Amid industry turmoil, complex rehab shines

YARMOUTH, Maine - With two new entrants into the complex rehab market in that many years, what's the big draw for manufacturers like Shoprider and Merits Health Products?

There's the obvious reason, say industry watchers: Complex rehab wheelchairs are not part of Medicare's competitive bidding program, which has doled out double-digit decreases in reimbursement to other products, including consumer mobility.

But there are other reasons, too, including the downfall of The Scooter Store in 2013, says Cody Verrett, president of ROVI Mobility, the complex rehab division of Shoprider, which offers the X3 through a partnership with Motion Concepts.

“With The Scooter Store gone, more folks are coming down stream to rehab clinics and being seen by certified ATPs,” he said. “Now, a lot of those folks are going into Group 3s.”

Combine that increase in demand with Invacare's difficulty with the FDA and “no real explosion in terms of product solutions,” and “you create a formula for a need for more options,” Verrett says.

“That's the dynamic in play here,” he said.

Also at play, watchers say: Unlike consumer mobility, which transitioned to a 13-month capped rental payment model in 2011, Medicare still pays for the majority of complex rehab wheelchairs in the first month.

“Basically, with competitive bidding and the capped rental, there is very little profit margin in providing a power wheelchair for 13 months and getting paid a little more than $3,000 for it,” said Martin Szmal, founder of The Mobility Consultants. “With the rehab market, providers are getting paid a lump sum and manufacturers are more likely to have their products paid for timely and up front.”

They may be entering an attractive market, but companies like Shoprider and Merits won't get very far if they're just offering me-too products with better pricing, Szmal says.

“Rehab providers are a unique breed,” he said. “Is pricing going to be a factor? Sure, they'd like to make more on each chair they provide. But they don't see it as how many units they can sell per month; it's how many people they can help. So the uphill battle (for the new entrants) is going to be building a reputation.”

Verrett says ROVI is doing just that by leveraging its partnership with Motion Concepts, a 20-year veteran of the space, and offering a unique product that has an in-line chassis designed around two batteries and two four-pole motors.

“Seven months into our launch, the product is going in the right direction,” he said. “We're seeing steady increases in all the right metrics—quotes, orders and amount of product shipped per month.”