OIG recommends new coding for K0011s

Sunday, May 2, 2004

May 3, 2004

WASHINGTON - The OIG has recommended that CMS revise the HCPCS codes for power wheelchairs - a move the industry has long promoted - after a report found that Medicare could have saved $459 million in 2002 if the reimbursement had been set at the supplier's wholesale acquisition cost.
The OIG's comparison of prices for power wheelchairs, released last Wednesday with a plethora of other K0011 reports, said that in 2002 the median price Medicare paid for a K0011 was $5,297. The consumer median price was $3,863.
Suppliers were able to purchase the chairs from wholesalers and manufacturers at median prices of just $2,363 and $1,550, respectively.
The Medicare median price was based on an evaluation of 300 K0011 claims paid in 2001. Consumer pricing data was gathered from supplier locations and Web sites. In total, 379 prices were collected from 41 suppliers in June 2003. The wholesaler median price was calculated from 22 individual prices, and manufacturer results came from 36 prices in orders made between 1999 and 2003.
The OIG admitted that its estimated of $459 million in savings might be flawed because no consideration was given to the supplier's cost of servicing Medicare patients, a point of contention that arises often between the industry and CMS.
In light of the report's findings, the OIG made two recommendations to CMS: Use the pricing information in the report to determine whether an inherent reasonableness review is appropriate; and create a new coding system for the K0011 that accounts for the variety in models and prices for power chairs.