Medicare Policy's Impact on Power Wheelchairs
February 8, 2005

From the Dallas Morning News.

Motor wheelchair firms may rebound but last year was rough,

By BOB MOOS
The Dallas Morning News

Motorized wheelchairs, which once seemed destined to become as common among older adults as snapshots of grandchildren, have hit a rut.

After sales tripled over five years, orders are off 40 percent in the last year. Larger suppliers have laid off workers, while smaller ones have left the business.

"A good part of our industry has shut down," said Mal Mixon, chairman and chief executive of Invacare Corp., the world's largest manufacturer of home medical products.

The Scooter Store was reimbursed by Medicare for more than 44,000 power chairs and scooters last year.

Mr. Mixon and other industry executives blame the hard times on Medicare, which reimburses qualified users for 80 percent of the chairs' $5,000 price tag.

The Centers for Medicare and Medicaid Services clamped down on claims more than a year ago after investigators uncovered fraud and only last week proposed new criteria for deciding who's eligible for reimbursement.

Medicare officials say they're wringing abuse from the system, but critics argue the crackdown has gone too far and is hurting honest businesses and people with disabilities.

"Medicare's policies have forced many Americans into isolation and dependence," said Robert Hayes, president of the Medicare Rights Center, a consumer advocacy group.

Herb Kuhn, director of the Center for Medicare Management, disagrees.

"Our goals are to make sure suppliers are legitimate, beneficiaries are indeed eligible, physicians are following the coverage criteria, and prices are fair," he said.

If anyone typifies the triple-digit growth of the power mobility industry over the last decade, it's Doug Harrison, founder and chief executive of the Scooter Store, which has headquarters in New Braunfels.

He and his wife, Susanna, opened their first store in New Braunfels in 1991 and have since become the No. 1 provider of power wheelchairs. The company was reimbursed by Medicare for more than 44,000 power chairs and scooters last year, representing about 30 percent of the market.

The company has 77 locations, including four stores in the Dallas-Fort Worth area. The Scooter Store's TV commercials invite viewers to call a toll-free number to see how they can qualify for help from Medicare.

For Mr. Harrison, a former petroleum engineer, his second career isn't just a business -- it's a mission.

"I drilled some pretty good wells, but I wanted to do something that really helped people," he explained.

At company headquarters, he has a chart that shows the number of "lives changed."

One life the Scooter Store has changed is that of John Lytle, who fiddled his way across America with a country band in his younger years.

During the last decade, he could barely move from room to room in his Dallas home.

A few months ago, the 80-year-old's daughter-in-law suggested he get a motorized wheelchair.

Once his physician confirmed the need, the Scooter Store fitted him for a chair and taught him how to use it.

"It's given me a new sense of independence," he said.

His wife, Lois, says he now sneaks snacks from the kitchen. "It's great he can do things for himself."

New scrutiny

The public's growing awareness of the government benefit, coupled with technological advances that made power wheelchairs less cumbersome, sent Medicare claims for the chairs soaring from $289 million in 1999 to $1.2 billion in 2003.

All that money also attracted the unscrupulous. Fly-by- night suppliers connived with dishonest doctors to obtain motorized wheelchairs for people who didn't need them.

The most serious fraud occurred in Houston, where Medicare paid for more than 31,000 power chairs in 2002 compared with 3,000 the year before.

Besides going after wrongdoers, Medicare applied new scrutiny to the wheelchair benefit.

The industry supports anti-fraud efforts but accused Medicare of restricting help to people who couldn't walk at all. Industry officials said claims were denied for individuals who could walk a few steps but were at risk of falling.

"The government clearly overreached," said Andrew Imparato, president of the American Association of People with Disabilities.

Medicare eventually rescinded the restriction but left many within the industry guessing about who qualifies for reimbursements.

New standard

The criteria that Medicare proposed last week spells out how people who can't perform certain household tasks would be eligible.

The new standard was long awaited by an industry devastated by the ambiguity of the last year.

Mr. Harrison's Scooter Store laid off 400 employees -- a quarter of its workforce -- and pulled out of the Houston market.

Industry officials say smaller companies less able to weather the sharp downturn left the business and shifted to other home medical products.

"Cautious suppliers stopped providing chairs," said Mr. Mixon of Invacare. "People with disabilities are having trouble getting the motorized wheelchairs they need."

"The government obviously can't afford to hand out a chair to everyone, but there must be a clear-cut way of deciding eligibility," said Dr. Mark Schmeler of the University of Pittsburgh's Center for Assistive Technology.

A beneficiary now needs a physician to certify a "medical necessity" to be reimbursed, but critics argue that the certificate's questions are too vague.

Dr. Schmeler and other clinicians want Medicare to pay for chairs if the beneficiaries can't fend for themselves in or outside their homes.

"If someone can't bath, dress or feed himself, he should qualify," he said.

The agency's critics are particularly concerned that power wheelchairs are provided for use mostly within the home but not outdoors.

"That's an archaic restriction," said Emily Niederman of the Independence Through Enhancement of Medicare and Medicaid Coalition. "It's at odds with other government initiatives aimed at promoting independence among people with disabilities."

Someone with multiple sclerosis, for example, might be able to walk at home but need a power chair to move safely around his community, she explained.

Building value

Medicare officials say they're just attempting to build value into a system that's been susceptible to fraud.

Mr. Kuhn of the Center for Medicare Management said the government will work hard to explain the new criteria to physicians and will require beneficiaries to have a face- to-face visit with their doctors before chairs can be prescribed.

"We've made progress -- claims in 2004 returned to historical levels," he said. "But we need to remain vigilant against fraud and abuse."

Still, industry executives continue to stress that the ballooning cost of the benefit for power wheelchairs isn't necessarily bad.

They estimate that each chair saves Medicare $6,000 over the long run by preventing falls and keeping older adults out of the hospital and nursing home.

As Eric Sokol, director of the industry's Power Mobility Coalition, said, "This is technology the government should embrace, because it ultimately will save the American taxpayer money."

WHO QUALIFIES

Requirements for a powerchair under Medicare's old standard:

• Confined to a bed or chair and can't operate a chair manually.
• Requirement under Medicare's proposed new standard:
• Can't do certain daily activities independently, such as bathing, grooming, eating and dressing.

SOURCE: Centers for Medicare and Medicaid Services

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