Rehab Carve-Out Promised but PWC Purchase Option Still Under Threat

WASHINGTON — Power wheelchair providers battling to convince Congress to retain the first-month purchase option got more time to work on the issue last week, but the threat is still great, they said.

House Democrats were forced Friday to stall the unveiling of their health care reform bill when the conservative Blue Dog Democrats dug in their heels and refused to support the plan without sweeping changes. The 842-page bill, which contains a provision that would eliminate the first-month purchase option for power wheelchairs, had been expected to go to markup today.

“The Blue Dogs — 75 or so legislators — are raising concerns, and that’s really forcing the Democrats to go back because they need those votes. They need to address [the Blue Dogs’] concerns to the point that they are confident that when they bring it to the floor, they can pass it,” said Seth Johnson, vice president of government affairs for Pride Mobility Products in Exeter, Pa.

The delay could be a boon to PWC providers if they grab the opportunity to educate legislators about the potential ramifications of eliminating the purchase option, Johnson said. Stakeholders have predicted it could shut down that segment of the HME business and severely impair Medicare beneficiaries’ access to the products.

“I am pleased that [the Democrats] are continuing to deliberate on this because I think this gives us more of an opportunity to carry this message and get more consumer groups involved,” Johnson said.

Already, a plethora of advocates has weighed in on the issue, including the Rehabilitation Engineering and Assistive Technology Society of North America, Consortium for Citizens with Disabilities, the American Association of People with Disabilities, the Clinician Task Force, the Amyotrophic Lateral Sclerosis Association, the Independence Through Enhancement of Medicare and Medicaid Coalition and the National Council on Independent Living. In addition, the American Association for Homecare and other industry stakeholders have sent letters to key legislators and committees decrying elimination of the option.

Apparently, their voices have been heard, at least in some sectors. Last week, Johnson said, “we did hear that the House committees have agreed to exempt complex rehab wheelchairs from the first-month purchase option [elimination]. We did receive that verbal confirmation. We are very anxious to see legislation in writing.”

While that is positive news, he and other stakeholders said, it is critical for the entire power wheelchair segment that the first-month purchase option be retained.

“Half of my business is non-complex, just like many other providers,” said Tim Pederson, CEO of WestMed Rehab in Rapid City, S.D., and chair of AAHomecare’s Rehab and Assistive Technology Council, noting that in some instances, the non-complex sales help carry the cost of the complex rehab equipment and service. “To be an effective provider, you have to provide the full spectrum. I am afraid that if they cap an entire segment of that business, it’s going to eliminate that business. I am not going to wait 13 months to get paid.”

Under the House provision, Johnson explained, power wheelchair reimbursement would be subject to a 13-month rental cap. Ironically, this would result in Medicare paying 5 percent more, he said, because more than 92 percent of beneficiaries use their chairs more than 13 months.

Johnson said the plan would not mirror the current 36-month rental cap for oxygen, which requires providers to continue to service patients for another two years without getting paid.

“This is different,” he said. “It’s a 13-month rental and they would frontload the payments within that period. So the provider would receive 45 percent of the total payment within the first three months. The balance would be spread out over months four through 13.”

After the 13th month, he said, ownership of the wheelchair would transfer to the user.

“That currently occurs in the first month [under the first-month purchase option],” Johnson said. “What I’m hearing from providers is that it is going to be impossible to make this kind of change in the economic environment that we’re in because of the inability to secure access to lines of credit … to acquire the equipment.”

“It’s not just the cost of holding the note for 13 months,” added Pederson. “It’s providing any kind of service and maintenance during that time. These items get heavy use. If there is some kind of abuse that is not covered under that warranty, then we have to absorb that cost. It can be significant, and I don’t know many providers that are willing to take that risk.”

Johnson pointed out the costs to the provider are all frontloaded — “the acquisition of equipment, all the evaluation, fitting, set-up and delivery, training and adjustments. And you have to pay your employees. Your employees can’t wait for 13 months to receive their paychecks. There are all kinds of fixed costs within businesses that do not work within this scenario.”

Even as the House debates its plan, the Senate is working on its own initiative, which is also rumored to include the elimination of the first-month purchase option. Last week, the Senate Health, Education, Labor and Pensions Committee ceased its contentious markup. It is expected to restart that markup today.

The regrouping bought the industry a little time.

“Time is good. It gives us more of an opportunity to try and influence the final outcome of this Senate Finance Committee package,” said Cara Bachenheimer, senior vice president, government relations, for Elyria, Ohio-based Invacare.

Meanwhile, stakeholders question why Congress is even talking about eliminating the first-month purchase option.

“The savings isn’t really that significant,” said Johnson. “It’s really hard to know what the actual savings would be because until they have the final legislative language, the Congressional Budget Office can’t score the savings. We did see some preliminary scoring earlier this week before the House removed complex rehab from the provision, and that score came in at $900 million over a 10-year period.”

Remove complex rehab from the equation, Johnson and Pederson said, and the savings shrinks significantly.

“Nine hundred million over 10 years? That’s smoke and mirrors,” said Pederson. “I am not sure how they would achieve that much of a savings, because ultimately on these chairs they are going to be paying five percent more. It’s nothing but window-dressing. And if you carve out complex rehab from that, your savings are even less. Why even bother?

“We seem to be the sacrificial lamb that is cut up on the altar of effective government every time they need a poster child, and there isn’t that much to cut up anymore,” he said.