The implementation of new codes and fee schedules in November 2006 has significantly impacted the power operated vehicle (POV) scooter market. The codes now differentiate scooters according to their performance capabilities, which is a change from the previous coding structure that used a single code. While this has presented a challenge to some, savvy providers have found ways to increase demand for what are considered Medicare-reimbursable products as well as product upgrades to which an advance beneficiary notice (ABN) may be applied.

While success in this area largely depends on a provider's client base, there are indications that disposable income rates among future Medicare enrollees may be increasing over the previous generation of beneficiaries. As more Baby Boomers become eligible for Medicare coverage, it is reasonable to expect them to use this higher level of disposable income to expand their choices when it comes to medical needs. In the DME world, the most attractive opportunity for this may lie in the POV market.

The ABN has two basic uses in Medicare: one for certain types of possible denial situations, and one for upgrade opportunities. With the current code set, all Group 2 scooters, based on performance capabilities, are down coded to Group 1 products to satisfy Medicare's in-home requirement. However, the reality of the market is that there are products that consumers prefer that exceed Medicare's baseline requirements on a number of criteria, including speed, range per charge, features, accessories, and climbing ability. This is where the ABN presents providers with the opportunity to give customers exactly what they are looking for in a scooter, while at the same time tapping into an additional revenue source.

Paul Komishock

Cy Corgan

Of course, the decision to expand high-end scooter sales through use of the ABN is up to the provider. To do so may require additional preparation, which could include training and education of staff on what differences would constitute an upgrade to which the ABN can be applied. There are support tools available to aid in this effort. Providers can review the policy and consult guidelines with their DME MAC by visiting CMS' Web site, or by reviewing the ABN module on www.prideprovider.com. Many of the steps providers need for retail sales also apply to generating revenue using an ABN.

Consumers want choices; therefore, it is important to offer a selection of products on the showroom floor to accommodate a broad range of individuals. The most successful providers are those that offer customers a selection of products with features that benefit and meet their needs. High-quality, feature-rich, affordable products are becoming increasingly more technologically advanced. Providers also need to stay in tune with sophisticated designs and features that appeal to consumers.

Providers can use the same advertising strategy they use for retail sales to increase consumer awareness about the products and features that would require an ABN. Newspapers, television, direct mail, and public events are all great ways to send a consistent daily message to potential consumers in regard to products and features. Providers should also train their sales staff to perform as all-around mobility specialists. Make sure staff members have customer service skills, are up-to-date on product information and reimbursement, and make an effort to obtain the appropriate merchandising tools.

Due to the coding structure, scooters are the optimal product for an ABN, and effort can be rewarded with additional revenues. For example, a larger battery option for enhanced range per charge, or a full light package for enhanced aesthetics and improved nighttime visibility, are typical upgrades that consumers find attractive. Any of these features or components that go above what Medicare will pay for represents a sales opportunity when working with those beneficiaries willing to spend a little more.

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Many providers have set up two tiers of products to help meet this demand: a "baseline" set of products that neatly fit into the Medicare allowables and specifications; and a "deluxe" set of products, considered upgrades from the baseline product. This allows for a greater selection that can be easily presented.

Many beneficiaries may be unaware that Medicare will cover a portion of an item that may be considered an upgrade or deluxe model, and that an increase in their co-payment is all that it would take to have the exact product they desire. By simply taking the time to explain this to your customers, you are creating new opportunities for additional revenue.

Of course, ABNs have certain limitations in their usefulness. The ability to upgrade largely depends on the client's ability or inability to afford a deluxe item. For example, clients who are dual eligible—eligible for Medicare and Medicaid—would generally not be afforded the opportunity for an upgrade since charging out-of-pocket costs for these clients is generally not allowed. While not typically as attractive as pure retail sales, you may find that during the spring and summer season—when scooter sales are at their peak—offering Medicare-eligible customers an upgrade is well worth the effort.

Paul Komishock is general manager of government affairs for Pride Mobility, Exeter, Pa. Cy Corgan is national sales director of retail mobility for Pride. They can be reached through the HME Today editor via e-mail: .