Funding Essentials

Complex Rehab & Mobility Industry Post-Healthcare Reform

Now that the dust has settled on the healthcare reform law officially known as the Patient Protection Affordable Care Act (PPACA), it’s time to review the law in detail and determine what it means for providers. The legislation presents challenges for the industry, but it’s important to remember that this is an election year, and that makes legislators much more attentive to constituents’ needs when we make our case and ask them for help.

Five issues of focus for complex rehab and mobility providers have been identified in the PPACA, so let’s discuss strategies discussed to advance positive outcomes in these areas.

Competitive Bidding Update

Section 6410 of the PPACA expands Round 2 of competitive bidding from 79 to 100 of the largest areas where bidding is set to begin in the summer of 2011. It also requires the Secretary to either expand the competitive bidding program, or apply competitively bid rates nationally by 2016. This includes Group 2 single and multiple power-option wheelchairs and related accessories.

In the House, Representative Kendrick Meek’s (D-Fla.) legislation (H.R. 3790) that would repeal the DME competitive bidding program in a budget-neutral manner has more than 240 co-sponsors, well surpassing the industry goal of 218.

That provides enough support to pass the bill in the House once the congressional budget office (CBO) score is released and the “pay-for” is agreed to by the industry. The “pay-for” specifically exempts complex rehab from any future payment reductions in order to repeal the competitive bidding program. The industry goal is now to secure introduction of a Senate companion bill.

In addition, efforts will continue on the regulatory front to address the most fundamental errors of the CB program as the Round 1 rebid moves toward implementation in January of 2011. The industry is planning to closely monitor the steps CMS takes over the next couple of months as the single-payment amounts and contract winners are announced.

Elimination of the First-Month Purchase Option

Section 3136 eliminates the first-month purchase option for standard power wheelchairs (K0813-K0829) effective January 1, 2011. Complex rehab bases (K0835-K0864) are exempt from this change.

The one benefit is that it front-loads the rental payments so providers will receive 15 percent each month for months 1-3 and 6 percent for the remaining months 4-13. The current rental methodology is 10 percent for months 1-3 and 7.5 percent for months 4-13. For a K0823 this provides an additional $546.21 within the first 90 days when compared to the current formula for such rentals. In addition, the first nine competitive bidding areas are exempt as long as contracts are signed prior to January 1, 2011.

The industry has met with senior staff in the Senate and House to discuss industry options prior to implementation. Key Democrat committee staff made it clear that a repeal of this provision is not possible this year. They did, however, indicate that they would support a budget-neutral delay in implementation in order to provide the industry and CMS an opportunity to plan for this significant change. At press time, the CBO was scoring both a short-term and a long-term delay. Once the CBO scores are available, the industry will have an opportunity to determine what level of reduction, if any, it supports in order to secure a delay in implementation.

Productivity Adjustment Applied to Medicare Payment Rates

Section 3401 requires that beginning in 2011 and for each year thereafter, a productivity adjustment be applied to Medicare payments, which may result in no CPI-U update or payment rates that are lower than the rates for the preceding year.

The average productivity adjustment over the last 10 years has been 1.3 percent for the other sectors where the adjustment has been applied. Assuming a 2-percent CPI-U update, once the productivity adjustment is applied (assuming 1.3 percent), the increase would be reduced to 0.7 percent. It is important to note that this provision applies to all DME, including complex rehab, and other healthcare-related payment rates.

Medical Device Excise Tax

The Health Care and Education Reconciliation package, which provided for some modifications to PPACA, included a provision (section 1405).

This article originally appeared in the July 2010 issue of Mobility Management.

About the Author

Seth Johnson is the vice president of government affairs for Pride Mobility Products Corp. He is a board member of the National Coalition for Assistive and Rehab Technology (NCART), a former chairman of the American Association for Homecare's Complex Rehab and Mobility Council (CRMC), and is active within several state associations and various other industry stakeholder organizations and coalitions. He can be reached by voice at 1 (800) 800-8586, or online by visiting

Rolling Dynamics, Rolling Resistance &  Optimizing Wheeled Prosthetics