Seating Perspectives

Funding Update

Q&A with Dave McCausland, The ROHO Group

Because access to assistive technology is invariably tied to funding, we also chatted with The ROHO Group’s Dave McCausland, senior VP of planning & government affairs, The ROHO Group, to catch up on the funding issues currently challenging this critical market segment. — Ed.

Q: What’s the current funding atmosphere for wheelchair seat cushions, particularly those designed for complex rehab clients?

Dave McCausland: I would say that the funding system for cushions, like DME in general, is — I can’t think of another way to describe it, except to say it’s in crisis. The reason is that seating has been included, along with a lot of other products, in various portions of competitive bidding, and no one can assume that competitive bidding is strictly limited to the initial nine metropolitan areas for Medicare patients.

Because of the way the law is structured, first of all, whoever wins the bids in those nine metropolitan areas has to offer, by contract, the same products to all their patients. Which means whatever products are not available to Medicare patients through those providers, should not be available to any patients by those providers in those metropolitan areas.

Q: So if I’m a provider in round 1, I have to offer the same cushions to all my clients, even if they aren’t Medicare beneficiaries? I can’t offer different cushions to clients who have different funding?

DM: Not if you’re a bid winner and you accept the Medicare money under the bid. And the question becomes if you’re not a bid winner, how many other providers will continue to be able to provide those products when the Medicare portion (of reimbursement) is removed? More importantly though and more disconcerting is that more and more payors are already taking some of the data from the initial round one that got thrown out (in 2008) and using it as an opportunity to cut their own reimbursement without significant consideration of what the impact’s going to be on quality access and choice.

The recession has hit the states incredibly hard. I live in one of the worst states as far as our financial situation here in Illinois, and everybody is desperate to find ways to cut their expenditures. Adopting some of these bid rates is starting to become a popular way to cut that reimbursement.

Q: Other payors are using the payment rates from 2008’s failed round 1 as the basis for setting their own reimbursement rates?

DM: In some cases, they absolutely are. And they’re also looking very carefully at the winning bid rates that have been announced recently for the new round 1.

Let me see if I can illustrate the scope of the problem. Right now in the entire United States, there are two separate fee schedules for all the wheelchair accessories including wheelchair seating. There’s the fee schedule for when all those products are associated with wheelchairs that are not included in competitive bidding — specifically, there’s a fee schedule when they’re associated with manual wheelchairs. There’s another fee schedule when they’re associated with power wheelchairs — and because MIPPA threw out the original round 1 bidding, whenever those accessories are tied to a power wheelchair, the allowable has been cut by 9.5 percent. That’s the pay-for that was used to get MIPPA implemented.

So right now you have two fee schedules throughout the United States for seating.

Now let’s go into the round 1 bidding. In those nine metropolitan areas, you had two product categories associated with the power wheelchairs rebid. You had standard power and you had complex power — complex rehab was excluded, but only the Group 3 power chairs. There were still Group 2 power chairs that are included, so they rebid that product category. And they rebid all the accessories again in both categories. So now in those nine metropolitan areas, you won’t have two fee schedules. You’re going to have four for accessories. You’re going to have the allowable when it’s tied to a manual wheelchair; the allowable when it’s tied to a high-end complex power wheelchair, Group 3; the allowable when it’s tied to a complex power wheelchair, not Group 3; and the allowable tied to a standard power wheelchair. So for these items that are first of all pittance in dollars and narrow in margin, any provider who wants to offer those now has four fee schedules to deal with.

And an end-user in those metropolitan areas, as of January when they call in and say, “I need a cushion” — the first thing the provider is going to say is “What kind of wheelchair do you have?” Because if it’s a high-end complex power wheelchair or a manual wheelchair, anybody can provide it. If it’s a complex Group 2 power wheelchair, only the bid winners will be able to provide it, and if it’s a standard power wheelchair, only the bid winners for the standards will be able to supply that cushion.

What’s astounding is giving a very conservative estimate, the total expenditure for wheelchair seat cushions in the last year we were able to get data from Medicare, which was 2008, was under $20 million total, nationwide. So on a product category that’s less than $20 million, you’re going to have four different fee schedules and three sets of rules regarding how a patient can obtain the product.

Q: And on top of that, other payors are watching Medicare and potentially basing their allowables on what Medicare’s allowables are?

DM: The real fear here: That’s what you see with the Medicaids. They’re not saying, “OK, we’re only going to pay this amount for a cushion when it’s tied to this.” They’re just taking the lowest price they can find and saying, “That’s what we’ll provide.” If I’m not mistaken, in Miami the winning bid rate for an adjustable skin-protection cushion is around $228. You’re not going to get a high-end adjustable skin-protection cushion for $228. It’s not going to happen. So what happens to quality access and choice in those areas?

This article originally appeared in the SCI Handbook October 2010 issue of Mobility Management.

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