Study projects exodus of wheelchair suppliers

A study by the American Association for Homecare (AAHomecare) concludes that cuts to the Medicare power mobility benefit will have a devastating impact on both the industry and beneficiaries who need wheelchairs.

The study forecasts an exodus of at least 1,500 wheelchair suppliers and a net cost increase to the Medicare system of $2.7 to $5.9 billion over the next eight years.

The cuts to the mobility benefit ultimately will increase Medicare expenditures for hospitalization, physician services, and home care services for beneficiaries who qualify for power wheelchairs but won't acquire them because the cuts will "impose massive short-run shutdowns of supplier firms."

Conducted by economist Clifford L. Fry, PhD, and his team at RRC Inc., the study recommends that the Center for Medicare & Medicaid Services (CMS) rely on market forces and not price controls, for Medicare's provision of products and services.

The study found that:

  • Medicare is imposing price controls below market price for power mobility and the services necessary for the qualified beneficiary to obtain the power mobility device;
  • While Medicare's direct expenditures on power mobility declines, there is a risk that price controls will impose massive short-run shutdowns of supplier firms as they escape the costs of providing services for which they will not be reimbursed;
  • The analysis suggests that there may be declines in the order of 30% to 50% in power mobility access in response to the new regulation, due to the assessment that many firms will cease providing power mobility and the services connected with it, and that beneficiaries will not be able to provide mobility services for themselves.
  • There could potentially be an exodus of at least 1,500 power mobility providers from major metropolitan areas and additional numbers from rural markets. The remaining suppliers will reduce services and not replace services lost by exiting firms.

The study is posted at www.aahomecare.org.