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Volume 12 Number 211
ISSN 1091-4021
Thursday, November 1, 2007

News: Medical Equipment

The federal government and Medicare beneficiaries could have saved nearly $40 million on power wheelchairs in the first quarter of 2007 had they paid the same rates as those available to consumers on the Internet, according to a government oversight report released Oct. 30.

The Department of Health and Human Services Office of Inspector General found that Medicare fee schedule amounts for power wheelchairs were about 45 percent higher than median Internet prices available to consumers in the first three months of 2007.

Beneficiaries on average could have saved $233 in out-of-pocket cost sharing amounts for power wheelchairs if Medicare had reimbursed suppliers at the median Internet rates available to other consumers, the OIG said in its report, A Comparison of Medicare Program and Consumer Internet Prices for Power Wheelchairs (OEI-04-07-00160).

Furthermore, the OIG noted that the most frequently reimbursed procedure code for power wheelchairs (K0823) accounted for 68 percent of the total possible savings to the Medicare program and its beneficiaries.

OIG Recommendations

The OIG recommended that the Centers for Medicare & Medicaid Services consider conducting additional reviews of Medicare's fee schedule amounts for power wheelchair reimbursements to determine whether adjustments should be made.

CMS concurred with the OIG's findings and said that in mid-2008, Medicare payments for power wheelchairs in 10 geographic areas will be based on suppliers' competitive bids for those items. The Medicare agency also noted that it has the authority in future years to adjust durable medical equipment reimbursement rates on data gleaned from the competitive bidding program.

The OIG's evaluation of Medicare reimbursement for power wheelchairs was in response to findings in 2004 that Medicare paid far more for the equipment than other health care payers. In 2006, CMS revised the Medicare fee schedule for power wheelchairs to improve the accuracy of payment rates for the equipment; however, some groups have said the rates are too low and do not provide adequate compensation.

The OIG said in its report that it is planning additional evaluations to compare Medicare fee schedule amounts to actual prices paid by suppliers.

The report is available.