“Consumer Deception, Choice and Medicare,” written by Ryan Sullivan, appeared in the December 2012 edition of Great Lakes Bay Business Magazine.
ARE FRAUD AND GOVERNMENT RULES FORCING CONSUMERS INTO EXPENSIVE MEDICAL EQUIPMENT THEY DON’T NEED?
BY RYAN SULLIVAN
If you want to read the laws and rules governing Medicare, the national health insurance program covering almost all adults in the United States older than 65, have your eyes checked. It’s a long read, and you need good eyes to spot a lot of the unintended consequences of the rules.
The popular program, started in 1965, covers nearly 50 million Americans – a number that will balloon with the baby boomers hitting retirement age in droves during the next 20 years. That’s why wringing every bit of savings and efficiency out of the program while maintaining quality care is key to making sure the program stays intact for future seniors and the disabled.
Cracking down on waste, fraud, and abuse within the Medicare system has taken center stage with the passage of the Patient Protection and Affordable Care Act. Durable medical equipment is an area of particular concern, especially in the wake of numerous schemes, for example, meant to trick beneficiaries into receiving “free” power wheelchairs when a much cheaper and more useful powered scooter would do. Who pays for these free chairs? You do.
Medicare covers Power Operated Vehicles (POVs) like the Amigo, as well as power wheelchairs, when a person lacks the ability to perform normal domestic, vocational, and social activities in their own homes. But power wheelchairs are much more expensive and complex devices that provide additional support for those with poor postural stability – a condition many disabled individuals do not have.
The Office of the Inspector General has been on the trail, finding that up to six out of 10 power wheelchairs are found to be medically unnecessary. Yet current Medicare reimbursement structures make it easier for beneficiaries to purchase a much more expensive power wheelchair – even though it often doesn’t best suit their daily needs and costs taxpayers much more. That drives up health care costs for everyone, while depressing the market for power scooters like those made by Bridgeport-based Amigo Mobility International, Inc.
Today, more than 70 percent of Medicare reimbursement for mobility equipment is spent on power wheelchairs, and only 3 percent for scooters like those make by Amigo. That adds up to more than $650 million in spending on power wheelchairs alone in 2010. While some consumers benefit greatly from these more expensive and complex vehicles, many consumers ended up receiving something other than a scooter like an Amigo that they expected to receive. Deceptive advertising campaigns, coupled with a Medicare benefit coding system that facilitates power wheelchair purchases, seem to be to blame.
Taxpayers ultimately bear the burden of an unnecessary medical device that costs many times more than a less expensive option more suited to a consumer’s needs. Moreover, Medicare beneficiaries, who are duped into the purchase of a power wheelchair when they wanted a scooter, find they cannot comfortably gain the mobility they sought when the equipment was received, and often resort to selling the power wheelchairs in order to raise funds for the purchase of a POV/scooter.
Consumers and taxpayers alike have a powerful interest in ensuring that the right equipment is available when needed. With the change of a few rules and codes, Medicare can make it more likely that the disabled have a true choice in the mobility solution that makes the most sense for them.
Meanwhile, the Office of the Inspector General is broadening its campaign to ferret out deceptive and fraudulent advertising and marketing schemes that lead many to obtain equipment they don’t want or need. These actions can also help boost sales of locally made products like the Amigo, while ensuring our government funds are spent appropriately for those who need them most.