Fine Tuning Mobility Rental
Providers of standard power mobility have been on quite the learning curve. In 2011, providers saw the removal of the first-month purchase option. This represented no less than turning mobility providers’ businesses completely upside down.
Originally, a patient with a permanent mobility condition could purchase a power mobility device at the outset of their claim. This made sense for patients with a life-long condition. But, arguing that power chair claim were rife with fraud, CMS decided that all standard power mobility devices must be rented to patients over a 13-month rental period. Providers would then have to bill Medicare in monthly installments over that time.
This meant that providers that once saw the full funding for those PMDs come in one installment, which covered their initial, expensive investment, they would have to provide the chair and related services up-front and make it back over time.
Now providers of standard power mobility must seek financing to cover the cost of the equipment while waiting for the funding to trickle in over 13 months. And, this new scenario has meant that providers have had to narrow the types of standard PMDs they will provision to patients.
Also, providers have had to become efficiency experts, to remove all unnecessary costs and maximize their margins while waiting for funding to come back to them. But if removal of the first month purchase option wasn’t bad enough, there are other funding threats facing standard power mobility providers, such as Round Two of competitive bidding. This has meant that providers have had to seek newfound efficiencies in every element of their businesses. Now all departments from billing to deliver and seekig to drive down costs and protect margins.
In short, there is a laundry list of considerations rental mobility providers must keep in mind to remain effective and profitable.
Lest mobility providers see too dark a horizon, it’s important to remember that there is still growth potential in standard power mobility. The thriving Baby Boomer market could help mitigate challenges that providers face by helping HMEs increase the size of their marketshare. Moreover, given the relative wealth of that generation, baby boomers have the purchasing power to acquire standard power mobility devices for themselvesand their parents even if funding is in question.
Mobility customers don’t necessarily have singular needs, either. When a patient comes in for rental PMD, he or she might also need a range of devices and services that the enterprising provider must explore. It is critical for mobility providers to offer the sorts of devices that accompany mobility devices, such as lifts, ramps and other home access devices, as well as auto access products to help the patient stay active and travel. In addition, providers need to think about how the patient’s limited mobility could create other needs, such as bath safety products.
Mobility providers also need to consider financing options to help patients obtain power mobility devices and accompanying items. Some patients might have neither the funding, nor available funds for a PMD, so a provider should offer the financial tools to assist them. A great place to start in sourcing patient financing is vendors. Some manufacturers of mobility systems and auto access products and the like have started offering turnkey financing programs that providers can offer patients.
And, of course, financing is critical for mobility providers themselves for the equipment that they must obtain in advance of full reimbursement. Fortunately, most vendors responded almost instantly to the removal of the purchase option with their own financing programs to help providers finance inventory. That said, HMEs can also look to third-party sources, such as industry member service organizations, and traditional inventory financing companies.
The Right DME
Given that some chairs will be coming in and out of a provider’s business, they will need to be revamped and prepped for new users, standard power mobility providers need to seek power mobility devices that can easily be services and continue to look good after use. Look for features such as simpler construction, durable materials and finishes, and rubber parts that don’t show age, such as black, no-scuff tires. This will help the provider quickly and cheaply put a PMD back into circulation.
Driving volume has become critical. By now, referral partners should be well aware of the removal of the first month purchase option, so now is the time to drive home the provider’s expertise in this new funding landscape. Use value marketing pieces such as newsletters and emails, as well as in-services to educate partners on how your rental business works, how you can still help facilitate patients getting ideal solutions, and your ability to provide quality care. This will help drive the volume of referrals that will help providers contend with the loss of the first-month purchase option.
Points to take away:
- Standard power mobility has been transitioned to a rental model for some time now, but providers must continue to drive effectiveness and efficiency.
- Growth potential remains, especially in the case of the Baby Boom generation.
- Providers need to seek financing solutions to help patients obtain nonfunded, high-ticket items such as auto access devices.
- They must also continue to review and source inventory financing to over the purchase of DME as its reimbursement trickles in over 13 months.
- Continuing to educate referral partners will help drive increased volume and hopefully diminish the impact of the first-month purchase option’s loss.
Read our collection of articles, columns and features on power mobility in HME-Business.com’s Mobility Solution Center.
This article originally appeared in the June 2012 issue of HME Business.