Industry Shifts to ‘Delay’ Mode on Elimination of First-Month Purchase Option

EXETER, Pa. — After more than a year of trying to save the
Medicare first-month purchase option for standard power
wheelchairs, industry stakeholders have changed tactics and are now
attempting to delay its elimination.

The nation’s new health reform legislation calls for elimination
of the first-month purchase option for standard PWCs. Instead,
providers would receive payment spread over 13 months, a plan they
say could create real financial problems.

Providers and manufacturers alike have been working with
Congress to strike the provision from the legislation, but with no
success.

“Basically, what the Democrats who control both the House and
Senate in Congress have indicated is that they are unwilling to
repeal any of the provisions in the bill prior to the elections,”
said Seth Johnson, vice president of government affairs for Pride
Mobility Products, Exeter, Pa. “It’s very unlikely that the
purchase option will be preserved prior to the end of the
year.”

The good news among the grim, however, is that legislators have
also said they are open to a delay, Johnson said. “We really view
that as a positive development even though we aren’t going to be
able to preserve the first-month purchase option. A delay is
certainly needed, and if that is the most we can achieve this year,
then we’ll take that and continue to work on this issue.” That
delay could be anywhere from six months to three years. The
timeframe depends on the Congressional Budget Office’s score
— that is, the cost for delaying the provision.

“Once we get the score back from our congressional allies, then
the industry will have an opportunity to evaluate what length of a
delay we can support,” Johnson said. That “pay for” would take the
form of a reimbursement cut that would be part of the Medicare fee
schedule, he said.

Johnson said the score could be released within 30 days.

Even CMS might welcome a delay, he thinks. “We believe CMS is
also open to a delay so they can make the changes that are needed
to implement this plan, and in a way that is not going to
jeopardize beneficiary access.”

Johnson said that if a delay can be paid for, “we’re being told
that the extenders bill, which must be passed by Sept. 30, is the
best vehicle to … include the delay language.” The “extenders
bill” covers certain tax provisions set to expire this year for
which there is broad bipartisan support for continuing.

Meanwhile, manufacturers, including Pride, are trying to find
ways to help providers shift to a new paradigm. “We’re looking at
things like leasing,” Johnson said. “We’re really evaluating all
options to help providers remain in business and be in a position
where they can continue to provide products to Medicare
beneficiaries.”

Going from a business model where a provider is paid up front,
usually within 45 days, to one where it takes 13 months to receive
full payment will be a huge challenge, he said. “This is a
significantly new business environment,” Johnson said, noting that
standard power wheelchairs are expensive items and providers would
need access to capital to carry them through. That latter is tough
since banks are not offering access to credit, he said.

“It’s really a very difficult situation,” Johnson said. “We’re
doing everything we can.”