Business Solutions: Power Mobility Outlook

Rebuilding Mobility

Audits and competitive bidding continue to strangle the industry while PAD and pending legislation promise some relief. How will providers build their future?

Rebuilding MobilityOver the past two years, power mobility providers have watched the Centers for Medicare and Medicaid turn their business models upside down and take them apart. As 2014 unfolds, they must rebuild their future. What will it look like?

HME Business magazine’s last power mobility outlook delved into an industry trying to overcome a barrage of revenue-depleting obstacles, including audits, competitive bidding and reimbursement reductions.

This year, the industry continues to struggle with challenges old and new. Audits wreak havoc, frustrate providers, and chip away at the ability to provide high-quality care. Competitive bidding is consistently sourced as why the number of mobility market suppliers is shrinking. And providers are trying to figure out how to provide power mobility repairs and still stay profitable.

To help you prepare for the coming year, various industry experts shared their perspectives on what the future might hold for the power mobility industry. They discussed the challenges ahead and some of the positive changes helping to reshape this struggling industry.

Winning an Audit

When asked what are the top three concerns of HME power mobility providers, David Baxter, president of Medical Necessities, replies, “Audits, audits and audits.” This sentiment was echoed by industry legislative expert Cara Bachenheimer, senior vice president of Government Relations for Invacare Corp., and her coworker Jim Stephenson, Rehab Reimbursement Manager for Invacare; both call audits one of the biggest potential roadblocks for the mobility industry in 2014.

“Audits are killing the industry,” Medical Necessities’ Baxter says. “I have talked with a number of companies in Tennessee and they all are going through the same thing with RAC audits. What we are all finding is that audits are simply open to interpretation of the audit company.

“We received approximately 100 RAC audits over the past six months,” he recounts. “We received several denials initially through the RAC firm; however, we had the majority of them quickly overturned when we stood up and pointed out Medicare’s policy for power chairs and that the patients met the criteria. They overturned their first opinion in a matter of days but the process of working through 100 audits and then fighting them in appeals took hours of our staff time and for the final opinion they were paid appropriately in the first place. We spent over 200 plus man-hours to work these audits and didn’t get a penny for doing this. It took us away from taking care of the new and existing patients who needed our help.”

Like Baxter, many providers perform their jobs with the uncertainty of knowing whether they will get paid.

“The best thing a provider can do is make sure they aren’t delivering equipment without having all the necessary paperwork in hand,” Invacare’s Stephenson explains. “Having a screening process in place where the documentation is reviewed for completeness and accuracy before the equipment is delivered is helpful also. There are medical review checklists available on the DME MAC websites that are good tools to use to make sure all the bases are covered.”

Baxter’s advice is to get away from Medicare and work with insurance companies that want you to help their patients. But at least one provider feels that many insurers are adopting the Medicare way.

Audits’ Impact on Care

Ariana Vesnesky is the manager of BLACKBURN’s rehab division. She says documentation constraints continue to restrict quality of care and that more involved policies and procedures will continue to make it very difficult to provide what is needed. Very alarming is that she reports seeing more and more doctors refusing to see patients for power mobility exams. She also sees the influence of Medicare policies reaching other insurance carriers.

“Most all other insurances, including major medical policies, have now implemented policies for coverage exact or similar to Medicare’s policies,” she explains. “The same goes for their reimbursement levels. Many of the Medicare changes in policy over the last decade have been put in place in an effort to combat fraud and abuse in the area of mobility products for our seniors.

“We now have to apply these same restrictions on members of the community that actually pay for their insurance coverage,” she continues. “These are active, participating members of society who are being denied coverage based off of Medicare’s rules. The fact that most other insurances follow Medicare’s lead may change the entire benefit category for all.”

The high audit activity in the power mobility space has significantly compromised the cash flow of many DME providers, forced some to exit the market and others to close their business all together, according to another industry legislative expert, Seth Johnson, vice president of Government Affairs for Pride Mobility Products Corp.

“The one thing the industry has learned from this is that it does not matter if you have a file full of documents; it takes solid documentation to win in an audit,” he says. “Businesses that have been successful in the audit arena have learned from the experience and made, or are making, changes in their up-front operations and order processes. This includes hiring or utilizing the services of experts who know the rules and regulations, review the documents and documentation prior to the company providing the item to the beneficiary and performing self-audits to ensure the statutory and medical necessity requirements have been met.”

According to audit consultant and one-time Medciare fraud investigator Wayne van Halem, president of The van Halem Group, LLC, providers must be proactive and have great attention to detail before submitting claims.

“The risk is so high and when they submit that claim, they accept the liability,” he said. “They must conduct internal audits, have a compliance program, and definitely have a Q&A [quality assurance] process. We have worked with numerous companies to do an ‘unofficial’ prior authorization process for them and when they have been audited, they came out without any problems because they were proactive and made sure everything was correct before sending that claim in.”

Prior Authorization Demonstration

A positive development for the mobility industry has been the Prior Authorization Demonstration (PAD). According to Pride’s Johnson, many providers are indicating they would like to see this rolled out nationally for all power mobility. In addition, Johnson points out that the market continues to increase due to the baby boomers reaching retirement age in record numbers and complex rehab is gaining the necessary recognition that it is different from standard DME with Medicaid and third-party payers, due in large part to the exemption from competitive bidding provided by Congress for these items back in 2008.

“Before equipment is provided, providers go through a prior authorization process and submit documentation,” says Jay Witter IV, vice president of Government Affairs for the industry’s national association the American Association for Homecare. “CMS approves the claim and then the equipment can be provided. That gives the provider the acknowledgement that the claim should be paid. If run properly, a prior authorization should let everyone know ahead of time what the requirements are.”

“The Medicare power mobility device prior authorization demonstration has been going for about a year now, and our provider customers have been pretty happy with how it has been going,” Invacare’s Bachenheimer says. “By requiring the medical documentation to be submitted up front and receiving a determination from the DMAC that in fact medical necessity has been met, providers have the reassurance that in an audit, at least upon medical necessity grounds, the claim will be upheld.”

Furthermore, she said that if documentation is not sufficient, the DMAC explains what type of information is missing or “incorrect.” While the results have been about 50/50 between affirmations and rejections, Bachenheimer says that the program still holds promise as systemic kinks get worked out and providers continue to adjust to the process. It is still too early to tell whether the program will expand to other markets, as there are two years remaining in the pilot.

“The program is definitely a good idea and will benefit the provider community greatly but whether it becomes a more widespread and permanent policy or not is still up in the air,” she says.

Johnson points out that the prior authorization process is one that has been used by State Medicaid programs and private insurance companies for years.

“The demonstration has given CMS the opportunity to develop an extensive list of denial reasons and codes, which should result in a more consistent review of the file so that there is a more equitable coverage determination process,” he says. “I do see Medicare expanding the prior authorization program nationally in the future.”

Surviving Competitive Bidding Round Two

Witter says that AAHomecare is receiving information that competitive bidding Round Two is causing significant access problems for power mobility. He recounts a patient who needed a power wheelchair and had to wait eight days on her couch, which she couldn’t remove herself from. Other patients are reporting two- to three-week equipment delays.

“What it is forcing beneficiaries to do is pay cash for items.” Witter says. “So it is setting up basically a dual system in Medicare for the ‘haves’ and ‘have nots.’ For those who can’t pay for the power mobility in cash, they are forced to deal with the competitive bidding program and sometimes wait two or three weeks for their item.”

There are significant repair problems for the industry as well. There are a number of wheelchairs out there that were provided by providers that are now out of business. And because of the current rules on auditing and recouping, Witter said that providers can’t repair those chairs without the fear of having their reimbursements for the repairs recouped because of some documentation problem from a provider that is out of business.

Peggy Walker, RN, director of Reimbursement Services for VGM Group’s U.S. Rehab, says she has seen competitive bidding affect the mobility industry negatively.

“Mobility providers have to find non-competitive bidding products and cash items to help them maintain their businesses,” she explains. “Cash is the best HCPCs code there is. Home modifications are becoming more and more a part of our industry and VGM offers a great group to help DME providers get involved in this cash industry.

“Competitive bidding is flawed,” Walker continues. “We’re already seeing what VGM and other groups have predicted: Delays in hospital discharges, providers dropping out of the system, and the suicide bid, which allowed a company to bid low to get business and not have to deliver on the bid, which affected the product prices.”

Stephenson says that competitive bidding has drastically reduced the number of providers who are able to provide mobility products.

“The average medical equipment provider does approximately 40 percent of their business with Medicare beneficiaries and that is a pretty big number to overcome in the short term,” he said. “Diversifying revenue streams can be done by exploring contracts with other funding sources, pursuing product categories that are not in the competitive bidding program and looking into more retail sales.”

The Face-to-Face

There is a face-to-face requirement in the Affordable Care Act and this is an area of concern for AAHomecare because enforcement for the requirement was supposed to start July 1, then Oct. 1, and now a yet-to-be-set date in 2014. But CMS has yet to release information about how to comply with this new regulation.

“We’ve worked at AAHomecare through our regulatory council to get information from CMS to help providers comply,” Witter says. “We even drafted a Q&A document that would deal with certain situations to ensure that there is compliance from the provider. CMS failed to release any information by the July 1 deadline. They delayed the enforcement of the requirements until Oct. 1, which means they aren’t going to enforce the face-to-face regulation but providers are still subject to audits on the backend.”

Educating the physicians is still a tall order for most providers primarily due to the mixed messages being delivered by other providers, Bachenheimer says. Physicians want the process to be as simple as possible and they have a hard time believing the process is so complex.

“Unfortunately there are no short cuts to the face-to-face evaluation process if the provider wants to be successful,” Bachenheimer explains. “The best advice is to remain consistent with your message and don’t compromise on what you will accept to meet the requirements.

“By explaining to the physician that Medicare is the one that requires this information for coverage and that you are only asking for the minimum of what is necessary, the conversation tends to go a bit smoother,” she suggests. “Being empathetic about the physician’s time and workload is also generally a plus. Being educated on the guidelines, maintaining the integrity of your company and not cutting corners throughout the process will help ensure long-term success.”

First-Month Purchase Option

Johnson said that the current market has generally adjusted to the significant change in the reimbursement process for standard power wheelchairs from first-month purchase to mandatory 13-month rental.

“Most providers have recognized the key to success is to provide a highquality product up front in order to limit the need to do maintenance or repairs during the rental period at additional cost to the provider,” he said. “Some providers have said they really like the recurring revenue each month now that they have fully transitioned to the new reimbursement model.”

However, Johnson points out that many providers have gone out of business, as well. Though this is not necessarily directly because of the removal of the first-month purchase option, but rather a cumulative effect. Walker explains that when rental is combined with competitive bidding, it creates a less-than-ideal reimbursement scenario that forces many providers give up providing standard power mobility as a rental — or just plain give up.

“It is not cost-effective for them to do so because they have to make sure the product they put out will last five years or they may become responsible for providing a different base to make it last,” she says. “The providers need to make sure that they put out bases that will last the full time and not require frequent servicing within the first 13 months.

“This is not as easy as it seems because of reduced reimbursement levels foisted on the industry by competitive bidding,” Walker adds. “The number of patients who are able to receive needed equipment in the future will be greatly diminished. This will hurt patient access and quality of life, not to mention the increased number of falls and ancillary injuries.”

Van Halem said the program has transitioned with success but that it certainly had an impact. He suggests that providers don’t provide patients with more complex group 3 chairs to avoid this policy. He has seen suppliers who have done this and their audit situation had a huge impact on them. Van Halem warns of significant consequences and scrutiny if they do this.

Action not Words

So how can providers improve their lot in life over 2014? It comes down to defending their industry. One of the most important things a provider can do to help make 2014 a better year for the mobility industry is to contact your legislator immediately and ask him or her to cosponsor H.R. 942 and S. 942 (see sidebar), as well as support replacing competitive bidding with the Market Pricing Program through H.R. 1717.

Providers can find more information at, and can also send an e-mail to Congress by visiting Also, stories that demonstrate how competitive bidding is hurting patient access to care are critical. Mobility patients should call People for Quality Care at (800) 404-8702 to report problems accessing HME, and providers should e-mail stories about competitive bidding to AAHomecare at

This article originally appeared in the November 2013 issue of HME Business.

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