WASHINGTON — Medicare reimbursed almost four times the amount providers paid for standard power wheelchairs in 2007, according to a new report from HHS' Office of Inspector General.
"Medicare allowed an average of $4,018 for standard power wheelchairs that cost suppliers an average of $1,048 in the first half of 2007," the report found. "Medicare and its beneficiaries paid suppliers an average of $2,970 beyond the supplier's acquisition cost to perform an average of five services and cover general business costs."
That amounts to 383 percent of the average acquisition cost for PWCs, the OIG calculated.
The report, issued yesterday, also said Medicare paid twice as much for complex rehab PWC packages (the power wheelchair plus power options and accessories) as providers paid to buy them: "Medicare allowed an average of $11,507 for complex rehabilitation power wheelchair packages that cost suppliers an average of $5,880 in the first half of 2007."
What's more, according to the OIG, Medicare could have significantly lowered its expenditures for PWCs — $688 million during 2007's first half — under competitive bidding by cutting its allowable for standard power chairs by nearly $1,000 to an average $3,073.
The report pointed out the 9.5 percent DME cut enacted after Congress' delay of the bidding program to make up for what Medicare would have saved had it continued. However, the OIG said, even though PWC reimbursements were reduced, "the 2009 fee schedule amount exceeds the average competitively bid price by $568."
As a result of its findings, the OIG recommended that CMS "determine whether Medicare's standard and complex rehabilitation power wheelchair fee schedule amounts should be adjusted by using information from the Competitive Bidding Acquisition Program, seeking legislation to ensure that fee schedule amounts are reasonable and responsive to market changes, or by using its inherent reasonableness authority."
CMS concurred with the recommendations.
But that wasn't the end of the bad news for the HME industry. Within hours of its release, CNN posted a story on the OIG report and noted its own July investigation, which found a Medicare "patient and taxpayers were billed about $1,200 over four years for a nonmotorized chair, while a nearly identical chair could be bought from the same supplier for $349."
Read the entire OIG study, titled "Power Wheelchairs in the Medicare Program: Supplier Acquisition Costs and Services," at http://www.oig.hhs.gov/oei/reports/oei-04-07-00400.pdf.
