Signaling another way to cut Medicare spending without affecting care, a federal audit alleges that the government paid nearly four times more for standard power wheelchairs than what equipment suppliers paid for them.
In 2007, 173,300 Medicare beneficiaries received power wheelchairs at a total cost to themselves and the Medicare program totaling $686 million, part of Medicare Part B. However, consumers could have bought those power wheelchairs outside the Medicare program for much less, according to the report from the Office of Inspector General (OIG).
"CMS' power wheelchair payments, and therefore its current methodology for developing power wheelchair fee schedule amounts do not reflect actual acquisition costs," according to the audit, which was signed by Inspector General Daniel R. Levinson.
And while the amounts should be sufficient to cover suppliers' costs, "Medicare and its beneficiaries should not pay amounts that result in suppliers' excess profit."
For example, for standard power wheelchairs, suppliers paid an average of $1,048 in the first half of 2007, but Medicare and its beneficiaries paid $4,018, almost four times that average amount. The beneficiary's 20% copayment of $804 was more than three-fourths of that amount.
Standard wheelchairs represented three-fourths of all wheelchairs provided under the Medicare program.
For more expensive, complex rehabilitation power wheelchair packages, suppliers paid an average of $5,880, but Medicare allowed an average of $11,507, almost twice as much.
The additional amounts were intended to cover wheelchair vendor services, such as assembling and delivering the equipment, and educating the beneficiary on its proper use.
Suppliers said they performed an average of five to seven services for standard and complex wheelchairs prior to, during, and over an average of nine months after delivering the chairs, but most services were prior to and during the wheelchairs' delivery.
"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," the audit said.
The OIG added, "Prior OIG evaluations found that consumers can purchase power wheelchairs at lower prices than Medicare and its beneficiaries. The findings of this evaluation suggest that CMS' (the Centers for Medicare and Medicaid Services') current methodology for developing power wheelchair fee schedule amounts does not reflect actual acquisition costs."
There have been other attempts to reduce this spending, the OIG report explained. In May 2006, CMS proposed a revised methodology that would not rely on manufacturer-suggested retail prices, but would instead be responsive to the general market.
Three years later, the OIG said, "CMS had not finalized this proposal."
CMS planned to use supplier-submitted competitive bids to establish reimbursement amounts for power wheelchairs and other durable medical equipment (DME) beginning in July 2008. That would have decreased by an average of 26% across all included categories of DME, saving up to an estimated $1 billion a year.
"However, Congress delayed the program and exempted complex rehabilitation power wheelchairs from future competitive bidding," according to the report.
To compensate for the savings lost by the delay, amounts were reduced in January 2009 by 9.5%.
The OIG recommended that CMS should determine whether Medicare's fee schedule amounts for standard and complex rehabilitation power wheelchairs should be adjusted, and should consider using the competitive bidding acquisition program to adjust fee schedules.
It also recommended that CMS should "seek legislation to ensure that fee schedule amounts are reasonable and responsive to market changes" and to use the audit results "to determine whether an inherent reasonableness review is appropriate."
Medicare pays for wheelchairs for beneficiaries who are unable to walk and have severe upper body weakness, and are medically necessary for people who cannot effectively perform mobility-related activities of daily living with other devices, such as a cane, manual wheelchair or power scooter.
More than 650 models are covered, but more than three-fourths of all wheelchairs purchased are standard models.
House Democrats are returning to work still unsettled over pending healthcare legislation—but they are in almost the exact position they were in when they left the Capitol in late July. In the lead-up to President Obama's critical address to a joint session of Congress, interviews with a cross section of about 15 House Democrats and half a dozen aides show that there is still overwhelming support for some overhaul of the healthcare system. But the caucus remains divided over the details of the measure and now faces a public that is more skeptical than when House committees began drafting the plan two months ago.
For the past month, Washington pundits have speculated about the specifics of healthcare reform legislation—and who will support it. With Congress coming back from its summer recess today, the answers are expected to emerge quickly on the presidential and congressional fronts.
President Obama will give a nationally televised speech on healthcare reform on Wednesday night. But on Monday afternoon, speaking to about 5,000 union members and their families at a Labor Day picnic in Cincinnati, Obama pulled the curtains back slightly on what he might be saying on Wednesday about healthcare reform.
"The debate has been good, and that’s important because we’ve got to get this right. But every debate at some point comes to an end. At some point, it’s time to decide. At some point, it’s time to act," Obama told the audience.
In particular, he saw reforms "where Americans and small businesses that are shut out of health insurance today will be able to purchase coverage at a price they can afford." This would mean the inclusion of a new health insurance exchange, which would use "competition and choice" of insurance plans "to hold down costs and help deliver them a better deal."
And it would include a public insurance option—an issue that has had a rousing effect at many congressional town hall meetings during August. "I continue to believe that a public option within that basket of insurance choices will help improve quality and bring down costs," Obama said.
But Obama reminded the crowd that lawmakers should not overlook other healthcare reform measures. This includes placing a cap on out of pocket expenses, he said, "so you don’t have to worry that a serious illness will break you and your family even if you have health insurance" and outlawing denial of coverage for those with preexisting conditions.
The Senate Finance Committee is not expected to include a public option or any government plan in its healthcare reform bill that is anticipated this week. The "gang" of six senators—three Democrats and three Republicans and led by Chairman Max Baucus (D-MT)—had been ironing out details via teleconferencing on Friday.
"We addressed a number of issues at hand and the next steps moving forward. We agree we need to take control of healthcare costs and make health insurance affordable for families and small businesses," Baucus said in a statement after meeting with the group.
Whether an agreement emerges from the Senate panel that would garner specifically bipartisan support remains to be seen. But a measure that calls for state co-ops—rather than a public option—to assist in providing coverage is expected to be included.
New taxes are also said to be considered in the Finance Committee proposal that would tax insurance companies on their most expensive health plans. The result is expected to be that employers would purchase cheaper, less generous coverage for employees—and thereby reducing the overuse of medical services.
On the House side, Speaker Nancy Pelosi (D-CA) last week again affirmed the placement of a public option in healthcare reform legislation. "A bill without a strong public option will not pass the House, she said last week. "Eliminating the public option would be a major victory for the insurance companies who have rationed care, increased premiums, and denied coverage."
President Obama attempted to reinvigorate support for his struggling healthcare agenda by giving a speech to thousands of union members celebrating Labor Day. Obama drew wild applause when he reiterated his support for a government-run insurance plan, one of the most contentious of the healthcare issues and a key change that labor officials strongly support.
Rescission, or canceling insurance coverage on grounds that the company was misled, has become central to the healthcare debate as President Obama tries to tap into dissatisfaction with the insurance industry to build support for reform efforts. Each of the bills pending in Congress would prevent insurers from rejecting clients because of preexisting conditions. Insurance company officials say they need to be able to cancel policies to control fraud, which by some estimates reaches $100 billion annually.
The Medicare Payment Advisory Commission as found that geographic variation in Medicare spending is substantial. But the Commission told Congress recently that much of the variation could be explained by local differences in the cost of providing care and in the health status of beneficiaries, as well as by extra payments, authorized by Congress, for hospitals that train doctors or treat large numbers of low-income patients. The new government data are adding fuel to a raging debate over what Congress should do to reduce geographic disparities in Medicare spending.
A proposal circulated by Sen. Max Baucus (D-MT), chairman of the Senate Finance Committee, would pay for sweeping healthcare reform in large part by taxing insurance companies on the most expensive policies they offer. Although no exact policy price threshold has been established, supporters estimate such a tax could raise as much as $180 billion over 10 years. Originally championed by Sen. John F. Kerry (D-MA), the tax would also help curb healthcare costs, supporters say, because insurers would be under pressure to reduce costs and premiums on their priciest products to avoid the levy.
Advocacy groups say the number of primary care physicians in Texas isn't keeping pace with the state's growing population, with rural areas taking the hardest hit. There are 27 Texas counties that have no doctor at all, many in West Texas or along the border with Mexico, according to the Texas Department of State Health Services. Some residents must travel across counties to find basic medical care.
To explore the healthcare reform issue, USA Today chronicled 24 hours in the emergency room at the UVA Medical Center, a teaching hospital and trauma center that serves patients in central Virginia. From dawn to dawn on Aug. 24-25, reporters talked with patients and their families, doctors and nurses, helicopter pilots, and ER housekeepers about their experiences with healthcare and their views on changing the system.
Proposals in Congress to overhaul healthcare may threaten the funding and future of the nation's already-struggling safety net hospitals, an irony hospital leaders are expressing quietly as Congress reconvenes this week to take up healthcare again. Hospital leaders support expanding insurance coverage to more Americans, but they worry financing the expansion will cause some teetering urban hospitals to deteriorate and close.
