Is there a new black market for power wheelchairs in California?

From HME News:

REDDING, Calif. - It's not uncommon for wheelchair users or their family members to take out classified ads in local newspapers to sell wheelchairs they no longer need. It is uncommon for HME providers to take out ads to buy them.

But in the months leading up to the elimination of the first-month purchase option for standard power wheelchairs, that's exactly what's happening in California, according to industry sources.

"The ads are in the shopper or penny saver and they're offering $300 to $500 for any used power wheelchair in good working order," said Tom Lambert, president of Maximum Comfort, who's seen the ads in Redding, Calif., where he's based, and heard of them in San Diego.

On Jan. 1, Medicare plans to start paying for standard power wheelchairs over 13 months instead of in one lump sum in the first month, a move that providers say will put them in a cash-flow crunch.

The way industry sources see it, the providers who are taking out the ads plan to buy used wheelchairs for $500 instead of new wheelchairs for $900 to $1,500 and provide those to beneficiaries. As long as they're not in a competitive bidding area, they'll still get paid the same by Medicare.

"If you can buy a used wheelchair cheap, then you're home free in the first month," said Lambert, who doesn't do business with Medicare. "Everything else is gravy."

HME News contacted a handful of providers outside of California and, while none of them had seen or heard of the ads being published in their areas, they weren't surprised.

"I can understand that providers are going to look for ways to lower their upfront costs," said Tom Kruse, founder and CEO of Hoveround in Sarasota, Fla., one of the largest providers of standard power wheelchairs in the country. "Maybe buying used wheelchairs will be a viable way to do that because there are quite a few of them out there and they're pretty reasonably priced."

What's the big deal, anyway? For starters, the ads have made used power wheelchairs a hot commodity, resulting in an up-tick in the number of thefts in California, industry sources say. Lambert replaced 30 stolen power wheelchairs in 2010. Another provider in California replaced five.

"It's like a black market is being developed because of this new rule," said John Wright, senior vice president of sales and marketing for Shoprider Mobility Products in Carson, Calif.

The biggest problem, though, may be that this new business model won't be all it's cracked up to be, industry sources say.

"I think it's extremely short-sighted," said Seth Johnson, vice president of government affairs for Pride Mobility Products in Exeter, Pa. "Providers are responsible for repairs and maintenance for the full 13-month period."

Provider Rick Perrotta puts that in perspective this way: "If a supplier paid $500 for a used wheelchair and then has to replace a joystick or motor, he could have purchased a new chair with a 12- or 13-month warranty," said the president of Network Medical Supply in Charlotte, N.C.

Still, Lambert doesn't expect the providers who are buying used wheelchairs to change their ways.

"As long as Medicare keeps power wheelchairs a rental, it's probably going to be an ongoing thing," he said.