by Mark S. Lore
Government policies and even manufacturer practices are making it tough on vehicle modifiers these days, but a bit of creative cooperation can help.
It always amazes me that although DME is a small percentage of Medicare and Medicaid’s budget, it is continually slashed for reimbursements because providers do not have enough money to buy lawmakers’ votes.
The providers who live and work in our local communities always seem to get shortchanged whenever there are cuts to be absorbed. Recently, the Veterans Administration (VA) took a big bite out of local vehicle modification dealers by bidding out wheelchair and scooter lifts directly to the manufacturers, so that the local dealers no longer get to sell these products to our veterans. Just for good measure, the VA also required the winning manufacturers to guarantee an installation price that the dealers would charge, further hurting the dealer’s ability to make a fair profit.
I know that manufacturers in the DME business have been selling directly to the VA for years, cutting out the local dealers altogether. This hurts local dealers in many ways, but none more than the reduction in revenue derived from the service part of our businesses. By reducing or controlling installation and service fees, this system guarantees that we as dealers will have trouble attracting and retaining good service technicians. This cuts the level of service our clients get, and makes our businesses a little less fun to run.
Tools and Tactics
- Don’t buy from manufactures who sell direct—or at least get them to pay you for building their brand.
- Require that manufacturers pay you a fair rate for warranty parts and labor.
- Publicize unfair payment practices by insurers and support sympathetic elected officials.
- Publicize stories where bad service or bad equipment prescriptions have cost the government money and/or hurt patients.
- Get clients to vocalize their dissatisfaction with government policies.
- Join industry groups that have the power and desire to make change.
- Get independent living centers to join this educational effort.
The writing is on the wall for the high-quality local equipment dealer; every time there is a financial cut in our industry, we will take the brunt of it until we are gone. Look at how many dealers have disappeared in the last 10 years.
We are our own worst enemies because we cannot get together and exert our power to stop this trend. Although few of us have much energy left after working a typical 80-hour week, we must find the time to publicize the inequities of the system. We employ local people, support our communities, and serve a segment of society that has little voice against big money and politics—and provide a needed high level of service that improves the quality of life for many people. There are a few things that we all must do if we are to keep our place in our communities and not allow huge national companies to drop off medical equipment without regard to service.
- Require that manufacturers pay dealers a fair rate for warranty parts and labor.
- If manufactures are going to sell direct, either don’t buy from them or get them to pay you for building their brand while they sell around you.
- Publicize stories of unfair payment practices by mega-rich insurers while supporting your elected officials to get access to their “ears.”
- Publicize stories about bad service or bad equipment prescriptions that have cost the government money or created a negative situation in the life of a disabled person.
- Get clients to vocalize their dissatisfaction with policies, and help them write and send letters to those in power.
- Join industry groups that have the power and desire to make change—consider it part of your daily job to support and promote fair practices in our industry.
- Get independent living centers and other groups that advocate for people with disabilities to join this educational effort.
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| Mark S. Lore |
I wish there were a “magic bullet” that would turn these trends around, but unfortunately there is only hard work ahead. Quality of life and staying in your own home when you are injured or ill are absolute rights to all of us, and spending money on failed policies that try to take this away is not acceptable. Laws should not be written by the political donor class, but by those who are most affected and have a greater understanding of all the issues.
As an industry, we can choose either fight or flight and so far the latter has not worked. Get together, get involved, unify the message; otherwise, people with disabilities will have to settle for even worse service as the good local dealers disappear. We are headed toward a system that provides only minimal levels of service, and those levels are not defined by the people who need it most.
Mark S. Lore is president and CEO of Ride-Away Handicap Equipment Corp, a vehicle modifier headquartered in Londonderry, NH. Ride-Away has 11 locations on the East Coast. Lore can be reached via e-mail: .
DIVORCE AND DME—SCARY SIMILARITIES
Fifteen years ago, when I went to see my divorce lawyer for an initial visit, he said, “If you ever say this is not fair, then I will immediately fire you as a client because divorce is not fair.” I thought, I can handle that. Over the next 18 months, I was able to save my clothes, acquire enough debt to almost pay my ex-wife, lawyer, accountant, her lawyer, and her accountant, and worsen my relationship with my children.
This lack of fairness in the divorce system can be topped only by the DME business. I started in the DME business because I wanted to provide uncommonly great service to people that had substantial challenges. I started in 1986, and by 1996 I had sold my business. During those 10 years, I saw my customers (the funding sources) take 6 months or more to pay for products, sometimes asking for a discount if they paid it in full after the bill was already 45 days old. Somehow, they had gotten the idea that paying my billed price was merely an option. More and more in that business, funding sources told me what they would pay regardless of what I needed to charge to make money. Often the price they paid was so low that I had to decide to lose money if I wanted to keep selling these services or products.
One egregious example was our state Medicaid, which reimbursed $10.50 for each hour of labor we performed, based on their flat rate schedule. If we drove an hour to fix a flat tire for a client, we were allowed to bill around $3 plus make another $2 on the part. This meant losing around $100 on each similar service call. Trying to explain to actual clients the need to visit that area only once a week made us seem like a “profit-driven money monger.” It went against our mission of delivering a high level of service for our clients.
For a while, we got into wound care and placed low air loss therapy mattresses. However, when disreputable companies began billing for cheaper, inappropriate products at higher reimbursement rates, insurance companies dramatically cut the allowable price they would pay. This made that part of the business less than profitable to continue at a high level of service (with wound care nurse specialists visiting clients). We could either dramatically reduce the level of service we gave and continue, or stop this product line.
I remember when an insurer (DMERC) approved the $300 elevating leg rests on a power wheelchair, but denied the rest of the $12,000 bill as not medically necessary. It took us almost a year of appeals and letters before we received 80% of the $12,000, and then we could bill the secondary insurer. This situation occurred all too often when we had a doctor’s prescription, a therapist’s report, and other supporting documents when billing a wheelchair, yet the insurer would find a ridiculous reason to deny or delay payment. This happened to clients that had been using a wheelchair for years, and obviously qualified for a new one.
As the business grew, I found myself having to call state representatives and senators in an effort to get paid on products or services delivered more than a year earlier. Payment delays due to denials based on erroneous decisions, lost forms, inconsequential paperwork errors, or other frustrating reasons constantly put a strain on our ability to remain in business. Of course, we could finance our products at rates substantially higher than prime, but that only put more pressure on the already shrinking bottom line.
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