use in the home, even though many other government regulations and acts support integrating people with disabilities into society and say they have the right to the least restrictive environment," says Meyer. "We just want them to acknowledge that we should be able to justify a piece of equipment for use not only in the home but also outside of the home for some people."
Opportunity and Unknowns
The power wheelchair market is viable even with so many factors uncertain, but Mike Serhan, executive vice president, Drive Medical Design and Engineering, believes providers must now look at the needs of the "whole patient."
"They need a power chair, but what other items do they require?" asks Serhan. "Is it another mobility item? Is it a retail or billable item? Providers can no longer count on power chairs to make all their money. They need to make sure all those medical needs are going to be covered."
With providers facing more reimbursement reductions, Serhan says operational efficiencies will continue to mean the difference between success or failure. "Your vendor can help you so you've got one [purchase order] instead of several to try and cover your needs," he says. "You need that efficiency that you didn't have before. You also really need to find a vendor that can partner with finance as well."
If you can do all this, Serhan is convinced the market will be there for motivated providers. "Someone is turning 60 every 8 seconds in our country, and that pie is growing," says Serhan. "We just need to put our finger on the pulse of what these customers are going to want, and who is going to pay for them.
"I think the power market is always going to be strong because there is going to be need. The question is, how is that going to get reimbursed? Whether it is retail, third-party or some combination — that market is going to be there."
Sunrise's Critchfield says his greatest confidence comes from clinicians and providers who care about their clients. "They truly want to provide the mobility and seating that will improve people's lives," he says. "My greatest concern is that state and federal budgets are shrinking, and cuts will cost people the mobility assistance they need."
In the midst of shrinking budgets, however, new opportunity lurks for savvy providers. "Medicare funding will become tighter in the near future because of economic pressures," explains Critchfield. "For some states whose budgets allow, I believe that Group 4 growth will fill in the gap."
Done well, there is also still a place for old-fashioned salesmanship, and Serhan notes this aspect should not be neglected in today's market. "Actively go out and promote your business," he enthuses. "A lot of providers sit back and wait for the business to come in, but you need to go out there and let the referrals know that you are there.
"Do some data-mining," continues Serhan. "You have customers with mobility issues, and now they may need walkers or other items. At some point they may need a power chair as well. They are your customers, so you can contact them to make sure that when they need that next level of mobility, you are the first one they call."
Market Monkey Wrench Sound Off
Months after bid prices were announced, industry voices still peg competitive bidding as a major contributor to market uncertainty in the PWC sector.
"Manufacturers have already responded to cut costs and attempt to maintain quality. If further cuts are placed, then quality and service will begin to erode. Many small HME businesses will not be able to continue to be profitable and will close up. Consumers will suffer with poor quality and service."
— Dan Critchfield, associate product manager, power mobility, Sunrise Medical
"Obviously, the competitive bidding prices are silly. There is no way anybody can provide a quality product when you are seeing that level of discounting. We are all waiting for this to fail, because it is going to fail."
— DuWayne Kramer, president, Leisure-Lift
"When the bid range came out, the rates were startling. We know what the prices are for this equipment, and the rates that we saw in many of the areas — in fact all of the areas — were significantly lower than what Medicare is currently providing as far as payment for powered wheelchairs."
— Seth Johnson, vice president of government affairs, Pride Mobility Products
"I don't want to see high quality technology get marginalized because you have a bunch of people low-bidding. We need to find a careful way to maintain our integrity while making sure products are of the highest quality possible — and taxpayers are paying a fair price."
— Mark Schmeler, PhD, OTR/L, ATP, assistant professor, University of Pittsburgh
"Competitive bidding has made it very difficult for a provider giving full service to make money. If providers have a narrow focus on power mobility, it can be a challenge for them now."
— Mike Serhan, executive vice president, Drive Medical Design and Engineering
Experts Interviewed
- Don Clayback, executive director, National Coalition for Assistive and Rehab Technology (NCART), Buffalo, N.Y.
- Dan Critchfield, associate product manager, power mobility, Sunrise Medical, Longmont, Colo.
- Julie Jackson, director, power mobility and seating products, Invacare Corp., Elyria, Ohio
- Seth Johnson, vice president of government affairs, Pride Mobility Products Corp., Exeter, Pa.
- DuWayne Kramer, president, Leisure-Lift, Kansas City, Kan.
- Miriam Lieber, president, Lieber Consulting, Sherman Oaks, Calif.
- Amy Meyer, PT, ATP, pediatric and standing specialist, Permobil, Lebanon, Tenn.
- Mark Schmeler, PhD, OTR/L, ATP, assistant professor, Department of Rehabilitation Science & Technology, University of Pittsburgh
- Mike Serhan, executive vice president, Drive Medical Design and Engineering, Port Washington, N.Y.
