Power Play

You can’t keep a good market down.

Take the power wheelchair market, for example. It has endured a DMERC policy clarification that stalled thousands of payments for power wheelchairs to home medical equipment providers; it has long grappled with an inadequate Medicare coding system; and it has had to compete with an influx of offshore manufacturers, many of whom undercut both prices and quality. But it’s still one of the best HME markets out there, manufacturers say, and there is nowhere to go but up.

“The market has steadily grown because the population continues to [get] older,” says Cy Corrigan, national sales manager for Pride Mobility Products, Exeter, Pa. “Individuals have had their freedom, they’ve seen a lot more than our fathers’ fathers saw in their day and that has left them wanting to retain their independence.”

Calvin Cole, national director of sales and corporate development for Sarasota, Fla.-based Hoveround, agrees. “Why would we expect the demand to go down?” he asks. “We should only expect it to go up.”

The Numbers Are There

The demographics support such optimism. It’s been estimated that another baby boomer — defined as those Americans born from 1946 to 1964 — turns 50 every seven or so seconds. That will eventually translate into a huge population of Medicare recipients; in the next several years, it is projected that 1.6 million Americans will join the 65-and-older population annually. And many of them eventually will need power wheelchairs.

In addition, bariatric wheelchairs are more and more in demand, and the rehab market also is growing.

But right now, says Tim Spatharos, president of San Antonio, Texas-based Teftec, “this market is getting extremely tight with the Medicare issues and new legislation. It’s a lot more difficult to get a wheelchair funded.”

“Everybody is down a little and some people are down a lot,” says DuWayne Kramer, president of Kansas City, Kan.-based Leisure-Lift.

Mark Greig, product manager for power wheelchairs for Sunrise Medical, Longmont, Colo., attributes the situation to actions of the durable medical equipment regional carriers. “The DMERCs’ recent attempts to reign in growth have slowed the market, specifically with the policy clarification they provided regarding ambulation,” Greig says. “However, the recent restatement of the policy should have a positive impact on the market.”

In December, the DMERCs issued a clarification of policy regarding Medicare coverage of power wheelchairs. Industry players protested, saying the clarification was, in fact, a change in policy. Some banded together to form the Restore Access to Mobility Partnership, or RAMP, and, in a unified voice, decried the DMERCs’ interpretation of “nonambulatory.” The clarification noted that power wheelchairs were covered “if a patient can only bear weight to transfer from a bed to a chair or a wheelchair.”

The clarification, said RAMP and others, was a significant change from previous policy and would, they cautioned, deny power wheelchairs to people with legitimate needs. That caution appeared to be borne out as power wheelchair reimbursement slowed and, in some areas of the country, such as Texas, almost ceased.

In mid-March, however, after hearing from providers, manufacturers, patient advocate groups and end users, CMS retracted the clarification. The coverage policy would remain unchanged and CMS would continue to pay claims for power wheelchairs, the agency said. It also promised to respond to “concerns voiced by the power wheelchair community.”

Outlined by CMS in a subsequent Open Door Forum held on March 31, those issues include confusion over the scope of the DME benefit, beneficiary access and documentation requirements, three points on a list of eight themes CMS and DMERC officials said they had gleaned from prior listening sessions on the issue. (See “Headline News” for an update.)

Industry advocates continue to protest the fact that there is no clear definition of coverage criteria for power chairs. Nevertheless, CMS’ retraction of the clarification served to hearten the power sector, which continues to move forward with plenty of new technology.

All the Bells and Whistles

Center- (or mid-) wheel drive, tilt-and-recline, stand-and-drive chairs, off-road capabilities — such features are advancing today’s power wheelchair market.

“When you look at the products and features, the chair configurations provide people a much better environment. They focus on maneuverability in [end users’] homes as well as outdoors, so people can still live their lives outside the four walls of their homes,” says Barb Riles, product manager, custom power wheelchairs, for Elyria, Ohio-based Invacare.

Allowing people to “still live their lives” is a common mantra in this market. “Quality of life is being integrated into medical devices in that the sole purpose is to provide and obtain more independence,” says Darren Jernigan, director of government affairs, Permobil, Lebanon, Tenn. He sees “a slow acceptance to the importance of seating and positioning.” End users like the “combination of tilt-and-recline not only for therapeutic purposes but the comfort level.

“The range of power mobility is growing,” he adds. “Seat elevators are now popping up all over; stand-and-drive chairs and even off-road power mobility are options now for end users.”

Manufacturers are mainly focusing on the center- or mid-wheel drive.

“A lot of people are going to mid-wheel drive for the maneuverability of it rather than a rear-wheel [drive],” says Michael Kraft, inside sales support for C.T.M. in Riverside, Calif.

“I think center-wheel drive [has taken] a lot of precedence in the last few years,” agrees Riles. End users are also looking for smoother climbing ability, she says. “One of the features we really have focused on has been … technology that allows a user to climb slowly, up to three inches, depending on the chair. Someone doesn’t have to get a running start to get over something and it isn’t as jostling, so it is a smoother transition.”

Pride’s Corrigan notes big advancements “in seating, the product itself, the materials we use. If you look at the styling of the chairs 10 years ago, or even seven years ago, and you look at the chairs today, they almost don’t look like medical devices.

“That helps people maintain their quality and dignity of life. The looks are sportier; there’s more curb appeal.”

With strong demographics and evolutionary — if not revolutionary — technology, the power wheelchair market has lots going for it. But there remain plenty of issues to keep manufacturers on their toes.

“By far, the most challenging part of operating within this market is dealing with the vagaries of a third-party payer system,” says Sunrise’s Greig. “The variety of payment systems and the rate at which they change — typically for the worse — has a significant impact on end users, our customers and ourselves.”

“The challenging aspect for the industry is trying to find which road it wants to go down,” says Hoveround’s Cole, who sees a variety of entities with different interests — rehab, pediatrics, bariatrics, assistive technology, spinal cord injuries, geriatrics — clamoring for different governmental benefits. “CMS is all confused. We need to be singing from the same hymnbook.”

Kramer sees another, perhaps even greater, challenge. “There is a problem developing, and that is a break in the market,” he says. “You can get on eBay and buy a power chair for half what you’d pay a dealer … The market is dividing into … these extremely cheap things that don’t last too long and more expensive products. It’s hard for a brick-and-mortar dealer to compete with those who are selling power chairs for just $100 or so over what they paid.”

HME providers, he says, “need to distinguish their products … Even with a basic chair, there is fitting. There’s height, how [the patient is] going to use it, whether it will work in their home. Dealers have to do some selling of themselves and the products that they carry.”

Sources Interviewed: Calvin Cole, national director of sales and corporate development, Hoveround, Sarasota, Fla.; Cy Corrigan, national sales manager, Pride Mobility Products, Exeter, Pa.; Mark Greig, product manager, power wheelchairs, Sunrise Medical, Longmont, Colo.; Darren Jernigan, director of government affairs, Permobil, Lebanon, Tenn.; Michael Kraft, inside sales support, C.T.M., Riverside, Calif.; DuWayne Kramer, president, and Jim Ernst, Leisure-Lift, Kansas City, Kan.; Barb Riles, product manager, custom wheelchairs, Invacare, Elyria, Ohio; Tim Spatharos, president, and Tom Finch, vice president, Teftec, San Antonio, Texas.

The K0011 Conundrum

For years, manufacturers and providers alike have asserted that CMS’ coding for power wheelchairs is, at the least, unclear and confusing. At the worst, it could prevent end users from getting the appropriate equipment. The coding needs to be changed, they say.

“The HCPCS power wheelchair coding scheme currently in use and now expanded to many other payers due to HIPAA is based on outdated technology and product classifications,” says Sunrise Medical’s Mark Greig, product manager for power wheelchairs. “This has effectively grouped a number of products with very disparate functionality all within the same code and all with the same funding allowance. This minimizes the ability of a provider to profitably provide the necessary product in many circumstances.”

Greig, along with others, champions splitting the code. But CMS effectively squelched that idea last year when the American Association for Homecare’s Re/hab and Assistive Technology Council submitted its second batch of coding suggestions. Chaired by Rita Hostak, vice president of government relations for Sunrise, the RATC proposed splitting the current code into three codes. Later in the year, Hostak reported that CMS had tabled any decision on the issue for the foreseeable future.

Hostak now heads the National Coalition for Assistive and Rehab Technology (NCART), a coalition formed in February to address issues specific to the rehab industry. In a position paper released in March, NCART describes the need for better-defined power wheelchair codes, more appropriate clinical indicators, more precise coverage criteria and equitable reimbursement. (For more information, visit www.ncart.us.)

CMS’ action — or lack thereof — frustrates Greig, who says splitting the code would ultimately reduce the cost to payers. “Redefining the codes into more logical groupings that more accurately represent current products would better align products and codes to actual user requirements,” he says. “Users would be less likely to be over prescribed products or under prescribed products. This would create a more efficient system and likely reduce the overall cost to payers while increasing functionality to users.”

Industry experts say that should be a good selling point, but so far, CMS isn’t buying.

Bigger Market, New Players

The demographics of the power wheelchair market have been tantalizing enough to draw numerous new players, including on the Internet and offshore. The question is, will they survive in the sector? Most manufacturers interviewed for this article think the market will shake out over time.

“There is a foundation of players that will never change, and that is a tribute to their business model and commitment to who they serve,” says Darren Jernigan, director of government affairs for Permobil. “As accreditation and certification laws pass, it will be more difficult to simply open up a shop, hang a shingle and start dealing in power mobility. It’s a long overdue protection to the end users.”

“I think some of the cheap stuff will go away, “ says Jim Ernst of Leisure-Lift. “[Those manufacturers] can’t afford to stay in a market that is not going to give them huge volumes. They are either too small or too big. Some of the manufacturers have already come and gone.”

“I would say more players are entering the market with few players departing,” says Mark Greig, product manager for power wheelchairs, Sunrise Medical. “[However,] the recent policy changes and fluctuations may ultimately have an effect on that.”

In the end, manufacturers say, the players that remain will be those dedicated to producing quality products specifically designed to answer the needs and desires of the end user.

“End users are demanding a better product,” says Tim Spatharos, Teftec’s president. “Whatever you are manufacturing, it needs to be a better quality.”

“The market is really driven by the consumer,” says Michael Kraft, inside sales support, C.T.M. “It’s always a work in progress. There’s always something better that will come up on the horizon, and you want to make sure that you’re ahead of the game and not just throwing a product out there but a quality product that meets the need.”