You've seen the commercials: a happy elderly person celebrates his freedom: eating dinner with the family, going to the park with the grandkids, making himself a snack! All thanks to the power wheelchair which he obtained free (or at minimal cost)!
But there is a dark side to the power wheelchair story. Improper payments, waste, and fraud - unfortunately, these problems are all too common. A recent report by the Medicare Office of Inspector General ("OIG") found that 61 percent of power wheelchairs provided to Medicare beneficiaries in the first half of 2007 were either medically unnecessary or lacked sufficient documentation to determine medical necessity. These power wheelchairs accounted for $95 million – nearly one-half of the $189 million that Medicare allowed for power wheelchairs during this period. Other key findings from the OIG include:
- Medicare and its beneficiaries paid four times the average amount paid by suppliers for standard power wheelchairs.
- Eight percent of power wheelchair claims were miscoded, meaning the suppliers billed Medicare using codes that did not match the model information on the invoices of the power wheelchairs supplied to beneficiaries.
- A total of 80 percent of claims for power wheelchairs did not meet Medicare coverage requirements and should not have been paid by Medicare.
Medicare Beneficiaries are eligible to receive power wheelchairs under Medicare Part B coverage of durable medical equipment (DME). Beneficiaries must be prescribed power wheelchairs by their physicians, and receive them from DME suppliers. These suppliers often bill Medicare for reimbursement as a "courtesy" to their customers. The "free or low cost" claims you hear on late-night TV refer to the fact that qualified beneficiaries will be reimbursed 80% of the cost by Medicare. If they have private insurance, the additional 20% will be covered.
However, in order to meet Medicare guidelines, the prescribed power wheelchair must be deemed medically necessary based on a number of criteria, which determine that it will help the beneficiary perform mobility-related activities of daily living ("ADLs"). In addition, a less expensive or different type of DME (such as a manual wheelchair, cane, or walker) would not be appropriate. There must also be a face-to-face consultation with the prescribing physician. It is these and other standards that the latest report found were either not met or not sufficiently documented in more than half of the claims.
Based on records submitted by suppliers that provided power wheelchairs, 9 percent of all power wheelchairs were medically unnecessary and another 52 percent had claims with documentation that was insufficient to determine medical necessity.
In reviewing prescribing physicians' records, OIG found that 78 percent of claims were for power wheelchairs that were medically necessary based on suppliers' records but were medically unnecessary, insufficiently documented, or undocumented based on physicians' records. In most cases, the physicians' records had insufficient documentation to support the power wheelchairs' medical necessity; less often, physicians' records actually contradicted suppliers' records.
Based on OIG's findings and prior studies, it recommended that Medicare (1) review records from sources in addition to the supplier, such as the prescribing physician, to determine whether power wheelchairs are medically necessary; (2) continue to educate power wheelchair suppliers and prescribing physicians to ensure compliance with clinical coverage criteria; and (3) review suppliers that submitted sampled claims OIG found to be in error. Medicare concurred with the recommendations.
The good news in all this is that OIG is actively prosecuting some of the worst contributors to the problem, and getting some of our Medicare dollars back.
In a recent Texas case, a Houston-area DME company was found to have submitted fraudulent claims to Medicare for medically unnecessary power wheelchairs, wheelchair accessories, and motorized scooters. The company would bill Medicare under a special code that designated the power wheelchairs as replacements for wheelchairs lost during Hurricane Katrina. In fact, the hurricane did not damage the wheelchair, or the beneficiary did not even have a power wheelchair to begin with.
In 2010, the company's owner and operator was sentenced to 41 months in prison. Another employee, who falsely claimed to be a doctor, is one of OIG's Most Wanted Fugitives.
In another case, the owner and operator of a Los Angeles DME company was sentenced to 55 months in prison in connection with a nearly $1 million power wheelchair fraud scheme.
The owner was also ordered to pay $508,134 in restitution by U.S. District Judge John F. Walter of the Central District of California. In addition, he was ordered to serve three years of supervised release following his prison term.
The owner pleaded guilty on Jan. 27, 2010, to conspiracy to commit health care fraud. According to court documents, he owned and operated Cooper Medical Supply. He admitted that between January 2006 and September 2009, he conspired with the owner of another DME supply company and others to purchase fraudulent prescriptions and medical documents. He then used those documents to submit false claims to Medicare for expensive, high-end power wheelchairs and other DME he claimed he supplied to Medicare beneficiaries. According to court documents, over 80 percent of Cooper Medical Supply's "beneficiaries" lived more than 100 miles from Cooper Medical Supply's store front location, in cities and towns such as Fresno and Oakland, Calif.
The owner also admitted that he knew Cooper Medical Supply's beneficiaries did not need the power wheelchairs he billed to Medicare. He also admitted that he knew the information contained in the fraudulent prescriptions and medical documents came from fraudulent medical clinics. He admitted that he used Cooper Medical Supply to submit or cause the submission of approximately $950,000 in false claims to Medicare.
Equipment such as power wheelchairs can make a huge difference in the quality of life of physically impaired individuals. Unfortunately, scam artists have, for far too long, hurt the cause of the truly needy, by presenting claims to Medicare for power wheelchairs that are not medically necessary, or are poorly documented.
Copyright 2011, Mercer Business Magazine. Reprinted with permission. All rights reserved.
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