Costs and Savings in Medicare Change on Wheelchairs

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Costs and Savings in Medicare Change on WheelchairsBy MICHAEL JANOFSKYPublished: January 30, 2004

ASHINGTON, 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.

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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.

Tarpey, the owner of Med-Care Supply, a small company in , 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 on, 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. , 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 Rico.

In 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.

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