Capped rental and two rounds of competitive bidding have dramatically lowered the fee schedule for power wheelchairs to the detriment of providers who build their business around Medicare—and especially to the detriment of customers. Less Medicare money has sent providers looking for other opportunities in power mobility, in particular cash sales. The good news is that manufacturers are responding with an expanding range of products directed toward cash customers.
“What it boils down to is, if you don’t like what’s going on with Medicare, understand it’s only going to get worse,” says John Wright, Shoprider USA’s executive vice president of sales management and business development. “Same with third-party payers. The government is trying to contain costs because they can’t afford it. The provider needs to figure out another avenue, and reliance on Medicare or any third-party payer should be a smaller part of the mix.” Consumer financing and cash sales are helping some providers succeed without relying on Medicare. Wright says credit is now more available and applications are becoming more streamlined again.
The Medicare Group 2 power mobility market is less attractive to manufacturers, providers and consumers, who will now most likely get the lowest quality, standard device, according to Philipp Preugschas, business manager for consumer power and scooters, Invacare.
“Many consumers accept that because they don’t have a choice, but some will opt out as they have enough disposable income to [pay cash for] what meets their personal preferences best,” he says. These consumers will look for products that have features that expand beyond the basics, which in turn open the window for new retail and cash-sale opportunities for providers.
Minimizing Dependence on Medicare
Wright observes that Medicare doesn’t recognize new technology as benefiting patients, as reflected by its low reimbursables that do not allow any margin for research and development (R&D). The competitive bid program is also making it harder for customers to find power chair providers and/or service to repair them.
Wright says he sees many providers looking to decrease their dependence on Medicare because of competitive bidding, more paperwork requirements and risk of audit. “Several years ago, it wasn’t uncommon to see a provider that was 80 percent Medicare, but now people have realized it is a dwindling opportunity,” he says. Wright recently spoke with one provider whose Medicare percentage was down to 30 percent.
Shoprider Mobility, owned by Pihsaing in Taiwan, provides a range of Group 2 power chair, including standard, portable and heavy-duty models. The company’s best seller is the Streamer Sport, a value-priced product whose sturdy build ensures trouble-free operation during a cap-rental period, when one service call could offset any price savings to the provider.
“We have sold tens of thousands of those chairs over the years,” says Wright. The chairs are manufactured in Taiwan with some components sourced from mainland China.
Wright sees some providers shifting business into the K0821 category, which is a portable wheelchair that now has a higher reimbursement than other Group 2 power chairs. A portable power chair can also be taken apart for easy travel. Alternatively, a provider could sell a portable chair for cash.
Diversification With Retail
Preugschas of Invacare agrees that providers must establish a retail pillar to complement their reimbursable business. They should also streamline their business with products designed for ease of service and refurbishing. In the Medicare capped rental for Group 2 wheelchairs, providers are responsible for all service repairs, whether warranty or non-warranty.
The reimbursement model leaves providers exposed to the possibility of costly maintenance bills during the first 13 months. It is more important than ever to judge product quality along with product price. Preugschas says successful providers must look past the initial purchase price to consider the total cost of ownership.
Invacare’s power mobility line encompasses the vast majority of the market, from economic mobility devices that serve basic needs, up to complex power wheelchairs that integrate key rehab features.
Lower reimbursements mean Group 2 products are more price-driven rather than feature-driven. Additional features take a back seat to economy, at least for reimbursable products, says Preugschas.
For providers, responding to new cash sale opportunities will require more outreach to customers to accompany better-decorated showrooms, says Preugschas. “They must not be afraid to ask for the money rather than asking for a prescription,” he says.
To meet the retail demand, Invacare has introduced the Pronto Air Personal Transporter (PT), a non-coded, retail-only mobility device. It is comfortable and travel-ready and can be be taken apart—a feature that is welcomed among consumers. “We are going to see more retail-only products that differentiate themselves from the reimbursed products through design, comfort, driving performance and additional features such as transportability,” says Preugschas.
Motors will be stronger and go faster while being quieter and more discreet. Advances in lithium ion battery technology are simultaneously extending range, lowering overall weight of the product and reducing life cycle cost.
Invacare sells only through providers and supports them with brochures, posters, catalogs and an array of marketing tools, as well as training in product information and training to address current developments in the market. The company has developed a comprehensive marketing strategy to support launch of the new Pronto Air PT, including videos and landing pages to attract attention.
Customizable marketing materials enable providers to reach out actively to bring consumers into the showrooms. Posters, banner stands and demo units can be used to decorate showrooms and to draw consumers in to get a hands-on experience.
More New Non-Coded Products
Cy Corgan, Pride Mobility’s director of corporate sales, urges providers to embrace the principles of merchandising and retail sales, such as crossover selling and suggesting additional accessories.
Pride Mobility is developing more non-coded power mobility products to boost retail opportunities for dealers, such as the GoGo LX chair with Comfort Track Suspension (CTS).
“Customers want higher-end features that Medicare doesn’t pay for,” he says. “Pride will be looking closer at retail products and what makes sense for providers, whether or not they won the competitive bid.” He notes that even bid winners can’t count on the business since there were other competitors in the area who also won.
“Providers need to branch out to increase their revenue streams, embracing the retail philosophy,” Corgan says. He urges providers to learn about the alternatives and take advantage of Pride’s marketing department services, which include web development, collateral materials and other services at lower cost than employing a local advertising agency.
Accessories are an easy add-on and are becoming more common on power chairs, including cup holders, oxygen tank holders, crutch or walker holders, saddle bags, rear-view mirrors, cell phone holders, etc.
Corgan suggests having power chairs on the sales floor decked out with accessories and offering a display board listing all available options as a reference for customers. The additional margin of cash sales from add-on products can help offset the profitability impact of shrinking Medicare allowables, says Corgan.
Pride Mobility’s Jazzy line of power wheelchairs offers non-medical appearance, more “curb appeal” and enhanced suspension for a more comfortable ride.
At Medtrade, Pride introduces the Elite ES Portable power chair offering portability and maneuverability. The product disassembles easily into five pieces—seat, batteries, front section (drive wheels and motors), rear section and a shroud that covers the base of the unit.
Accessories offered to accompany the Pride Jazzy line include arm-mount saddlebags, cup holders, crutch and cane holder, rear basket, walker holder, oxygen tank holder, elevating leg rests, heel loops, swing-away leg rests and the Jazzy weather cover.
Opportunity in Complex Mobility
The Quantum Rehab division of Pride Mobility has its own research and development team that has been advancing cutting-edge complex rehab power mobility solutions over the last several years.
Developments include the popular Q6 Edge power base and the TRU-Balance 3 power positioning systems, including 450-pound bariatric version launching soon. The system allows adjustments to be made more easily on the fly while the client is in the chair;, with fewer tools needed to adjust the seat.
In general, Jay Brislin, vice president of Quantum Rehab, says technology is paving the way for more reliable, user-friendly components, and products that are streamlined, multi-functional, and easily customizable.
“We believe we have a lot of products on the rehab side that can change a lot of things in the industry,” says Brislin. “We offer high-end value while helping clients be more functionally independent. We want to take care to incorporate aesthetics. Products also must be durable so people can rely on them. They want to wake up every day and know that their mobility device can do what they need it to do.”
Quantum Rehab supports formation of a separate benefit category for complex rehab within the Medicare program to ensure access to critical technology and related services.
“We need to talk to Congressmen and Senators and be aware of the issues and legislation at hand,” Brislin says. “We need all mobility providers and therapists to be on top of this and know what’s going on. It will take a lot of voices to make these changes.” Quantum Rehab is also active in education and clinical development, offering continuing education unit (CEU) credits to maintain accreditation. Quantum has a large presence in the disability awareness arena.
Quantum is looking for ways to help providers be more efficient, such as setting a goal to minimize the time spent in processes from evaluation to delivery. The idea is to get products to the provider as quickly as possible, and to have products pre-assembled at the manufacturing facility with any optional features, so the provider can just do minor adjustments, says Brislin.
Functionality to Profitability
“We believe more and more power chairs will be sold through cash retail channels in coming years, just as scooters are now,” says Jason Davis, vice president, sales, Golden Technologies.
“Providers need to understand how to be good marketers, merchandisers and retailers to be successful and grow their business.”
Golden Technologies has created a “functionality to profitability” line of power chairs. The Golden Compass line features full functionality, with products that are easy to adjust, and has a patented springless articulating chassis.
Golden’s LiteRider (PTC) Personal Transport Chair is a profitable, easy-to-disassemble cash-only power chair. The compact chair has a 300-pound weight capacity, a storage basket under the seat, and can be disassembled for easy transport, with the heaviest piece weighing only 35 pounds.
The company’s selection offers the majority of what a provider needs to serve clients, says Jason Davis, vice president of sales, Golden Technologies.
To support dealers, Golden Technologies offers the mobility retail “Flagship Dealer Showroom” program to teach providers how to sell scooters and power chairs as a retailer for cash. Any provider that might be looking into mobility for cash sales should consider this course as an avenue for development of their product knowledge and sales techniques.
“We teach proven sales methods to providers to grow their sales in this category —and it works,” says Davis.
Alec Lin, general manager of Heartway USA recommends providers use e-commerce to attract more buyers. He says investing in marketing and search engine optimization (SEO) is a good idea, and a provider’s website should be tweaked to be more user-friendly. If an online shopper is unable to smoothly and sucessfully navigate a provider’s website, that customer is likely to shop elsewhere.
Offering an e-commerce site in a mobile version (compatible with mobile devices) can attract shoppers who already use mobile devices for internet purposes, and open the possibilities to place online orders while on the move.
Beyond e-commerce, an emphasis on customer service is key to running any business long-term and getting return customers, says Lin.
Heartway USA designs, manufactures and distributes power scooters and wheelchairs. Heartway offers brochures, catalogs, product images, specifications and troubleshooting tech support to help dealers. Heartway also redirects leads from its website to its online dealers’ sites.
Among its products is the S19 Passport Folding Scooter that folds up in one step, weighs 56 lbs, and travels farther on a charge of its lithium battery pack.
Wheelchairs for the Active Set
Lifestyles and shifting demographics also impact the power wheelchair market. Rick Michael, president of Innovation in Motion, says his company’s product line reflects a trend toward people looking for wheelchairs that fit their lifestyles—rather than having to settle for what’s out there. “Now you’re seeing more customization and fitting of wheelchairs to people—the wheelchairs are taking on their own personality,” he says.
Innovation in Motion offers “aggressive” power wheelchairs for active individuals, says Michael. “You can use our wheechairs with aggressive terrains.” The company’s Frontier V6 model has outdoor capabilities and can travel through uneven or soft terrains where other chairs bog down. The model offers one base and seven configurations that could fit any lifestyle. Various configurations with castors or tires can handle indoor use, and a quick change of a bolt or two can transform a power wheelchair from the equivalent of a Honda Accord (safe for the city) to a Jeep.
The X8 Extreme is a 4x4 power chair that handles any terrain. “This allows them to go off the beaten path,” says Michael. “It all comes down to lifestyle. We attract the active lifestyle customers.” Innovation in Motion has distributed the products, which are made in Australia, for 14 years.
Michael urges dealers to do their due diligence. “There are products out there that don’t have FDA [Food and Drug Administration] approval, so you don’t know if they have gone through the required tests. It’s a little troubling and unfair to those who play by the rules.”
Michael also supports carving out complex rehab from Medicare competitive bidding. “Having the right people in the right product is most cost-effective,” he says. The company is active in the regional Ability Expo events, which Michael says is a great place for disabled individuals to come together to view the products.
