PWC Payment Study ‘Disappointing, Misleading,’ AAHomecare Says

ARLINGTON, Va.—The American Association for Homecare
issued a statement yesterday labeling an Office of Inspector
General report on Medicare power wheelchair payments
 “both disappointing and extremely
misleading.”

Posted Sept. 2, the report—“Power
Wheelchairs in the Medicare Program: Supplier Acquisition Costs and
Services”—compared Medicare reimbursements
for PWCs in 2007 to providers’ costs to purchase the
equipment. “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 said. “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.”

But the OIG report “ignored the substantial costs of services
related to providing power wheelchairs, including complex rehab, to
seniors and people with disabilities who require mobility
assistance,” AAHomecare said.
 
“The OIG admits that they did not account for services
involved in providing and maintaining properly adjusted wheelchairs
to Medicare beneficiaries in their homes. The OIG study notes,
‘We did not determine the cost of performing these services
or other general supplier business expenses, such as billing,
accreditation, staff salaries, or facility
maintenance.’”

Neither did the report account for the cost to comply with the 26
federally mandated supplier standards required of HME providers
doing business with Medicare. “Compliance with those
standards is a significant cost-driver for providers of power
wheelchairs,” AAHomecare said.

“The economic reality for a rehab provider in 2009 has
changed markedly since 2007,” according to Tim Pederson, CEO
of WestMed Rehab, Rapid City, S.D., and chairman of
AAHomecare’s Complex Rehab and Mobility Council.
“Reimbursement rates have dropped dramatically. As a result,
it is becoming increasingly difficult for the rehab provider to
continue to provide items and services to seniors and people with
disabilities. It’s also worth noting that today there are new
medical policies, updated quality standards, and surety bond and
mandatory accreditation requirements in place that did not exist in
2007.”  

Over the past five years, AAHomecare said, Congress has reduced
power wheelchair pricing by more than 35 percent through cuts
including:
 

• A 9.5 percent cut across Round 1 bid categories, a “pay
  for” under the Medicare Improvements for Patients and
  Providers Act of 2008 in exchange for delay of competitive
  bidding;

• Elimination of inflation updates for power wheelchair payments
  from 2004 to 2009;

• An average 27 reduction in reimbursements as a result of fee
  schedule changes in November 2006; and

• An approximate 3 percent reduction to fee schedule prices in
  2005.

“This study, unfortunately, perpetuates the myth that
suggests one could order a power wheelchair and have it dropped at
your front door,” said AAHomecare President Tyler Wilson.
“The study glosses over the level of care, service, and
professionalism that an accredited home medical provider would
furnish directly to a senior or person with a disability.
“

Continued Wilson, “The association believes that it is
inappropriate for the OIG to infer that providers are making
significant high profits.  We stand ready to work with the OIG
to conduct a more thorough and useful analysis of the
service-related costs of providing power wheelchairs to Medicare
beneficiaries.”

Read the entire OIG study at http://www.oig.hhs.gov/oei/reports/oei-04-07-00400.pdf.

Responding on another front, HME provider Joel Marx, president
and CEO of Medical Service Co., Cleveland, and chair of
AAHomecare’s HME/RT Advisory Council, will appear on
C-SPAN’s “Washington Journal” tomorrow (Saturday,
Sept. 5) to voice concerns over former Medicare Administrator
Bruce Vladeck’s
comments about the HME industry. Vladeck, who appeared
on the program Aug. 27, called home oxygen “nothing but
air.”

The Saturday morning program is scheduled to air at 9:30 a.m. ET.