Funding Essentials

Providers Confront the End of the 1st-Month Purchase Option

On Jan. 1, Medicare’s first-month purchase option for standard power wheelchairs was eliminated, and those chairs became capped rental items. The new policy has been the mobility industry’s hottest topic this year, according to funding expert Jim Stephenson. As the first weeks of the new year drew to a close, Mobility Management asked how providers were responding to this big change in business. — Ed.

Q: What impact has the elimination of the first-month purchase option for standard power had on providers?

Jim Stephenson: It’s a big deal because it changes cashflow. In order to maintain the same cashflow, people essentially have to sell seven chairs for every one (that they sold in the past). Providers are not going to go from selling 10 chairs a month to 70 chairs a month.

It’s caused some folks to really change the way that they do business. Some are looking at “I can still do a scooter as an up-front purchase, so maybe I can qualify them for a scooter and not get into the whole power wheelchair rental.” There are providers who are trying to figure out how to bump customers up to Group 3 power chairs, which also are not rentals.

Some providers are buying used equipment, they’re not doing power wheelchairs at all, or they’re only doing a few, to where they’re not on the hook for so much money.

Q: Providers are buying used power chairs?

A: I hear about it regularly. They’re going to fl ea markets, they’re putting ads in newspapers: “We’ll buy your old wheelchair.”

I understand the reason why; it’s all about getting the equipment for the least amount of money. But what I think a lot of people are shortsighted on is that they have no idea what they’re buying if they buy a used chair on craigslist or eBay or they’re getting it at a garage sale. Who knows what’s wrong with it? When they put the chair out there, sure — it’s not costing them much. But they’re on the hook for repairs for 13 months. So if they replace one joystick, they’ve spent about as much as they would have spent for a brand-new chair with a warranty. If one major component goes bad in 13 months, they might as well have bought a new chair.

These providers are playing the risk game: Maybe it will last 13 months. But how do you know what you’re getting? If I were a businessperson, I would have concerns about that. I don’t know what somebody’s done to that chair; it could have sat out in the rain!

From the equipment perspective, if a provider puts out a used chair, and the beneficiary stays in that chair for 13 months, the chair becomes the beneficiary’s. Technically, it’s the same as if you or I went to a car dealership and bought a used car and paid a brand-new price for it. There’s no difference in price between a used piece of equipment and a new piece of equipment. For the beneficiary, they’re paying the same 20-percent co-pay for a used chair that they would pay for a brand-new one.

I’ve heard some providers say, “We’ll put the used chair out for the 13 months, and if it comes to the point where the end-user takes ownership of it, we’ll give them a new chair then.” And then the provider will take the used chair back and put it in the rental fl eet again, so they’ll only provide a beneficiary with a new chair at the end of 13 months. I’m not sure that makes sense.

Q: What else are you hearing about the first-month purchase option elimination?

A: The questions I’ve been getting are about the billing of it: How do I bill it as a rental, and what modifiers do I use? Those questions are coming just because standard power chairs have been a purchase for so long.

There’s nothing significant about how you bill a power wheelchair as a rental in comparison to how you would bill a standard manual wheelchair or a hospital bed as a rental. There are no unusual rules as far as power wheelchairs are concerned that are any significant difference from any other capped rentals that people have been billing.

Q: What other funding issues are providers talking about in 2011’s first quarter?

A: Audits are a big deal because people get hit coming and going. They’ve got RAC audits, pre-payment audits, post-payment audits — everywhere they turn, there’s an audit lurking. There are some people who have been run out of business based on audits, because their money’s been held up so much or they’ve had to pay back more than they could bear.

The best way to prepare for one is to make sure you have your documentation in order. That seems to be the biggest thing people are getting dinged on. People out there by and large are doing the best they can to gather up all the information they can. But then, rather than continue to argue with physicians about “I need this” or “I need that,” they decide to take their chances. Then they miss a key piece of information, and they end up having to pay back or don’t get paid in the first place.

Q: So, collect documentation as if you expect to be audited?

A: Absolutely. These are Medicare contractors. They’re paid based on how much money they recover. They’re going to try to find every last penny they can possibly pull out of an audit.

A lot of people get those audit results, and they just pay the money back. What they don’t realize is there’s a fairly significant percentage of times that the results get turned over when somebody fights them. Statistically, what they’re having to pay back in an audit is probably not what they would truly owe if they were to fight to keep the money that they’ve been paid.

I’ve seen enough audit results get turned over that it’s something I always mention. Don’t just accept the audit results. Review them. If you review the chart and you think, “Oh, yeah, they got me on this one,” then by all means, leave it at that. But if you can’t figure out why they said what they said, then fight it. Don’t let it go.

This article originally appeared in the March 2011 issue of Mobility Management.

About the Author

Jim Stephenson is Reimbursement & Coding Manager for the Rehab Department of Invacare Corp.

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