Report on Senate Hearing RE Power Wheelchair Benefit
May 2004

The following summary of a recent Senate hearing is provided by the law firm of Powers, Pyles, Sutter and Verville -- an active participant in the ITEM Coalition:

Senate Finance Committee Examines Medicare's Power Wheelchair Benefit

On Wednesday, April 28, 2004, the Senate Finance Committee held a hearing on fraud and abuse in the Medicare system with regard to power wheelchairs. Chairman Charles E. Grassley (R-IA) opened the hearing by citing reports released that day by the General Accounting Office (GAO) and the Office of Inspector General (OIG) at the Department of Health and Human Services (HHS). The OIG report found that only an estimated 13% of Medicare's power wheelchair claims for the most common model (K-11) meet the specific benefit criteria and almost 33% of Medicare claims for power wheelchairs did not meet requirements for any type of wheelchair. The OIG estimates that Medicare has spent $1.2 billion in 2003 on total payments for power wheelchairs and has seen an increase of almost 450% for such payments in the last four years.

Testifying at the hearing was Rebecca Lewandowski who has pleaded guilty to defrauding Medicare of $25 million through an extensive power wheelchair scam. The witness stated that with the assistance of friends and relatives, she obtained fraudulent Medicare numbers, forged physicians' signatures, set up fake store fronts and billed Medicare for wheelchairs that were never delivered. With little visible remorse for her actions, Lewandowski blamed the Centers for Medicare and Medicaid Services (CMS) for creating a system easy to manipulate.

With damaging statistics and several recommendations for CMS, Dara Corrigan, Acting Principal Deputy Inspector General, OIG-HHS, and Leslie Aronovitz, Director of Health Care, Program Administration and Integrity Issues, GAO, testified that their investigations of Medicare's Power Wheelchair Benefit show that changes must be made to ensure that criminals do not continue to take advantage of the program. Beside fraudulent claims for power wheelchairs, the witnesses stated that Medicare is simply paying too much for these wheelchairs. The average reimbursement rate for K-11 wheelchairs under Medicare is $5,297, while other federal health programs such as the Veterans Administration, as well as wholesalers and suppliers, are paying as low as $1,550 for the same product. While it should be noted that Medicare pays for additional services, investigators believe that Medicare is overpaying for these wheelchairs.

During the hearing, Herbert Kuhn, Director of the Center for Medicare Management, CMS, stated that his agency has developed a three-prong approach to combating fraud and abuse and controlling current waste in Medicare system. Described in detail in a press release issued the same day, the three-prong approach centers on coverage, payment and quality of suppliers of power wheelchairs. With the help of physicians and other professionals, CMS plans to develop new coverage guidelines that clearly explain the eligibility requirements associated with power wheelchairs. The agency also plans to revamp the billing codes as current codes date back to 1993. The codes would distinguish between different types and price levels associated with various K-11 power wheelchairs that are currently grouped under essentially one billing code.

In terms of quality, CMS plans to improve standards for power wheelchair suppliers as the agency uses it competitive bidding authority granted by the new Medicare Law. Additionally, CMS announced that it plans to use Inherent Reasonableness (IR) in its effort to reduce payments for power wheelchairs. Although a revamped IR authority was given to the agency in 2002, CMS has yet to successfully implement the process by which they are able to adjust payment ceilings on durable medical equipment such as power wheelchairs.

Although reducing fraud in the Medicare system may be a laudable goal, the intended methods of doing so created questions and concerns from several witnesses. Henry Claypool, Co-Director of Advancing Independence and Co- Chair of the ITEM Coalition, as well as a K-11 wheelchair consumer himself, asked Congress and government officials as they tackle this fraud and abuse problem, to bear in mind that the ambiguity and restrictive nature of the current policy denies access to power mobility for countless needy recipients annually. Mr. Claypool pointed to Medicare's current "in the home" coverage criteria, which provides power wheelchairs only to individuals who need them to move about the "four walls of their home" and not for use in the community, school or workplace.

Additionally, [Claypool] reminded CMS that the term "in the home" was created when Medicare Part B began to cover durable medical equipment and wanted to differentiate between equipment used by the patient in a hospital and equipment used in the individual's home. He included three stories, one being his own, in which deserving individuals have or would be denied power wheelchairs under this standard. Claypool continued by recommending the agency communicate with medical professionals and consumers to develop clear coverage criteria that values the functionality and independence of people with disabilities and compliments other current policies such as Chairman Grassley's Ticket to Work Program. Senator Grassley, Herbert Kuhn and CMS Administrator Mark McClellan in a follow-up statement, all stated their intentions to reduce waste, fraud and abuse in the Medicare system and provide power wheelchairs to legitimate beneficiaries.

Powers, Pyles, Sutter and Verville, PC is an active participant in the ITEM Coalition. See the website for more information on the ITEM Coalition or call 202-349-4260.

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