Department of Health and Human Services
OFFICE OF 
   
INSPECTOR GENERAL 
 
 
 
 
 
 
 
 
A C M
  OMPARISON OF  EDICARE 
 
P   C
ROGRAM AND  ONSUMER 
 
I P P
NTERN  ET  RICES FOR  OWER 
 
W  
HEELCHAIRS
 
 
 
 
 
Daniel R. Levinson  
Inspector General 
 
October 2007 
OEI-04-07-00160   
Office of Inspector General 
 
http://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 the health and welfare of beneficiaries served by those 
programs.  This statutory mission is carried out through a nationwide network of audits, 
investigations, and inspections conducted by the following operating components: 
Office of Audit Services 
The Office of Audit Services (OAS) provides all auditing services for HHS, either by 
conducting audits with its own audit resources or by overseeing audit work done by others.  
Audits examine the performance of HHS programs and/or its grantees and contractors 
in carrying out their respective responsibilities and are intended to provide independent 
assessments of HHS programs and operations.  These assessments help reduce waste, 
abuse, and mismanagement and promote economy and efficiency throughout HHS. 
Office of Evaluation and Inspections 
The Office of Evaluation and Inspections (OEI) conducts national evaluations to provide 
HHS, Congress, and the public with timely, useful, and reliable information on 
significant issues.  Specifically, these evaluations focus on preventing fraud, waste, or 
abuse and promoting economy, efficiency, and effectiveness in departmental programs.  
To promote impact, the reports also present practical recommendations for improving 
program operations.  
Office of Investigations 
The Office of Investigations (OI) conducts criminal, civil, and administrative 
investigations of allegations of wrongdoing in HHS programs or to HHS beneficiaries 
and of unjust enrichment by providers.  The investigative efforts of OI lead to criminal 
convictions, administrative sanctions, or civil monetary penalties. 
Office of Counsel to the Inspector General 
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 OIG's internal operations.  OCIG imposes program exclusions and civil 
monetary penalties on health care providers and litigates those actions within HHS.  
OCIG also represents OIG in the global settlement of cases arising under the Civil False 
Claims Act, develops and monitors corporate integrity agreements, develops compliance 
program guidances, 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  
OBJECTIVE 
To compare the Medicare fee schedule amounts for power wheelchairs to 
Internet prices available to consumers. 
BACKGROUND 
Medicare beneficiaries are eligible to receive power wheelchairs under 
Medicare Part B coverage of durable medical equipment.  Medicare will 
pay 80 percent of the cost of a power wheelchair, up to the fee schedule 
amount, and the beneficiary is responsible for paying the remaining 
amount.  In 2006, Medicare and its beneficiaries spent over $900 million 
on power wheelchairs.   
In 2004, we found that Medicare and its beneficiaries paid higher prices 
for power wheelchairs than consumers or suppliers.  In November 2006, 
the Centers for Medicare & Medicaid Services (CMS) implemented a 
revised fee schedule for power wheelchairs as part of its strategy to 
reform Medicare payments for these devices.  The revised fee schedule 
was designed to improve the accuracy of Medicare pricing for power 
wheelchairs.  However, the new fee schedule amounts have been 
criticized by some suppliers as too low to cover the costs of the power 
wheelchairs and the additional costs of providing them to Medicare 
beneficiaries. 
We collected and analyzed prices of power wheelchairs from the 
Internet sites of power wheelchair suppliers during the first quarter of 
2007.  We then compared the median Internet prices of power 
wheelchairs to the Medicare fee schedule amounts during the same time 
period.  In addition, we calculated the potential savings to Medicare and 
its beneficiaries during the first quarter of 2007 had power wheelchair 
claims submitted to Medicare been reimbursed at the median Internet 
prices we collected. 
FINDINGS 
Medicare fee schedule amounts for power wheelchairs were           
45 percent higher than median Internet prices available to 
consumers in the first quarter of 2007.  We found that the median 
prices available to consumers over the Internet were less than the 
Medicare fee schedule amounts for 24 of the 28 procedure codes for 
which we collected Internet prices.  On average, Medicare fee schedule 
amounts for the 28 procedure codes were 45 percent higher than median 
  OEI-04-07-00160  A COMPARISON OF MEDICARE PROGRAM AND CONSUMER INTERNET PRICES FOR POWER WHEELCHAIRS  i   
   
E X E C U T I V E   S U M M A R Y  
Internet prices available to consumers in the first quarter of 2007.  
Medicares fee schedule amount for the most frequently reimbursed 
procedure code (K0823) exceeded the median Internet price by              
36 percent.   
Medicare and its beneficiaries could have achieved savings during 
the first quarter of 2007 had Medicare reimbursements more closely 
resembled prices available to consumers over the Internet.  Had 
suppliers been reimbursed for the same power wheelchairs at median 
Internet prices, Medicare and its beneficiaries would have spent 
approximately 28 percent ($39 million out of $138 million) less than 
actual payments.  On average, each beneficiary could have saved  
$233 of his or her power wheelchair copayment.  The most frequently 
reimbursed procedure code (K0823) accounted for 68 percent of total 
potential savings to Medicare and its beneficiaries.    
RECOMMENDATION 
We found that consumers could have purchased most power wheelchairs 
over the Internet at prices lower than the Medicare fee schedule 
amounts.  We recommend that CMS:   
Consider performing additional reviews to determine whether the 
current Medicare power wheelchair fee schedule amounts for 
certain groups and procedure codes are appropriate.   
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 
RESPONSE 
CMS concurred with our recommendation.  In addition, CMS noted 
that, in mid-2008, Medicare payment amounts for power 
wheelchairs in 10 large metropolitan statistical areas will be based 
on power wheelchair suppliers competitive bids.  CMS further 
noted that it has the authority in future years to use payment 
information from the competitive bidding program to adjust 
payments in areas not included in the program. 
OIG work is continuing in this area.  We plan to conduct further 
evaluations to compare Medicare fee schedule amounts to actual prices 
paid by suppliers.    
 
  OEI-04-07-00160  A COMPARISON OF MEDICARE PROGRAM AND CONSUMER INTERNET PRICES FOR POWER WHEELCHAIRS  ii   
 T A B L E   O F   C O N T E N T S  
EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i
 
 
I N T RO DUC T IO N . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 
 
 
F I N D IN G S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 
  Fee schedule amounts exceeded consumer Internet prices. . . . . . . 8 
  Medicare and its beneficiaries could have achieved savings. . . . . 10 
   
R E C O MMEN D A T ION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 
 
 
APPENDICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 
  A:  Performance Requirements by Group. . . . . . . . . . . . . . . . . . . . 13 
  B:  Findings by Procedure Code . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 
  C:  Potential Savings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 
D:  Agency Comments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 
   
A C K NO WL E D G M E N T S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19   
   
 I N T R O D U C T I O N  
OBJECTIVE 
To compare the Medicare fee schedule amounts for power wheelchairs to 
Internet prices available to consumers. 
BACKGROUND 
In 2003, combined spending for power wheelchairs by Medicare and its 
beneficiaries peaked at $1.2 billion.  In 2004, these expenditures 
decreased to $850 million.  However, Medicare and its beneficiaries 
spent more than $900 million per year on power wheelchairs in 2005 
and 2006.1   
Medicare Coverage of and Reimbursement for Power Wheelchairs 
Medicare beneficiaries are eligible to receive power wheelchairs under 
Medicare Part B coverage of durable medical equipment (DME).  
Medicare will reimburse suppliers when power wheelchairs are 
medically necessary, the beneficiaries mobility problems can be 
ameliorated or compensated for by the power wheelchairs, and the 
beneficiaries environment supports the use of power wheelchairs, 
among other criteria.2   
A physician or a treating practitioner must conduct a face-to-face 
examination of the Medicare beneficiary to assess the need for and 
prescribe a power wheelchair.3  The beneficiary receives the power 
wheelchair from a DME supplier which, in turn, bills the Medicare 
program for reimbursement.  Medicare Part B claims for power 
wheelchairs are processed and paid by four DME Medicare 
administrative contractors according to the Medicare fee schedule for 
power wheelchairs.  The Centers for Medicare & Medicaid Services 
(CMS) sets fee schedule amounts for DME.  Although fee schedule  
 
1  Office of Inspector General analysis of CMS claims data, January and June 2007. 
2  Medicare National Coverage Determinations Manual, section 280.3.  Last modified 
August 2005.  Effective May 5, 2005, power wheelchairs may be medically necessary 
for beneficiaries who cannot effectively perform mobility-related activities of daily 
living using other mobility assistive equipment. 
3  December 8, 2003, Section 302(a)(2) of the Medicare Prescription Drug, Improvement, 
and Modernization Act of 2003, Public Law 108-173, added Section 1834(a)(1)(E)(iv) of 
the Social Security Act. 
  OEI-04-07-00160  A COMPARISON OF MEDICARE PROGRAM AND CONSUMER INTERNET PRICES FOR POWER WHEELCHAIRS  1   
   
I N T R O D U C T I O N  
amounts for many DME items vary by State to account for geographic 
differences in price, power wheelchair fees are the same for all States.4   
Medicare will pay 80 percent of the cost of a power wheelchair, up to the 
fee schedule amount, and the beneficiary is responsible for paying the 
remaining amount.  To be reimbursed by Medicare, power wheelchairs 
must include certain basic items, such as tires, leg rests, and battery 
chargers.  Delivery costs are also included in the power wheelchair fee 
schedule amounts, except for rare and unusual circumstances (e.g., the 
beneficiary lives in a remote area that is not served by a local supplier).5  
However, certain items, such as batteries, are not included in the power 
wheelchair fee schedule amounts and are reimbursed under separate 
procedure codes.   
Previous Office of Inspector General Work 
In 2004, we found that Medicare and its beneficiaries paid higher prices 
for power wheelchairs than consumers or suppliers.6  At that time,            
97 percent of Medicare expenditures for power wheelchairs were covered 
by one of the four procedure codes (K0011) on the Medicare fee schedule.  
We reported that if K0011 power wheelchair prices had been adjusted to 
the median price available to consumers over the Internet (hereafter 
referred to as Internet prices), Medicare and its beneficiaries could 
have saved over $224 million of the $829 million spent during 2002.   
Further, we found that a wide variety of power wheelchair models were 
reimbursable under procedure code K0011.  Internet prices for these 
models ranged from $1,600 to almost $17,000.  Consequently, we 
recommended that CMS implement a new coding system for power 
wheelchairs to account for the variety in models and prices and 
determine whether it was paying reasonable prices for these items.   
Changes in the Medicare Fee Schedule for Power Wheelchairs 
In November 2006, CMS implemented a revised fee schedule for power 
wheelchairs as part of its strategy to reform Medicare payments for 
 
4  Durable Medical Equipment, Prosthetics, Orthotics, and Supplies 2007 Fee Schedule.  
Available online at  
http://www.cms.hhs.gov/DMEPOSFeeSched/LSDMEPOSFEE/itemdetail.asp?filterTyp
=none&filterByDID=99&sortByDID=3&sortOrder=ascending&itemID=CMS1192263&
intNumPerPage=10.  Accessed January 23, 2007. 
5 Cigna Government Services.  Available online at 
http://www.cignagovernmentservices.com/jc/pubs/pdf/Chpt3.pdf.  Accessed            
August 2, 2007. 
6  OEI-03-03-00460, A Comparison of Prices for Power Wheelchairs.  April 2004. 
  OEI-04-07-00160  A COMPARISON OF MEDICARE PROGRAM AND CONSUMER INTERNET PRICES FOR POWER WHEELCHAIRS  2   
   
I N T R O D U C T I O N  
these devices.  The revised fee schedule replaced the original four 
procedure codes with 43 new procedure codes.  According to CMS, the 
new procedure codes are intended to describe the range of models and 
options available in the power wheelchair market.7   
The 43 procedure codes are tied to industry standards of performance 
and durability.  They are designed to support accurate payment and 
coverage decisions and replace out-of-date codes that did not adequately 
describe current technology.8  As of January 2007, 573 power 
wheelchair models were reimbursable under these 43 procedure codes, 
with as many as 75 models per code.9   
The revised fee schedule is divided into three groups based on the power 
wheelchairs performance.  Each group is further divided based on 
patient weight capacity, seat type, portability, and power seating 
system capability.10  Appendix A compares the performance 
requirements of the three groups.     
The revised fee schedule was designed to improve the accuracy of 
Medicare pricing for power wheelchairs.11  However, the new fee 
schedule amounts have been criticized by some suppliers of power 
wheelchairs.12  These suppliers have claimed that Medicares revised fee 
schedule amounts do not cover the cost of the power wheelchairs and 
the additional costs of providing them to Medicare beneficiaries. 
 
7  CMS Publication Number 11272-P, 2006 Fee Schedule Amounts for Power Mobility 
Devices Have Been Refined, November 2006. 
8  Ibid. 
9  Statistical Analysis Durable Medical Equipment Regional Carrier correspondence,  
January 2, 2007. 
10  Power Mobility Device Coding Guidelines, August 3, 2006.  Available online from 
the Statistical Analysis Durable Medical Equipment Regional Carrier at 
http://www.palmettogba.com/palmetto/other.nsf/Attachments/85256D430058D01D8525
71CA004EC839/$FILE/Power+Mobility+Device+Coding+Guidelines+Final.doc.  
Accessed August 1, 2007. 
11 CMS Publication Number 11272-P, 2006 Fee Schedule Amounts for Power Mobility 
Devices Have Been Refined, November 2006. 
12 Power Wheelchair Industry Lines Up 44 House Members Opposing Medicare Fee 
Cut, November 3, 2006.  Available online at 
http://www.seniorjournal.com/NEWS/Medicare/6-11-03-PowerWheelchair.htm.  
Accessed April 16, 2007. 
  OEI-04-07-00160  A COMPARISON OF MEDICARE PROGRAM AND CONSUMER INTERNET PRICES FOR POWER WHEELCHAIRS  3   
   
I N T R O D U C T I O N  
METHODOLOGY 
We collected and analyzed consumer prices for power wheelchairs from 
the supplier Internet sites from January 1 to March 31, 2007 (the first 
quarter of 2007).  We then compared the median prices of power 
wheelchairs in each procedure code to the Medicare fee schedule 
amounts during the same time period.  In addition, we calculated the 
potential savings to Medicare and its beneficiaries had power 
wheelchair claims submitted to Medicare been reimbursed at the 
median Internet prices we collected. 
We used the product classification list generated by the Statistical 
Analysis Durable Medical Equipment Regional Carrier as of January 
2007.  We identified 573 power wheelchair models under the                 
43 procedure codes (K0813K0864).    
Consumer Internet Prices   
To identify Internet prices available to consumers, we reviewed the 
supplier Internet sites we found using two widely used search engines 
(Google and Yahoo).  We used the Internet business directories of these 
search engines to identify the suppliers.  When particular power 
wheelchair models were not sold by any of the suppliers listed in the 
directories, we performed supplemental Internet searches for these 
models using the same search engines.  We reviewed all power 
wheelchairs sold on the Internet sites found through these searches.  
We collected prices from a total of 52 Internet sites of power wheelchair 
suppliers located in the United States.   
We obtained 635 prices for 126 power wheelchair models found on the 
52 Internet sites.  Each price we collected represents the amount a 
consumer could pay to purchase a particular power wheelchair from the 
supplier at the time we visited the suppliers Internet site.   
For each Internet price we collected, we determined the procedure code 
the power wheelchair would have been reimbursed under had it been 
provided to a Medicare beneficiary.  We found Internet prices for 28 of 
the 43 procedure codes on the Medicare fee schedule.  Over 99 percent of 
power wheelchair claims submitted to Medicare during the first quarter 
of 2007 were reimbursed under these 28 procedure codes.13  We 
 
13 Suppliers submitted 33,834 claims for new, nonrental power wheelchairs during the 
first quarter of 2007, current as of June 2007.  The 28 procedure codes for which we 
collected prices accounted for 33,542 of these claims.       
  OEI-04-07-00160  A COMPARISON OF MEDICARE PROGRAM AND CONSUMER INTERNET PRICES FOR POWER WHEELCHAIRS  4   
   
I N T R O D U C T I O N  
calculated the median Internet price for power wheelchairs in each of 
the 28 procedure codes.   
We determined whether the suppliers included batteries and delivery in 
the power wheelchair prices when this information was available on the 
Internet sites.  The cost of batteries, which is reimbursed by Medicare 
under separate procedure codes, is not included in the Medicare fee 
schedule amounts for power wheelchairs.14  Medicare fee schedule 
amounts for the batteries range from $30 to $186.15  Because a power 
wheelchair uses two batteries, Medicare and its beneficiaries pay 
between $60 and $372 per chair for batteries in addition to the cost of 
the power wheelchair.16  Batteries were included in 440 of the  
635 Internet prices (69 percent).  We did not subtract the cost of the 
batteries from these prices. 
Delivery, which is included in the Medicare fee schedule amounts for 
power wheelchairs, was included in 582 of the 635 Internet prices  
(92 percent).  For the remaining 8 percent of Internet prices, delivery 
was not included or we were unable to determine whether delivery was 
included.  The highest delivery fee, when not included in the price of the 
power wheelchair, was $55.  We did not add the cost of delivery to these 
Internet prices.   
Price Comparison   
We used the January 2007 national Durable Medical Equipment, 
Prosthetics, Orthotics, and Supplies fee schedule to determine 
Medicares allowable amounts for the 28 procedure codes.  The fee 
schedule amounts we used were for the purchase of new, nonrental 
power wheelchairs.  We removed all claims for used or rental power 
wheelchairs as indicated by Modifiers 14 in the National Claims 
History database.  In the first quarter of 2007, less than 2 percent of all 
Medicare power wheelchair expenditures were for used or rental power 
wheelchairs. 
 
14 Power wheelchair batteries are reimbursed by Medicare under procedure codes K0733 
and E2360E2365.   
15 Durable Medical Equipment, Prosthetics, Orthotics, and Supplies 2007 Fee Schedule.  
Available online at  
http://www.cms.hhs.gov/DMEPOSFeeSched/LSDMEPOSFEE/itemdetail.asp?filterTyp
=none&filterByDID=99&sortByDID=3&sortOrder=ascending&itemID=CMS1192263&
intNumPerPage=10.  Accessed January 23, 2007. 
16 Statistical Analysis Durable Medical Equipment Regional Carrier correspondence, 
August 2, 2007. 
  OEI-04-07-00160  A COMPARISON OF MEDICARE PROGRAM AND CONSUMER INTERNET PRICES FOR POWER WHEELCHAIRS  5   
   
II NN TT RR OO DD UU CC TT II OO NN   
For each procedure code, we calculated the percentage by which the 
median Internet price differed from the Medicare fee schedule amount.  
We also determined the average percentage differences between the 
Medicare fee schedule amounts and median Internet prices for the three 
power wheelchair groups and for all 28 procedure codes.  To do this, we 
weighted the percentage difference for each procedure code by the 
Medicare expenditures for the procedure code during the first quarter of 
2007.  We then found the average of the weighted percentages for each 
group and for all 28 procedure codes.   
Potential Medicare Savings  
We calculated the potential savings to Medicare and its beneficiaries in 
the first quarter of 2007 had power wheelchairs been reimbursed at 
median Internet prices for the 28 procedure codes.  We obtained 
Medicare claims and expenditure information by procedure code from 
the National Claims History database for the first quarter of 2007.17   
Because Medicare and its beneficiaries pay the actual charge for the 
power wheelchair up to the fee schedule amount, we subtracted the 
median Internet price from the Medicare allowed amount for all claims 
submitted under the 28 procedure codes.  We summed the differences to 
obtain the total potential savings for the first quarter of 2007.  We also 
determined the potential savings for power wheelchairs in each of the 
three groups.   
Limitations   
This study was not designed to meet CMSs inherent reasonableness 
standards for revising Medicare payment rates.18  Further, we did not 
assess the administration costs of participating in the Medicare 
program when calculating potential Medicare and beneficiary savings.  
Instead, this study shows the extent to which Internet prices available 
to consumers differ from Medicare fee schedule amounts.   
We assumed that the power wheelchairs we reviewed included the basic 
equipment items and services required by Medicare and did not include 
items Medicare will reimburse separately.  We also assumed that the 
Internet prices established by suppliers were adequate to cover all 
 
17 We analyzed data processed by CMS through June 2007 for claims with dates of 
service between January 1 and March 31, 2007.  
18 42 CFR  405.502 (g).  Available online at 
http://a257.g.akamaitech.net/7/257/2422/14mar20010800/edocket.access.gpo.gov/cfr_20
02/octqtr/42cfr405.502.htm.  Accessed October 25, 2007.     
  OEI-04-07-00160  A COMPARISON OF MEDICARE PROGRAM AND CONSUMER INTERNET PRICES FOR POWER WHEELCHAIRS  6   
   
I N T R O D U C T I O N  
administrative costs associated with selling the power wheelchairs and 
provide a reasonable profit margin.   
We also did not adjust prices based on battery and delivery charges.  To 
the extent possible, we determined whether the Internet prices included 
batteries and delivery charges.  Batteries are not included in the 
Medicare fee schedule amount for power wheelchairs.  However, at least 
69 percent of all Internet prices we found included batteries.  Delivery is 
included in the Medicare fee schedule amounts for power wheelchairs, 
and at least 92 percent of Internet prices that we found included 
delivery.  Medicare and its beneficiaries pay between $60 and $372 per 
chair for power wheelchair batteries.  The highest Internet delivery 
charge was $55.   
The first quarter of 2007 claims data we analyzed were current as of 
June 2007.  However, suppliers are permitted to submit claims up to  
1 year after the date of service.  Therefore, we assume our potential 
savings calculations are conservative.   
Standards 
This study was conducted in accordance with the Quality Standards for 
Inspections issued by the Presidents Council on Integrity and 
Efficiency and the Executive Council on Integrity and Efficiency.  
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 F I N D I N G S  
 
Medicare fee schedule amounts for power  Medicare fee schedule amounts for 
wheelchairs were 45 percent higher than median  power wheelchairs exceeded 
Internet prices available to consumers in the  median Internet prices by an 
average of 45 percent during the 
first quarter of 2007    
first quarter of 2007.  Specifically, 
the median prices available to consumers over the Internet were less 
than the Medicare fee schedule amounts for 24 of the 28 procedure 
codes for which we collected prices.  The Medicare fee schedule amounts 
were between 0.3 percent and 35 percent less than the median Internet 
prices for the other four procedure codes.19  However, Medicare fee 
schedule amounts for nine procedure codes exceeded median Internet 
prices by more than 100 percent.   
Power wheelchairs reimbursed under the 28 procedure codes for which 
we collected Internet prices accounted for over 99 percent of power 
wheelchair claims submitted to Medicare during the first quarter of 
2007.  Appendix B lists the median Internet prices and percentage 
differences for all 28 procedure codes.   
Medicare fee schedule amounts exceeded median Internet prices for power 
wheelchairs in all three groups  
On average, Medicare fee schedule amounts were 45 percent higher 
than median Internet prices available to consumers.  Within the three 
groups of power wheelchairs, the average percentage by which the 
Medicare fee schedule amounts exceeded median Internet prices was 
greatest for Group 1 power wheelchairs.  However, as illustrated in 
Table 1 on the next page, Medicare fee schedule amounts for power 
wheelchairs in all three groups exceeded median prices available to 
consumers over the Internet during the first quarter of 2007.  See 
Appendix B for more details.   
 
19 Claims for power wheelchairs in the four procedure codes accounted for less than         
2 percent of power wheelchair claims submitted to Medicare during the first quarter of 
2007. 
  OEI-04-07-00160  A COMPARISON OF MEDICARE PROGRAM AND CONSUMER INTERNET PRICES FOR POWER WHEELCHAIRS  8   
   
F I N D I N G S  
 
Table 1:  Difference Between Internet Prices and the Medicare 
  Fee Schedule by Group  
 
Average Percentage 
Range of Procedure  Medicare Fee Schedule 
  Group 
Codes*  Amounts Exceed Median 
Internet Prices 
 
Group 1  K0813K0816  72% 
 
Group 2   K0820K0843  43% 
 
Group 3   K0848K0864  65% 
 
All Power 
K0813K0864   45% 
Wheelchairs  
 
* We analyzed Internet prices for power wheelchairs in 28 of the procedure codes referred to in this 
 c olumn. 
Note:  All figures in the table have been rounded. 
 Source:  Office of Inspector General analysis of consumer prices available over the Internet, 2007. 
Group 1 power wheelchairs.  Power wheelchairs classified under        
Group 1 are covered by Medicare under four procedure codes.  We 
collected 44 prices for power wheelchairs in three of these procedure 
codes.  The fee schedule amounts for these three codes exceeded the 
median consumer prices by an average of 72 percent.   
Group 2 power wheelchairs.  Power wheelchairs classified under        
Group 2 are covered by Medicare under 21 procedure codes.  We 
collected 508 prices for power wheelchairs in 15 of these procedure 
codes.  The fee schedule amounts for these 15 codes exceeded the 
median consumer prices by an average of 43 percent.   
Group 3 power wheelchairs.  Power wheelchairs classified under        
Group 3 are covered by Medicare under 18 procedure codes.  We 
collected 83 prices for power wheelchairs in 10 of these procedure codes.  
The fee schedule amounts for these 10 codes exceeded the median 
consumer prices by an average of 65 percent.   
Medicares fee schedule amount for the most frequently reimbursed 
procedure code exceeded the median Internet price by 36 percent 
Claims reimbursed under one procedure code (K0823) accounted for     
75 percent of power wheelchair claims during the first quarter of 2007.  
Power wheelchairs in procedure code K0823 are classified under     
Group 2.  They are designed for basic daily mobility for persons 
weighing less than 300 pounds and feature an automotive-style seat.  
Seventy-five power wheelchair models were reimbursable under 
procedure code K0823 as of January 2007.   
  OEI-04-07-00160  A COMPARISON OF MEDICARE PROGRAM AND CONSUMER INTERNET PRICES FOR POWER WHEELCHAIRS  9   
   
F I N D I N G S  
Internet prices for K0823 power wheelchairs ranged from $1,452 to 
$6,149.  Consumers could have purchased K0823 power wheelchairs 
over the Internet for a median price of $2,959.  The Medicare fee 
schedule amount was $4,024, which exceeded the median Internet price 
by 36 percent.  Eighty-six percent of Internet prices we reviewed for 
K0823 power wheelchairs (190 of 222) were less than the Medicare fee 
schedule amount.  Table 2 illustrates the differences between Internet 
prices and the Medicare fee schedule for K0823 power wheelchairs.    
 
Table 2:  Comparison of K0823 Power Wheelchair Prices  
 
  Range of Internet Prices  $1,452$6,149 
  Median Internet Price  $2,959 
 
Medicare Fee Schedule Amount  $4,024 
 
Percentage Medicare Fee Schedule Amount 
  36% 
Exceeds Median Internet Price 
 
Note:  All figures in the table have been rounded. 
S ource:  Office of Inspector General analysis of consumer prices available over the 
Internet, 2007. 
 
Medicare and its beneficiaries 
 Medicare and its beneficiaries could have 
could have spent less on power 
achieved savings during the first quarter of 2007 
wheelchairs during the first 
had Medicare reimbursements more closely 
quarter of 2007 had they paid 
resembled prices available to consumers over 
median Internet prices.  
the Internet  
Medicare and beneficiary power 
wheelchairs payments totaled 
approximately $138 million in the first quarter of 2007.20 21  Medicare 
and its beneficiaries could have spent $99 million28 percent less than 
actual paymentshad suppliers been reimbursed for the same power 
wheelchairs at median Internet prices available to consumers.  Of the 
potential savings,22 Medicare beneficiaries who received power 
wheelchairs during the first quarter of 2007 could have saved a total of 
$8 million in copayments.  On average, each beneficiary could have 
saved $233 of his or her power wheelchair copayment.  
 
20 Office of Inspector General analysis of CMS claims data, May 2007.  We analyzed   
first-quarter claims processed by CMS as of June 2007. 
21 This amount excludes claims for rental and used power wheelchairs.    
22 Total potential savings of $39 million could have been achieved by Medicare and its 
beneficiaries in the first quarter of 2007. 
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FF II NN DD II NN GG SS   
Medicare and its beneficiaries could have achieved savings on power 
wheelchairs in all three groups 
Medicare and its beneficiaries would have spent less on power 
wheelchairs in all three groups had they paid median Internet prices.  
However, potential savings for power wheelchairs in Group 2 would 
have been significantly greater than potential savings for power 
wheelchairs in the other two groups combined.  Group 1 and           
Group 3 power wheelchairs accounted for 3 percent and 5 percent, 
respectively, of power wheelchair claims (33,834) submitted to Medicare 
in the first quarter of 2007.  Group 2 power wheelchairs accounted for 
93 percent of claims.  Table 5 of Appendix C illustrates the differences 
between the groups in percentages of claims and potential savings.          
The most frequently reimbursed procedure code accounted for 68 percent 
of potential savings to Medicare and its beneficiaries  
Power wheelchairs reimbursed under the most frequently reimbursed 
procedure code (K0823) accounted for 68 percent of total potential 
savings.  Medicare and its beneficiaries spent $102 million in the first 
quarter of 2007 on K0823 power wheelchairs.  Had suppliers been 
reimbursed for these power wheelchairs at the median Internet price 
($2,959), Medicare and its beneficiaries would have spent approximately 
$75 million on K0823 power wheelchairs during the first quarter of 
2007, a potential savings of $27 million.   
Medicare beneficiaries who received K0823 power wheelchairs could 
have saved a total of approximately $5 million in copayments.  On 
average, each beneficiary could have saved $211 of his or her  
K0823 power wheelchair copayment.  Table 6 of Appendix C illustrates 
the potential savings to Medicare and its beneficiaries for K0823 power 
wheelchairs.   
 
 
 
 
 
 
 
  OEI-04-07-00160  A COMPARISON OF MEDICARE PROGRAM AND CONSUMER INTERNET PRICES FOR POWER WHEELCHAIRS 11   
   
 R E C O M M E N D A T I O N  
Consumers could have purchased most power wheelchairs over the 
Internet at prices lower than the Medicare fee schedule amounts.   
On average, Medicare fee schedule amounts for power wheelchair 
claims during the first quarter of 2007 exceeded median Internet prices 
by 45 percent.  Further, Medicare and its beneficiaries could have 
achieved savings during the first quarter of 2007 had Medicare 
reimbursements more closely resembled prices available to consumers 
over the Internet.    
Internet prices for power wheelchairs in the most frequently reimbursed 
procedure code (K0823), which included 75 models, ranged from        
$1,452 to $6,149.  Consumers could purchase K0823 power wheelchairs 
over the Internet for a median price of $2,959, which the Medicare fee 
schedule amount exceeded by 36 percent.  Furthermore, K0823 power 
wheelchairs accounted for 68 percent of total potential savings.  We 
recommend that CMS:  
Consider Performing Additional Reviews To Determine Whether the 
Current Medicare Power Wheelchair Fee Schedule Amounts for 
Certain Groups and Procedure Codes Are Appropriate.   
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 
RESPONSE 
CMS concurred with our recommendation.  In addition, CMS noted 
that, in mid-2008, Medicare payment amounts for power 
wheelchairs in 10 large metropolitan statistical areas will be based 
on power wheelchair suppliers competitive bids.  CMS further 
noted that it has the authority in future years to use payment 
information from the competitive bidding program to adjust 
payments in areas not included in the program. 
OIG work is continuing in this area.  We plan to conduct further 
evaluations to compare Medicare fee schedule amounts to actual 
prices paid by suppliers. 
For the full text of CMSs comments, see Appendix D.    
 
 
 
 
  OEI-04-07-00160  A COMPARISON OF MEDICARE PROGRAM AND CONSUMER INTERNET PRICES FOR POWER WHEELCHAIRS 12   
   
 A P P E N D I X ~ A  
Table 3:  Performance Requirements for Power Wheelchair Groups 
Performance  Description of Performance  Group 1  Group 2  Group 3 
Category  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  0.79 inches  1.57 inches  2.36 inches 
obstruction that can be climbed 
The minimum speed 
Minimum top-end speed   acceptable on a flat, hard  3 miles per hour  3 miles per hour  4.5 miles per hour 
surface 
The minimum distance 
Range  acceptable on a single charge  5 miles  7 miles  12 miles 
of the batteries 
The minimum degree of slope 
at which the power wheelchair 
in the most common seating 
Dynamic stability incline  6 degrees (1:12)  6 degrees (1:12)   7.5 degrees (1:10) 
and positioning configuration(s) 
remains stable at the required 
patient weight capacity 
Source:  Power Mobility Device Coding Guidelines, August 3, 2006.  From the Statistical Analysis Durable Medical Equipment Regional Carrier.  
 
  OEI-04-07-00160  A COMPARISON OF MEDICARE PROGRAM AND CONSUMER INTERNET PRICES FOR POWER WHEELCHAIRS 13   
   
 A P P E N D I X ~ B  
Table 4:  Findings by Procedure CodeA Comparison of Medicare Fee Schedule Amounts and Prices 
Available Over the Internet for Power Wheelchairs, JanuaryMarch 2007 
Percentage 
Percentage of  Number of  Medicare 
Medicare  Median  Medicare Fee 
Power  Internet  Range of Internet  Fee 
Procedure  Group  Internet   Schedule Amount 
Wheelchair  Prices  Prices  Schedule 
Code  Price  Exceeds Median 
Claims  Collected  Amount 
Internet Price** 
K0813  1  0.27%  14  $1,349$3,295  $1,462  $2,412  65.0% 
K0814  1  1.27%  19  $1,165$5,500  $1,199  $3,088  157.5% 
K0816  1  0.87%  11  $1,763$5,295  $3,525  $3,367  (4.5%) 
K0821  2  0.86%  28  $1,299$3,436  $1,697  $3,308  94.9% 
K0822  2  9.14%  94  $1,165$7,027  $1,899  $4,008  111.1% 
K0823  2  74.92%  222  $1,452$6,149  $2,959  $4,024  36.0% 
K0824  2  0.87%  10  $1,391$2,349  $1,935  $4,843  150.3% 
K0825  2  3.92%  48  $1,599$5,895  $3,895  $4,230  8.6% 
K0826  2  0.10%  2  *  $2,400  $6,269  161.2% 
K0827  2  0.29%  6  $2,978$7,554  $3,742  $5,331  42.5% 
K0828  2  0.04%  3  $2,890$3,184  $2,890  $6,908  139.0% 
K0829  2  0.01%  4  *  $9,746  $6,344  (34.9%) 
K0830  2  0.33%  4  $2,405$5,195  $2,900  $3,914  35.0% 
K0831  2  0.73%  52  $2,405$5,325  $3,999  $3,914  (2.1%) 
K0835  2  0.74%  13  $3,695$5,490  $3,955  $4,132  4.5% 
K0836  2  0.20%  17  $3,125$6,200  $3,900  $4,208  7.9% 
K0838  2  0.09%  4  $1,599$5,795  $3,923  $4,372  11.5% 
 
K0842  2  0.03%  1  *  $3,950  $4,319 
9.3% 
K0848  3  0.65%  1  *  $5,300  $5,434  2.5% 
K0849  3  0.75%  41  $1,745$5,995  $2,495  $5,081  103.6% 
* No variation in Internet prices.   
** Parentheses indicate a negative value. 
Note:  All figures in the table have been rounded.  These results are for new, nonrental power wheelchairs. 
Source:  Office of Inspector General analysis of consumer prices available over the Internet, 2007. 
  OEI-04-07-00160  A COMPARISON OF MEDICARE PROGRAM AND CONSUMER INTERNET PRICES FOR POWER WHEELCHAIRS 14   
   
A P P E N D I X   B    
Table 4 (Continued):  Findings by Procedure CodeA Comparison of Medicare Fee Schedule Amounts and 
Prices Available Over the Internet for Power Wheelchairs, JanuaryMarch 2007 
Percentage 
Percentage of  Number of  Medicare 
Medicare  Median  Medicare Fee 
Power  Internet  Range of Internet  Fee 
Procedure  Group  Internet   Schedule Amount 
Wheelchair  Prices  Prices  Schedule 
Code  Price  Exceeds Median 
Claims  Collected  Amount 
Internet Price** 
K0850  3  0.08%  1  *  $5,595  $6,140  9.7% 
K0851  3  0.30%  25  $2,498$7,900  $4,799  $5,741  19.6% 
K0852  3  0.04%  2  $5,583$5,955  $5,769  $7,083  22.8% 
K0853  3  0.16%  8  $4,535$9,495  $7,296  $7,276  (0.3%) 
K0855  3  0.00%  1  *  $2,950  $9,105  208.6% 
K0856  3  1.21%  2  *  $4,100  $5,672  38.3% 
K0859  3  0.01%  1  *  $2,719  $6,538  140.5% 
K0861  3  1.24%  1  *  $2,331  $5,681  143.7% 
* No variation in Internet prices.  
** Parentheses indicate a negative value. 
Note:  All figures in the table have been rounded.  These results are for new, nonrental power wheelchairs. 
Source:  Office of Inspector General analysis of consumer prices available over the Internet, 2007. 
 
 
 
 
 
 
 
 
 
 
 
 
 
  OEI-04-07-00160  A COMPARISON OF MEDICARE PROGRAM AND CONSUMER INTERNET PRICES FOR POWER WHEELCHAIRS 15   
   
 A P P E N D I X ~ C  
 
 
 
Table 5:  Potential Savings for Power Wheelchairs, JanuaryMarch 2007 
 
Percentage of  Potential  Potential  Total 
Medicare 
Group  Medicare  Savings to  Savings to  Potential    
Expenditures 
Claims  Beneficiaries  Medicare    Savings 
 
Group 1  3%  $3,017,390  $165,064  $660,257  $825,321 
 
Group 2   93%  $126,263,128  $7,093,648  $28,374,591  $35,468,239 
 
Group 3   5%  $8,982,483  $560,035  $2,240,140  $2,800,175 
All Power   
100%  $138,263,001  $7,818,747  $31,274,988  $39,093,735 
Wheelchairs  
 
Note:  All figures in the table have been rounded.  Lines may not sum to totals because of rounding.  These results are for new, nonrental 
power wheelchairs.  Dollar amounts were calculated based on the 28 procedure codes for which we collected Internet prices.  
 
Source:  Office of Inspector General analysis of consumer prices available over the Internet, 2007. 
 
 
Table 6:  Potential Savings for K0823 Power Wheelchairs,   
JanuaryMarch 2007 
 
Medicare Expenditures  $101,789,963 
 
Potential Savings to Medicare  $21,418,635 
 
Potential Savings to Beneficiaries  $5,354,659 
 
Total Potential Savings  $26,773,294 
 
Note:  All figures in the table have been rounded.  These results are for new, nonrental power 
wheelchairs.   
Source:  Office of Inspector General analysis of consumer prices available over the Internet, 
2007.   
 
 
 
 
 
 
 
 
  OEI-04-07-00160  A COMPARISON OF MEDICARE PROGRAM AND CONSUMER INTERNET PRICES FOR POWER WHEELCHAIRS 16   
   
 A P P E N D I X ~ D  
AGENCY COMMENTS 
 
 
 
  OEI-04-07-00160  A COMPARISON OF MEDICARE PROGRAM AND CONSUMER INTERNET PRICES FOR POWER WHEELCHAIRS 17   
   
A P P E N D I X   D    
 
 
 
  OEI-04-07-00160  A COMPARISON OF MEDICARE PROGRAM AND CONSUMER INTERNET PRICES FOR POWER WHEELCHAIRS 18   
   
 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, Acting 
Regional Inspector General for Evaluation and Inspections in the 
Atlanta regional office, and Dwayne F. Grant, Deputy Regional 
Inspector General.   
Mina Zadeh served as the team leader for this study, and Sarah 
Ambrose served as the lead analyst.  Other principal Office of 
Evaluation and Inspections staff from the Atlanta regional office who 
contributed to this report include Marcus Britton, Diane Caves, Peggy 
Daniel, and Jaime Durley; central office staff who contributed include 
Eddie Baker, Dave Graf, Kevin Farber, and Scott Manley.    
 
  OEI-04-07-00160  A COMPARISON OF MEDICARE PROGRAM AND CONSUMER INTERNET PRICES FOR POWER WHEELCHAIRS 19