Life Without Medicare

The question a lot of home medical equipment providers are asking these days is, "Is there life without Medicare?" Gerald Choate has an answer: Yes.

The owner of Tulsa, Okla.-based Sooner Mobility & Rental gave up the Medicare slice of his pie two years ago and, instead, beefed up his retail sector. He has not regretted it.

"When we stopped taking Medicare, we had a fairly good, diverse mix between retail sales, repairs and third-party payers," Choate says. "Medicare was about 12 percent. We didn't want to lose that 12 percent, but neither could we justify all the expenses and headaches to get that 12 percent."

So Sooner got out of the Medicare business and, Choate says, took back control of its future. It wasn't necessarily painless nor was it without expense. It may not be for everyone, but for Sooner, it was the right move.

"We were apprehensive at losing 12 percent of sales overnight, and it wasn't easy for us to tell the first few customers we can't provide what you want," Choate says. "It wasn't an easy transition, but it was a necessary transition."

Goodbye, Medicare

Choate doesn't claim to be a visionary or to have a crystal ball. He just got tired of dealing with the extreme vagaries of Medicare reimbursement, its constant snarl of red tape, declining reimbursement and the threat of competitive bidding.

"There was no specific instance," he says about the trigger to dispense with Medicare. "We've always had a pretty good showroom. When it came time to renew our Medicare contract, we looked at the reductions in reimbursement, the scrutiny of claims, competitive bidding — it made sense to me to look at another [model] that was not dependent on a single-payer source, especially not Medicare. A provider should not have to jump through hoops like that to get paid."

Expanding the retail showroom seemed to be the answer. After all, Sooner Mobility has been a fixture in a sizeable Tulsa shopping center near one of the city's major intersections for about 18 years.

"Sixty thousand cars a day pass by," says Choate, who has owned the company for 11 years.

It had the showroom, it had the traffic, it had just under a dozen longtime employees. With an investment and some adjustments, Choate decided, he could walk away from Medicare and concentrate on retail.

"We had to do a couple of things [before dropping Medicare]," Choate says. "We had to improve our internal processes so we were operating as efficiently as possible."