Pediatrics: Dynamic in its potential—and challenges

When assessing its potential, the pediatric market always shows promise for providers: It has a base of customers who need services over their lifetimes, reimbursement is not subject to competitive bidding and it also offers retail possibilities. Moreover, technology and clinical knowledge are advancing, making pediatrics a dynamic category for the HME business.

“There is a good deal of growth and competition among suppliers in the pediatric market, both domestically and internationally, which gives users a lot of options,” said Kelsey DiGiacomo, product manager for Fresno, Calif.-based Sunrise Medical. “It's critical for providers to strive to offer the most clinically functional products possible to best suit the needs of children with disabilities. We believe it is important for providers to listen to the companies that provide the products to end users -- the clinical community, users and caregivers and others who understand developmental and educational goals when we are considering new products or new designs for the pediatric market.”

Driving the market evolution is a shift in thinking about matching children with the right products at an earlier age, said Jamie Crawford, vice president of marketing for Lebanon, Tenn.-based Permobil.

“The emphasis is on providing independent mobility solutions for children with cognitive and physical disabilities as early as possible,” he said. “Movement for young children is critical not only for physical milestones, but for social development as well.”

Propelled by the research of organizations like Go Baby Go, “the message has become clearer that we must find more ways to provide children who are not typically developing opportunities to explore their world to maximize mental, social and physical development,” Crawford said. “Providers are also facing more knowledgeable parents and clinician advocates who are seeking solutions beyond dependent positioning and mobility devices while balancing the challenge of unclear funding pathways. Due to advances in pediatric mobility solutions, funding will become increasingly more difficult and it is unlikely that reimbursement will keep up with technology.”

Funding challenges

With Medicaid as the primary funding source for pediatric patients, there are specific challenges in finding coverage for a complete array of products.

J.B. Radabaugh, clinical education manager for Exeter, Pa.-based Quantum Rehab's Eastern Region, said “generally speaking, most state Medicaid programs do a nice job supporting pediatric clients as far as seating and wheeled mobility goes,” but that other items present greater difficulty with coverage and reimbursement, such as specialty beds, specialty car seats, activity chairs, gait trainers, standers and bath safety equipment.

However, Radabaugh said providers should know that “if a service, supply or equipment that has been determined to be medically necessary for a child is not listed as covered (for adults) in a State Medicaid Plan, the state will nonetheless need to provide it to the child as long as the service or supply could be covered under the State Plan.  In such circumstances, the state would need to develop a payment methodology for the service, supply or equipment, including the possibility that payment may need to be made using a single-service agreement with an in-state provider or an out-of-state provider who will accept Medicaid payment.”

Michael Gipson, vice president of sales for Port Washington, N.Y.-based Inspired by Drive, adds that dealing with Medicaid from state to state is the most difficult part of the program. For example, he cites reimbursement in some states is an all-inclusive E1399 code for a special needs car seat, which reimburses roughly 70%-85% of the manufacturer's suggested retail price and could top $2,000. In other states, the code is T5001 and reimbursement is around $600.

“However, there is an additional caveat in that there are several different managed Medicaid plans within certain states that each reimburse a different amount, so it is not black and white,” he said. “This would mean that a child in the lower reimbursed state may receive a less custom seat that is inept to handle the child's needs, but if they moved to the next state over, they may be able to receive the most comprehensive special needs seat on the market.”

Retail potential

One market reality is consolidation, which is limiting families' access to care, even while the demand continues to grow, Gipson said. Additionally, he said providers are focusing on higher reimbursement items to stay competitive and don't have the time to focus on ancillary items.

“This frustration has caused parents to explore alternative means to purchase products and as a result, we are seeing more retail purchases on these products,” Gipson said.

While a retail aspect of the category can be seen as a positive development for providers, Gipson cautions that it is also concerning “as families are ordering products that may not necessarily meet all of the clinical needs of their child. To combat this problem, we're working on creating a program called Inspired Touch to ensure families are choosing the right products from retail sites, and receiving the clinical guidance needed for proper set-up.”

DiGiacomo also acknowledges that “there is a market for people willing to buy technology outside of traditional funding sources,” but that “we always do our best to balance innovation with the current funding environment.”