Department of Health and Human Services 
OFFICE OF 
INSPECTOR GENERAL 
Medicare Maintenance Payments for 
Capped Rental Equipment 
JANET REHNQUIST 
INSPECTOR GENERAL 
JUNE 2002 
OEI-03-00-00410  O I G
FFICE OF  NSPECTOR  ENERAL

http://www.oig.hhs.gov/ 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as amended, 
is to protect the integrity of the Department of Health and Human Services (HHS) programs, as well as 
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The OIG's Office of Evaluation and Inspections (OEI) conducts short-term management and program 
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prosecute fraud and patient abuse in the Medicaid program. 
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The Office of Counsel to the Inspector General (OCIG) provides general legal services to OIG, rendering 
advice and opinions on HHS programs and operations and providing all legal support in OIGs internal 
operations.  The OCIG imposes program exclusions and civil monetary penalties on health care providers 
and litigates those actions within the Department.  The OCIG also represents OIG in the global settlement 
of cases arising under the Civil False Claims Act, develops and monitors corporate integrity agreements, 
develops model compliance plans, renders advisory opinions on OIG sanctions to the health care 
community, and issues fraud alerts and other industry guidance.  E X E C U T I V E  S U M M A R Y  
PURPOSE 
To determine the cost-effectiveness of Medicare maintenance payments for capped rental 
equipment. 
BACKGROUND 
Medicare Part B pays for certain pieces of durable medical equipment such as hospital beds, 
nebulizers, and wheelchairs under the capped rental category.  Payments for capped rental 
equipment are made monthly and cannot exceed 15 months of rental.  After the  rental period 
has ended, Medicare will pay for either the continuing maintenance or repair of these items.  In 
2000, Medicare paid approximately $111 million for maintenance and $19 million for repairs of 
capped rental equipment.  Medicare beneficiaries were responsible for 20 percent of these 
payments in the form of coinsurance. 
Once a Medicare beneficiary has been renting the equipment for 10 consecutive months, the 
supplier must give the beneficiary the option of purchasing the equipment. If a beneficiary 
chooses to continue renting the equipment, Medicare will pay for an additional 5 months of 
rental. Suppliers may then bill for maintenance and servicing of the equipment beginning 6 
months after the rental period has ended and every 6 months thereafter.  Maintenance billed in 
one month covers any servicing performed for 6 months following the service date. Suppliers 
are not required to perform maintenance in order to receive the semi-annual maintenance 
payment.  If the beneficiary chooses to purchase the equipment, Medicare will pay for 13 
months of rental. After the rental period has ended, Medicare will pay for repairs on purchased 
equipment when service is performed. 
We primarily focused on two sources of information for this report:  (1) a 5-year review (1996 
to 2000) of maintenance and repair payments for capped rental equipment that beneficiaries 
decided to rent or purchase in 1996 and (2) a survey of suppliers who received payment from 
Medicare for the maintenance and servicing of capped rental equipment in June 2000. 
FINDINGS 
Medicare paid substantially more for maintenance than repairs over a 5-year period 
for the 31 equipment codes in our review 
We tracked, over a 5-year period (1996 to 2000), the maintenance and repair payments for 
3,553 pieces of equipment representing 31 equipment codes that beneficiaries decided to rent or 
purchase in 1996.  We found that, on average, Medicare paid substantially more for 
maintenance on rented equipment than repairs on purchased equipment over the 5 years. 
i 
Maintenance Payments for Capped Rental Equipment  OEI-03-00-00410  For half of the 31 equipment codes, there were no associated repairs over the 5-year period. 
We found that, overall, Medicare would have saved 96 percent of the maintenance payments 
made to suppliers for the services in our review had Medicare paid for actual equipment repair 
rather than routine maintenance. If this 96 percent is applied to the total maintenance payments 
for the 31 codes in 2000, Medicare would have saved $98 million of the $102 million paid for 
maintenance that year. 
Only 9 percent of capped rental equipment actually  received any maintenance and 
servicing from June to December 2000 
In addition to a 5-year review comparing maintenance payments to repair payments, we also 
reviewed a sample of equipment to determine if any maintenance and servicing was actually 
provided.  Out of 964 maintenance services with a June 2000 service date, we requested 
documentation for a sample of 260 services.  Overall, just 9 percent of the capped rental 
equipment with a June 2000 service date actually received any servicing between June and 
December 2000.  We estimate that of the $7.3 million Medicare paid for maintenance services 
from June 2000, $6.5 million was paid for equipment that received no actual servicing. 
CONCLUSION 
The findings of this report illustrate that Medicares current policy of paying for maintenance and 
servicing of capped rental equipment is not cost-effective. We found that Medicare pays 
substantially more in maintenance payments for rented items than it does for actual repairs on 
purchased equipment. In addition, we found that Medicare beneficiaries are receiving little or no 
routine maintenance on their rented equipment. 
RECOMMENDATION 
We recommend that the Centers for Medicare & Medicaid Services eliminate the 
semi-annual maintenance payment currently allowed for capped rental equipment and 
pay only for repairs when needed.  We believe this change would result in nearly $100 million 
dollars being saved each year by Medicare and its beneficiaries.  As a broader issue relating to 
capped rental equipment, CMS may also want to consider if eliminating the 15-month rental 
option would be a viable solution. By requiring any continuous rentals to be converted to a 
purchase after the 13th month of rental, the need for the semi-annual maintenance payment 
would automatically be eliminated. 
Agency Comments 
The CMS agreed with our recommendation and stated that they will consider a legislative 
initiative to eliminate the 15-month rental option.  This initiative would result in significant savings 
to the Medicare program by eliminating the semi-annual maintenance and servicing fee and by 
eliminating monthly rental payments for months 14 and 15. Appendix E contains the full text of 
CMS comments. 
ii 
Maintenance Payments for Capped Rental Equipment  OEI-03-00-00410  T A B L E  O F  C O N T E N T S  
PAGE

EXECUTIVE SUMMARY .................................................... i

INTRODUCTION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1

FINDINGS 
Comparing Maintenance Payments to Repair Payments............................. 6

Maintenance and Servicing Not Provided ....................................... 7

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  9

RECOMMENDATION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  9

APPENDICES 
A. Comparison of Repair and Maintenance Payments for 31 Equipment Codes  ......... 10

B. Description of 26 Equipment Codes in Maintenance Review  ..................... 12

C. Maintenance and Servicing Performed on 26 Equipment Codes  .................. 14

D. Estimates and Confidence Intervals ........................................ 16

E. Agency Comments  .................................................... 17

ACKNOWLEDGMENTS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18

iii 
Maintenance Payments for Capped Rental Equipment  OEI-03-00-00410  I N T R O D U C T I O N  
PURPOSE 
To determine the cost-effectiveness of Medicare maintenance payments for capped rental 
equipment. 
BACKGROUND 
Title XVIII of the Social Security Act established coverage requirements for Part B of the 
Medicare Program. Medicare Part B pays for certain pieces of durable medical equipment such 
as hospital beds, nebulizers, and wheelchairs under the capped rental category.  Capped rental 
equipment generally costs more than $150 and is not routinely purchased, service intensive, or 
customized.  Payments for capped rental equipment are made monthly and cannot exceed 15 
months of rental. After the monthly rental period has ended, Medicare will pay for either the 
continuing maintenance or repairs of these items.  In 2000, Medicare paid approximately $111 
million for maintenance and $19 million for repairs of capped rental equipment. Medicare 
beneficiaries were responsible for 20 percent of these payments in the form of coinsurance. 
Once a Medicare beneficiary has been renting the equipment for 10 consecutive months, the 
supplier must give the beneficiary the option of purchasing the equipment. If a beneficiary 
chooses to continue renting the equipment, Medicare will pay for an additional 5 months of 
rental.  After that time, the supplier retains ownership of the equipment and Medicare will cover 
maintenance and servicing every 6 months. If the beneficiary chooses to purchase the 
equipment, the rental payments for the equipment end at 13 months instead of 15 months.  The 
supplier then transfers the title of the equipment to the beneficiary and Medicare pays only for 
necessary repairs. 
Medicare Maintenance Payments for Rented Equipment 
For equipment that beneficiaries have elected to continue to rent, Medicare will pay for routine 
maintenance and servicing after the 15 month rental cap has been reached. If beneficiaries do 
not inform suppliers of their decision, it is assumed that the beneficiary will continue to rent the 
equipment. Suppliers may begin billing for maintenance and servicing 6 months after the rental 
period has ended, and then they may bill once every 
6 months thereafter.  The semi-annual maintenance payment covers any maintenance performed 
during the 6-month time period following the service date billed on the claim.  Medicare pays for 
this maintenance and servicing regardless of whether or not the equipment is actually serviced by 
suppliers. 
1 
Maintenance Payments for Capped Rental Equipment  OEI-03-00-00410  Medicare Repair Payments for Purchased Equipment 
For equipment that beneficiaries have elected to purchase at the end of the rental period, 
suppliers may bill Medicare for repairs when they are performed.  Repairs include reasonable 
and necessary charges for parts and labor which are not covered under any manufacturer or 
supplier warranty. Routine periodic servicing of equipment is not covered. However, more 
extensive maintenance which is recommended by the manufacturer is covered as repairs.  These 
repairs, which should be performed by authorized technicians, can include breaking down sealed 
components and performing tests which require specialized testing equipment. 
METHODOLOGY 
We primarily focused on two sources of information for this report:  (1) a 5-year review (1996 
to 2000) of maintenance and repair payments for capped rental equipment that beneficiaries 
decided to rent or purchase in 1996 and (2) a survey of suppliers who received payment from 
Medicare for the maintenance and servicing of capped rental equipment in June 2000. 
5-Year Data Review 
Data Collection and Analysis. We began with a 1 percent file of durable medical equipment 
services from CMS 1996 National Claims History file. We extracted all capped rental services 
with a BR or BP modifier indicating that the beneficiary made a decision either to continue to 
rent the equipment (BR modifier) or to purchase the equipment (BP modifier).  Then using 
CMS National Claims History File data from 1996 through 2000, we extracted all of the 
services for those beneficiaries who decided to rent or purchase equipment in 1996. It is 
possible that during the 5 years we tracked, beneficiaries may have stopped using their rented or 
purchased equipment due to changes in medical condition or death.  We did not review 
individual beneficiary histories to determine if the need for the equipment continued over the 5-
year period reviewed. 
There was a total of 60 different equipment codes representing 1,251 pieces of equipment that 
beneficiaries decided to purchase and 2,359 pieces of equipment that beneficiaries decided to 
continue renting in 1996.  Of these 60 codes, only 31 had both rented and purchased 
equipment. These 31 codes had a total of 1,244 purchased items and 2,309 rented items. We 
used these 31 codes for our review. Two of these codes were terminated in 1999 and replaced 
by other codes. In these instances, we included the maintenance and repair payments for both 
the original and replacement codes in our totals. 
For the beneficiaries who decided to rent a particular piece of equipment in 1996, we extracted 
all of their maintenance services for that equipment code (indicated by an MS modifier) from the 
1996 to 2000 data. We determined the number of maintenance services received in each year 
and the dollar amount associated with the maintenance services. 
2 
Maintenance Payments for Capped Rental Equipment  OEI-03-00-00410  For the beneficiaries who decided to purchase a piece of equipment in 1996, we extracted all of 
their repair and labor charges associated with that equipment from 1996 to 2000. To do this, 
we selected all the beneficiaries services with an RP modifier for repairs as well as services 
billed with codes E1340 and E1350 to account for labor charges. Since a beneficiary may have 
decided to purchase more than one piece of equipment over the years, we reviewed the list of 
repair services to determine if it was an appropriate code for the piece of equipment the 
beneficiary decided to purchase in 1996.  We then compiled a list of appropriate repair codes 
for each piece of equipment purchased in 1996. We included all E1340 and E1350 charges, as 
well as all E1399 services (for miscellaneous durable medical equipment) billed with an RP 
modifier in this list.  We determined the number of repair services received in each year and the 
dollar amount associated with those repair services. 
For each code in our review, we determined the average of maintenance payments for rented 
equipment and the average of repair payments for purchased equipment. We did this by 
aggregating all the maintenance and repair payments over 5 years and dividing by the total 
number of equipment rented or purchased in 1996 respectively.  Throughout this report, we 
refer to these averages as average maintenance payment and average repair payment. To 
calculate the 5-year dollar savings if the program paid only for equipment repair and not 
maintenance, we began by subtracting the average repair payment from the average maintenance 
payment for each code. We then multiplied this number by the total number of equipment rented 
in 1996 for each of the codes.  To calculate the Medicare savings for the services in our review, 
we aggregated the dollar savings for each individual equipment code.  To determine the savings 
percentages for each equipment code and overall, we took the amount that Medicare would 
save if the program paid for equipment repair rather than maintenance, and divided it by the total 
maintenance payments from 1996 to 2000.  To calculate total Medicare savings, we applied the 
overall savings percentage to the total projected amount Medicare paid for maintenance 
between 1996 and 2000 on these 31 codes. The maintenance and repair payments for the 31 
equipment codes are provided in Appendix A. Point estimates and confidence intervals are 
provided in Appendix D. 
Survey Data 
Sample Design.  We began with a 1 percent file of durable medical equipment services from 
CMS 2000 National Claims History file which included all claims processed through December 
2000. From this file, we extracted all paid services with an MS modifier indicating maintenance 
and servicing was billed. We verified that all the equipment codes billed with an MS modifier 
were for capped rental equipment. 
We selected our sample maintenance services from 1 month, June 2000. A single maintenance 
service covers a 6-month time frame during which maintenance can be performed.  Our analysis 
indicated that June 2000 was similar to the other months of 2000 in terms of the number of 
maintenance services paid and allowed charges. We removed services for deceased 
beneficiaries, and then selected a stratified random sample of maintenance services with a 
service date from June 2000.  We stratified our sample to 
3 
Maintenance Payments for Capped Rental Equipment  OEI-03-00-00410  ensure that we would have a variety of equipment types to review.  Our sample contained four 
strata based on equipment type. Stratum one included wheelchairs and accessories, stratum two 
included nebulizers, stratum three included hospital beds and accessories, and stratum four 
included all other equipment such as continuous positive airway pressure (CPAP) devices, 
patient lifts, and commodes. After eliminating services for suppliers under review by our Office 
of Investigations, our sample consisted of 260 maintenance services. These services represent 
26 different equipment codes. A description of our sample is presented in Table 1 below. A list 
describing the 26 equipment codes in our sample is provided in Appendix B. 
Table 1. Sample of Maintenance Services from June 2000 
Sampling 
Strata  Equipment Type 
Frame  Sample 
1  Wheelchairs and Accessories  348  65 
2  Nebulizers  241  65 
3  Hospital Beds and Accessories  227  65 
4  All Other Equipment  148  65 
TOTAL  964  260 
Data Collection and Analysis. We mailed surveys to the suppliers who billed for the June 
2000 maintenance services in our sample. We collected this data from suppliers from April to 
July 2001. The survey asked suppliers whether or not they provided any maintenance, 
servicing, or repairs on the equipment between June and December 2000. We asked suppliers 
to indicate the dates they performed the service, to describe the type of maintenance performed, 
and to include documentation of the service. If suppliers indicated that on a visit they checked, 
cleaned, repaired, tested, replaced a part, or exchanged the equipment, we counted this as 
maintenance and servicing. If the supplier indicated that they called the beneficiary to see if 
service was needed or if they mailed supplies to beneficiaries, we did not count this as 
maintenance and servicing. 
We sent a second request to providers who did not respond to our initial survey request. In a 
third and final request, we informed suppliers that for the purposes of our study, we would 
conclude that no maintenance or servicing was performed from June to December 2000 if we 
did not receive a response. We received responses for 250 of the 260 services in our sample. 
We did not receive responses for 10 of our sample services. For eight of these services, it 
appeared that suppliers received all three of our requests; therefore, we concluded that there 
was no documentation to support these maintenance services. We were not able to locate 
suppliers for two of these services; therefore, we excluded these services from our analysis.  Our 
sample for analysis consisted of 258 services.  Estimates and confidence intervals for all statistics 
regarding our sample data are projected to the universe of maintenance services for June 2000. 
The estimates and confidence intervals are provided in Appendix D. 
4 
Maintenance Payments for Capped Rental Equipment  OEI-03-00-00410  ____________

This inspection was conducted in accordance with the Quality Standards for Inspections 
issued by the Presidents Council on Integrity and Efficiency. 
5 
Maintenance Payments for Capped Rental Equipment  OEI-03-00-00410  F I N D I N G S  
Our detailed 5-year analysis which involved tracking more than 3,500 pieces of capped rental 
equipment for beneficiaries who decided to rent or purchase the equipment in 1996 
demonstrated that Medicare paid substantially more for maintenance on rented equipment than 
repairs on purchased equipment.  Furthermore, our additional analysis of supplier documentation 
for more than 250 maintenance services from June 2000 found only 9 percent of the capped 
rental equipment actually received any maintenance and servicing.  The combination of these two 
findings provides strong evidence that Medicares current policy of paying for maintenance and 
servicing of capped rental equipment is not cost-effective. 
Medicare paid substantially more for maintenance than repairs 
over a 5-year period for the 31 equipment codes in our review 
We tracked, over a 5-year period (1996 to 2000), the maintenance and repair payments for 
3,553 pieces of equipment representing 31 capped rental equipment codes that beneficiaries 
decided to rent or purchase in 1996.  We found that, on average, Medicare paid substantially 
more for maintenance on rented equipment than repairs on purchased equipment over the 5 
years. Between 1996 and 2000, there was only one equipment code where the average repair 
payment was more than the average maintenance payment. For half of the 31 codes, there were 
no associated repairs over the 5-year period. There were 21 equipment codes where Medicare 
would have saved over 90 percent of maintenance payments had the program paid for repairs 
rather than maintenance on the equipment. The seven equipment codes with the highest dollar 
savings in our review are presented in Table 2 on the next page. Appendix A contains a 
comparison of the repair and maintenance payments for all 31 equipment codes. 
We found that, overall, Medicare would have saved 96 percent of the maintenance payments 
made for the services in our review had Medicare paid for actual equipment repair rather than 
routine maintenance.  If we apply this 96 percent to the estimated $49 million paid for 
maintenance over the 5 years, Medicare would have saved $47 million on this equipment. This 
savings is based only on the maintenance payments for beneficiaries who decided to rent rather 
than purchase the 31 types of equipment in 1996. If this 96 percent is applied to the total 
maintenance payments for the 31 equipment codes in 2000, Medicare would have saved $98 
million of the $102 million paid for maintenance that year. 
6 
Maintenance Payments for Capped Rental Equipment  OEI-03-00-00410  Table 2. Average Repair and Maintenance Payments for Selected Equipment (1996 to 2000) 
Dollar 
Average  Average 
Savings if 
Repair  Maintenance 
Medicare 
Equipment  Description  Payment for  Payment for 
Paid for 
Code  of Equipment  all Purchased  all Rented 
Repairs 
Items over  Items over 5-
Instead of 
5-Year Period  Year Period 
Maintenance 
E0260  Hospital bed, semi-electric  $10.36  $413.09  $163,105.65 
K0001  Standard wheelchair  $5.07  $111.41  $52,850.98 
E0277  Powered pressure reducing air mattress  $39.42  $712.91  $44,450.34 
K0003  Lightweight wheelchair  $12.96  $221.59  $29,834.09 
K0004  High strength, lightweight wheelchair  $0.51  $330.57  $29,045.28 
E0255  Hospital bed, variable height  $0.00  $330.08  $28,056.80 
E0570  Nebulizer, with compressor  $0.68  $61.76  $27,302.76 
Source: OIG review of CMS National Claims History File Data, 1996-2000 
Only 9 percent of capped rental equipment actually received 
any maintenance and servicing from June to December 2000 
In addition to a 5-year review comparing maintenance payments to repair payments, we also 
reviewed a sample of equipment to determine if any maintenance and servicing was actually 
provided.  Out of 964 maintenance services with a June 2000 service date, we requested 
documentation for a sample of 260 services.  Overall, just 9 percent of the capped rental 
equipment with a service date in June 2000 actually received any servicing between June and 
December 2000. Current Medicare regulations allow suppliers to be paid for maintenance and 
servicing even if they do not perform any service.  We estimate that of the $7.3 million Medicare 
paid for maintenance services from June 2000, $6.5 million was paid for equipment that received 
no actual servicing. 
Of the 26 equipment codes in our sample, less than one-third received any servicing from June 
to December 2000. In terms of equipment type, 16 percent of nebulizers, 9 percent of hospital 
beds, 2 percent of wheelchairs, and 17 percent of other equipment such as CPAP devices and 
suction pumps received maintenance during this time frame. 
For the 91 percent of equipment that did not receive any maintenance, some suppliers indicated 
why they had not performed any servicing.  Twenty-eight suppliers indicated that although they 
did not perform maintenance from June to December 2000, they had performed maintenance on 
the equipment sometime during the last 3 years. However, most made only one visit during this 
time. Fifteen suppliers indicated that no maintenance was performed because they wait for the 
beneficiary to call them for service.  Ten suppliers indicated they did not service the equipment 
because they phoned the beneficiary and were told that the equipment was working properly. 
7 
Maintenance Payments for Capped Rental Equipment  OEI-03-00-00410  Seven suppliers indicated that they provided filters for the equipment but that the beneficiaries 
were able to replace the filters themselves; therefore, a maintenance visit was not necessary. 
Of the 9 percent of equipment that received maintenance and servicing from June to December 
2000, most (24 of 28 items) received just one maintenance visit. Only four pieces of equipment 
received more than one maintenance visit in the 6-month time period.  For a majority of 
equipment, the one maintenance visit included having a part replaced.  Of the equipment that had 
a part replaced, five were hospital beds that had parts such as a crank, head board, and hand 
control cable replaced. Three nebulizers had accessory parts such as filters replaced, and three 
CPAP devices had accessory parts such as filters and tubing replaced.  Even though suppliers 
are allowed to bill Medicare separately for nebulizer and CPAP filters and other accessories, we 
considered it maintenance and servicing if the supplier, not the beneficiary, replaced these parts. 
Some suppliers performed other types of maintenance and servicing including checking, cleaning, 
testing, repairing, or exchanging the equipment. While suppliers performed multiple types of 
service on some equipment, three-quarters of the equipment received only one type of 
maintenance on a single visit.  See Appendix C for the type of maintenance and servicing 
performed on all of the equipment reviewed. 
8 
Maintenance Payments for Capped Rental Equipment  OEI-03-00-00410  C O N C L U S I O N  
The findings of this report illustrate that Medicares current policy of paying for maintenance and 
servicing of capped rental equipment is not cost-effective. We found that Medicare pays 
substantially more in maintenance payments for rented items than it does for actual repairs on 
purchased equipment. In addition, we found that Medicare beneficiaries are receiving little or no 
routine maintenance on their rented equipment. 
R E C O M M E N D A T I O N  
We recommend that the Centers for Medicare & Medicaid Services eliminate the 
semi-annual maintenance payment currently allowed for capped rental equipment and 
pay only for repairs when needed.  We believe this change would result in nearly $100 million 
dollars being saved each year by Medicare and its beneficiaries.  As a broader issue relating to 
capped rental equipment, CMS may also want to consider if eliminating the 15-month rental 
option would be a viable solution. By requiring any continuous rentals to be converted to a 
purchase after the 13th month of rental, the need for the semi-annual maintenance payment 
would automatically be eliminated. 
Agency Comments 
The CMS agreed with our recommendation and stated that they will consider a legislative 
initiative to eliminate the 15-month rental option.  This initiative would result in significant savings 
to the Medicare program by eliminating the semi-annual maintenance and servicing fee and by 
eliminating monthly rental payments for months 14 and 15. Appendix E contains the full text of 
CMS comments. 
9 
Maintenance Payments for Capped Rental Equipment  OEI-03-00-00410  APPENDIX  A 
Comparison of Repair and Maintenance Payments 

for 31 Equipment Codes (1996 to 2000) 

Difference  Dollar  Percent 
Average  Average 
between  Savings if  Savings if 
Repair  Maintenance 
Average  Medicare  Medicare 
Equipment  Equipment  Payment for  Payment for 
Maintenance  Paid for  Paid for 
Code 1  Description  all Purchased  all Rented 
and Average  Repairs  Repairs 
Items over  Items over 
Repair  Instead of  Instead of 
5-Year Period  5-Year Period 
Payment  Maintenance  Maintenance 
E0146  Folding walker  $0.00  $0.00  $0.00  $0.00  0% 
E0165  Commode chair  $6.58  $21.78  $15.20  $334.40  70% 
Pressure pad, alternating 
E0180  $25.28  $37.70  $12.42  $422.28  33% 
w/pump 
Pressure pad, alternating 
E0181  $0.00  $37.00  $37.00  $1,073.00  100% 
w/pump, heavy duty 
E0235  Paraffin bath unit, portable  $0.00  $0.00  $0.00  $0.00  0% 
E0250  Hospital bed, fixed height  $0.00  $118.04  $118.04  $1,180.40  100% 
E0255  Hospital bed, variable  $0.00  $330.08  $330.08  $28,056.80  100% 
E0260  Hospital bed, semi-electric  $10.36  $413.09  $402.73  $163,105.65  97% 
E0265  Hospital bed, total electric  $0.00  $465.41  $465.41  $2,792.46  100% 
Powered pressure reducing 
E0277  $39.42  $712.91  $673.49  $44,450.34  94% 
air mattress 
Intermittent assist device 
E0452  $0.00  $1,287.16  $1,287.16  $16,733.08  100% 
with CPAP 
E0480  Percussor  $0.00  $0.00  $0.00  $0.00  0% 
E0570  Nebulizer, with compressor  $0.68  $61.76  $61.08  $27,302.76  99% 
E0600  Suction pump  $0.00  $60.88  $60.88  $1,826.40  100% 
Continuous positive airway 
E0601  $0.00  $417.10  $417.10  $24,608.90  100% 
pressure (CPAP) device 
E0630  Patient lift, hydraulic  $18.82  $235.67  $216.85  $10,842.50  92% 
Neuro-muscular stimulator 
E0745  $0.00  $106.41  $106.41  $532.05  100% 
for shock 
10 
Maintenance Payments for Capped Rental Equipment  OEI-03-00-00410  APPENDIX  A 
Difference  Dollar  Percent 
Average  Average 
between  Savings if  Savings if 
Repair  Maintenance 
Average  Medicare  Medicare 
Equipment  Equipment  Payment for  Payment for 
Maintenance  Paid for  Paid for 
Code 1  Description  all Purchased  all Rented 
and Average  Repairs  Repairs 
Items over  Items over 
Repair  Instead of  Instead of 
5-Year Period  5-Year Period 
Payment  Maintenance  Maintenance 
E0910  Trapeze bar, attached to  $0.00  $44.56  $44.56  $2,450.80  100% 
E0940  Trapeze bar, free standing  $0.00  $37.40  $37.40  $598.40  100% 
E1031  Rollabout chair  $0.00  $50.25  $50.25  $552.75  100% 
K0001  Standard wheelchair  $5.07  $111.41  $106.34  $52,850.98  95% 
Standard hemi 
K0002  $31.72  $140.52  $108.80  $1,958.40  77% 
(low seat) wheelchair 
K0003  Lightweight wheelchair  $12.96  $221.59  $208.63  $29,834.09  94% 
High strength, lightweight 
K0004  $0.51  $330.57  $330.06  $29,045.28  100% 
wheelchair 
K0006  Heavy-duty wheelchair  $13.29  $333.49  $320.20  $7,044.40  96% 
K0007  Extra heavy-duty  $0.00  $457.44  $457.44  $2,744.64  100% 
Standard weight frame 
K0010  $253.10  $687.56  $434.46  $2,606.76  63% 
power wheelchair 
Standard weight powered 
K0011  $279.22  $836.84  $557.62  $7,249.06  67% 
wheelchair w/control 
Lightweight portable power 
K0012  $199.15  $0.00  ($199.15)  ($199.15)  ) 
wheelchair 
CPAP device, with 
K0193  $0.00  $0.00  $0.00  $0.00  0% 
humidifier 
Elevating wheelchair 
K0195  $0.27  $39.03  $38.76  $6,356.64  99% 
leg rests 
TOTAL  $466,354.07  96% 
PROJECTED 
$46,635,407 
TOTAL 
Source: OIG review of CMS National Claims History File Data, 1996-2000 
1 In October 1999, equipment code E0452 was replaced by code K0532 and equipment code K0193 was 
replaced by code E0601. We included the maintenance and repair payments for both the original and 
replacement codes in our review. 
11 
Maintenance Payments for Capped Rental Equipment  OEI-03-00-00410  APPENDIX B 
Description of 26 Equipment Codes in Maintenance Review 
STRATA 1 - WHEELCHAIRS AND ACCESSORIES 
Codes  Description 
E1090	 High-strength lightweight wheelchair; detachable arms, desk or full-length, swing-away, 
detachable footrests 
E1150  Wheelchair; detachable arms, desk or full-length, swing-away, detachable, elevating legrests 
K0001  Standard wheelchair 
K0002  Standard hemi (low seat) wheelchair 
K0003  Lightweight wheelchair 
K0004  High strength, lightweight wheelchair 
K0006  Heavy-duty wheelchair 
K0007  Extra heavy-duty wheelchair 
K0012  Lightweight portable motorized/power wheelchair 
K0101  One-arm drive attachment, each 
K0195  Elevating legrest, pair (for use with capped rental wheelchair base) 
STRATA 2 - NEBULIZERS 
Codes  Description 
E0570  Nebulizer, with compressor 
STRATA 3 - HOSPITAL BEDS AND ACCESSORIES 
Codes  Description 
E0250  Hospital bed, fixed height, with any type side rails, with mattress 
E0255  Hospital bed, variable height, hi-lo, with any type side rails, with mattress 
E0260  Hospital bed, semi-electric (head and foot adjustment), with any type side rails, with mattress 
E0265	 Hospital bed, total electric (head, foot, and height adjustments), with any type side rails, with 
mattress 
E0910  Trapeze bar, also know as Patient Helper, attached to bed, with grab bar 
12 
Maintenance Payments for Capped Rental Equipment  OEI-03-00-00410  APPENDIX B 
STRATA 4 - ALL OTHER EQUIPMENT 
Codes  Description 
E0146  Folding walker, wheeled, with seat 
E0165  Commode chair, stationary, with detachable arms 
E0180  Pressure pad, alternating with pump 
E0181  Pressure pad, alternating with pump, heavy duty 
E0277  Powered pressure reducing air mattress 
E0600  Suction pump, home model, portable 
E0601  Continuous positive airway pressure (CPAP) device 
E0630  Patient lift, hydraulic, with seat or sling 
K0532	 Respiratory assist device, bi-level pressure capability, without backup rate feature, used with 
noninvasive interface, e.g., nasal or facial mask 
Source: 2000 HCPCS published by Medicode Inc. 
13 
Maintenance Payments for Capped Rental Equipment  OEI-03-00-00410  APPENDIX C 
Maintenance and Servicing Performed 

On 26 Equipment Codes Reviewed

The table below shows the equipment that received maintenance and servicing from June through 
December 2000, as well as the different types of maintenance and servicing performed for each 
equipment code. A check indicates that at least one piece of equipment for that code received a 
particular type of maintenance during the period of our review. 
Type of Maintenance and Servicing 
Number that  Number that  Number that 
HCCoPdCe S  DEeqsucirpimpteinotn   NSiunam moupbrlee r   JMunRaeie-ncDteeeincva e2nd0c 0e0   ReVDcieesiicvt  e2Jd0u 0nO0en -e  RJtheucanenei -vODenedec  M V20ios0irt0e    Checked  Cleaned  Tested  Repaired  Part replaced Exchanged 
 
Wheelchairs and Accessories 
High strength, 
lightweight 
E1090  1  0  0  0  - - - - - -
wheelchair 
detachable arms 
Wheelchair, standard, 
E1150  1  0  0  0  - - - - - -
with leg rests 
K0001  Standard wheelchair  25  0  0  0  - - - - - -
Standard hemi (low 
K0002  2  0  0  0  - - - - - -
seat) wheelchair 
Lightweight 
K0003  8  0  0  0  - - - - - -
wheelchair 
High strength 
K0004  lightweight  7  0  0  0  - - - - - -
wheelchair 
Heavy-duty 
K0006  4  0  0  0  - - - - - -
wheelchair 
Extra heavy-duty 
K0007  1  0  0  0  - - - - - -
wheelchair 
Lightweight portable 
K0012  1  0  0  0  - - - - - -
power wheelchair 
One-arm drive 
K0101  1  0  0  0  - - - - - -
attachment 
K0195  Elevating wheelchair  14  1  1  0  - - - - U  -
leg rests 
14 
Maintenance Payments for Capped Rental Equipment  OEI-03-00-00410  APPENDIX C 
Type of Maintenance and Servicing 
Number that  Number that  Number that 
HCCoPdCe S  DEeqsucirpimpteinotn   NSiunam moupbrlee r   JMunRaeie-ncDteeeincva e2nd0c 0e0   ReVDcieesiicvt  e2Jd0u 0nO0en -e  RJtheucanenei -vODenedec  M V20ios0irt0e    Checked  Cleaned  Tested  Repaired  Part replaced Exchanged 
 
Nebulizers 
E0570  Nebulizer, with  64  10  7  3  U  U  U  U  U  U 
compressor 
Hospital Beds and Accessories 
Hospital bed, fixed 
E0250  4  0  0  0  - - - - - -
height 
Hospital bed, variable 
E0255  7  0  0  0  - - - - - -
height 
E0260  Hospital bed, semi- 46  6  5  1  - - - U  U  U 
electric 
Hospital bed, total 
E0265  2  0  0  0  - - - - - -
electric 
E0910  Trapeze bar  6  0  0  0  - - - - - -
Other Equipment 
E0146  Folding walker  1  0  0  0  - - - - - -
E0165  Commode chair  6  0  0  0  - - - - - -
E0180  Pressure pad,  5  1  1  0  - - - - U  -
alternating with pump 
Pressure pad, 
E0181  alternating with pump,  1  0  0  0  - - - - - -
heavy duty 
E0277  Powered pressured  2  1  1  0  - - - - U  -
reducing air mattress 
E0600  Suction pump  7  1  1  0  - - - - - U 
Continuous positive 
E0601  airway pressure  27  7  7  0  U  - - - U  -
(CPAP) device 
E0630  Patient lift, hydraulic  11  0  0  0  - - - - - -
K0532  Respiratory assist  4  1  1  0  U  - U  - - -
device 
Totals  258  28  24  4 
Source: OIG Survey Data, 2001 
15 
Maintenance Payments for Capped Rental Equipment  OEI-03-00-00410  A P P E N D I XD   
Estimates and Confidence Intervals

The table below contains statistical estimates presented in Findings section of this report.  Point 
estimates and corresponding 95 percent confidence intervals were weighted based on the 
sample design as described in the Methodology section. 
95 Percent Confidence 
Statistic  Point Estimate 
Interval 
Percent of Equipment that Received Maintenance 
9.17%  5.88% - 12.46% 
and Servicing from June through December 2000 
Percent of Nebulizers that Received Maintenance 
15.63%  6.67% - 24.58% 
and Servicing from June through December 2000 
Percent of Hospital Beds that Received 
Maintenance and Servicing from June through  9.23%  2.15% - 16.31% 
December 2000 
Percent of Wheelchairs that Received 
Maintenance and Servicing from June through  1.54%  0.00% - 4.56% 
December 2000 
Percent of Other Equipment that Received 
Maintenance and Servicing from June through  17.19%  7.89% - 26.48% 
December 2000 
Total June 2000 Medicare Payments for 
Maintenance and Servicing where No  $6,508,828  $5,888,202 - $7,129,453 
Maintenance was Performed 
Total June 2000 Medicare Payments for 
$7,306,998  $6,672,518 - $7,941,479 
Maintenance and Servicing 
Total 1996-2000 Medicare Payments for 
Maintenance and Servicing of Equipment that  $48,607,283  $47,227,524 - $49,987,042 
Beneficiaries Decided to Rent in 1996 
Total 1996-2000 Medicare Payments for Repairs 
of Equipment that Beneficiaries Decided to  $5,192,415  $4,532,632 - $5,852,198 
Purchase in 1996 
16 
Maintenance Payments for Capped Rental Equipment  OEI-03-00-00410  APPENDIX E 
Comments from the

Centers for Medicare & Medicaid Services

17 
Maintenance Payments for Capped Rental Equipment  OEI-03-00-00410  A C K N O W L E D G M E N T S  
This report was prepared under the direction of Robert A. Vito, Regional Inspector General for 
Evaluation and Inspections in Philadelphia, PA and Linda M. Ragone, Deputy Regional Inspector 
General. Other principal Office of Evaluation and Inspections staff who contributed include: 
Tara J. Bernabe, Project Leader  Stephanie Lattin, Program Specialist 
Cynthia R. Hansford, Program Assistant  Brian Ritchie, Technical Support Staff 
Cortney Hayflinger, Program Analyst 
18 
Maintenance Payments for Capped Rental Equipment  OEI-03-00-00410