AAHomecare Addresses the Impact of the President's Budget on Power Wheelchair Segment
The President's Fiscal Year (FY) 2008 budget request includes a provision that would eliminate the ability of Medicare beneficiaries to purchase a power wheelchair when it is initially prescribed by a physician. The theory behind the 13-month rental proposal is that there are many beneficiaries who require power wheelchairs on a temporary basis. The administration contends that the Medicare program and beneficiaries would achieve savings through a rental period of less than 13 months.
According to AAHomecare, the opposite is true. Medicare will pay approximately 5 percent more under the president's
proposal. Providers of power wheelchairs will be unlikely to secure appropriate credit and financing from lending institutions to cover the up-front costs of the device and related service if additional uncertainty is added to this benefit category. This proposal would not only increase Medicare costs but also result in diminished beneficiary access.
Background:
Power wheelchairs, while currently in the capped rental payment category, have a day-one purchase option.
This option allows Medicare beneficiaries to choose to either purchase or rent their power wheelchair at initial issue. When beneficiaries choose to purchase, payment is made on a lump-sum basis. During consideration of the Budget Reconciliation package in October 2005, the Senate debated this provision and soundly rejected it. The proposal was defeated for the following reasons:
- Beneficiaries who are prescribed a power wheelchair suffer from long-term debilitating conditions that are not short-term in nature.
- Many power wheelchairs are custom-configured and individualized for the patient. They are not commodity-type items.
- Forcing rental of highly specialized and configured power wheelchair will severely curtail access due to the significant up-front costs that the provider must be able to cover soon after delivery.
- Providers do not have the access to capital to wait 13 months to receive full payment.
- Over the past year, power wheelchair providers have seen significantly increased setup, delivery and documentation costs due to the face-to-face examination and other new coverage policy requirements. At the same time reimbursement was cut 27 percent, on average.
- Medicare beneficiaries currently have the choice to rent or purchase their power wheelchair and more than 95 percent elect the purchase option because those who meet the Medicare coverage criteria have long-term needs.
- The average Medicare fee schedule payment for a "Group 2 Standard Weight with Captain Seat" (HCPCS code K0823) is $4,023.70. By eliminating the beneficiary's purchase option and requiring power wheelchairs to be rented over a 13-month period, the total rental payments would be $4,224.91. The Medicare program would pay 5 percent more for power wheelchairs under this proposal.
Recommendation:
AAHomecare recommends that Congress retain the first-month purchase option for power wheelchairs. Maintaining the current policy of allowing the beneficiary to purchase the equipment in the first month will ensure appropriate beneficiary access and lower costs to both Medicare beneficiaries and the Medicare program.
Visit www.aahomecare.org.
This article originally appeared in the March 2007 issue of HME Business.