'. .. '. .

. . . ".

MEDICARE COVERAGE OF SEAT'

CHAIRS .... 
. LIFT 

". 
J 
""""'lAt\. Vie...!.. sOuJ'.-1... 
.:~ 
r . '(
.~ L.

'o ::

"'+ . 
oiIy-l!fVd30 
OFFICE OF INSPECTOR GENERAL 
OFFICE OF ANALYSIS AND INSPECTIONS 
FEBRUARY 1989  '"  "0 
MEDICARE COVERAGE OF SEAT

LIFT CHAIRS

Richard P. Kusserow 
INSPECTOR GENERAL 
OAI-02-88-00100  FEBRUARY 1989
 '. 
EXECUTIVE SUMMARY 
PURPOSE 
The purpose of this study was to review the Medicare program's experience in responding to 
the high volume of claims being received for seat lift chairs. 
BACKGROUND 
A seat lift chair (SLC) is a mechanized chair, that assists a person in standing up and sitting 
down alone. The SLC has been covered by the Medicare program as durable medical equip
ment (DME) since 1978. The Health Care Financing Admnistration (HCFA) defines DME 
as: "... equipment which (1) can withstand repeated use, (2) is primarly and customarily used 
to serve a medical purose, (3) generaly is not useful to a person in the absence of illness or 
injury, and (4) is appropriate for use in the home." All elements of the definition must be met 
in order for the equipment to be covered by Medicare. 
Prior to 1986, HCFA restrcted Medicare coverage of SLCs to patients with severe arthri tis of 
the hip or knee, muscular dystrophy, or other neuromuscular diseases. In 1986, HCFA 
amended its policy to tie coverage of SLCs directly to medical necessity rather than diagnostic 
categories. 
Nationally, in 1985, the number of SLC claims received trpled--from about 200,000 in 1984 
to about 700,OO--and alowed charges went from $33.7 milion to $63.3 million. This ex
perience revealed that the aggressive national marketing by suppliers of SLCs had given rise 
to a Medicare beneficiar "consumerism" in which beneficiares were initiating requests for 
SLCs. It also raised questions about the adequacy of SLC coverage guidelines and the role of 
physicians in authorizing them. 
METHODOLOGY 
Two samples were selected: 8 Medicare carers; and 97 beneficiares for whom a SLC claim 
was paid by Medicare in 1986. Site visits were made to the 8 carers where discussions were 
held and case records for 161 selected 1987 paid claims were reviewed. In addition, 
telephone discussions were held with 107 respondents, including 61 seat lift chair 
beneficiares, 7 famly members of beneficiares and 39 physicians who authorized chairs for 
some of the beneficiares. 
FINDINGS 
There are strong indications that seat lift chairs do not qualify as durable medical equip
ment under the Medicare program.  "  Most beneficiares' comments indicated that the SLCs were used primarily for 
non-medical purposes, such as personal comfort, and can be useful to persons in the 
absence of ilness or injury. Between 31 percent and 44 percent did not require

assistance in getting up from bed, table or toilet, and most of those said they were able 
to walk around their home, many without assistance. Most of the remaining 
beneficiares were either unable to walk at all or went from the SLC to a wheelchair or 
power-operated vehicle in order to move about their homes. Since two of the four 
elements which define DME frequently are not met, there appears to be no basis for 
covering SLCs as DME under the Medicare program. 
Over 85 percent of the 61 beneficiares contacted stated they initiated the request for 
seat lift chairs. Most said they learned about them through aggressive mass media 
marketing by suppliers. 
Sixty percent of the 61 beneficiaries said the supplier told them they would not have to 
pay anything, and 69 percent said they never made payments (i.e., for coinsurance or 
deductibles owed). 
Beneficiaries' physicians were often authorizing SLCs under pressure from both 
beneficiaries and suppliers, rather than as part of an existing course of treatment. In 
nearly half the 161 cases reviewed on-site, the SLCs were actually delivered before the 
chair was prescribed by a physician. 
The HCFA has recognized vulnerabilties related to SLC claims and has taken aggressive 
action; nevertheless, more effectii'e payment safeguards need to be implemented. 
More rigorous SLC claims review by Medicare carrers, in response to timely HCFA 
directives and guidance, resulted in significant reductions in SLC reimbursement after 
1985. 
The question of carer jurisdiction, already under review by HCFA, needs to be 
resolved to avoid out-of-service-area claims for which carers lack beneficiary history 
data needed to prevent duplicate claims and to identify claims for contraindicated DME. 
Some carer best practices for more effective evaluation of SLC claims need to be 
shared. 
11  " 
RECOMMENDA TIONS 
1. Coverage of SLCs

In light of the strong evidence that most SLCs appear to be used primarily as furniture,

HCFA should reconsider whether SLCs, in fact, meet the Medicare definition of DME.

2. Payment safeguards

a) Immediate steps should be taken by HCFA to further improve the effectiveness of 
carer processing of SLC claims. The HCFA should disseminate to its carriers best 
practices identified in this inspection which help to assure that current coverage 
requirements for SLCs are met. These include having carers review beneficiaries' 
claims histories to: 
detennine whether the authorizing physician for the SLC had previously treated 
the beneficiary to help ascertain whether a course of treatment including a SLC 
was initiated prior to its authorization and delivery. 
ascertain whether the beneficiary has a wheelchair and, if so, whether the SLC 
should also be covered. 
b) The HCFA should implement the OBRA 1987 provision prohibiting payment for 
DME unless the supplier has received a written order from the physician before 
delivery of the item to the patient. 
c) The HCFA should instrct carers to develop and refer sanction recommendations 
to the OIG when carers have identified physicians with patterns of unnecessarily 
prescribing SLCs. 
d) The HCFA should direct carers to enforce the provisions of the Medicare Carriers 
Manual, section 5220, by allowing only those charges which the supplier expects to 
receive when they routinely waive collection of coinsurance and deductible' 
payments. Suppliers found to have routinely advertised a general intention to waive 
such payments or to have failed to make reasonable collection efforts should be 
referred to the OIG for sanctions. 
e) The HCFA should also instruct cariers to refer to the OIG for civil money penalty 
action in which suppliers advertise SLCs as being "Medicare-approved" or 
"endorsed" or "authorized" in violation of the Medicare Catastrophic Coverage Act 
of 1988.

11  " 
f) The HCFA should expedite its review of the carer jurisdiction issue and resolve the 
problem of out-of-service-area claims which denies carriers data essential to 
assuring the integrty of SLC and other claims. 
COMMENTS ON DRAFT REPORT 
Comments received from the Administrator of HCFA indicate essential agreement wi th the 
findings. The HCFA reports it has begun a number of actions to implement the OiG recom
mendations, including: 
development of a draft Federal Register notice that addresses coverage issues relating to 
SLCs (recommendation 1); 
disseminating best practices information to the carers (recommendation 2a); 
preparng regulations to implement section 1834 of the Omnibus Budget Reconciliation 
Act of 1987. The regulations wil include SLCs as one of the items for which the 
supplier must have received a physician's written order before the item is delivered to 
the patient (recommendation 2b); 
instructing carers, effective for services rendered on or after January 1, 1989, to

require that the suppliers have a written order in hand prior to delivery of the equipmeni 
to the beneficiary (recommendation 2b); 
instructing the carers to conduct an indepth medical review of all SLC claims 
(recommendation 2c); and 
reviewing the issues of carers' jurisdiction in order to look at ways to resolve the 
problems of out-of-service area claims (recommendation 2f). 
The HCFA also suggested that the OIG take vigorous action to curb abuses regarding SLCs 
noted in the report. We have expanded our recommendations to reflect such concerns ex
pressed by HCFA and the OIG's Offce of Investigations. However, before the OIG can act, 
cases must be referred to it by HCFA and its carers through increased diligence in identifying 
instances of routine waiver of coinsurance and of suppliers who misuse the word "Medicare" 
in advertisements. 
iv  " 
TABLE OF CONTENTS 
EXECUTIVE SUMMARY 
INTRODUCTION..............,...................................................................................... .1

FI N DI NGS ............................................................................................................... 5

There are strong indications that seat lift chairs do not qualify as 
durable medical equipment under the Medicare program ...............................5

The HCFA has recognized the vulnerabilities related to SLC claims 
and has taken aggressive action; nevertheless, more effective pay

ment safeguards need to be implemented ........................................................12

RECOMMENDATIONS .................................... ...................... ................................. .14

APPENDIX: Comments on Draft Report................................................................ ..16
 " 
INTRODUCTION 
BACKGROUND 
"When I saw the TV advertsement I felt that I wanted it (the seat lift chair) because it was get
ting to the point where I was having dificulty getting out of a chair by myself." 
This statement, obtained durng the research for this inspection, was made by a Medicare 
beneficiar who was able to walk unassisted around her aparment, had a home health aide 
daily and had ordered the chai through a national supplier of medical equipment. When her 
physician was interviewed he verified that he had not initiated the order for the seat lift chair 
(SLC): "I did not order the chair and I can't say that it's par of my course of treatment, but 
the chair has been helpful to her." 
Numerous complaints about SLCs received and investigated by the OIG kindled concern over 
the rapidly growing number of claims being received for SLCs apparently in response to ag
gressive marketing efforts by suppliers. This concern prompted this inspection. 
Medicare coverage of seat lift chairs 
Durable medical equipment (DME) is defined by the Health Care Financing Administration 
(HCFA) as: "... equipment which (1) can withstand repeated use, (2) is primarly and cus
tomarly used to serve a medical purose, (3) generaly is not useful to a person in the absence 
of ilness or injur, and (4) is appropriate for use in the home." All of the elements of the

definition must be met in order for the equipment to be covered by Medicare. 
A seat lift chair, or SLC, is a mechanized chair, that assists a person in standing up and sitting 
down unassisted. The HCFA's current coverage policy and contractor guidelines for the SLC 
are based in par on a June 1978 Public Health Service (PHS) assessment requested by HCFA. 
The PHS offered the opinion that the chair "seems to be equipment presumptively medical" 
similar to hospital beds and wheelchairs" c,nd as such should be covered as DME. This is in 
contrast to items which HCFA has deterrned to be "presumptively nonmedical," i.e., items 
that basically serve a comfort or convenience purpose, such as stairway elevators, posture 
chairs, bathtub lifts and seats, lounge beds (power or manual) and raised toilet seats. Such 
items are not covered as DME: 
Prior to 1986, Medicare coverage of SLCs was restrcted to patients with severe arhritis of the 
hip or knee, muscular dystrophy, or other neuromuscular diseases. In 1986, HCFA clarified its 
policy to tie coverage of SLCs directly to medical necessity rather than diagnostic categories, 
In order for a SLC to be covered, it is required that: 
a physician determnes that a patient can benefit therapeutically from its use; 
1  '. 
.  the SLC is included in the physician's course of treatment and is likely to effect 
improvement or arest or retard deterioration in the patient's condition, and 
the severity of the condition is such that the alternative would be chair or bed 
confinement. 
Medicare carers are responsible to see that these coverage requirements are met before ap
proving payment. Payments are most frequently made under assignment to the SLC supplier, 
who is paid 80 percent of the allowable charge. The beneficiar is then responsible for paying 
the 20 percent coinsurance to the supplier. The purchase allowance for a SLC, which varies 
by carer, ranged from $697 to $1,795 in September 1987; the average allowance was

$906.41. At that time, the allowable monthly charge for renting a SLC ranged from $40 to 
$162. 
HCFA and OIG Concerns 
In May 1985, the HCFA Director of the Bureau of Eligibility, Reimbursement and Coverage is
sued a Medicare Coverage Alert on SLCs to HCFA Regional Administrators. The alert men
tioned an extensive advertising campaign for "Medicare-approved" seat lift chairs that was 
resulting in numerous claims being submitted. Nationally, the number of SLC claims \Vent 
from about 200,000 in 1984 to about 700,000 in 1985, and allowed charges went from $33.7 
million in 1984 to $63.3 milion in 1985. 
In June 1985, the HCFA Bureau of Program Operations asked regional HCFA staff to conduct 
a survey of carers' experiences in reimbursing claims for SLCs, "... so that, if necessary, 
more precise national procedures could be developed." The survey revealed that SLC 
coverage and reimbursement rules were being abused. Many more Medicare beneficiaries 
were obtaining SLCs than HCFA expected on the basis of existing guidelines and coverage 
cri teria. 
The OIG's Office of Investigations in New York, working with a large local carrier, helped 
devise a questionnaire to be completed by the prescribing physician after a SLC claim was 
submitted and before it was paid. This questionnaire solicited information for the carrier's 
medical staff on the medical necessity and appropriateness of the chair. This project 
the claims (1,198 of 1,215) submitted within an 8
resulted in a denial rate of98.6 percent of 

week period in 1985 and a savings of $910,480. 
When later adopted by several other Region II carers, the questionnaire again resulted in a 
very high rate of denials (82 percent) for 44,150 claims submitted for the first three quarters of 
Fiscal Year (FY) 1986 (a savings of nearly $8.5 million). This encouraged HCFA and its car
riers to implement similar claims development procedures. The use of a unifonn national 
questionnaire was, however, not mandated and not every carrer followed the Region II ex
ample. 
2  '.  The experience of 1984 to 1986 showed that the aggressive national marketing of SLCs had 
given rise to a Medicare beneficiary "consumerism" in which beneficiaries were apparently in
itiating the medical authorization process for this equipment. It also raised questions about the 
adequacy of SLC coverage guidelines as well as the role of physicians in authorizing them. 
OBJECTIVES 
Describe the nature of beneficiary responses to the marketing by suppliers of seat lift 
chairs. 
Assess the role of physicians when their patients wish to obtain seat lift chairs under. 
Medicare. 
Describe and characterize the nature of the response of HCFA and its carriers to the 
increase in the volume of seat lift chair claims. 
Identify those factors which raise particular concerns about SLC coverage and related 
Medicare policies and procedures. 
METHODOLOGY 
Oi'err'iew 
Site visits were made to 8 Medicare carers where discussions were held with a total of 31 in
dividuals and selected case records were reviewed. Respondents included 22 managers and sll
pervisors and 9 staff members, among them claims examiners and Fair Hearing officers. 
Telephone discussions were held with 107 respondents, including 61 seat lift chair 
7 family members of beneficiares and 39 physicians who had authorized chairs. 
beneficiares, 
Laws, regulations, HCFA correspondence, guidelines and special studies, as well as carrier 
and supplier forms and related materials were also reviewed. 
Samples and respondents 
Two samples were drawn: a stratified purposive sample of carers; and a random sample of 
beneficiares for whom a SLC claim was paid by Medicare in 1986. More specifically, 8 
Medicare carers were selected from a universe of 35 carers nationwide, stratified according 
to high, medium and low amounts of dollars allowed for SLCs. Two carrers were selected 
from the low group. Each of the of the sample carers in turn provided a randomly selected 
group of 100 approved 1987 claims. From these, 161 claims (about 20 for each carrer) were 
randomly selected by the study team for on-site review while examining the carer's SLC 
claims review procedures. 
The second sample, consisting of 97 beneficiares whose SLC claims were paid in 1986, was 
randomly selected from HCFA's Par B Medicare Annual Data base (BMAD) for all carriers. 
3  '. 
Sample represented 25 from as many States around the country. Out of these 97 potential 
respondents, 68 contacts were made: 61 telephone discussions were held directly with 
beneficiares and 7 with the spouses or children of deceased beneficiaries. From the initial 
sample of 97 beneficiares, 50 beneficiares were selected and an effort was made to contact

the 50 physicians who authorized the SLCs for those beneficiares. Thirty-nine were success
fully contacted by telephone. These contacts resulted in 30 matched pairs of beneficiaries and 
their physicians with whom separate discussions were held. 
4
 '. 
FINDINGS

There are strong indications that seat lift chairs do not qualify as durable medical equip
ment under the Medicare program. 
The SLC is used primarily as furniture. 
The fact that a SLC can serve a non-medical purpose as furniture is one characteristic which 
raises a question about its qualifying as DME under Medicare. The SLC can serve as a com
fortable and attractive piece of furniture, much as a recliner. Its only distinguishing feature 
from an ordinary chair is that it has a mechanism which assists a person in sitting down and 
standing up. This circumstance appears to contradict one element of HCFA's definition of 
DME: that it would not be generally useful to a person in the absence of ilness or injury. 
As far back as 1984, a question was raised by a carer's associate medical director on whether 
the SLC was primarily a therapeutically beneficial piece of medical equipment or a convenient 
letter to a member of Congress, he argued that the 
piece of furniture. In a July 1984 

therapeutic value of the SLC does not meet HCFA's requirements that the patient can benefit 
therapeutically from use of the device: 
"In my opinion, the key word here is therapeutic. I see no way that 
 a chair of any kind 
can be said to have a par in the therapy or treatment of a patient's disease or disorder. 
No matter how I look at it, the seat lift chair is stil an item of furniture. It may be 
handy; it may be convenient; and it may be desirable, but I do not view this as a part of 
a course of treatment prescribed by a physician for any named disorder, disease or dis
ability. It seems to me that if we provide a seat lift for all of aged people who are crip
pled up with arhritis and others who are simply too old and weak to get out of a chair 
alone or at least without considerable trouble, that we are going to be spending an awful 
lot of money for some expensive equipment that really was not intended to be a part of 
the Medicare Program, which so greatly benefits our aged population. The more money 
we spend on things like this, the less there is going to be available for reaJly necessary, 
trly medical care services and equipment."

In 1987 this physician wrote again to HCFA regarding SLCs and complained about the market
ing techniques of suppliers and their effect on physician practice: 
"I write this time over my personal private practice letterhead and personal signarure to 
make a strong complaint as a practicing physician and as a tax-paying citizen of this 
country about the possibility of the Medicare Program providing reimbursement for this 
item of durable equipment. This is almost fraud, if not fraud, the way these people 
solicit our beneficiares and the way they fil out all these forms in a way that no really 
practical practicing physician would complete them. You wil notice that the language 
is almost exactly, if not exactly, that of the printed regulations. They have obviously 
constructed a piece of paper here and a completed form deliberately patterned after the 
5  '.	 regulations and not after the facts in any paricular case.... They send them to the 
physicians, and naturally most of the busy physicians, even if they are fairly alert and 
even if they are fairly experienced, will believe that the Congress intended their patient 
to have the benefit of this kind of device.... I doubt if any particular physician ... has 
any idea how much is being spent on durable medical equipment and how much of thaa 
is indeed strictly a luxury or buying furniture and not medically necessary.... I was hope
ful that after our last session on this subject the regulation of authorizing the payment 
for these chairs would be substantially modified and clarfied or even eliminated all 
together. " 
The following comments by some beneficiares provide insights into the SLC's function as fur
niture: 
"The chair is fine but it's too big for my living room. It's beautiful, like a piece of furni
ture." 
"It's a very wonderful piece of furniture." 
"It is very beautiful, but I regret not having one that reclines as well as lifts up." 
"The seat lift chair is a good, sturdy chair and comes in handy." 
"It's very handy and is very comfortable. It also has nice materiaL." 
One of the physicians who acknowledged that a chair was not part of his course of treatment 
for his patient said, "It's more of a convenience." 
Some beneficiaries did not appear to be benefitting therapeutically from their SLC. 
The therapeutic value of a SLC ostensibly consists in helping a patient stand up in order to 
walk, so as to correct or stabilize the patient's condition and prevent confinement to bed or 
hospitalization. However, 18 percent of the 68 beneficiares contacted said they were not able 
to walk around their home, even with assistance. Further, as many as 44 percent said that they 
didn't need assistance, either in standing when getting up from the table or when getting up 
from the toilet. Thirty-one percent said they didn't need help to stand when getting out of bed. 
Some beneficiares told us or the carers of cases where the chair was not used or was not con

sidered useful after delivery: 
"I've never been satisfied with (it)," one beneficiar said. "My hips hurt me worst when 
I'm just sitting in it than when I sit in my recliner. I have been waiting for a letter from 
Medicare so I could tell my story.... I really hate the chair." 
6  '. 
Another beneficiar wrote to the Medicare carer: 
"I'd like you to send someone to pick the chair up. It's very hard, and I can't put my 
left foot up. I used the chair about 15 minutes. It's new, I kept it covered." 
There is little in what we learned from beneficiares and physicians that supports any distinc
tion between SLCs and, for example, posture chairs and lounge beds, items judged by HCFA 
to be "presumptively nonmedical" and not covered as DME by Medicare. On the contrary, 
there is compelling evidence that SLCs are not primarly serving a medical purpose and can be 
useful to a person in the absence of ilness or injury; hence, there appears to be no basis for 
SLCs to be considered DME under Medicare provisions. 
Beneficiaries learn about SLCs from advertisements and take the initiative to obtain 
chairs. 
When the 61 beneficiares were asked, "How did you first learn about the seat lift chair YOll 
obtained?" 73 percent said they heard about it through supplier advertising; most mentioned 
television as a source with a smaller number mentioning suppliers' salespersons. Of those not 
mentioning advertising, 15 percent said they learned through family or friends; only 12 per
cent said they leared about the SLCs from a doctor. 
Respondent comments, as well as study observations of television and brochure advertise
ments reveal that the ads commonly refer to the SLC as "Medicare-approved" and imply there 
may be no cost to the beneficiary. Indeed, 60 percent of the 67 beneficiares who dealt with 
the suppliers, usually on a toll-free telephone number displayed in the ad, reported that the sup
pliers said they wouldn't have to pay anything for a SLC, suggesting the suppliers would be 
willing to forego the 20 percent coinsurance. One carer's claims review supervisor told of 
seeing a television ad recently in which the announcer said that all one needed to do was caIJ 
and order the chair if one had Medicare; no mention was made of the need for medical 
authorization. 
The degree to which suppliers are aggressively marketing seat lift chairs is reflected in the 
statement of one doctor: "There have been chair companies calling people and telling them 
all they have to do is buy the chair and then have the doctor okay it and Medicare wilJ pay." 
One beneficiary said she ordered a chair through a television ad and, before she could contact 
her doctor, the chair was delivered to her home (within a few hours). 
It should be noted that the Medicare Catastrophic Coverage Act of 1988, effective after the 
field work for this study was completed, prohibits the "use, in connection with any item con
stituting an advertisement ... the (word) 'Medicare'... in a manner which such person knows or 
should know would car the false impression that such item is approved, endorsed, or 
authorized by the ... Health Care Financing Administration." Civil money penalties can be 
levied against violators. 
7  '. 
Most patients say gettng the chair was their idea. 
Unlike most ordering of medicines or other DME, requests for SLCs tend to be initiated by 
the patient and subsequently authorized by the doctor. As shown in figure 1, 85 percent of the 
contacted beneficiares said it was either their own idea or their family's idea to get a SLC. 
Only 12 percent stated it was their doctor's idea. 
Figure 1

Whose Idea Was It to Get a Seat Lift Chair? 
Beneficiary Response  Physician Response 
. Patient/Family (65%)

II Son/Family (85'r.)

~ MD(21%)

L6 MD (12%) 
D Othor (3%)  r: SUppll,f (12%j 
D Don't know (2,,) 
One woman stated: "My mother and I were together when we saw the announcement (about 
the SLC) on television. We made the decision to purchase the chair and ordered it." 
The physician responses in figure 1 confir this reversal of roles - 65 percent of the 39 
physicians confimmed it was their patient's idea. 
Most beneficiaries were told they would not have to pay for SLCs. 
Eighty-four percent of the beneficiares contacted said they were told they would not, or might 
or might not have to pay anything for their SLC; and 69 percent of them said they did not pay 
anything. 
As shown in figure 2,60 percent of the beneficiares reported that the suppliers advised them 
they would not have to pay anything; another 24 percent were told they might or might not 
have to pay anything, 10 percent could not remember what they were told; and 6 percent gave 
other responses, e.g., their children had taen care of their finances for them. 
8  " 
Figure 2

What Supplier Told Beneficiaries About Whether They Would Have to Pay for SLC 
. Wouldn't have to 60%

~ Might have to 24%

L2 Don't remember 10%

D Other 6% 
When beneficiares were asked whether they actually paid anything for their chair, 69 percent 
said no; a quarter said they paid something and 6 percent could not remember. 
While a few beneficiares said the supplier kept billing them, the great majority did not report 
any supplier efforts to collect coinsurance or deductible payments. While nearly two-thirds of 
the beneficiares said their policy paid something for their SLC and 30 percent said they did 
not know. The majority, 58 percent, said their insurance did not pay anything. 
The HCFA had given specific instrctions to its regional offices in a May 1985 memorandum 
concerning SLCs to have carers "enforce vigorously the ground rules in MCM (Medicare 
Carners Manual) section 5220 when suppliers, including suppliers of seat lift chairs, routinely 
waive the collection of coinsurance or deductible amounts." The appropriate carrer action in 
response to such instances was to assure that: 
"(1) the amount allowed on current claims should not exceed the amount the supplier ac
tually expects to receive; and (2) the correct actual charges should be recorded and ac
cumulated for use in future updates of the supplier's customary charge profile. The 
supplier should, of course, be notified." 
The beneficiary responses indicate that some such action by carers may have been warranted, 
Many physicians authorize SLCs in response to beneficiary or supplier requests. 
The physician interviews indicated that SLC approvals are often responses to patient or family 
requests rather than professional treatment decisions of the physician. One doctor, when 
9
 asked if he initiated the authorization for the seat lift chair, said: "The chair was her request

and I authorized it to help her get up and watch television."

While most physicians contacted did not report being pressured into prescribing the chair,

nearly one-fifth did admit pressure from the patient or the family. One said:

"This is a small town and everyone knows me. I have been treating Mrs. "X" for 5 
years. When the supplier called to say he needed an authorized form for the chair 
Mrs. "X" had ordered, I was very uncomfortable. Then her daughter called to say her 
mother needed the chair and I should give it to her. I signed." 
Another physician spoke of pressure from both patients and suppliers: 
"The supplier tells the beneficiary that if their doctor fils in the right information on re
lated ilnesses, coverable by the Medicare program, they can get a seat lift chair. The 
patient pressures the doctor as does the supplier, putting the doctor in the middle." 
Other physicians, however, noted that they sometimes turn down requests for chairs. One doc
tor, for example, said: "I've turned down patients who ask for them because I felt they didn't 
need them."

Suppliers frequently provide authorization forms for doctors to sign. Most (58 percent) of the 
physicians contacted reported that suppliers provided forms or suggested the words to use. 
Another 32 percent said both they and the suppliers playa par in completing the fomis. Only 
8 percent wrote an authorization without any supplier involvement. 
Suppliers have been accused, by some physicians interviewed, of soliciting SLC business 
from Medicare beneficiares and then sending authorization forms to the beneficiaries' 
physicians without the knowledge or permission of the beneficiaries. 
Including a SLC in beneficiary's course of treatment often appears to be a physician jus
tification after the fact. 
An important requirement for SLC coverage is that the SLC be part of the physician's course 
of treatment. Five physicians (13 percent) of those contacted acknowledged that the SLC was 
not part of their course of treatment. When they were asked if the SLC was intended as part 
of the patients course of treatment, several remarked as follows: 
"No, the patient is not ambulatory but the alternative would be a nursing home." 
"The patient wanted the chair and her daughter felt it would help when mom is in the 
living room watching T.v." 
"It (the authorization form) does look like my signature but I have no records regarding 
authorizing a chair and I wouldn't." 
10  " 
Eighty-four percent of the physicians said the chair was intended for use as part of their course 
of treatment for their patients. However, a comparson of the date the physician authorized 
the chair with the date of service, i.e., the date the chair was delivered, showed that in nearly 
half (48 percent) of 141 cases reviewed on-site, for which both dates were available, the date 
of delivery occurred before the chair was authorized. The course of treatment in these cases, 
rather than preceding the ordering of the SLC, may not have been developed until after the 
chair was ordered. 
One physician expressed the view that "doctors should not be put in a position to rubber stamp 
an authorization because DME has been ordered by a patient and already delivered, and now 
the patient states that Medicare wil pay 80 percent if the doctor would just sign." 
Some physicians also playa passive role in following up on the patient's use of a SLC and on 
any therapeutic value the chair may have had. After an interval of 1 1/2 to 2 1/2 years follow
ing their authorization of a SLC, 44 percent of physicians contacted said they had not spoken 
to their patient about whether the seat lift chair was helpfuL. Another 10 percent did nOt 
remember whether they had or not. Although 84 percent of the physicians had seen their 
patient subsequent to authorizing the SLC, 27 percent did not know whether the chair had any 
effect on the patient's condition. A large number of physicians profess ignorance of what 
Medicare coverage guidelines are for SLCs. As a matter of fact, when asked whether they fell 
this authorization of a SLC for their patients met Medicare guidelines, nearly half (46 percent) 
said they did not know the guidelines. 
Medicare is the most prominent payer for SLCs. 
Commercial insurance members of the National Health Insurance Association of America do 
not ordinarly offer coverage for DME, paricularly SLCs. In order to provide such coverage, 
a rider would be added to policies if subscribers were willng to pay substantially higher 
Blue Cross and Blue Shield reported that its plans do 
premiums. The National Association of 

not cover SLCs for private policy holders. The Veterans Administration (VA) does cover 
SLCs under very stringent controls. All prescriptions are reviewed by a VA physician and the 
VA's Chief of Prosthetics to assure that like other types of medical equipment, SLCs will be 
"furnished when it is medically necessar and not for the convenience of life outside the hospi
tal." The volume of SLCs approved by the VA for 1987, primarily for patients with prosthetic 
limbs, was only 200. A survey of the nation's eight largest State Medicaid plans revealed that 
only two cover SLCs. In those States, prior approval under strngent medical necessity 
guidelines is required. 
11  '.	 The HCFA has recognized vulnerabilities related to SLC claims and has taken aggressive 
action; nevertheless, more effective payment safeguards need to be implemented. 
Carriers alerted by HCFA to take action. 
Coverage of SLCs was not seen as a serious problem by HCFA until early 1985, when a 
remarkable increase in SLC claims and reimbursement was noted: SLC claims rose 240 per
cent from 205,800 in 1984 to 700,600 in 1985. The amounts allowed for SLCs rose 94 per
cent from $33,750,653 in 1984 to $63,360,201 in 1985.

In June 1985, HCFA notified its regional offices to have carers review SLC claims more 
closely. The HCFA also surveyed carers to learn how SLC claims were being handled. The 
survey results, reflected in a November 1985 memorandum, indicated"... this coverage area 
continues to be a source of potential program abuse although current coverage policy indicates 
seat lifts are to be covered only in very limited situations." Regional offces were advised to 
encourage carers to develop a "... special purpose claims development and certification fomi 
when requesting additional infommtion from physicians." Such a form was already in use by 
11 carers and a model was attached to the memorandum for carer use. A list of "Claims 
Review Criteria for High Cost Durable Medical Equipment Claims" was also provided. 
Carrier review efforts reduced amounts allowed by 1986 and carriers continue to apply 
coverage guidelines. 
Nationally, the timely actions taken by HCFA and carers in 1985 and 1986 were largely 
responsible for the 66 percent drop in volume of SLC claims to 236,013 in 1986 and the 55 
percent drop in allowances in 1986 to $28,304,558. The dollar amounts al10wed illustrate 
how effective the actions by HCFA and carers have apparently been. Nationally, more than 
half (56 percent) of the carers reduced the amounts allowed in 1986. The eight sample car
riers showed allowances for SLCs dropping in 1986 to $4,488,000 from $25,175,000 in 1985. 
The results of the eight carer site visits show that carers continue to apply SLC coverage 
guidelines, although the efforts of some are more rigorous than others. Three carriers use 
personnel to review SLC claims to determine their appropriateness; five use non
medical staff 

medical staff personnel, usually a claims examiners. One medical director said that "the non
medical staff are capable of making coverage decisions and the carer couldn't afford to pay 
(the medical director's) salar to review such claims." However, seven carers use medical 
personnel to review questionable claims including denied SLC claims going to fair hearings. 
A best practice was seen at six carers where claims examiners check beneficiaries' claims his
tories to determine whether the beneficiaries also have wheelchairs. The possession of a 
wheelchair and a SLC, from the cariers' perspective, is generally contraindicated, based on 
the reasoning that the therapeutic benefit of the chair, if any, resides only in its ability to get 
the patient into a standing position so he or she can ambulate (with or without assistance). If 
the patient is helped to a standing position only to sit down again in a wheelchair, that patient 
12  would be chair-ridden even with the SLC. At best, the SLC would have limited value in allow
ing the brief stretching of the patient's legs before the patient is again chair-ridden. 
Of the 68 patients or family members contacted in 1988, 9 percent volunteered that the 
beneficiary also had a wheelchair. When their Medicare claims histories were reviewed for 
1986 (the year they received their SLC), we found that an additional three percent obtained 
wheelchairs in that year alone. A recent postpayment audit conducted by a sample carrier of 
one supplier found that 56 of 72 beneficiares with SLCs also had wheelchairs. As a conse
quence of this study the carer expanded the audit and reviewed a sample of 257 beneficiaries 
who reside within the State or in several neighboring States. Forty-five percent of the SLCs 
were denied as not medically necessary and a refund of over half a million dollars was estab
lished. 
An emergent problem, however, is that the prepayment checking of beneficiary claims his
tories is difficult when the beneficiary resides outside the carrer's service area, a frequent cir
cumstance. Six of the carers who review beneficiary claims histories in-house do not obtain 
out-of-area claims histories from other carers. Their reason is they cannot wait for the infor
mation on an otherwise "clean" SLC claim which must be processed under stringent payment 
cycle standards.

There is concern over carer claims jurisdictional issues and the problems they generate, par
ticularly when SLCs are involved. Extensive supplier national media advertising frequently 
results in carers paying SLC claims for beneficiares out of their service area for whom they 
have no claims histories, possibly resulting in unidentified duplicate claims. In addition, car
rier reasonable charge allowances are sometimes higher for out-of-area beneficiares whose 
claims would have been reimbursed less by a carer serving their community. Among the 97 
beneficiares included in the 1986 SLC paid claims sample, 26 (27 percent) did not reside in 
the area serviced by the carer paying the claim. The HCFA is currently reviewing the area of 
carer claims jurisdiction. 
Another carer best practice involves reviews of beneficiaries' claims histories to detemiine 
whether the authorizing physician for the SLC has previously treated the beneficiary, a likely 
indicator that a course of treatment preceded the prescribing of the SLC. 
13  " 
RECOMMENDA TIONS 
1. Coverage of SLCs 
In light of the strong evidence that SLCs appear to be used primarly as furniture, HCFA 
should reconsider whether SLCs, in fact, meet the Medicare definition of DME. 
2. Payment safeguards 
a)	 Immediate steps should be taen by HCFA to further improve the effectiveness of 
carer processing of SLC claims. The HCFA should disseminate to its carrers the 
best practices identified in the inspection which help to assure that current coverage 
requirements for SLCs are met. These include having carers review beneficiaries' 
claims histories to: 
determine whether the authorizing physician for the SLC had previously 
treated the beneficiary. This would indicate whether a course of treatment 
including a SLC was initiated prior to its authorization and delivery; and 
ascertain whether the beneficiar has a wheelchair or power-operated vehicle 
and, if so, whether the SLC should also be covered. 
b) The HCFA should implement the OBRA 1987 provision of PL 100-203, section 
1834, which prohibits payment for DME unless the supplier has received a written 
order from the physician before delivery of the item to the patient. 
c)	 The HCFA should instruct carers to develop and refer sanction recommendations 
to the OIG when carers have identified physicians with patterns of unnecessarily 
prescribing SLCs. 
d) The HCFA should direct carers to enforce the provisions of the Medicare Carriers 
Manual section 5220 by allowing only those charges which the supplier expects to 
receive when they routinely waive collection of coinsurance and deductible pay
ments. Suppliers found to have routinely advertised a general intention to waive 
such payments or to have failed to make reasonable collection efforts should be 
referred to the OIG for sanctions. 
e)	 The HCFA should also instrct carers to refer to OIG for civil money penalty 
cases in which suppliers advertise SLCs as being "Medicare-approved" or "en
dorsed" or "authorized" in violation of the Medicare Catastrophic Coverage Act of 
1988; 
14
 f)	 The HCFA should expedite its review of the carer jurisdiction issue and resolve 
the problem of out-of-service-area claims which denies carrers data essential to as
suring the integrty of SLC and other claims. 
" 
15  APPENDIX 
COMMENTS ON DRAFT REPORT 
? 
Comments received from the Administrator of Health Care Financing Administration indicate 
essential agreement with the findings. The HCFA reports it has begun a number of actions to 
implement the OIG recommendations, including: 
.	 development of draft Federal Register notice that addresses coverage issues relating to 
SLCs (recommendation 1); 
disseminating best practices information to the carers (recommendation 2a); 
preparng regulations to implement section 1834 of the Omnibus Budget Reconciliation 
Act of 1987. The regulations wil include SLCs as one of the items for which the 
supplier must have received a physician's written order before the item is delivered to 
the patient (recommendation 2b); 
.	
instructing carers, effective for services rendered on or after January 1, 1989, to 
require that the suppliers have a written order in hand prior to delivery of the equipment 
to the beneficiary (recommendation 2b); 
instructing the carers to conduct an indepth medical review of all SLC claims 
(recommendation 2c); and 
.	 reviewing the issues of carers jurisdiction in order to look at ways to resolve the 
problems of out-of-service area claims (recommendation 2f). 
The HCFA also suggested that the OIG take vigorous action to curb abuses regarding SLCs 
noted in the report. We have expanded our recommendations to reflect such concerns ex
pressed by HCFA and the OIG's Offce of Investigations. However, before the OIG can act, 
cases must be referred to it by HCFA and its carers through increased diligence in identifying 
routine waiver of coinsurance and of suppliers who misuse the word "Medicare" 
instances of 

in advertisements. 
16