"Change in Medicare's Power Chair Coverage"

From the New York Times:

Costs and Savings in Medicare Change on Wheelchairs

The New York Times
January 30, 2004

WASHINGTON, Jan. 29 - For a few months after severe
arthritis in her knees forced Sister Scholastica Rzepka
into a manual wheelchair, her arms still had the strength
to propel her around the Sisters of the Holy Spirit convent
near Pittsburgh, her home for the last 77 years. By last
fall, with arthritis crippling her shoulders, her doctor
prescribed a power wheelchair.

Not long ago, Medicare would have reimbursed the company
that provided the chair - with almost no questions asked -
covering the usual 80 percent of the $5,200 cost. But after
a soaring demand for power wheelchairs and dozens of highly
publicized cases of fraud and abuse in recent years,
Medicare administrators late last fall began to take a
closer look at reimbursement requests, an effort now saving
the government millions of dollars.

Medicare officials say they are merely doing their jobs
better. But companies that make and provide the wheelchairs
contend that the government has, in effect, tightened the
eligibility requirements, which they say is hurting both
them and their customers.

Victoria Tarpey, the owner of Med-Care Supply, a small
company in
Patterson, N.Y., that sent Sister Scholastica,
88, her new chair, said Medicare had denied initial claims
for nearly 20 of her customers. In the nun's case, Ms.
Tarpey said, the agency ruled the chair was not medically
necessary despite assurances from Sister Scholastica's
doctor that the arthritis in her knees prevented her from
taking even a single step.

Ms. Tarpey has appealed the denials for each customer and
is awaiting hearing dates. If a first appeal is denied, she
has the right to a second. But she said she feared the
worst: denials that would force her to choose between going
out of business or going to court to sue her customers for
the cost of the chairs. She has already cut her staff in
half, to just two part-time workers.

"I'm just a small-business owner," she said. "I've already
spoken to a bankruptcy attorney and used most of my savings
to keep going. Now, it's down to pretty much just me, but I
don't know how long I can hold on."

Big companies are suffering as well. The Scooter Store, a
Texas company that is the largest supplier of power
wheelchairs and scooters in the country, selling 50,000 a
year, recently dismissed 200 of its 1,500 employees and
blamed the government for the layoffs.

"It's just nuts," Doug Harrison, the company president,
said. "They talk about fraud and abuse. To me, it's abuse
in the home of the beneficiaries. They now have a choice to
crawl around or go to a nursing home. That's abuse, and
it's absurd."

The controversy over payments for power wheelchairs has
been growing as the demand for them has increased. In
recent years, Medicare reimbursements have nearly tripled,
to more than $845 million in 2002 from just over $289
million in 1999, an increase that reflects a rise in the
number of Medicare payments for power wheelchairs, to
159,000 in 2002 from 55,000 in 1999.

For the same period, overall Medicare spending rose by 22
percent as the population of Medicare increased by just 1
percent a year.

Much of the new demand was driven by shady companies that
took advantage of the relatively loose Medicare approval
process. Ben St. John, a spokesman for the inspector
general of the Department of Health and Human Services,
said federal prosecutors have already won convictions in
more than a dozen cases and are trying more than 50 other
cases in 20 states, the
District of Columbia and Puerto

In Harris County, Tex., Medicare paid for more than 3,000
power wheelchairs in 2001. A year later, it paid for
31,000, reflecting what federal officials said was $84
million in fraudulent claims.

As federal officials around the country began prosecuting
cases, officials at the Centers for Medicare and Medicaid
Services, the agency that runs Medicare, initiated a
program to crack down on abuses. As part of a 10-point
program, the agency said it would begin "a more detailed
screening process" for new suppliers and require stricter
overall monitoring.

To educate the public, Medicare instructed the four private
insurance companies that handle Medicare claims for power
wheelchairs to adopt standards that reflect "the clinical
conditions for which mobility products are reasonable and
necessary." That led to a "policy clarification" for
suppliers, which outlines who is eligible for a power
wheelchair and what medical records are required to support
the claim.

Tim Hill, the center's chief financial officer, described
the effort as not so much new policy as "new scrutiny" by
officials who had grown lax in monitoring regulations in
place since 1997.

"We had seen a spike in power wheelchair spending," Mr.
Hill said. "It was the prudent thing to do."

Makers and suppliers of power wheelchairs say the change is
more than a restatement of old policy. They say it narrows
the eligibility requirement by eliminating people like
Sister Scholastica who can stand without help but have
limited arm strength. In addition, suppliers say they are
facing new demands for paperwork, like a physician's
contemporaneous notes of a patient's deterioration, that
were never before asked to submit.

"They've thrown the baby out with the bath water," said A.
Malachi Mixon III, chairman and chief executive of Invacare
of Elyria, Ohio, the nation's largest manufacturer of power
wheelchairs with sales of $1 billion a year. "They're
trying to stop the fraud, but instead, they've decided to
kill the program."

Thomas A. Scully, who stepped down last month as
administrator for the Center for Medicare and Medicaid
Services, said he had asked his staff to develop a new
strategy in the face of the rising number of fraudulent

If no further changes are made, health experts say
pressures will grow on health care providers to help people
who, with a power wheelchair, can do many things for
themselves. Annette Kasper, a nurse at the convent where
Sister Scholastica lives, said that if the nun loses her
power wheelchair, convent staff members will have to tend
to her constantly or she will have to be moved to a
facility better equipped to help her.

"It's all just starting to sink in with the disabled
community," said Andrew Imparato, president and chief
executive of the American Association of People with
Disabilities. "If they're concerned about fraud, there are
ways to crack down on bad actors that don't require a one-
size-fits-all approach to ways to pay for power
wheelchairs. They are going to force people to impoverish
themselves in institutional settings. People who have not
committed fraud are penalized, and the punishment doesn't
fit the crime."