Choose the right equipment the first time, get discounts from manufacturers, and nourish referral sources to maximize profit as reimbursement heads south.

How can today’s providers of pediatric seating and positioning equipment continue to serve patients while remaining profitable? The key to success is working smarter. “The business is more challenging than it used to be, but things are not as bad as some in the industry make them out to be,” says Larry Schaffer, CRTS, ATS, of National Seating & Mobility Inc, Chatsworth, Calif. “If you understand the codes and the costs, you can still fulfill the therapeutic goals and stay profitable.”

Up until recent years, the only established codes were on basic equipment. Virtually everything in the pediatric category—from specialized wheelchairs to seating, backs, headrests, and harnessing devices—fell under miscellaneous. That meant HME providers often received 100% reimbursement. “For a long time, we were getting full retail on wheelchairs and many other items,” says Mark Grillo, CRTS, of Sacramento, Calif-based ATG-Wheelchair Center. “Now, we’re receiving 20% less.” As a result, revenue at ATG-Wheelchair Center is down 20% to 25%.

Whether you are dealing with Medicare, MediCal (as Schaffer and Grillo do), or private insurance companies, reimbursement challenges abound. Even so, there are a number of steps you can take to be more efficient, offset reimbursement cuts, and keep your business growing.

Choose Right from the Start
Selecting the right equipment at the outset can save you money in time and labor down the line. Schaffer says it is key to understand the physical disability, therapeutic goals, and the environment when choosing a system. Assessing environmental factors—the family’s need to transport the device, whether the child’s residence is equipped with an elevator, and if the child attends school—can save you from choosing the wrong equipment and spending additional time reevaluating and reordering down the line. “It is critical to choose something that fulfills the goals of the therapist,” Schaffer says. “Also, it has to meet the expectations and the environment of the patient.”

For example, if the family lives in a rural area, you don’t want to choose a chair that is too delicate to handle dirt roads. Choosing the right system—right from the start—will save you time and that translates into money.

Grillo emphasizes selecting quality products that will hold up. “With kids, you encounter more repair problems,” Grillo says. “It is vital to select quality equipment because reimbursement on repairs does not even cover our costs.”

Indeed, constant repairs can be a money-losing proposition for providers. In Grillo’s case, replacing a footrest hanger costs $26 with a reimbursement of just $18. But if you choose solid products up front—and try to accommodate for growth spurts in the planning process—repairs will be less frequent, taking a smaller bite out of your bottom line.

Package Deals and Discounts
Working smarter means identifying strategies that bring you the best return despite today’s tough reimbursement climate. For starters, it is critical to know the codes and understand the allowables. “We are just careful about what we order,” Schaffer says. “The first concern is meeting the medical needs, but you don’t have to choose a Cadillac.” For example, a basic wheelchair can range from $5,000 to $9,000. Savvy pro-viders know how to select a quality chair in the $5,000 range and at the same time collect better reimbursement than they would on a higher-end product.

Still, some individual products have such a low reimbursement that they eat into profits. The key is to provide a comprehensive package. “I’m losing money on seat cushions,” Grillo says. “But I can absorb the low-level reimbursement if I’m doing the whole package.”

Looking for the best product to fit the allowable is a priority. But what if the retail price is lower than the allowable? For providers feeling hard-pressed by cuts, it may be tempting to recoup a few additional dollars this way. But Schaffer and Grillo agree that it is imperative to do the right thing and submit the lower price. “True, you’re taking a beating on other things,” says Grillo. “But it would still be unethical to collect the higher amount.”

Another cost-saving strategy is to focus on a few manufacturers so you can maximize your discounts. It means less variety in your product line, but the trade-off may be worth it in the long run. “We limit the number of manufacturers we work with because we get better contractual discounts,” Grillo says. “It’s affected the number of products we carry, but sticking with one or two key sources has been financially advantageous.”

Physicians and Therapists
A strong rapport with physical therapists, occupational therapists, and physicians is key to success for pediatric seating and positioning providers. “We work closely with therapists to marry the equipment to the needs of the child and the available funding,” Grillo says. Naturally, the better your relationships with these professionals, the more likely you are to get referrals.

When therapists understand the options, they are more likely to be open-minded about equipment choices. Equally important, make sure you are accessible. Make it a practice of giving therapists your office phone, mobile phone, fax, and e-mail—and return calls promptly. Your professionalism will solidify lasting relationships.

Physicians are also an important referral source. At the same time, doctors can pose a real challenge if they recommend equipment with a low allowable. However, both Grillo and Schaffer say the situation is rare. “I don’t find that physicians are typically prescribing equipment with low allowables,” Schaffer says. “However, if it’s medically necessary and happens to have a low allowable, we bite the bullet.”

More than ever, a solid referral base is vital. Keeping visible at special education schools, hospitals, and clinics can expand your network of therapists and physicians. While reimbursement cuts remain a reality, there are ample opportunities to generate referrals and grow your client base.

Marianne Matthews is a contributing writer for Dealer/Provider.