Lose-Lose Situation with Strike of Power Wheelchair Purchase Option

WASHINGTON — Who is the biggest loser under Congress’ new mandate to eliminate the first-month purchase option for standard power wheelchairs? It isn’t the provider; it’s the Medicare beneficiary, according to PWC stakeholders.

Signed into law by President Obama on March 23, a provision in the Patient Protection and Affordable Care Act eliminates the option. Under the new law, reimbursement for power mobility devices will be stretched over 13 months as a capped rental. (The purchase option for complex rehab power chairs will be maintained.)

Beneficiaries almost always choose the purchase option since their need is long-term and they require the chair for longer than the 13-month rental period. That also allows providers to be reimbursed for the expensive equipment early on.

The provision will take effect Jan. 1, 2011.

“We can certainly work the new reimbursement model into our program and make product available,” said Jim Greatorex, owner of Black Bear Medical in Portland, Maine. “But it will certainly not benefit the beneficiary very much; they may have to be provided used equipment.”

It may sound shocking, but it also might be the model of the not-too-distant future. The vast majority of power chair providers cannot afford to expend thousands of dollars up front, then wait for reimbursement to trickle in.

“If somebody has a chair for three months and then for some reason they no longer use it and it comes back to us, it’s not going to become a decoration for the store,” Greatorex said, adding that the used chair would go through the appropriate cleaning and inspection controls before being provided to a beneficiary.

He also said in order to get the best deals, providers will have to commit to a certain model rather than carrying several brands.

The new law “is going to force our hand,” Greatorex said. “The beneficiary is going to be very limited in product choice.”

‘Quite a Change’

Seth Johnson, vice president of government affairs for Exeter, Pa.-based Pride Mobility Products, called Congress’ Sunday health reform vote a “pretty big blow,” especially since many in the power mobility sector had spent nine months trying to craft legislation that would preserve the PWC purchase option.

After the Congressional Budget Office came out with a score on the original plan (dubbed the “clawback”) that showed only $300 million in savings, stakeholders went back to the drawing board to come up with a new proposal that the CBO scored as budget-neutral in January.

The hope, Johnson said, was for the proposal to be to be included in conference committee discussions on the final health reform bill.

“It was unfortunate how it played out,” he said. “[Congress] bypassed the traditional process [of conference committee discussions] and went with reconciliation that would not allow for the budget-neutral legislation.”

He’s hopeful the proposal could still be added to “doc fix” legislation to remedy a Medicare physician pay cut, or perhaps another Medicare bill later in the year.

“Right now, the possibilities are not crystal clear,” he said.

For the time being, providers can take some solace in a few of the provision’s stipulations. Johnson pointed out elimination of the purchase option will not apply to any contracts entered into before Jan. 1, 2011, under competitive bidding; winners in the nine Round 1 bid areas will retain the option for the duration of the three-year contract.

Payments will also be front-loaded, with 15 percent of the purchase price paid in the first three months — as opposed to the 10 percent under current reimbursement — and 6 percent in months four through 13.

“That does yield the provider $550 more within the first three months, so that is clearly better than no front-loading of payments,” Johnson said. “Front-loading the payments takes some of the financial pressure off, but it’s still quite a change.”

Change — it’s something Greatorex says the industry has gotten used to.

“We’ve gotten so used to change and rethinking our business model that we’re pretty good at it now,” he said, speaking about Black Bear Medical. “There’s only so many cuts and efficiencies that are available and at a point in time, you make the decision whether you can provide the service or you can’t.”

In anticipation of the purchase option loss, Greatorex said his company has already cut back on vendors.

“We’ve done a lot of diversification,” he said. “The only way we feel comfortable is with our Medicare mix being below 20 percent of our revenue. To me, that makes me feel safe just because of all the strings attached.”