HHS OIG bashes power wheelchair payments.
by Cara C. Bachenheimer, Esq.

Earlier this month, the Office of Inspector General issued
another negative report comparing the acquisition cost of power
wheelchairs to the Medicare payment levels for these items.

The OIG report, “Power Wheelchairs in the Medicare
Program: Supplier Acquisition Costs and Services,” was
designed to compare Medicare payments for power wheelchairs with
suppliers' acquisition costs and to determine the number and types
of services that suppliers performed in conjunction with providing
power wheelchairs to Medicare beneficiaries.

Undoubtedly the report will add to the negative impression that
many lawmakers have, since the naked numbers alone lead to the
misguided conclusion that Medicare pays too much for PWCs. We know
the OIG's focus on their acquisition costs bears no relationship to
the “total delivered costs” that PWC providers
incur.

The OIG conclusion, however, that Medicare pays two to four
times acquisition costs will reinforce perceptions in Washington
that Medicare simply pays too much (and likely that competitive
bidding will help solve this problem).

The OIG nods at the service component, stating that its surveys
showed suppliers of standard power wheelchairs provide an average
five separate services, and suppliers of complex rehab power
wheelchairs provide seven discreet services. Unfortunately, the
report does not address the cost of services, nor does it make any
statement regarding the appropriateness or cost of these
services.

We cannot let this OIG report stand without response, and
without educating members of Congress and staff. I urge you to use
the statements developed by various industry organizations such as
the American Association for Homecare and NCART that address the
serious shortcomings of this OIG report.

Following are excerpts from the OIG report:

“Medicare and its beneficiaries paid almost four times the
average amount paid by suppliers to acquire standard power
wheelchairs during the first half of 2007. Suppliers purchased
standard power wheelchairs for an average of $1,048 and reported
performing an average of five services in conjunction with
supplying them.

“Because Medicare allowed an average of $4,018 for
standard power wheelchairs, Medicare and its beneficiaries paid
suppliers an average of $2,970 beyond their acquisition cost to
perform an average of five services and cover general supplier
business costs.”

  • “Medicare and its beneficiaries paid almost two times the
    average amount paid by suppliers to acquire complex rehabilitation
    power wheelchair packages during the first half of 2007.”

    Relating to complex rehab, the OIG report states:
    “Suppliers purchased complex rehabilitation power wheelchair
    packages for an average of $5,880 and reported performing an
    average of seven services in conjunction with supplying them.
    Because Medicare allowed an average of $11,507 for complex
    rehabilitation power wheelchair packages, Medicare and its
    beneficiaries paid suppliers an average of $5,627 beyond the
    suppliers' acquisition cost to perform an average of seven services
    and cover general supplier business costs.”

    “Medicare's average allowed amount for standard power
    wheelchairs in the first half of 2007 ($4,018) was 383 percent of
    suppliers' average acquisition cost. In comparison, Medicare's
    average payment under the competitive bidding program ($3,073)
    would have been 293 percent of suppliers' average acquisition cost.
    Although Medicare's fee schedule amount was reduced to $3,641 to
    offset the competitive bidding program's delay, the 2009 fee
    schedule amount exceeds the average competitively bid price by
    $568.”

  • The OIG recommends 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 program, and that CMS should seek legislation
    to ensure that payment amounts are reasonable and responsive to
    market changes, or CMS should use its inherent reasonableness
    authority. CMS agreed with the OIG recommendation.

    For a copy of the complete report, go to: href="http://www.oig.hhs.gov/oei/reports/oei-04-07-00400.pdf">http://www.oig.hhs.gov/oei/reports/oei-04-07-00400.pdf.

    Read more Washington Wit & Wisdom
    columns.

    A specialist in health care legislation, regulations and
    government relations, Cara C. Bachenheimer is vice president,
    government relations, for Invacare Corp., Elyria, Ohio.
    Bachenheimer previously worked at the law firm of Epstein, Becker
    & Green in Washington, D.C., and at the American Association
    for Homecare and the Health Industry Distributors Association. You
    can reach her at 440/329-6226 or cbachenheimer@invacare.com.