Good News Soon for Power Wheelchair Sector?

ATLANTA — In the first glimmer of hope for mobility providers in a long while, a bill to delay elimination of the first-month purchase option for power wheelchairs could come through as early as this week.

Mandated by the Affordable Care Act, the first-month purchase option for Group 2 PWCs is scheduled to be eliminated as of Jan. 1, 2011. Rather than getting reimbursed up front, providers would have to wait 13 months before receiving Medicare’s full payment for the power chairs. (The mandate does not apply to providers serving the Round 1 competitive bidding areas.)

Stakeholders have been working to stave off the elimination but were not able to move forward with a bill until the Congressional Budget Office issued a score for the delay. That score — $50 million for a 12-month delay — has been released.

“Now that we have the CBO score, the purchase option delay is being put into legislative language and we are looking to have that introduced maybe as early as [this week],” said Pride Mobility Products’ Seth Johnson, vice president, government affairs, adding that the legislation will be introduced in the Senate.

Johnson said both the Senate Finance and the House Ways and Means committees have expressed support for a 12-month implementation delay.

“They recognize that when they drafted the [health reform] bill, there was significant time for the industry and CMS to adjust to this change,” Johnson said, pointing out that providers will have to change their business model and CMS will need to put together significant guidance on the change. “But the reality is that by the time the bill was signed, there was [less than a year].”

Oddly, the lagging economy has aided in hanging onto the purchase option a while longer.

“Many providers are unable to secure the financing to cover the upfront cost of the power wheelchairs,” Johnson explained. “Banks are unwilling to loan money, credit is so tight. And you cannot use a Medicare receivable as collateral. So we really need additional time to allow for the economy to continue to recover. Hopefully, assuming we get the delay, banks next year will be lending money again, and the transition to this model will be easier.”

Johnson also said consumer groups are very concerned about the access issue. The National Council on Independent Living, the United Spinal Association and the National Spinal Cord Injury Association have already weighed in on the issue with letters to key congressional committees. They recognize, he said, that “providers don’t have the financial wherewithal to adjust to his change.”

Consequently, Medicare beneficiaries trying to get new chairs or even fix older ones could run into significant trouble, “and there won’t be anyone in many areas, especially in rural and underserved areas, to assist these customers with their existing power wheelchairs,” Johnson said.

He is optimistic the delay bill will go through. “We had eight or so meetings [with legislators on Capitol Hill last week], and I haven’t heard any opposition at all to delaying the transition into the mandatory rental model.”

But he delay won’t come for free, he pointed out. Providers will have to “pay” $50 million for it, most likely through taking a 1 percent cut in their portion of the CPI update. Still, said Johnson, it is the best the mobility sector can hope for. “There’s no talk of a repeal right now,” he said. “Those in power in Congress are not interested in repealing any portion of the care act.”

The mobility sector is also grappling with competitive bidding, which will cut an average 32 percent chunk out of Medicare allowables for bid products. Those cuts run higher for power wheelchairs in several areas, as much as 37.5 percent for a K0823 chair in Orlando, Johnson said.

“Many of the rates appear unsustainable, especially when you consider the reductions that have already occurred to the product category in recent years,” he said.

HME advocates have been pushing for passage of H.R. 3790 to eliminate the bidding program. But with CMS estimating a $17 billion savings from the program over 10 years, the bill’s pay-for doubled over what stakeholders had anticipated.

American Association for Homecare board members met last week in Chicago to discuss the issue and go over the data available so far about the bidding program. CMS has divulged little information about Round 1 except the rates; names of contract holders won’t be revealed until September.

Johnson said Pride, along with other companies and associations, is trying to identify problems areas within the bidding program. “The more we call into question the decisions that were made in awarding bids, the stronger the chance to delay the program or stop it,” he said. “But until we see the providers that CMS ultimately contracts with, we won’t have any of the information we really need.”

During the first Round 1 in 2008, Pride identified bidding improprieties in the Riverside, Calif., CBA and, along with several members of Congress, called for an investigation. Concerns centered on reports that a health care consultant worked directly with a wholesale distributor to establish pricing levels for PWCs in that CBA. In the end, of the 19 providers the consultant worked with, 18 won contracts with nearly identical bids.

Johnson said Friday that neither Pride nor any of the legislators heard from CMS regarding the call for an investigation. However, he said, “when you look at the number of winners for this round, I do believe that since 46 of 48 bidders won, CMS did take into account the information that was alleged to have occurred last time when they evaluated the bids this time.”

That doesn’t necessarily mean that all is well in the Riverside CBA, however.

“My only concern, and one of the things we are looking into in Riverside, is why are there so many [power wheelchair] winners? Forty-six seems like a lot of winners in that category,” said Johnson. “You wouldn’t need that many to fill the capacity bucket.”

For a chart showing the number of contracts offered for all product categories in the nine Round 1 CBAs, see the CBIC website.