Funding Fundamentals

Fixing Our Repair Businesses

Finding an equitable method for Medicare repairs.

• By Georgie Blackburn
• Aug 01, 2009

You know what I’m talking about: A call comes in from a Medicare beneficiary or his or her caretaker upset that the power wheelchair is “dead,” the bed won’t raise or lower, or the special Group 2 mattress is not working. Immediately, the customer service staff begins a litany of questions to determine how to handle the call, verifying the emergency status of the repair; if it will it be reparable on location or if necessary to bring the unit into the service center; if a one-month rental replacement will be required; and if a system is in inventory that closely resembles the owned equipment.

However, before there’s a commitment to complete the work, it’s necessary to know if your company provided the product or if it was supplied by another firm; if the primary or secondary insurance coverage has changed; if the present insurer purchased the equipment to be repaired; if the patient resides at the address on record, and if that residence is considered “home” by Medicare.

Will Medicare pay for the repair? That depends on how some of those questions are answered. If the answer is no, then a discussion outlining the need for an Advance Beneficiary Notice (ABN) begins, explaining why one is required, the amount of money for which the customer will be liable, if it’s necessary to pay the technician “up front” and why the ABN must be signed before any work can start.

The product might have been purchased elsewhere and that provider no longer provides repair services. Does the patient meets the medical necessity criteria for coverage? Did the provider of the product follow Medicare documentation guidelines? Is it possible to even be certain? This is especially important when servicing power mobility devices (PMD’s). Remember the face-to-face requirement?

It’s decision time. Is your service van dispatched to the beneficiary’s home? Do you explain that the product must be brought in to the service center? If not deemed an emergency, do you explain their location is not on your technician’s route without sounding dismissive?

Provider attitudes regarding repair services are changing. Some providers of mobility products have taken the position that if a patient can get to a doctor, they can surely come into the service center when a repair is needed. Others feel that the only way they can continue to provide service is to tell the customer he or she must pay first, then a claim will be filed for reimbursement. It’s legal for a non-participating provider to file assigned or non-assigned and collect payment directly from the customer, right?

But the fallacy is that, more often than not, mobility patients cannot travel with their malfunctioning equipment to the service center, especially if they live alone, do not drive, or do not have a caretaker to assist. Medicare beneficiaries do not have the money to pay up front for repairs of manual mobility, let alone a power wheelchair repair that might retail for several hundred dollars. Many have secondary payers, such as state Medical Assistance that precludes collecting from the beneficiary. And, finally, depending upon the equipment to be repaired, it’s often necessary to send a service technician to the patient’s residence.

The cost of inventorying units to rent during repair, cost of travel that is bundled into the component payment, the ill effect of the 9.5 percent cut to wheelchair components, lack of an equitable labor allowable, and changes in Medicare repair policy, limiting the number of units of labor that might be billed regardless of time invested in completing the repair, has pushed providers to the edge. Many firms no longer provide repair services. 

Actually, Medicare doesn’t mandate a supplier must have a repair department. The Supplier Standards say we must maintain and replace at no charge or repair directly, or through a service contract with another company, Medicare covered items are rented to beneficiaries and the items must function as required and intended after being repaired or replaced. So must we service what we sell? No. Even Medicare’s fatally flawed competitive bidding program does not mandate contracted supplier’s service what they sell. How will that factor alone affect beneficiary access?

Not many providers I know consider their service department to be a revenue stream. Conversely, most feel it’s simply a necessity to provide continuity of care to rehab patients, respiratory patients, and patients confined to bed. Providing good repair service also affects the next sale. For years, many service departments have operated as a monthly write-off against the DME/Rehab sales specifically for those reasons.

With mounting audits from multiple sources looming overhead, its no wonder our anxiety as an industry is escalating!

Comments from Dr. Paul Hughes, DME medical director for Jurisdiction A, during the June 18 AAHomecare and University of Pittsburgh presentation “Policy Intent versus Industry Response and Implementation,” were slightly encouraging when he said that Jurisdiction A has not audited repairs, and he did not intend to do so. He was quick to add that he could not speak for Jurisdiction B, C and D and agreed with me when reminded, that within the 2009 OIG Work Plan, repairs were indeed listed as an audit objective.

So, suppliers cannot be lax regarding service policies, procedures and protocols, repair intake processes, technician documentation, parts inventory management, credit returns, warranty paperwork or the manner in which claims are filed. Many of us believe by creating a leaner operation, we might reach a point where the services we provide result in a profit. Many believe that will never occur as long as Medicare bundles travel within allowable and ask, “When was the last time anyone came to our home to fix anything and didn’t charge travel?”

It’s a fact that our industry is filled with giving, caring souls. We commit to facilitating function, we thrive on assisting others to achieve enhanced quality of life, and we love feeling that what we do makes a difference. But, our businesses must be profitable in order to continue servicing our clients.

When every piece of DME ordered for a patient is bought within 13 months and the lifetime usefulness is five years, Medicare must guarantee equitable parts replacement and labor payments. The industry must work toward that objective.

Imagine a day when we can say to the distressed caller on the line that “we’ll be right there” without giving the third degree and without worry that our payment will be less than our cost!

This article originally appeared in the August 2009 issue of HME Business.