Reinventing Standard Mobility
As reimbursement for standard power mobility has declined, mobility providers are learning that they must not only broaden and diversify their offerings to those patients, but possibly rethink their entire business models.
- By David Kopf
- May 01, 2016
The business of providing standard power mobility has seen
a considerable amount of change over time. Whether we’re talking about
competitive bidding, or the removal of the first month purchase option and the
conversion to a rental business, various funding factors have coalesced into
sweeping changes that have forced standard power mobility providers to redefine
themselves and how they run their businesses.
Pennsylvania and Maryland HME provider Laurel Medical Supplies Inc. finds
itself in a unique position in that it has a location that was in initial rounds
of competitive bidding, and a location that was not impacted by competitive
bidding (that is, before CMS implemented national expansion this year),
according to the company’s President John Letizia, ATP, CAPS, CEAC.
“We bid for contracts where we thought we could make money and still
provide quality products and service to the patients, while taking into consideration
all the things that go into truly providing the right equipment to the
patient,” he says. “I was not offered a contract.
“At first, I had the bidders remorse,” he continues. “I thought, ‘What did I do
wrong?’ And now, looking at the rates, I can tell you I’m pretty happy that I did
not win a contract.”
And providing power mobility will get worse as certain repair items for power
mobility devices (PMDs) convert to a rental model, a business model Letizia says
is not right for Laurel Medical Supplies, and he’ll be able to avoid it since his
business is not participating in bidding. But for contracted providers that must
provide service, renting out components such as joysticks and motors could
open a can of worms.
“I can tell you: I’m not renting a joystick or a motor,” he says. “There are so
many problems in that scenario … I can foresee there are going to be a lot of
problems with service.”
Switching gears to the Laurel Medical Supply location that’s in the non-bid
area, and that portion of Letizia’s business is starting to see additional cuts due
to this year’s rollout of national expansion. Those cuts will grow larger if the
industry cannot delay additional cuts that Medicare has slated for July 1. (Read,
“Bidding Relief Bill Launched in Senate,” on page 8 to learn more about the
industry’s legislative efforts to reform the current national expansion of competitive
Suffice it to say that the revenue prospects of providing Group 2 standard
power mobility to Medicare patients are not all that tantalizing.
A Full-Scale Shift
So with a Medicare model that offers attenuated funding and increasing
barriers, many standard power mobility providers are looking to pursue other
business models that can drive additional revenue. At first retail seemed like a
helpful supplement. Now it’s seeming like the end game.
“I almost look to the Group 2 business as becoming a cash market as
opposed to a Medicare market,” Letizia says. “Medicare’s kind of forcing us in
This is especially true when the time required to provide a Group 2 chair
is factored into the equation. The steps required to assess a patient’s needs,
document necessity, and ensure that every aspect of provisioning the chair has
followed the right policies and procedures further negate the profitability under
competitive bidding’s rock-bottom rates. As things now stand with competitive
bidding, Letizia notes with a bit of gallows humor that it’s easier for patients to
obtain legitimately prescribed OxyContin than it is to a get a walker — let alone
a Group 2 power wheelchair.
So for a patient who has the means to get what he or she wants by paying
for it, as opposed to relying on a funding source, such as Medicare, to deliver
a more basic chair with few features via a more time-consuming process, the
prospect of purchasing the right standard power wheelchair with the desired
features on a cash basis doesn’t seem out of order. In fact, it often makes a heck
of a lot more sense for everyone involved.
“As seniors get older, they want better technology,” Letizia adds. “And you’re
not getting that in an $1,800, Group 2 powerchair that’s rented. … It’s really
going to come down to product, what the patient wants, and the service that
So are providers ready for retail? Are they in a position where they can
migrate their businesses to a cash sales model? Letizia says they’re getting
there. As it stands, providers are already looking for retail items that can pair
with funded items as an upsell. So that willingness to engage and embrace retail
models can help them move in that direction.
“You have to be retail ready,” he advises. “When someone comes into the
store, we’re so conditioned to say ‘What insurance do you have?’ Instead, we
need to say, ‘What’s your diagnosis? What do you need?’”
If providers start to engage patients in a more consultative fashion, they
can leverage their care and product knowledge to ensure that a patient gets
the right mobility solution, as well as other DME items, by providing them with
options and information.
“In this industry, we’re educators,” Letizia says. “No one plans on buying a
bath bench, but when you do, you don’t know anything about it. Our staffs need
to be educators, and say, ‘These are what your options are. This is what is going to work best for you,’ not ‘This is what Medicare will pay for.’ We are consultants
and we need to make people aware of what their options are.”
Of course, what standard power mobility providers are experiencing is not
occurring in a bubble. Manufacturers are starting to respond to this drive
toward feature-rich retail offerings. For example, Pride Mobility Products Corp.
recently made a big splash at the Feb. 29-March 1 Medtrade Spring event in
Las Vegas with the unveiling of its Jazzy Air, a non-coded power wheelchair that
offers a variety of enticing features for cash-paying customers.
Taking a cue from the Quantum Rehab side of the Pennsylvania mobility
maker, Pride set its sights on improved social interaction. Last year, Quantum
used Medtrade Spring as the venue to debut its Q6 Edge with iLevel, which not
only raised users 10 inches in order to improve their engagement with others,
but let them continue operating the chair at 3.5 mph, which is more than sufficient
for a walking pace.
That same capability is now available to retail customers for standard mobility
products. The Jazzy Air features 10 in. of seat elevation while driving to provide
enhanced environmental access and interaction that Pride has dubbed “social
mobility.” A one-touch, “Air” button, enables driving up to 3.5 mph while fully
elevated, with added stability technology. When not raised, the scooter also
offers additional features that would appeal to retail customers, such as a top
speed of 4.1 mph, Active-Trac suspension, integrated LED lighting, and “ultracomfort”
seating. And in terms of looks, the chair features a retail-oriented
design and color palette.
If anything, the new Jazzy Air indicates that just like providers, mobility equipment
manufacturers are seeing the same retail trend develop for standard power
mobility. The product makers are responding to providers’ growing acceptance
of retail mobility as patients demonstrate that they’re willing to pay cash.
“What is new is that, when I’m out there talking to dealers, I see a belief that
they can make that transition,” says Randy Walsh, vice president of Retail for
Pride Mobility. “… There is a general feeling that out there that, as the dealer, ‘I
believe in myself, and I can make this move.’
“… There’s a new dynamic in the marketplace where our consumer-inspired
research is telling us that consumers don’t necessarily want what they need,” he
adds. “I might need a power mobility device, but what I really want is greater
social interaction, greater environmental access, or what we’re calling ‘social
mobility.’ Because of that, if the funding source isn’t going to allow me that then
I’m willing to pay for what I want, and not just what I need.”
What can be said for certain is that the business of providing standard
mobility is undergoing a rapid and definitive shift. While the story might be
unfolding, it’s clear that the marketplace is heading in a retail direction. For
dealers that embrace this opportunity, they will find a market of ready and
willing standard power mobility users to purchase mobility offerings that deliver
far more than what Medicare is willing to fund.
“They [customers] want what they want,” Letizia concludes. “…You’re going
to have more flexibility when you’re purchasing something than when you’re
waiting for CMS to pay for it. And we’re getting there. More and more people
are willing to pay for these items.”
This article originally appeared in the May 2016 issue of HME Business.