When you're looking at a health-care bill estimated to cost $850 billion or more, battles over big money are fought on fronts large and small. The flash point for a heated skirmish can be found tucked into page 153 of the 220-page health-care proposal advanced on Sept. 16 by Senator Max Baucus (D-Mont.), chairman of the Senate Finance Committee. It's a provision to alter the Medicare reimbursement guidelines for motorized wheelchairs, eliminating an up-front payment option while retaining an existing plan to pay for up to 13 months of rentals. A similar proposal surfaced earlier this year in a House draft health-care proposal.
The wheelchairs in question will be familiar to watchers of daytime TV, where vendors pitch them as mobility-enhancing devices available to Medicare beneficiaries at little or no up-front cost. (The proposed changes do not affect more complex and rehabilitative wheelchairs.) But they're also targeted as an example of wasteful payments in the Medicare system. A report issued earlier this month by the Health & Human Services Dept.'s Office of the Inspector General found that Medicare has been paying on average about four times the suppliers' acquisition costs for the wheelchairs. According to the OIG report: "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 industry has been fighting back. A group called the Power Mobility Coalition, a nationwide association of manufacturers and providers of power mobility devices, has been sending out talking points to supporters and urging them to raise the issue with their elected officials. "The elimination of the purchase option will drive Medicare power mobility suppliers out of business and hurt domestic manufacturing of power wheelchairs," says Eric Sokol, director of the Power Mobility Coalition. "It could impact access to needy beneficiaries who will then end up in institutional settings, ultimately costing the government more money."
Vendor: More Than 13 Months Needed
Suppliers complain that many of them will be forced out of business if they receive payment only on a month-by-month basis, with tight credit markets making it difficult to effectively front the cost of the devices. (Medicare reimburses suppliers only after they've made delivery to beneficiaries.) "Fickle" reimbursement criteria by Medicare means they are sometimes not paid back at all, suppliers say, warning that small dealers in rural and frontier communities will be hit hardest.
In addition, Sokol contends a majority of Medicare beneficiaries opt for the lump-sum payment because chronic and long-term ailments cause them to require the chair for longer than the 13 months allowed under the rental reimbursement cap. He points to a data analysis by Texas-based The Scooter Store, one of the largest vendors, which found that more than 92% of customers in a sampling lived longer than 13 months after acquiring a chair.
Altering the Medicare reimbursement structure is one way to decrease the program's outlays, which have been rising precipitously for years. From 1999 to 2003, Medicare payments for motorized wheelchairs increased approximately 350%, from $259 million to $1.2 billion, while overall Medicare program expenditures climbed just 28%, according to the Office of the Inspector General. The Centers for Medicare & Medicaid Services (CMS) revised its policies on coverage and payment in 2005 and 2006, cutting some of the outlays. By 2007, some 173,000 Medicare beneficiaries received power wheelchairs, at a total cost of $686 million.
Durable Medical Equipment: More Cuts?
In a preliminary report released on Sept. 16, the Congressional Budget Office estimated that provisions in the new Baucus bill regarding power wheelchair reimbursements would save an estimated $800 million over 10 years. The most concentrated savings would come in the first year: $300 million worth. Marilyn Moon, vice-president and director of health programs at the American Institutes for Research in Washington, says the savings could come from not purchasing the chairs when people would be using them for less than the 13-month rental period, or by discouraging those who may not truly need a wheelchair from acquiring one.
The Medicare Prescription Drug Improvement & Modernization Act of 2003 established a competitive bidding program for the wheelchairs, but implementation has been delayed. (Meanwhile, a 9.5% reduction in the fee schedule took effect in January 2009.) Still, says Moon, it makes an attractive target for budget cutters, because of the vivid comparison with over-the-counter sales. "It's one of the last areas where retail prices are still available," she says "Durable Medical Equipment, of which wheelchairs are one component, will undoubtedly be something that's looked at to find some savings because people feel there's already overpayment or high enough payment levels where cuts can be absorbed."
Whether the scooter proposals survive the legislative process will be determined by the push and pull of competing interests in the larger health-care bill. "There's a thousand different stakeholders and interests affected by these provisions," says Edwin Park, a senior fellow for health policy at the Center on Budget and Policy Priorities in Washington. "Suppliers and providers will always argue that changes in reimbursements will adversely affect beneficiaries. In some cases they might and in some cases they probably won't."