Here We Go Again

It’s difficult not to get infuriated as you read the Office of Inspector General’s recent report, “A Comparison of Medicare Program and Consumer Internet Prices for Power Wheelchairs.”

The OIG concludes that “Medicare fee schedule amounts for power wheelchairs were 45 percent higher than median Internet prices available to consumers in the first quarter of 2007,” and that “Medicare and its beneficiaries could have achieved savings during the first quarter of 2007 had Medicare reimbursements more closely resembled prices available to consumers over the Internet.”

Wow.

The OIG examined median Internet pricing for 28 power mobility device codes from Groups 1, 2 and 3 (codes K0813 through K0861) and compared it to 2007 Medicare fee schedules for these codes. The OIG did not examine whether or not these Internet vendors were Medicare Part B suppliers, whether they submitted claims on behalf of beneficiaries or adhered to any of the Medicare required standards. The report was markedly silent on all those important facts.

In its response included in the OIG report, CMS failed to acknowledge that the agency specifically rejected using Internet pricing as a basis for setting new fees for the new codes that were effective Nov. 15, 2006. Instead, in its published response to the OIG findings, CMS remarked that it is collecting pricing information in the competitive bid program, and that it has the authority in future years to adjust pricing for these items across the country, based upon bid prices.

Clearly, the OIG conclusion that Medicare could be saving money if beneficiaries obtained their power wheelchairs from Internet vendors is unfounded. We know that. But we need to educate and inform policymakers of the reasons why. Those reasons are fairly compelling.

First, Internet providers typically do not adhere to Medicare standards. Second — for very good reasons — beneficiaries do not obtain physician-prescribed power wheelchairs from these sources. Instead, beneficiaries obtain these items and services from local providers that offer a full gamut of services that prescribing physicians want for their patients, that consumers desire and that the Medicare program requires.

Product acquisition cost for high-end rehab providers represents, on average, only 50 percent of the power wheelchair provider’s total delivered costs.

Medicare suppliers must bear the expense of evaluating the beneficiary’s specific needs, evaluating the home, assembling the wheelchair, delivering the equipment to the home, on-site fitting and adjusting to accommodate the individual’s seating needs, on-site training, processing the claim for payments to insurers and maintaining facilities to provide service and repair.

Any analysis of costs required to provide the expected Medicare standard of care must take into account these services and administrative costs, which are distinct from the costs of acquiring the equipment.

An informal survey reveals that most online merchants do not provide even the basic services required of Medicare enrolled suppliers, nor do most online vendors possess Medicare billing numbers. As a rule, no high-end rehab power wheelchairs are sold through Internet vendors.

Internet pricing typically does not account for the individual evaluations, set-up, services and other non-equipment costs that suppliers incur when furnishing power wheelchairs to Medicare beneficiaries. Since most online merchants are not Medicare Part B suppliers, they typically do not offer in-home evaluation or assistance with the product beyond guaranteeing delivery to the beneficiary’s front door.

In contrast, Medicare enrolled providers must meet Medicare supplier standards, new quality standards including mandatory accreditation and the service standards that are included under Medicare coverage policies for power mobility devices.

For these reasons, Internet prices for power wheelchairs are an inappropriate and inaccurate source of data for establishing Medicare fees for these devices.

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 by phone at 440/329-6226 or by e-mail at [email protected].