Page 28 - HME Business, April 2018

STANDARD POWER’S GEAR CHANGE
How are providers of standard power mobility changing their business strategies to target new revenue sources with better margins?
By David Kopf
AS ANY PROVIDER OF STANDARD POWER MOBILITY WILL TELL YOU, Medicare reimbursement cuts and changes have turned their businesses literally upside down. It’s as though they were rolling along in the fast line on cruise control, and suddenly found themselves screeching through the hairpin twists and turns of a challenging rally car race.
Competitive bidding signi cantly cut funding, and the removal of the rst-month purchase option turned their businesses from a sales- focused business to a rental-focused business. Given power mobility’s higher inventory costs, that’s a tough business proposition.
So how are power mobility providers adapting their businesses strategies to conform to this landscape, and where are they nding the opportunities to broaden and diversify their revenues so that they aren’t trapped in a maze of diminishing Medicare returns? To put it simply, where is the standard power money?
Is There a Workable Medicare Model?
Let’s start by reviewing standard power mobil- ity’s current situation when it comes to Medicare. As mentioned, well-known reimbursement trends such as competitive bidding and the removal
of the rst-month purchase option have made running a standard power mobility business based on Medicare reimbursement a tough road to hoe — very tough. Medicare business still remains for standard power but it changed in recent years?
“When we talk about standard power it’s
a really very different discussion than, for instance, complex rehab or scooters,” says Micah Swick, national sales director for pride mobility Products. Swick has seen the entire business change over recent years. “Standard power in terms of Medicare and private insur- ance is a rental opportunity today as opposed to a sale. And the problem is the numbers, it’s just simple math, the numbers just don’t add up. They’re required to offer a warranty period, and there’s a signi cantly reduced reimbursement schedule that is set up as rental.
“And at the end of the day it’s just like oxygen and other things that have happened in this realm, there just aren’t any dollars left for the provider to net much of a pro t,” he adds.
There are ways that providers of standard power can stretch their reimbursement.
“The caveat is, is that they can rent used products, and so they can rent an item and get it out there for a period of months and then re-rent it,” Swick explains. “Having to buy a unit once and then rent it two or three times can help to offset that. If that’s part of their busi- ness model. Of course, that’s not good for me