Sen. Chuck Grassley, chairman of the Committee on Finance, has asked the General Accounting Office to brief his staff on Medicare reimbursement policies for motorized wheelchairs in light of explosive spending in this area. Grassley said he is concerned about whether the Medicare reimbursement rules are too loose, leading to some providers exploiting the rules to over-bill and possibly to defraud Medicare.
"No one who qualifies for a Medicare-financed motorized wheelchair should be denied one," Grassley said. "The questions are whether the reimbursement rules are too lax, whether government oversight of those rules is too weak, and if so, whether some providers are exploiting those circumstances to make a fast, dirty buck. Undeserved provider profits would drain Medicare dollars from the beneficiaries who really need them. If that's happening, we have to stop it now."
Grassley said he hopes to have a hearing on the issue this spring with testimony from the General Accounting Office. Grassley's letter to the GAO follows.
February 10, 2004
VIA FACSIMILE: (202) 512-5507
ORIGINAL BY U.S. MAIL
The Honorable David M. Walker
Comptroller General
U.S. General Accounting Office
441 G Street NW
Washington, D.C. 20548
Dear Mr. Walker:
The Senate Finance Committee (Committee) is presently investigating companies that may be taking advantage of federal healthcare programs to increase sales and profits of power scooters and wheelchairs. Last week, the Department of Health and Human Services (HHS), Office of Inspector General (OIG), announced several arrests in a multi-million dollar Medicare fraud scheme involving motorized wheelchairs in Texas – "[a]ccording to the HHS, the billings to Medicare in the schemes were in excess of $36 million, with more than $15 million paid out by Medicare to the defendants . . .Typically Medicare was billed $8000 - $10,000 for the motorized wheelchairs. For each claim they submitted, the wheelchair suppliers would receive approximately $5000 from Medicare." It appears that Medicare payments for power wheelchairs and scooters are so exorbitant that criminals have been seeking easy profits. As chairman of the Committee, I request that the General Accounting Office (GAO) brief my Committee staff about federal oversight of power wheelchair and scooter payments. In the event that the Committee schedules a hearing(s) this spring, I also request that the GAO be prepared to testify before the Committee.
Over the last four years, overall Medicare spending increased by about 11 percent, but spending for power wheelchairs increased nearly 450 percent. This represents an unprecedented growth in spending for a single item of durable medical equipment. In 2003, total Medicare payments for power wheelchairs were about $1.2 billion. Spending growth has been fueled by the number of beneficiary claims for power wheelchairs filed, which increased 189 percent between 1999 and 2002, at a time when the overall Medicare population increased by only 1 percent. Billing for power-operated vehicles – also known as scooters – has also significantly increased.
The amount that Medicare reimburses for each individual power wheelchair and scooter may also be a factor in Medicare's spending. As individual items, power wheelchairs are very expensive products, compared to other items of durable medical equipment. In 2004, Medicare paid almost $5,000 for each individual power wheelchair. As in the past, the Committee is concerned that Medicare is paying amounts that are higher than those paid by other insurers or public programs. For example, the OIG reported in June 2002 that Medicare paid 20 percent more than state Medicaid programs for manual wheelchairs.
While ethical suppliers that follow Medicare's rules provide many of these wheelchairs and scooters, some of this spending growth may be fueled by aggressive marketing or outright fraud – both of which can lead to improper payments. In anticipation of a Committee hearing(s) on these matters, the GAO should be prepared to answer the following questions:
1. What systems are in place for CMS and its contractors to identify indications of, and address, improper payments for power wheelchairs and power-operated vehicles?
2. What has been CMS's experience in setting payments for durable medical equipment that are in line with current market prices?
Thank you in advance for your cooperation and your response by February 17, 2004.
Sincerely,
Charles E. Grassley
Chairman