WRAL Investigates

Medicare spokesman: 'We're overpaying' for medical supplies

Posted February 15, 2011

WRAL Investigates
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— If a wheelchair costs $160, why would Medicare pay eight times as much? That's the question one local woman asked after her elderly father needed a wheelchair to get around.

As a WRAL investigation found, it’s all in the way Congress set up the spending plan.

A wheelchair seemed like a simple purchase for Jeanne Gunter's 95-year old-father when he moved to assisted living, but she soon learned that Medicare's payment system is not so simple.

Medicare rents to own equipment, such as wheelchairs. One wheelchair, for example, costs $104 a month for up to 13 months, which is about $1,300 total. Providers must maintain the liability to repair the chair during the 13 months of rental.

“We could’ve bought a wheelchair,” Gunter said. “I looked at a local pharmacy and looked at a wholesale club, and you could easily get one for $150 to $200 comparable to what we have.”

Laurence Wilson, director at Centers for Medicare and Medicaid Services, said he thinks Medicare is "overpaying substantially for wheelchairs."

Wilson said he blames medical supply companies and their powerful lobbies for allowing $1,300 wheelchairs. The rent-to-own plan started with the idea that some people only need equipment for a short time. Still, at those wheelchair prices, Medicare only breaks even if a patient needs a wheelchair for a month or two.

Medicare has a rent-to-own policy for most durable medical supplies, such as hospital beds, CPAP machines for sleep apnea and power wheelchairs.

WRAL News found audits by the Office of the Inspector General that specifically target power wheelchairs and overspending in that category.

According to a 2007 report, Medicare fee schedule amounts for power wheelchairs were 45 percent higher than median Internet prices available to consumers in the first quarter of 2007.

A 2009 report also made note that 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.

Between 1999 and 2003, Medicare payments for power wheelchairs increased approximately 350 percent, from $259 million to $1.2 billion, while overall Medicare program expenditures rose 28 percent, according to a 2009 report.

Medicare spokesman: 'We're overpaying' for medical supplies Medicare spokesman: 'We're overpaying' for medical supplies

The agency said Congress set up the current rent-to-own process and how the monthly rent is calculated.

“In my opinion, the major problem is that Medicare needs to be paying a fair price, and we’re not getting a fair price now,” Wilson said.

After many phone calls, Gunter got her father's assisted living facility to cut the Medicare payments after three months, because she said it just wasn't right.

“How can we get it to Congress and get some changes made?” she asked.

Medicare started competitive bidding in January on some products to try to save money. Wilson says they have saved 35 percent on power wheelchairs so far. However, manual wheelchairs still aren't part of those changes.

Until then, Gunter said she wonders how many more $1,300 wheelchairs will be purchased.

The competitive bid process is being tested in a few cities, including Charlotte, and there is controversy surrounding it. Since medical supply companies have to win a contract, some Medicare patients say the program limits the companies from which they can choose.

A spokeswoman for the North Carolina Association for Medical Equipment Services did not want to comment specifically about Medicare policy.


This story is closed for comments.

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  • GOTTAGO64 Feb 18, 2011


  • Ready2Taxi Feb 17, 2011

    Wow! Medicare fraud! Medicaid fraud! This story has only been coming around again and again for the past 40 years. Why? Because Uncle Sam is giving away FREE MONEY and YOU'RE ENTITLED! Don't look at that bill, YOU'RE NOT PAYING FOR IT!

  • whatusay Feb 16, 2011

    Simple solution, give everyone their money back (that they paid in), and let them buy their own health insurance. Those who have not paid into the ponzi scheme yet, keep your money and buy health insurance.

  • Timetogo Feb 16, 2011

    “How can we get it to Congress and get some changes made?” she asked.

    When you find out, you'll win the lottery!

  • daiseydear Feb 16, 2011

    We did not need Obamacare to fix this.(Obamacare is a whole new problem) Medicare fraud should have been investigated long ago. Whenever the government starts writing checks it never bothers to see if it can pay less. After all, it's somebody elses money (ours) they are spending so who cares. ObamaCare fraud comes next.

  • maybelle Feb 16, 2011

    And if the person who uses the wheel chair dies its sold at yard sales or advertised on Craigs list etc.and the family makes money Talking about rip off.A neighbor of mine just bought one the person he brought it froms Mom had it 3 weeks and Medicare paid for it. Neighbor got it fro $400 Medicare paid over $2000 for it.

  • naylard Feb 16, 2011

    Okay-I am an "evil" provider who has issues with the pricing structure. We price things a bit different than most in the industry (ie @ wholesale) however the current culture is not pricing to the consumer but to the fee rate. Also, its rare to hear someone shop around. I am amazed how often you get the "its free" statement when in fact its not. However, I should add another part of the price discrepancy is the whole billing and delivery mechanism which differs from an online purchase. Its really not as easy as swiping a credit card for your insurance to cover something. Also the licensing one has to go through compared to just a stnd retail store is horrible. But $1300 is absurd for a wheelchair but something a bit higher than the $200 is fair as one has to employ staff, etc to bill the insurance unless Medicare or your insurance allowed you to do it. What I fear is the In-network and out-of network bs being created. Your choices will be limited even if the out-of-network charges less

  • btneast Feb 16, 2011

    By the way Obamacare addresses the medicare abuse and includes some reforms.

    Adresses it, or fixes it? Pretty words and promises do not a fix make. Your handle impies a Navy retiree....surely you have seen firsthand how difficult it is for an enormous bureacracy to make quick, smart decisions?

  • btneast Feb 16, 2011

    Lobbies have too much input to our legislation,

    ....and who is at fault here....the lobbyist or the legislator? Did the lobbyist hold a gun to the legislators head, or did the legislator knowingly change some rules to pay back as part of his quid pro quo? Who made the rror.....hmmm?

  • usnret Feb 16, 2011

    Lobbies have too much input to our legislation, it's called quid pro quo. Let's see how the NC legislation on online gaming comes out after the closed door meetings with the gaming lobby. By the way Obamacare addresses the medicare abuse and includes some reforms.