Elimination of the first-month purchase option

Thursday, March 25, 2010

WASHINGTON - The provision to eliminate the first-month purchase option for standard power wheelchairs does have some strings attached that make it more "palatable."

First, the provision doesn't apply to complex power wheelchairs; second, it doesn't apply to the nine competitive bidding areas in Round 1 (assuming CMS sticks to its schedule of announcing winning bids this year, before the provision goes into effect next year); and third, it frontloads payments.

"It frontloads payments 15% for the first three months of the 13-month rental period, instead of 10% under the current methodology, which yields providers nearly $550 more, " said Seth Johnson, vice president of government affairs for Pride Mobility Products. "That makes it more palatable."

The provision, part of the healthcare reform bill signed by the president March 23, kicks in Jan. 1, 2011.

Reacting to the provision last week, wheelchair providers had questions--lots of them. In a tight credit market, will they be able to get financing to hold them over until they get fully reimbursed? If a patient doesn't use a wheelchair for the full rental period, can they refurbish and re-issue it? If so, what are the requirements? What will and won't Medicare pay for?

"I think when you're asking providers to make a fundamental shift in payment like this, it ranks right up there with the 27% price cut in 2006 and the 9.5% price cut last year," said Mark Leita, senior director of government relations for The Scooter Store, arguably the largest provider of standard power wheelchairs in the country. "As we move forward, I think we will see providers make rash decisions in an effort to say in business."

It's unclear, at this point, how the provision will play out, Johnson said.

"There will be additional information that will be required from CMS, probably through rule-making, which will outline the process that will be followed," he said.

Johnson and other industry stakeholders plan to spend the rest of this year lobbying to get language or legislation introduced that would preserve the purchase option. There are other healthcare-related bills on Congress' docket that could serve as good vehicles for that language/legislation.

"We need to continue to voice our concerns as to the impact this provision will have," Johnson said. "There are going to be a lot of opportunities, because it's an election year, to get in front of legislators. They're hearing a lot of concerns about provisions in the healthcare reform bill and we need to make sure this is one of the provisions they're hearing about loud and clear."

Editor's note: For more coverage on the provision, read Liz Beaulieu's blog, "Wheels in Motion," at http://www.hmenews.com/blogwm/ and the May issue of HME News.