DEPARTMENTOFHEALTH &. HUMAN SERVICES Office of InspectorGeneral
Washington, D.C. 20201
JUL 13 2009
TO: Deborah Taylor
Acting Director, Office ofFinancial Management
Centers for Medicare & Medicaid Services
FROM: Stuart Wright
Deputy Inspector General
for Evaluation and Inspections
SUBJECT: Memorandum Report: "Miscoded Claims for Power Wheelchairs in the
Medicare Program," OEI-04-07-00403
The Office ofInspector General (ala) is conducting a series ofevaluations ofMedicare's
payments for powerwheelchairs supplied to beneficiaries in the first halfof2007. This report
provides information on the extentto which Medicare suppliers used correct procedure codes to
bill for standard and complex rehabilitation power wheelchairs during the first halfof2007. This
information should be viewed in the context ofour other recent reports on power wheelchairs
and may also be included as part ofan aggregate error rate in an OIG report onthe medical
necessity ofpower wheelchairs. To ensure that we provide timely information, we are providing
this report on coding errors at this time.l
We discovered the coding errors identified in this report while reviewing power wheelchair
model information on manufacturer invoices, as part ofa separate evaluation, to determine
suppliers' costs to purchase these chairs. Because powerwheelchairs are assigned to procedure
codes based on the manufacturers' model information, we defined miscoded claims as thosefor
which the suppliers billed Medicare using procedure codes thatdid not match the model
information on the invoices ofpowerwheelchairs supplied to beneficiaries.
We found that suppliers miscoded 8percent ofstandard and complex rehabilitation power
wheelchair claims from the first halfof2007. Three percent ofstandard and complex
rehabilitation power wheelchair claimswere upcoded, resulting inthe Centers for Medicare &
Medicaid Services (CMS) overpayments to the suppliers, and 4percentwere downcoded,
resulting in underpayments to the suppliers. Onepercent ofclaims were miscoded, butthe
manufacturers' invoices had insufficientmodel informationto categorizethe claims as either
upcoded or downcoded. Complex rehabilitationpowerwheelchair claims were miscoded more
oftenthan standard powerwheelchair claims (23 percent and 7percent, respectively). Complex
I Themedical necessityreviews will becompleted in 2010.
OEI-04-07-00403 Miscoded Claims for PowerWheelchairs intheMedicareProgram Page 2  Deborah Taylor 
 
 
rehabilitation power wheelchair claims were also upcoded more often than standard power 
wheelchair claims (12 percent and 3 percent, respectively).  In the first half of 2007, suppliers 
submitted over 13 times more standard than complex rehabilitation power wheelchair claims.  
Therefore, the greater number of standard power wheelchair claims strongly influenced the 
combined error rates.   
 
BACKGROUND 
 
Medicare beneficiaries are eligible to receive power wheelchairs under Medicare Part B coverage 
of durable medical equipment (DME).  In 2007, approximately 173,300 Medicare beneficiaries 
received power wheelchairs at a total cost to Medicare and its beneficiaries of $686 million.2 
 
Power wheelchairs are medically necessary for beneficiaries who cannot effectively perform 
mobility-related activities of daily living using other mobility-assistive equipment, such as a cane, 
manual wheelchair, or power-operated scooter.3 4  Most beneficiaries who require power 
wheelchairs are unable to walk and have severe upper body weakness because of a neurologic or 
muscular condition.5    
 
Beneficiaries receive power wheelchairs from DME suppliers, which bill the Medicare program for 
reimbursement.   The prescribing physician provides the supplier with documentation from the 
beneficiarys medical record to support the medical necessity of the power wheelchair, along with 
the power wheelchair prescription.6  Based on the prescription, the supplier recommends a specific 
power wheelchair for the beneficiary.  The physician must then review and approve the suppliers 
recommendation.   
 
Medicare beneficiaries may choose to rent or purchase their power wheelchairs, although most 
choose to purchase them.7  In the first half of 2007, new power wheelchair purchases accounted for 
 
2 OIG analysis of 2007 CMS claims data, July 2008. 
3 CMS, Medicare National Coverage Determinations Manual, Pub. No. 100-03, ch.1,  280.3.  Last modified in 
August 2005.  Available online at http://www.cms.hhs.gov/manuals/downloads/ncd103c1_Part4.pdf.  Accessed on 
March 17, 2009. 
4 Based on Medicares National Coverage Determination for Power Mobility Devices, mobility-related activities of 
daily living include toileting, feeding, dressing, grooming, and bathing in customary locations within the home.   
5 CMSs Medicare Learning Network, Medicare Coverage of Power Mobility Devices:  Power Wheelchairs and 
Power Operated Vehicles, April 2006. 
6 Local coverage determinations issued by Medicare contractors require a physician or other treating practitioner to 
conduct a beneficiary examination to assess the beneficiarys need for a power wheelchair before prescribing it.  The 
supplier must also conduct an assessment of the beneficiarys home to determine whether it is conducive to power 
wheelchair usage.  A beneficiary who receives a complex rehabilitation power wheelchair must have an additional 
specialty evaluation.   
7 Medicare covers power wheelchairs under a capped rental arrangement.  Suppliers must give beneficiaries the 
option of purchasing the power wheelchairs when they first provide them.  If the beneficiary declines to purchase in 
the first month, Medicare will pay for the power wheelchair on a rental basis through the 13th month.  The supplier 
must transfer ownership to the beneficiary after the 13th month.  
 
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95 percent of all Medicare power wheelchair expenditures.8  Medicare pays 80 percent of the 
suppliers reimbursement and the beneficiary is responsible for the remaining 20 percent.     
 
Medicare Procedure Codes and Program Requirements 
Suppliers submit Medicare claims for power wheelchairs using Healthcare Common Procedure 
Coding System codes (procedure codes).  Medicare determines the highest dollar amount that 
suppliers may be reimbursed for each procedure code (fee schedule amount).   
 
Accurate coding is critical to ensuring that Medicare makes proper payments.  CMSs National 
Correct Coding Policy Manual for Part B Medicare Carriers (the Coding Manual) provides 
guidance for the use of procedure codes.  The Coding Manual requires that when submitting 
claims, suppliers should report the [procedure] code that describes the procedure performed to the 
greatest specificity possible.9   
 
Power Wheelchair Procedure Code Assignment 
As of January 2007, Medicare covered more than 500 different power wheelchair models under  
42 procedure codes on its power wheelchair fee schedule.10 11  Medicares Pricing, Data Analysis, 
and Coding (PDAC) contractor conducts coding reviews of each power wheelchair model 
submitted by manufacturers to assign the model to a specific procedure code.12  Each model is 
assigned a procedure code based on the power wheelchairs performance, patient weight capacity, 
seat type, portability, and power seating system capability.13  As of January 2007, a minimum of  
2 and a maximum of 75 models were reimbursable under individual power wheelchair procedure 
codes.14   
 
Each power wheelchairs model information includes a product name assigned by the 
manufacturer.  Power wheelchairs may be further differentiated by a model number.  When 
multiple model numbers are associated with one product name, Medicare assigns each model 
number to a procedure code, although the same product name may appear under multiple 
procedure codes. 
 
 
8 OIG analysis of 2007 CMS claims data, January 2009. 
9 CMS, National Correct Coding Policy Manual for Part B Medicare Carriers, Version 14.3,  
p. XII-1, 2007.  Available online at http://www.cms.hhs.gov/NationalCorrectCodInitEd/.  Accessed on March 20, 
2009. 
10 Power wheelchair procedure codes are K0813K0816, K0820K0831, K0835K0843, and K0848K0864.   
11 Since January 2007, additional models have been assigned to power wheelchair procedure codes.  As of April 
2008, Medicare covered 685 power wheelchair models.   
12 Until August 2008, the Statistical Analysis DME Regional Carrier contractor performed the activities that PDAC 
now performs. 
13 Power Mobility Device Coding Guidelines, Statistical Analysis DME Regional Carrier, August 3, 2006.  
Available online at https://www.dmepdac.com/resources/articles/2006/08_14_06.pdf.  Accessed on April 1, 2009. 
14 Two power wheelchair models were reimbursable under procedure code K0863 and 75 models were reimbursable 
under procedure code K0823 as of January 2007.  
 
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When submitting a power wheelchair claim, a supplier can use the manufacturers model 
information to identify the correct procedure code to bill Medicare.  The PDAC provides resources 
to assist manufacturers, distributors, and suppliers with DME product coding questions.  In 
addition to publishing educational articles and maintaining a call center, the PDAC posts results of 
coding decisions for power wheelchairs and other DME on the Internet through its DME Coding 
System (DMECS).15 16  Using the DMECS, suppliers can search the power wheelchair Product 
Classification List by manufacturer, product name, or model number to identify the correct 
procedure code to bill Medicare.  
  
Power Wheelchair Groups 
Power wheelchairs are divided into three groups based on their reported testing performance in 
categories such as speed, range, and height of vertical obstructions they can climb.  Group 3 power 
wheelchairs must meet the highest performance requirements, while Group 2 chairs and Group 1 
chairs must meet intermediate and the lowest performance requirements, respectively.  For 
example, Group 3 power wheelchairs must be able to travel at least 12 miles on a single charge of 
batteries, while the minimum distances for power wheelchairs in Groups 2 and 1 are 7 and 5 miles, 
respectively.  Appendix A compares the performance requirements of the three groups. 
 
Power Wheelchair Types 
Standard power wheelchairs:  Group 2 includes the most frequently reimbursed procedure code 
(K0823).  In this report, we refer to K0823 power wheelchairs as standard power wheelchairs.  
Standard power wheelchairs feature an automotive-style seat and are designed to provide basic, 
daily mobility for persons weighing less than 300 pounds.  These power wheelchairs cannot be 
upgraded with power options (e.g., a powered seating system) or other electronic features (e.g., a 
device to enable the user to control the chair by sipping and puffing through a straw).   
 
Medicares 2007 fee schedule amount for standard power wheelchairs was $4,024.  Standard power 
wheelchairs accounted for nearly three-quarters of Medicares power wheelchair claims and 
expenditures in the first half of 2007.17  Seventy-five power wheelchair models were reimbursable 
under the standard power wheelchair procedure code as of January 2007.18   
 
Complex rehabilitation power wheelchairs:  Complex rehabilitation procedure codes include all 
Group 3 power wheelchairs and Group 2 power wheelchairs that can be upgraded with power 
options.  To receive a complex rehabilitation power wheelchair, a beneficiary must meet criteria 
beyond those required to receive a standard power wheelchair.  For example, the beneficiarys 
mobility limitation must be because of a neurological condition, muscle disease, or skeletal 
 
15 Available online at https://www.dmepdac.com/dmecs/index.html.  Accessed on March 27, 2009. 
16 DMECS Guide.  Available online at https://www.dmepdac.com/docs/search/2-DMECS%20Guide.pdf.  
Accessed on March 5, 2009. 
17 OIG analysis of claims from the National Claims History File with dates of service from January 1 to June 30, 
2007, processed as of June 30, 2007.   
18 Motorized Wheelchair Product Classification List, as published by the Statistical Analysis DME Regional Carrier, 
January 2, 2007.  
 
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deformity.  Complex rehabilitation power wheelchairs can be upgraded with power options and 
other electronic features to accommodate beneficiaries specific mobility needs.   
 
The 2007 fee schedule amounts for complex rehabilitation power wheelchair procedure codes 
ranged from $4,132 to $11,965.  Medicare payments for complex rehabilitation power wheelchairs 
accounted for less than 7 percent of power wheelchair claims and expenditures in the first half of 
2007.19  Medicare covered 276 complex rehabilitation power wheelchair models under  
26 procedure codes as of January 2007.20 21   
 
Measures Employed To Prevent Improper Payments 
Medicare utilizes contractors to ensure that claims meet requirements and to prevent fraud, 
waste, and abuse.  To identify potential coverage and coding errors, contractors use automated 
computer edits at the time a claim is submitted, as well as targeted prepayment and postpayment 
claims reviews.  
 
The DME Medicare Administrative Contractors (MAC) use automatic computer edits to ensure 
that claims that suppliers submit include all required information.  The edits may deny an 
erroneous claim or suspend it for futher review.22  When submitting a claim, a supplier must 
provide information pertaining to the beneficiary, the prescribing physician, place of service, and 
type of service, among other information.  However, suppliers are not required to provide the 
equipments model information.   
 
Both DME MACs and Zone Protection Integrity Contractors (ZPIC) conduct targeted claims 
reviews.23  Medicares Program Integrity Manual directs contractors to request appropriate 
medical documentation and review cases for coverage and correct coding.24  Medical reviews by 
DME MACs focus on compliance with coverage criteria through provider feedback.  Notification 
and medical reviews by ZPICs focus on identifying potential fraud, waste, and abuse.  Beneficiary 
medical records do not include information about the power wheelchair models that beneficiaries 
receive.  Because power wheelchairs are assigned to procedure codes based on model information, 
Medicare contractors reviews of medical records will not identify power wheelchairs billed with 
incorrect procedure codes. 
 
19 OIG analysis of claims from the National Claims History File submitted under procedure codes                    
K0835K0864 with dates of service from January 1 to June 30, 2007, processed as of June 30, 2007.   
20 Complex rehabilitation procedure codes are K0835K0864. 
21 Motorized Wheelchair Product Classification List, as published by the Statistical Analysis DME Regional Carrier, 
January 2, 2007.   
22 CMS, Medicare Program Integrity Manual, Pub. No. 100-08, ch. 3.4.  Available online at 
http://www.cms.hhs.gov/manuals/downloads/pim83c03.pdf.  Accessed on March 20, 2009. 
23 In 2008, CMS began to replace program safeguard contractors with ZPICs, which will operate in seven zones.  
Program safeguard contractors were charged with benefit integrity functions for Medicare Parts A and B.  ZPICs 
scope of work includes Medicare Parts A, B, C, and D, including DME, home health, hospice, and dually eligible 
beneficiaries.   
24 CMS, Medicare Program Integrity Manual, Pub. No. 100-08, ch. 3.2.  Available online at 
http://www.cms.hhs.gov/manuals/downloads/pim83c10.pdf.  Accessed on April 1, 2009.  
 
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OIG Power Wheelchair Evaluation Series 
OIG is conducting a series of evaluations of Medicares payments for power wheelchairs supplied 
to beneficiaries in the first half of 2007.  In addition to issuing this report, OIG plans to issue 
separate reports on (1) suppliers costs to purchase power wheelchairs and the services that 
suppliers performed in conjunction with providing the chairs; (2) suppliers costs to purchase 
power wheelchair batteries; (3) compliance with documentation requirements; and (4) the 
appropriateness (e.g., the medical necessity) of power wheelchair claims.  We discovered the 
coding errors identified in this report while reviewing power wheelchair model information on 
manufacturer invoices, as part of a separate evalulation, to determine suppliers costs to 
purchase these chairs.   
 
METHODOLOGY 
 
Scope 
We reviewed the model information on manufacturer invoices for a random sample of power 
wheelchair claims that we selected to conduct the series of power wheelchair evaluations.  We 
determined whether suppliers billed Medicare using correct procedure codes based on the model 
information on the invoices.25  This evaluation focuses on standard and complex rehabilitation 
power wheelchairs supplied to Medicare beneficiaries in the first half of 2007.     
 
Sample Selection 
Our population consisted of new, nonrental power wheelchair claims from CMSs National Claims 
History DME Standard Analytical File with dates of service during the first half of 2007.26  Before 
selecting our sample, we removed claims associated with suppliers that were not actively enrolled 
in Medicare and claims associated with suppliers or prescribing physicians that were under OIG 
investigation.27 28  After removing these claims, the population from which we sampled included  
93 percent of standard and 91 percent of complex rehabilitation power wheelchair claims.   
 
 
 
25 The invoice is the itemized bill from the manufacturer or distributor, containing individual prices, the total charge, 
and sales terms. 
26 The final date to submit claims with dates of service during the first half of 2007 was December 31, 2008.  We 
analyzed claims CMS processed, as of June 30, 2007.  Suppliers had submitted 79 percent of claims with dates of 
service during the first half of 2007 at the time we selected our sample.   
27 Pursuant to 42 CFR  424.520(a), to maintain Medicare billing privileges after initial enrollment, suppliers must 
comply with Medicare regulations and relevant Federal and State requirements.  Pursuant to 42 CFR  424.535, 
Medicare may revoke a suppliers billing privileges because of a felony, noncompliance with enrollment 
requirements, etc.  Pursuant to 42 CFR  424.540, Medicare also may deactivate a suppliers billing privileges when 
the supplier does not submit a claim for a full year or when the supplier fails to report a change to the information 
provided on the enrollment application.   
28 We removed 3,430 standard and 301 complex rehabilitation power wheelchair claims because of suppliers 
Medicare enrollment status or an ongoing investigation.  After removing these, our population consisted of  
43,133 standard and 3,001 complex rehabilitation power wheelchair claims.     
 
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We grouped the resulting population into three strata:  
 
1.  standard power wheelchair claims submitted by low-volume suppliers (those that submitted 
fewer than 10 standard power wheelchair claims in the first half of 2007),  
2.  standard power wheelchair claims submitted by high-volume suppliers (those that 
submitted 10 or more standard power wheelchair claims in the first half of 2007), and  
3.  complex rehabilitation power wheelchair claims.29 
 
We selected 375 total claims by selecting simple random samples of 125 claims from each stratum.  
Appendix B provides the number of claims, Medicare expenditures, and number of suppliers for 
the population and sample, by stratum.   
Data Collection and Analysis 
We obtained suppliers addresses from the National Supplier Clearinghouse and, for each claim, 
requested the manufacturers invoice for the suppliers purchase of the power wheelchair.30  We 
mailed up to three requests and telephoned nonresponding suppliers to ensure that they received the 
requests.   
 
We removed 17 claims for which the suppliers did not submit invoices.31  We also removed five 
claims because the invoices suppliers submitted had insufficient information about the model to 
determine whether the claims were miscoded.  Finally, we removed 14 claims for power 
wheelchairs that the manufacturer supplied directly to the beneficiaries because no manufacturer 
invoices existed for our review.  After removing these claims, our sample consisted of 339 claims, a 
response rate of 90 percent.     
 
We determined whether power wheelchairs were miscoded using the manufacturers model 
information (i.e., product name and model number) on the invoices.32  We defined miscoded claims 
as those for which the supplier billed Medicare using a procedure code that did not match the 
model information listed on the manufacturers invoice (i.e., the correct procedure code).  In 
addition, we ensured that the power wheelchair serial numbers for miscoded claims matched the 
serial numbers on the power wheelchair delivery records, when this information was available.33   
 
 
29 We chose to divide the standard power wheelchair population at a supplier volume of 10 claims based on the 
distribution of suppliers and claims.  Only 25 percent of suppliers had 10 or more claims, and these accounted for  
83 percent of all standard power wheelchair claims. 
30 We also requested supplier documentation related to other evaluations in our series of power wheelchair 
evaluations.  
31 We will forward a list of nonresponding suppliers to CMS. 
32 We used Medicares Motorized Wheelchair Product Classification List from January 2007.  We also confirmed 
that the sample claims models were not reassigned to different procedure codes during the first half of 2007, using 
the effective date field on a 2008 Product Classification List. 
33 We had serial numbers, which are unique to individual power wheelchairs, from both the invoice and the delivery 
record for 29 out of 45 miscoded claims identified.   
 
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We categorized miscoded claims as either upcoded or downcoded.  Upcoded claims were those for 
which Medicare allowed more than the fee schedule amount for the correct procedure code.  
Upcoded claims resulted in CMS overpayments to the suppliers.  Downcoded claims were those 
for which Medicare allowed less than the fee schedule amount for the correct procedure code.  
Downcoded claims resulted in CMS underpayments to the suppliers.     
 
We were unable to categorize miscoded claims that had insufficient documentation.  For these 
claims, the models product names, but not the specific model numbers, were listed on the 
invoices.  The claims were miscoded because the product names were not reimbursable under the 
procedure codes the suppliers used to bill Medicare.  However, we could not determine whether 
they were upcoded or downcoded because the product names were reimbursable under multiple 
procedure codes, with fee schedule amounts that were both higher and lower than the billed 
procedure codes.   
 
We calculated error rates by power wheelchair type and, for standard power wheelchair claims, by 
supplier volume and projected the results.34  See Appendix C for the confidence intervals for these 
estimates.   
 
We calculated Medicares average and maximum overpayments and underpayments (improper 
payments) for upcoded and downcoded sample claims.  We calculated overpayments and 
underpayments based on the difference between the amounts Medicare allowed and the fee 
schedule amounts for the correct procedure codes.  We used the highest fee schedule amount to 
calculate improper payments for upcoded and downcoded sample claims with multiple potentially 
correct procedure codes.  This approach was conservative because it resulted in the lowest 
overpayment for upcoded claims and the highest underpayment for downcoded claims.  We did not 
calculate improper payments associated with miscoded claims that had insufficient documentation 
to categorize as upcoded or downcoded.   
 
Limitations 
We did not contact the beneficiaries associated with miscoded claims to verify that the power 
wheelchairs they received matched the model information from the manufacturer invoices that 
suppliers submitted.  However, we ensured that the power wheelchair serial numbers for miscoded 
claims matched the serial numbers on the power wheelchair delivery records, when this 
information was available.   
 
We do not know why suppliers submitted miscoded claims.  For all miscoded claims, we do not 
know whether the power wheelchairs that suppliers provided were medically necessary. 
 
We did not project improper payment estimates because the sample sizes associated with miscoded 
claims were not large enough to produce these estimates reliably.  Therefore, this report does not 
address the impact of miscoded power wheelchair claims on Medicare and beneficiary payments.   
 
34 We used SAS and Survey Data Analysis software to project our sample results to the population. 
 
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Standards 
This study was conducted in accordance with the Quality Standards for Inspections issued by 
the Presidents Council on Integrity and Efficiency and Executive Council on Integrity and 
Efficiency (now Council of the Inspectors General on Integrity and Efficiency). 
 
RESULTS 
 
Eight Percent of Standard and Complex Rehabilitation Power Wheelchairs Were Miscoded 
in the First Half of 2007 
Medicare reimbursed suppliers for 46,134 new, nonrental standard and complex rehabilitation 
power wheelchair claims in the first half of 2007.35 36  Based on the power wheelchair model 
information on the manufacturer invoices that suppliers submitted, 8 percent of these claims were 
miscoded.  Suppliers billed Medicare for these claims using procedure codes that did not match the 
power wheelchairs they provided to beneficiaries.   
 
Table 1 compares the miscoded error rates for two power wheelchair types, standard and 
complex rehabilitation, and presents the combined error rates.  In the first half of 2007, suppliers 
submitted over 13 times more standard than complex rehabilitation power wheelchair claims.  
Therefore, the greater number of standard power wheelchair claims strongly influenced the 
combined error rates.  Appendix C provides the confidence intervals for all estimates. 
 
Table 1:  Error Rates for Miscoded Standard and Complex Rehabilitation Power Wheelchair 
Claims, First Half of 2007 
Miscoded Error Rate (Percentage) 
Complex  Standard and Complex 
Standard Power  Rehabilitation Power  Rehabilitation Power 
Miscoded Error Type  Wheelchairs  Wheelchairs  Wheelchairs 
Upcoded  3%  12%  3% 
Downcoded  4%  4%  4% 
Insufficient documentation to 
categorize  0%  7%  1% 
Total   7%  23%  8% 
Source:  OIG analysis of power wheelchair manufacturer invoices, 2009.   
 
 
35 This figure excludes claims we removed from the population because the suppliers did not have active Medicare 
enrollment status or were under OIG investigation.        
36 We analyzed claims CMS processed as of June 30, 2007.  Suppliers had submitted 79 percent of claims with dates 
of service during the first half of 2007 at the time we selected our sample. 
 
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Three percent of standard and complex rehabilitation power wheelchair claims were upcoded and  
4 percent were downcoded.  Complex rehabilitation power wheelchair claims were miscoded and 
upcoded more often than standard power wheelchair claims in the first half of 2007.37   
 
Seven percent of standard power wheelchair claims were miscoded in the first half of 2007.   
Medicare reimbursed suppliers for 43,133 new, nonrental standard power wheelchair claims in the 
first half of 2007.38 39  Based on manufacturers invoices, 7 percent of these claims were miscoded.  
Eleven percent of standard power wheelchair claims submitted by low-volume suppliers and  
6 percent of those submitted by high-volume suppliers were miscoded.  Suppliers that submitted 
these miscoded claims provided Medicare beneficiaries with power wheelchairs other than a 
standard power wheelchair.   
            
Table 2 compares the miscoding error rates for standard power wheelchair claims by supplier 
volume.   
 
Table 2:  Error Rates for Miscoded Standard Power Wheelchair Claims, by Supplier 
Volume, First Half of 2007 
Miscoded Error Rate (Percentage) 
High-Volume  Low-Volume  All Standard Power 
Miscoded Error Type  Suppliers  Suppliers  Wheelchair Claims 
Upcoded  2%  5%  3% 
Downcoded  4%  4%  4% 
Insufficient documentation to 
categorize  0%  1%  0% 
Total   6%  11%*  7% 
* Column does not add to total because of rounding. 
Source:  OIG analysis of power wheelchair manufacturer invoices, 2009.  
 
Three percent of all standard power wheelchair claims were upcoded.  Five percent of standard 
power wheelchair claims submitted by low-volume suppliers and 2 percent of those submitted by 
high-volume suppliers were upcoded.   
 
In the first half of 2007, Medicare allowed up to $4,024 for standard power wheelchairs.40  Based 
on the sample, suppliers that submitted upcoded standard power wheelchair claims received an 
average of $437 more than the fee schedule amount to which they were entitled.  Medicares 
 
37 The miscoded and upcoded error rates for standard and complex rehabilitation power wheelchair claims are 
statistically different at a 95-percent confidence level, based on a chi-square test.   
38 This figure excludes claims we removed from the population because the suppliers did not have active Medicare 
enrollment status or were under OIG investigation.        
39 We analyzed claims CMS processed as of June 30, 2007.  Suppliers had submitted 79 percent of claims with dates 
of service during the first half of 2007 at the time we selected our sample. 
40 In January 2009, the fee schedule amount was reduced to $3,641. 
 
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maximum overpayment for a single claim was $936.  Many beneficiaries associated with upcoded 
standard power wheelchair claims received less expensive Group 1 power wheelchairs.   
 
Four percent of all standard power wheelchair claims were downcoded.  Standard power 
wheelchair claims submitted by low- and high-volume suppliers were downcoded at approximately 
the same rate (4 percent).     
 
Based on the sample, suppliers that submitted downcoded standard power wheelchair claims 
received an average of $977 less than the fee schedule amount to which they were entitled.  
Medicares maximum underpayment for a single claim was $3,252.  Most beneficiaries associated 
with downcoded sample claims received more expensive power wheelchairs in the same group as 
standard power wheelchairs (Group 2).  However, two beneficiaries received Group 3 complex 
rehabilitation power wheelchairs instead of standard power wheelchairs.  
 
In addition, less than 1 percent of standard power wheelchair claims were miscoded, but the 
manufacturers invoices had insufficient model information to categorize the claims as either 
upcoded or downcoded.  For each of these claims, the chairs product name was not reimbursable 
under the procedure code the supplier used to bill Medicare.  However, because the invoices did 
not include the model numbers for each of these claims, we could not determine which of several 
possible procedure codes was correct. 
 
Twenty-three percent of complex rehabilitation power wheelchair claims were miscoded in the first 
half of 2007.  Medicare reimbursed suppliers for 3,001 new, nonrental complex rehabilitation 
power wheelchair claims in the first half of 2007.41 42  Based on the manufacturers invoices,  
23 percent of these claims were miscoded.  Twelve percent of complex rehabilitation power 
wheelchair claims were upcoded and 4 percent were downcoded.  Suppliers that submitted these 
claims billed Medicare using complex rehabilitation procedure codes that did not match the model 
information on the invoices for power wheelchairs they provided to Medicare beneficiaries.   
 
In the first half of 2007, Medicare fee schedule amounts for complex rehabilitation power 
wheelchairs ranged from $4,132 to $11,965.43  Based on the sample, suppliers that submitted 
upcoded complex rehabilitation power wheelchair claims received an average of $1,081 more than 
the fee schedule amount to which they were entitled.  Medicares maximum overpayment for a 
single claim was $2,087.  Beneficiaries associated with upcoded complex rehabilitation power 
wheelchair claims from the sample received less expensive power wheelchairs, including Group 1 
power wheelchairs, standard power wheelchairs, and less expensive complex rehabilitation power 
wheelchairs.   
 
41 This figure excludes claims we removed from the population because the suppliers did not have active Medicare 
enrollment status or were under OIG investigation.        
42 We analyzed claims CMS processed as of June 30, 2007.  Suppliers had submitted 79 percent of claims with dates 
of service during the first half of 2007 at the time we selected our sample. 
43 In January 2009, fee schedule amounts for complex rehabilitation power wheelchairs were reduced by   
9.5 percent, to between $3,739 and $10,828.   
 
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Based on the sample, suppliers that submitted downcoded complex rehabilitation power wheelchair 
claims received an average of $881 less than the fee schedule amount to which they were entitled.  
Medicares maximum underpayment for a single claim was $1,363.   
 
In addition, 7 percent of complex rehabilitation power wheelchair claims were miscoded, but the 
manufacturers invoices had insufficient model information to categorize the claims as either 
upcoded or downcoded.  For each of these claims, the chairs product name was not reimbursable 
under the procedure code the supplier used to bill Medicare.  However, because the invoices did 
not include the model numbers for each of these claims, we could not determine which of several 
possible procedure codes was correct. 
 
CONCLUSION 
 
Medicare reimbursed suppliers for 46,134 new, nonrental standard and complex rehabilitation 
power wheelchair claims in the first half of 2007.44  Suppliers billed Medicare for 8 percent of 
these claims using procedure codes that did not match the model information on the invoices for 
the power wheelchairs provided to beneficiaries.  Three percent of standard and complex 
rehabilitation power wheelchair claims were upcoded and 4 percent were downcoded.  One 
percent of claims were miscoded, but the invoices had insufficient model information to 
categorize the claims as either upcoded or downcoded.  Complex rehabilitation power 
wheelchair claims were miscoded more often than standard power wheelchair claims (23 percent 
and 7 percent, respectively).  Complex rehabilitation power wheelchair claims were also upcoded 
more often than standard power wheelchair claims     (12 percent and 3 percent, respectively).   
   
We will forward information on the miscoded claims identified in our sample to CMS for 
appropriate action.  In addition, our analysis indicates that suppliers may need further education to 
determine the correct power wheelchair procedure codes to bill Medicare.  Our analysis also 
demonstrates that opportunities exist to improve CMSs review of power wheelchair claims.  If 
suppliers provided model information when submitting claims, CMS contractors could use this 
information to automatically determine whether the models are reimbursable under the billed 
procedure codes.  In addition, if contractors included manufacturers invoices in their targeted 
reviews, they could determine whether billed procedure codes match the model information on the 
invoices.   
 
This report is being issued directly in final form because it contains no recommendations.  If you 
have comments or questions about this report, please provide them within 60 days.  Please refer 
to report number OEI-04-07-00403 in all correspondence. 
 
 
 
 
44 This figure excludes claims we removed from the population because the suppliers did not have active Medicare 
enrollment status or were under OIG investigation.         
 
OEI-04-07-00403                                            Miscoded Claims for Power Wheelchairs in the Medicare Program  Page 13  Deborah Taylor 
 
 
APPENDIX A 
 
 
Power Wheelchair Performance Requirements, by Group 
Performance  Description of  Group 1  Group 2  Group 3 
Category  Performance Category  Requirement  Requirement  Requirement 
Length  
  40 inches  48 inches  48 inches 
Width  
  24 inches  34 inches  34 inches 
Vertical height of a solid 
Obstacle height  obstruction that can be 
climbed  0.79 inches  1.57 inches  2.36 inches 
The minimum speed 
Minimum top-end 
acceptable on a flat, hard 
speed  
surface  3 miles per hour  3 miles per hour  4.5 miles per hour 
The minimum distance 
Range  acceptable on a single 
charge of the batteries  5 miles  7 miles  12 miles 
The minimum degree of 
slope at which the power 
wheelchair in the most 
Dynamic stability  common seating and 
incline  positioning configuration(s) 
remains stable at the 
required patient weight  6 degrees  6 degrees  7.5 degrees 
capacity  (1:12)  (1:12)   (1:10) 
Source:  Power Mobility Device Coding Guidelines, August 3, 2006.  From the Statistical Analysis Durable Medical Equipment Regional Carrier.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OEI-04-07-00403                                            Miscoded Claims for Power Wheelchairs in the Medicare Program  Page 14  Deborah Taylor 
 
 
 
APPENDIX B 
 
Population and Sample Sizes for Standard and Complex Rehabilitation Power Wheelchairs, First Half of 2007 
Population  Sample 
 Stratum  Definition  Claims  Expenditures  Suppliers  Claims  Expenditures  Suppliers 
Standard power wheelchair claims  
1  by low-volume suppliers  7,223  $28,949,132  2,352  125  $499,152  124 
Standard power wheelchair claims 
2  by high-volume suppliers  35,910  $144,354,060  716  125  $502,989  94 
All standard power wheelchair 
1 and 2  claims       43,133   $173,303,192  3,068  250  $1,002,141  218 
Complex rehabilitation power 
3  wheelchair claims*  3,001  $16,010,906  1,064  125  $665,200  113 
Total  46,134 $189,314,098  3,362**  375  $1,667,341  325** 
* Procedure codes K0835K0864. 
** Supplier figures do not sum to totals because of overlap (some suppliers in our sample provided both standard and complex rehabilitation power wheelchairs).    
Source:  Office of Inspector General analysis of Medicare power wheelchair claims with dates of service from January 1 to June 30, 2007. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OEI-04-07-00403                                            Miscoded Claims for Power Wheelchairs in the Medicare Program  Page 15  Deborah Taylor 
 
 
 
 
APPENDIX C 
 
 
Estimates and Confidence Intervals for Miscoded Error Rates Among Standard and Complex 
Rehabilitation Power Wheelchair Claims, First Half of 2007 
95-Percent 
Sample  Point  Confidence 
Estimate Description  Size  Estimate  Interval 
Standard and Complex Rehabilitation Power Wheelchairs 
Miscoded claims  339  7.7%  4.8%12.1% 
Upcoded claims  339 3.2%  1.6%6.2% 
Downcoded claims  339 3.9%  1.9%8.1% 
Miscoded claims for which invoices had insufficient documentation 
to categorize the claims as upcoded or downcoded  339 0.6%  0.1%2.2% 
Standard Power Wheelchairs:  All Suppliers 
Miscoded claims  219  6.6%  3.6%11.6% 
Upcoded claims  219  2.5%  0.8%6.0% 
Downcoded claims  219  3.9%  1.8%8.5% 
Miscoded claims for which invoices had insufficient documentation 
to categorize the claims as upcoded or downcoded  219  0.2%  0.0%2.0% 
Standard Power Wheelchairs:  High-Volume Suppliers 
Miscoded claims  105  5.7%  2.6%12.3% 
Upcoded claims  105  1.9%  0.2%6.7% 
Downcoded claims  105  3.8%  1.4%9.8% 
Miscoded claims for which invoices had insufficient documentation 
to categorize the claims as upcoded or downcoded  105  0.0%  0.0%0.0% 
Standard Power Wheelchairs:  Low-Volume Suppliers 
Miscoded claims  114  10.5%  6.1%17.7% 
Upcoded claims  114  5.3%  2.4%11.3% 
Downcoded claims  114  4.4%  1.8%10.2% 
Miscoded claims for which invoices had insufficient documentation 
to categorize the claims as upcoded or downcoded  114  0.9%  0.0%4.8% 
Complex Rehabilitation Power Wheelchairs  
Miscoded claims  120  22.5%  15.9%30.8% 
Upcoded claims  120  11.7%  7.1%18.7% 
Downcoded claims  120  4.2%  1.8%9.6% 
Miscoded claims for which invoices had insufficient documentation 
to categorize the claims as upcoded or downcoded  120  6.7%  3.4%12.7% 
 
 
 
 
OEI-04-07-00403                                            Miscoded Claims for Power Wheelchairs in the Medicare Program