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After all the trauma of the recent deep reimbursement cuts by Medicare, the Office of Inspector General in the United States has found that Medicare, in certain cases pays 35% to 45% more than internet advertised prices for certain power wheelchairs.

The industry is quick to protest and will argue “the higher bar” that Medicare providers have to attain accounts for the difference in cost.

Nevertheless - here is the recommendation of the Office of Inspector General.

RECOMMENDATION
We found that consumers could have purchased most power wheelchairs over the Internet at prices lower than the Medicare fee schedule amounts. We recommend that CMS: Consider performing additional reviews to determine whether the current Medicare power wheelchair fee schedule amounts for certain groups and procedure codes are appropriate.

And Medicare agrees:

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL
RESPONSE
CMS concurred with our recommendation. In addition, CMS noted that, in mid-2008, Medicare payment amounts for power wheelchairs in 10 large metropolitan statistical areas will be based on power wheelchair suppliers’ competitive bids. CMS further noted that it has the authority in future years to use payment information from the competitive bidding program to adjust payments in areas not included in the program. OIG work is continuing in this area. We plan to conduct further evaluations to compare Medicare fee schedule amounts to actual prices paid by suppliers.

The report goes on to estimate a total saving to Medicare and consumers of close to $40 million in the first quarter of 2007.

Again there will be a counter argument from the industry which will point to the extra regulatory and service hurdles that Medicare imposes.

The fact of the matter is that - pricing (and reimbursement) on Power mobility products is under strong review (again). CMS is looking to their newly established national competitive bidding process to lower prices - and it, together with other measures it will take, will again reduce the price of power wheelchairs to the government and consumers.

The full OIG (smallish pdf download) report can be found here.

Michael N. Cannizzaro has been hired as Vice Chairman, President, and Chief Executive Officer of Sunrise Medical. He is described as an executive with significant experience in successfully leading healthcare businesses, and will also join the company’s Board of Directors. His recent experience includes six years at J.W. Childs Associates, a Boston, MA private equity firm. Prior to that he was President and Chief Executive Officer of Beltone Electronics from 1998 until June 2000 when he sold the company to GN ReSound.

This comes shortly on the heels of the announcement by Sunrise to split its business into two parts - Sunrise Mobility and Devilbiss Healthcare.

“Jim Elrod, Managing Director at Vestar Capital Partners - the major Sunrise shareholder (who took Sunrise private in 2000) and is a major equity investor in Sunrise, commented, “Success in today’s healthcare environment requires a solid understanding of underlying clinical solutions, reimbursement, competitive dynamics, and the changing patterns of distribution. We are very pleased to attract someone with Mike Cannizzaro’s experience. Mike has the ability to build upon the solid foundation that Mike Hammes developed in creating highly attractive, focused businesses from the historical operations of Sunrise Medical.””

The full release is here

“Sunrise Medical Appoints Healthcare Industry Veteran as Vice Chairman, President, and Chief Executive Officer

Michael N. Cannizzaro to Lead the Newly Separated Sunrise Mobility and DeVilbiss Healthcare Units

[Read more →]

Topchair is a brand new powered wheelchair (and concept) that enables its drivers to easily be able to climb and descend stairs, steps and other obstacles - all of this in addition to having similar performance to an industry leading powered wheelchair on the road or at home.

After several years of development by French scientist and engineer Hervé le Masne, and following the completion of a significant clinical study amongst a representative user group, the powered wheelchair is now ready for commercialization.

In addition to its speed, maneuverability and performance on the ground, the Topchair automatically detects the first step while driving with infrared sensors and then goes on to detect the last step as it retracts its built in climbing mechanism.

In this video the driving performance and step climbing mechanism is shown:

Owner and inventor Hervé le Masne goes on to demonstrate the impressive mobility potential of the chair as he heads down the stairs at Trocadero in Paris, France on the way to the Eiffel tower.

Additional detailed information is available at the Topchair website in English or French.

Topchair has passed all the regulatory certifications in France and is available for sale to local consumers.

It will soon be made available in several other countries through the development of key partnerships.

Interested parties should contact Topchair for further information.

In a far reaching move to be ahead of the game in the new world order of NCB (National Competitive Bidding), reimbursement cuts worldwide and Asian competition - Sunrise Medical CEO Mike Hammes has announced a fundamental structural change.

As from July Sunrise Medical will split into two distinct organizations, Sunrise Mobility and Devilbiss Healthcare. Hammes while being overall group chairman will run Sunrise Mobility and Kees Regeling will run Devilbiss Medical as its President and CEO. The change is not purely superficial and customers will be required to order their products from the distinct responsible business.

In addition to the above the sales force of the specialty ART group will be combined with the Sunrise Mobility salesforce.

In an excellent communication package - including a video, Hammes outlines clearly the reason for change as well as admitting to not necessarily having all of the answers in this change process.

News From The Taipai International Bicycle Show

Pihsiang Machinery Manufacturing Co., Ltd., Taiwan`s largest supplier of handicapped electric scooters, is expected to enjoy a 30% shipment growth this year due to the subsidization program offered by Centers for Medicare & Medicaid Services (CMS) to electric-scooter buyers in the United States.

According to Pihsiang, CMS listed the handicapped electric scooter a subsidization item for the first time in late 2006, and the highest subsidy amount is now set at US$3,800 for each scooter, which almost covers the full price of a Pihsiang product.

Last year, Pihsiang shipped about 65,000 handicapped electric scooters, including around 30,000 units to the U.S. market. Thanks to the CMS subsidization program, some institutional investors estimated that the company`s total shipment this year would surge 30%.

Go figure.

On Friday this news quietly slipped through the news wires but could have a dramatic effect on several businesses, not least of which the US homecare industry.

“WASHINGTON: The Bush administration, in a major escalation of economic pressure on China, said Friday that it would adopt a new policy of imposing tariffs on Chinese manufactured goods on the grounds that its government subsidies violated international trade laws.”

This is an interesting development as the homecare industry continues its frenetic scurry to the outsourcing haven of China.

In the above case, in the paper industry, some costs are estimated to increase by up to 20%. There is no reason why the homecare industry will not be in the line of fire as well. In any event, with Chinese homecare suppliers becoming increasingly arrogant about how they chose to treat their US and European customers, this may be an interesting swing of the pendulum.

Worst effected - will be those companies that have “gazumpted” the homegrown value added manufacturers and suppliers and have chosen to “import commodities at lowest cost” and largely use price as a basis for competition. A cost increase of 20% will close them down, much to the delight of the more diversified value added players.

There is nothing wrong with sourcing in China - just make sure your business model does not wholly depend on it.

More from The International Herald Tribune
With tariffs, U.S. steps up economic pressure on China

Its official - CMS (Medicare - Medicaid) have gone public with a website to provide further information on National Competitive Bidding (NCB).

This is yet another indication that NCB is coming sooner rather than later.

Of particular interest is this statement “CMS has not set a deadline for DMEPOS suppliers to become accredited in order to retain/obtain a supplier enrollment number or to competitively bid”…

Here is the site:

http://www.cms.hhs.gov/competitiveacqfordmepos/

Here is a related site providing further detailed information on implementation. (Work in progress).

http://www.dmecompetitivebid.com/

(For non US companies this provides useful insights into the US market - It is worthwhile clicking on the links).