Stark Lauds OIG Report; AAHomecare Disputes ‘Apples to Oranges’ Findings on PWC Prices

WASHINGTON–According to the American Association for Homecare,
an influential congressman lent credibility on Friday “to the
inaccurate and misleading government study” that suggests Internet
prices available to consumers should be the basis for Medicare
reimbursement of power wheelchairs.

House Ways and Means Health Subcommittee Chairman Pete Stark,
D-Calif., sent a “Dear Colleague” letter to fellow representatives
about a Department of Health and Human Services Office of Inspector
General report, released Oct. 30, that found Medicare payments for
PWCs were 45 percent higher than median Internet prices for the
equipment.

Called “A Comparison of Medicare Program and Consumer Internet
Prices for Power Wheelchairs,” the report said that for the first
three months of 2007, the government could have saved nearly $40
million if its fees had been the same as those Internet prices, and
beneficiaries could have saved $233 in copays for the products.
(See
HomeCare Monday, Nov. 5.)

“Based on this analysis, the OIG concludes that lower prices for
wheelchairs–and savings–are available to consumers and the
Medicare program,” Stark wrote in his letter.

But because “this study and the flawed comparison of Medicare
and Internet pricing will be used by some members of Congress [to]
justify further cuts to power wheelchair reimbursement rates,”
according to AAHomecare President Tyler Wilson, the association is
scheduling meetings with both Rep. Stark and Inspector General
Daniel Levinson to rebut the OIG’s “apples to oranges
comparisons.”

The association said it will make the following points to both
OIG and Stark:

–The cost of acquiring power wheelchairs used by Medicare
beneficiaries through the Internet does not in any way compare to
the cost of providing these devices to Medicare beneficiaries
adhering to the appropriate standards of care. The implied cost
savings of Internet pricing is extremely misleading.

–In a previous OIG analysis of power wheelchair prices–“A
Comparison of Prices for Power Wheelchairs in the Medicare
Program”–from April 2004, the OIG acknowledged that “the estimates
of potential program savings presented in the findings of the
report would be lower if median prices had included any supplier
administrative costs.”

–In former Inspector General Janet Rehnquist’s testimony before
the U.S. Senate Appropriations Subcommittee on Labor, Health and
Human Services and Education on June 12, 2002, the OIG indicated
that when CMS compared Medicare prices to those from the Department
of Veterans Affairs they added a 67 percent markup to the VA
prices.

–Internet pricing does not account for the specialty
evaluations performed by certified medical professionals, training,
repairs and other non-equipment costs that are required in
furnishing power wheelchairs to Medicare beneficiaries. Under
Medicare, durable medical equipment providers must bear the expense
of evaluating the beneficiary’s specific needs, assessing the home,
assembling the wheelchair, delivering the equipment to the home,
conducting customized onsite fitting to accommodate the
individual’s seating needs, performing onsite training, processing
claims for payments to insurers and maintaining facilities to
provide service and repair. Any accurate 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.

–Online power wheelchair merchants cannot comply with Medicare
standards. They carry limited product inventories and offer little
or no assistance with product set-up, beneficiary training or
repairs.

–Internet prices for power wheelchairs are an inappropriate and
inaccurate source of data for establishing Medicare fees for these
devices. Use of such data would skew the median price downward
because the data does not account for all of the required services
and activities necessary to furnish power wheelchairs to Medicare
beneficiaries in a manner that ensures the beneficiary’s safety or
complies with standards applicable to Medicare enrolled
providers.

Read the
OIG report in full.