Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENERAL 

Inspector General 

April 2004 

OEI-03-03-00460 

A COMPARISON OF PRICES FOR 

POWER WHEELCHAIRS IN THE 

MEDICARE PROGRAM 
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 OIG's Office of Audit Services (OAS) provides all auditing services for HHS, either by 

conducting audits with its own audit r esources 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 in order to reduce waste, abuse, and 

mismanagement and to promote economy and efficiency throughout the department. 

Office of Evaluation and Inspections 

The OIG's Office of Evaluation and Inspections (OEI) conducts short-term management and 

program evaluations (called inspections) that focus on issues of concern to the department, 

the Congress, and the public. The findings and recommendations contained in the 

inspections reports generate rapid, accurate, and up-to-date information on the effic iency, 

vulnerability, and effectiveness of departmental programs. 

Office of Investigations 

The OIG's 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. The OI also oversees state Medicaid 

fraud control units, which investigate and prosecute fraud and patient abuse in the Medicaid 

program. 

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. 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 arisin g 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. 
EXECUTIVE SUMMARY

OBJECTIVE 

To compare the Medicare reimbursement amount for K0011 power 

wheelchairs to purchase prices available to consumers and 

suppliers. 

BACKGROUND 

Medicare beneficiaries are eligible to receive power wheelchairs 

under Medicare Part B coverage of durable medical equipment. 

Physicians order K0011 power wheelchairs for Medicare 

beneficiaries who qualify for them. Medicare beneficiaries receive 

their K0011 power wheelchairs from suppliers that bill the 

Medicare program for reimbursement. Suppliers purchase power 

wheelchairs from wholesalers and directly from power wheelchair 

manufacturers. 

The K0011 power wheelchair is described as a standard-weight 

frame motorized/power wheelchair with programmable control 

parameters for speed adjustment, tremor dampening, acceleration 

control, and braking. A wide variety of models of power 

wheelchairs are reimbursed under the K0011 procedure code. 

However, the Medicare program does not collect information on the 

model of power wheelchair actually provided to each beneficiary. 

In 2002, Medicare and its beneficiaries paid $856 million for all 

power wheelchairs. Payments for the K0011 power wheelchair 

accounted for 97 percent of this total, or $829 million. In 2003, the 

median reimbursement for a purchased K0011 power wheelchair 

was $5,297. 

We collected prices for 96 models of K0011 power wheelchairs. We 

identified these wheelchairs from the Statistical Analysis Durable 

Medical Equipment Regional Carrier’s product classification list. 

We also identified the power wheelchair models that were provided 

to Medicare beneficiaries. We then obtained prices of K0011 power 

wheelchairs from three sources: the Web sites of power wheelchair 

suppliers, two national wholesalers, and suppliers who negotiated 

directly with manufacturers and distributors of K0011 power 

wheelchairs. 

OEI - 03 - 03 - 00460 A C OMPARISON OF P RICES FOR W HEELCHAIRS i 
EXECUTIVE SUMMARY EXECUTIVE SUMMARY 

FINDING 

Medicare and its beneficiaries pay considerably more than 

consumers or suppliers for K0011 power wheelchairs. The 

median purchase prices for both consumers and suppliers were 

lower than the CY 2003 Medicare reimbursement amount for 

K0011 power wheelchairs. Compared to the Medicare 

reimbursement amount of $5,297, consumers were able to purchase 

K0011 power wheelchairs for a median price of $3,863, suppliers 

were able to purchase K0011 power wheelchairs from two 

wholesalers for a median price of $2,363, and suppliers who 

negotiated directly with distributors and manufacturers were able 

to obtain K0011 power wheelchairs for a median price of $1,550. 

For the models of K0011 power wheelchairs actually supplied to 

Medicare beneficiaries, we found that the median prices to 

consumers and suppliers were below the Medicare reimbursement 

amount of $5,297. The median prices for these power wheelchairs 

were very close to the median prices obtained for all the power 

wheelchairs, with the median prices ranging from $1,699 to $3,888. 

If the Medicare reimbursement amount was set at the prices 

available to consumers and suppliers, Medicare and its 

beneficiaries could have saved over $224 million. If the Medicare 

program based its reimbursement amount on the median price 

offered by wholesalers or the median price negotiated by suppliers 

with manufacturers and distributors, the program could have saved 

more than $459 million in 2002. The actual savings to the program 

could be less than these amounts, since any potential supplier 

administrative costs related to furnishing K0011 power wheelchairs 

to Medicare beneficiaries were not included in the prices reviewed. 

RECOMMENDATION 

We found that both consumers and suppliers could purchase K0011 

power wheelchairs at prices lower than the Medicare 

reimbursement amount. Consequently, the program and its 

beneficiaries could have realized substantial savings if the 

Medicare reimbursement amount for K0011 power wheelchairs 

more closely resembled the costs to consumers and suppliers. 

OEI - 03 - 03 - 00460 A C OMPARISON OF P RICES FOR W HEELCHAIRS ii 
EXECUTIVE SUMMARY 

We recommend that the Centers for Medicare & Medicaid Services: 

(1) Create a new coding system for K0011 power wheelchairs that 

accounts for the variety in models and prices for power 

wheelchairs. 

(2) Use the pricing information obtained as part of this review to 

determine whether an inherent reasonableness review for 

K0011 power wheelchairs is appropriate. 

Agency Comments 

CMS believes our recommendation regarding coding warrants 

further consideration. CMS is currently reviewing whether the 

need for an overall change in the coding structure for power 

wheelchairs is necessary. CMS noted that our report does not fully 

explain why additional codes are necessary, other than the fact that 

there is a wide variation in prices for the different models of K0011 

power wheelchairs. 

CMS agreed with our recommendation that it consider using its 

inherent reasonableness authority to reduce the reimbursement 

amount for K0011 power wheelchairs. 

The full text of CMS’s comments is presented in Appendix C. 

OIG Response 

In our study, we found that consumers were able to purchase 

K0011 power wheelchairs from supplier Web sites for a wide range 

of prices. The lowest priced wheelchair available to consumers was 

$1,600, while the highest priced wheelchair was $16,995. The 

median price to consumers for models of K0011 power wheelchairs 

actually provided to Medicare beneficiaries was $3,888, with prices 

ranging from a low of $2,000 to a high of $5,995. In 2003, the 

median reimbursement for a purchased K0011 power wheelchair 

was $5,297. We believe that the wide range of K0011 power 

wheelchairs available and the finding that beneficiaries tend to 

receive lower priced power wheelchairs supports the need for a new 

coding system. The goal of this coding system would be to create a 

number of reimbursement levels for the wide range of power 

wheelchairs now included under the K0011 procedure code. 

OEI - 03 - 03 - 00460 A C OMPARISON OF P RICES FOR W HEELCHAIRS iii 
TABLE OF CONTENTS

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

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

FINDINGS ................................ ........................ 8

Medicare pays more............................................................................. 8

RECOMMENDATIONS ................................ ........... 12

APPENDICES ................................ .................... 14

A. Comparison of Prices for Individual Models...................................14

B. Calculation of Potential Savings ....................................................15

C. Centers for Medicare & Medicaid Services’s Comments .................16

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

OEI - 03 - 03 - 00460 A C OMPARISON OF P RICES FOR W HEELCHAIRS iv
INTRODUCTION

OBJECTIVE 

To compare the Medicare reimbursement amount for K0011 power 

wheelchairs to purchase prices available to consumers and 

suppliers. 

BACKGROUND 

Medicare Coverage of K0011 Power Wheelchairs 

Medicare beneficiaries are eligible to receive power wheelchairs 

under Medicare Part B coverage of durable medical equipment. A 

beneficiary who requires a power wheelchair usually is totally non -

ambulatory and has severe weakness of the upper extremities due 

to a neurological or muscular disease. A K0011 power wheelchair is 

covered when all of the following criteria are met: 

1. the beneficiary’s condition is such that without the use of a 

wheelchair the beneficiary would otherwise be bed or chair 

confined; 

2. the beneficiary’s condition is such that a wheelchair is 

medically necessary and the beneficiary is unable to operate 

a manual wheelchair; and 

3. the beneficiary is capable of safely operating the controls of a 

power wheelchair. 

Power wheelchairs are identified by the Healthcare Common 

Procedure Coding System codes (procedure codes) K0010, K0011, 

K0012, and K0014 for reimbursement purposes. The K0011 power 

wheelchair is described as a standard-weight frame 

motorized/power wheelchair with programmable control 

parameters for speed adjustment, tremor dampening, acceleration 

control, and braking. A wide variety of models of power 

wheelchairs are reimbursed under the K0011 procedure code. The 

Medicare program does not collect information on the 

manufacturer, model name, or serial number of individual power 

wheelchairs reimbursed under the K0011 procedure code. 

Therefore, the program is unable to determine what model of 

K0011 power wheelchair is provided to Medicare beneficiaries. 

OEI - 03 - 03 - 00460 A C OMPARISON OF P RICES FOR W HEELCHAIRS 1 
INTRODUCTION 

Medicare Reimbursement of K0011 Power Wheelchairs 

Medicare Part B classifies certain items of durable medical 

equipment, such as power wheelchairs, as capped rental items. 

Medicare pays for the rental of these items for a period of 

continuous use not to exceed 15 months. Beneficiaries also have 

the option of purchasing a power wheelchair within the first month 

of use. In 2001, 99 percent of all expenditures for K0011 were for 

first-month purchases. 

In 2002, Medicare and its beneficiaries paid $856 million for all 

power wheelchairs. Payments for the K0011 power wheelchair 

accounted for 97 percent of this total, or $829 million. According to 

the Centers for Medicare & Medicaid Services (CMS), the K0011 

code ranked fourth among the top 200 procedure codes ranked by 

Medicare payments in calendar year (CY) 2002. Spending for 

motorized wheelchairs has increased at least 33 percent each year 

since 1999. In contrast, total Medicare benefit payments rose only 

11 percent during that same period. Also, the number of Medicare 

beneficiaries with at least one claim for a motorized wheelchair rose 

from just over 55,000 in 1999 to almost 159,000 in 2002, an 

increase of 189 percent. During the same time period, the overall 

Medicare population rose only 1 percent per year. 

Part B claims for power wheelchairs are processed and paid by four 

durable medical equipment regional carriers. Medicare’s payment 

for K0011 power wheelchairs is 80 percent of the lower of either the 

actual charge for the item or the Medicare fee schedule amount 

calculated for the item. The beneficiary is responsible for the 

remaining 20 percent as part of his/her Medicare copayment. 

Medicare Fee Schedule Amount for K0011 Power Wheelchairs 

Federal statute requires fee schedule amounts for K0011 power 

wheelchairs and other capped rental items to be calculated for each 

State using average Medicare payments from 1986 as a base year. 

These base year payment amounts are adjusted annually by the 

change in the Consumer Price Index for all urban consumers (CPIU). Since procedure code K0011 was added to the list of procedure 

codes in 1994, payment data from 1986 was not available for K0011 

power wheelchairs. As a result, the base fee schedule amounts for 

the K0011 power wheelchair code were determined using retail 

prices. Retail prices in effect for periods subsequent to the 1986 fee 

schedule base period were deflated to 1986 by the percentage 

change in the CPI-U. 

OEI - 03 - 03 - 00460 A C OMPARISON OF P RICES FOR W HEELCHAIRS 2 
INTRODUCTION 

The fee schedule amounts for the K0011 power wheelchair are 

limited by national ceilings and floors. The fee schedule ceiling is 

equal to the median of the statewide fee schedule amounts and the 

fee schedule floor is equal to 85 percent of that median. In 2003, 

the ceiling amount for a purchased K0011 power wheelchair was 

$5,297, and the floor amount was $4,502. 

Medicare Prescription Drug, Improvement, and Modernization Act of 

2003 

On November 22, 2003, Congress passed the Medicare Prescription 

Drug, Improvement, and Modernization Act of 2003. Section 

302(c)(2) of the Act states that payments for certain items and 

supplies furnished in 2005 

shall be reduced by the percentage difference 

between the amount of payment otherwise 

determined for the specified item or supply under 

this subsection for 2002, and the amount of 

payment for the specified item or supply under 

chapter 89 of title 5, United States Code . . . 

The payment amount under Chapter 89 of Title 5, United States 

Code, is identified as the median Federal Employee Health Plan 

price, which was obtained from the Inspector General’s June 12, 

2002 testimony before the Senate Committee on Appropriations. 

The Inspector General reported that the median Federal Employee 

Health Plan price for K0011 power wheelchairs was $5,097. 

Supplying K0011 Power Wheelchairs to Medicare Beneficiaries 

Physicians order K0011 power wheelchairs for Medicare 

beneficiaries who qualify for them. Medicare beneficiaries receive 

their K0011 power wheelchairs from suppliers that bill the 

Medicare program for reimbursement. If the beneficiary chooses to 

purchase the power wheelchair at that time, the supplier receives a 

lump-sum payment. 

Suppliers purchase power wheelchairs from wholesalers and 

directly from power wheelchair manufacturers. Wholesalers 

purchase large quantities of medical equipment and supplies at 

discounted rates from manufacturers and sell these products to 

suppliers. Wholesalers and manufacturers may offer rebates or 

other discounts to suppliers. 

OEI - 03 - 03 - 00460 A C OMPARISON OF P RICES FOR W HEELCHAIRS 3 
INTRODUCTION 

CMS Creates Power Wheelchair Workgroup 

In April 2003, CMS created a workgroup to examine the rapid 

growth in power wheelchair payments, identify its causes, and 

propose solutions. 

The workgroup found that Medicare had little comparative data to 

use in determining the appropriateness of the fee schedule amounts 

for power wheelchairs. However, the workgroup did conclude that 

large suppliers could obtain pricing discounts from power 

wheelchair manufacturers. As a result, CMS is investigating longterm options that may address problems with the fee schedule. 

One of these options includes analyzing K0011 power wheelchairs 

for a potential inherent reasonableness payment adjustment. CMS 

may use its inherent reasonableness authority to deviate from 

standard payment methodologies, if their application results in a 

payment amount that is determined to be grossly excessive or 

deficient. 

CMS and OIG Efforts to Stop K0011 Fraud and Abuse 

On September 9, 2003, CMS and the Office of Inspector General 

(OIG) issued a joint press release detailing new efforts to stop abuse 

of the power wheelchair benefit. As part of this joint press release, 

CMS announced a “10-point initiative to substantially curb abuse of 

the Medicare program by unscrupulous providers of power 

wheelchairs and other power mobility products who prey on 

Medicare beneficiaries.” 

The 10-point initiative includes developing inherent reasonableness 

review guidelines so Medicare can be assured that it is paying 

appropriately for power wheelchairs. Power wheelchairs will be 

the first item analyzed for potential inherent reasonableness 

payment adjustments. 

At the same time, OIG will be investigating the proliferation of 

durable medical equipment fraud cases involving inflated billings to 

Medicare, charges for equipment and supplies not delivered, and 

the falsification of documents to qualify beneficiaries for 

wheelchairs and other equipment that they often did not need. 

OEI - 03 - 03 - 00460 A C OMPARISON OF P RICES FOR W HEELCHAIRS 4 
INTRODUCTION INTRODUCTION 

METHODOLOGY 

Models of K0011 Power Wheelchairs 

Since there are a wide variety of power wheelchairs on the market, 

we used the Statistical Analysis Durable Medical Equipment 

Regional Carrier’s (statistical analysis carrier) product 

classification list for wheelchairs to determine which models of 

power wheelchairs are coded as K0011. Some K0011 power 

wheelchair models have additional features (such as semi-reclining 

back mechanisms, anti-tipping devices, safety belts) that have 

separate procedure codes. In order to obtain prices for base units 

only, we compiled a list of power wheelchair models that were coded 

solely as K0011. This list consisted of 96 models of K0011 power 

wheelchairs. 

We also wanted to specifically review pricing for models of K0011 

power wheelchairs that were actually provided to Medicare 

beneficiaries. Since Medicare claims do not identify the model of 

K0011 power wheelchair supplied, we used information from 

related OIG work to determine what models of K0011 power 

wheelchairs were actually supplied to Medicare beneficiaries. As 

part of this work, we selected a random sample of 300 K0011 power 

wheelchair claims paid in 2001. We contacted the suppliers who 

submitted the sample claims and requested that they provide the 

manufacturer, model, and serial number of the K0011 power 

wheelchair provided to the beneficiary. We identified 33 models of 

K0011 power wheelchairs that were provided to Medicare 

beneficiaries in our sample and were also included on the statistical 

analysis carrier’s product classification list. 

Sources of Prices for K0011 Power Wheelchairs 

Supplier Web Site Prices 

In order to determine the prices charged to consumers for K0011 

power wheelchairs, we collected prices of K0011 power wheelchairs 

from the Web sites of power wheelchair suppliers in June 2003 and 

July 2003. We performed an Internet search for power wheelchair 

suppliers who provide power wheelchairs directly to consumers. 

Consumers are able to purchase power wheelchairs either by 

placing an order on the Internet or by phone. We obtained prices 

from 41 suppliers located in the United States. These suppliers 

may or may not participate in the Medicare program. Some of the 

suppliers had storefront operations as well. We collected 379 

OEI - 03 - 03 - 00460 A C OMPARISON OF P RICES FOR W HEELCHAIRS 5 
INTRODUCTION 

individual prices for K0011 power wheelchair models from the 41 

suppliers. We obtained prices for 54 models of K0011 power 

wheelchairs that were identified on the statistical analysis carrier’s 

product classification list. 

Medicare allows suppliers to bill for batteries separately from the 

power wheelchair itself. Some suppliers included batteries in the 

price of the K0011 power wheelchair. In cases where we were able 

to identify the battery price, we subtracted the battery price from 

the power wheelchair price. This was done so that we could 

determine a price for the base unit. 

National Wholesaler Prices 

We also obtained the prices of K0011 power wheelchairs to 

suppliers from two national wholesalers. The wholesalers are two 

of the largest distributors of medical and surgical products in the 

United States. From one of the wholesalers, we obtained prices 

quoted to the wholesaler from three power wheelchair 

manufacturers. The prices from the manufacturers were quoted in 

October 2001, October 2002, and September 2003. We obtained the 

August 2002 home health care products catalog from the other 

wholesaler, which included prices for power wheelchairs from one 

manufacturer. We collected 22 individual prices from the two 

wholesalers for 18 models of K0011 power wheelchairs. 

Manufacturer and Distributor Prices 

We obtained documentation on suppliers’ prices negotiated directly 

with manufacturers and distributors of K0011 power wheelchairs. 

We collected documentation from eight suppliers. A review of the 

documentation, which included invoices and purchase orders from 

1999 to 2003, yielded 36 individual prices for 12 models of K0011 

power wheelchairs. 

Comparison of Medicare Reimbursement Amount to Median Prices 

We determined the percentages that the Medicare reimbursement 

amount exceeded the median prices of the three sources reviewed. 

In order to accomplish this, we first calculated the median price 

from the prices collected from each of the three sources reviewed. 

We then determined the percentage difference in prices for each 

source by subtracting the median prices of K0011 power 

wheelchairs from the Medicare reimbursement amount and then 

dividing this number by the median price. We used Medicare’s CY 

OEI - 03 - 03 - 00460 A C OMPARISON OF P RICES FOR W HEELCHAIRS 6 
INTRODUCTION INTRODUCTION 

2003 fee schedule’s median of $5,297 as the Medicare 

reimbursement amount. 

Calculating Potential Medicare Savings 

We calculated how much Medicare and its beneficiaries would save 

if the reimbursement amount for K0011 power wheelchairs was set 

at the median price of the sources reviewed. We first determined 

the percentage difference in prices for each source by subtracting 

the median prices of K0011 power wheelchairs from the CY 2003 

Medicare reimbursement amount ($5,297) and then dividing this 

number by the Medicare reimbursement amount. We then 

multiplied these percentage differences by the total Medicare 

payments for K0011 power wheelchairs in 2002 ($828,887,761) in 

order to determine potential program savings. Medicare payments 

were obtained from CMS’s Part B Extract and Summary System. 

The data used to calculate potential Medicare and beneficiary 

savings are presented in Appendix B. 

Limitations of Pricing Data 

In regard to the prices available to suppliers, we did not collect data 

to determine if suppliers had any administrative costs related to 

furnishing K0011 power wheelchairs to Medicare beneficiaries. 

Therefore, the median prices available to suppliers do not include 

any potential associated supplier costs. The estimates of potential 

program savings presented in the findings of this report would be 

lower if median prices had included any supplier administrative 

costs. 

We would assume that the prices collected from Web sites of 

suppliers include profit margins and any costs related to billing 

other insurers. We do not know if the costs associated with billing 

the Medicare program would be significantly different from the 

costs of billing other insurers. 

OEI - 03 - 03 - 00460 A C OMPARISON OF P RICES FOR W HEELCHAIRS 7 
OEI - 03 - 03 - 00460 A C OMPARISON OF P RICES FOR W HEELCHAIRS 8

The median purchase prices for 

both consumers and suppliers were 

lower than the Medicare 

reimbursement amount for K0011 

power wheelchairs. Our comparison of prices for the K0011 power 

wheelchair to Medicare’s reimbursement amount and our estimates 

of potential savings are presented in Table 1 below. The Medicare 

reimbursement amount for K0011 power wheelchairs exceeded the 

median prices from the three sources by 37, 124, and 242 percent. 

Of the three sources reviewed, the median price negotiated by 

suppliers with manufacturers and distributors was the lowest. 

Prices obtained for K0011 power wheelchair models varied widely, 

from a low of $999 to a high of $16,995. Ninety-four percent of the 

prices reviewed were below the Medicare reimbursement amount. 

Table 1: Comparison of Consumer and Supplier Prices to Medicare Reimbursement Amount

Source: Median Price Range of Prices

Percentage by 

which Medicare 

Reimbursement 

Amount Exceeds 

Median Price

Potential Medicare 

and Beneficiary 

Savings

Medicare1$5,297 $4,502 to $5,297 NA NA

Supplier Web Sites $3,863 $1,600 to $16,995 37% $224,395,894

Wholesalers $2,363 $1,713 to $3,141 124% $459,119,632

Supplier Prices Negotiated with 

Manufacturers and Distributors $1,550 $999 to $2,161 242% $586,339,898

1

This is Medicare’s reimbursement amount for CY 2003. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 lowered the 

reimbursement amount to approximately $5,100 for K0011 power wheelchairs furnished in 2005. 

Source: Office of Evaluation and Inspections, 2003

Note: All figures in the table have been rounded

Medicare and its beneficiaries pay considerably 

more than consumers or suppliers for K0011 

power wheelchairs.

FINDINGS
OEI - 03 - 03 - 00460 A C OMPARISON OF P RICES FOR W HEELCHAIRS 9

FINDINGS

The median price to consumers for a K0011 power wheelchair was 

$3,863.

According to supplier Web sites, consumers are able to purchase 

K0011 power wheelchairs for a median price of $3,863. Only 28 of 

the 379 prices offered by suppliers to consumers exceeded the 

Medicare reimbursement amount for K0011. 

The prices available to consumers ranged from a low of $1,600 to a 

high of $16,995. The most expensive K0011 power wheelchair 

available for purchase was the Levo Mobil LCM Comfort, 

manufactured by Levo USA, Inc. This wheelchair was $4,000 more 

than the second most expensive wheelchair. The wheelchair is able 

to transfer the patient to a standing position. Those who are 

unable to stand on their own, such as people with spina bifida or 

cerebral palsy, and need a maneuverable indoor power wheelchair 

utilize this power wheelchair. 

The majority of the suppliers offered free shipping to consumers 

who purchased power wheelchairs from their Web sites. Some 

suppliers also offered free maintenance of the power wheelchair for 

1 year after the date of purchase. 

Since the Medicare program does not collect information on the 

manufacturer or model of the K0011 power wheelchair being 

provided to beneficiaries, it is unable to determine whether most 

beneficiaries are using lower-priced or higher-priced models. 

However, we found that the median price to consumers for models 

of K0011 power wheelchairs that were actually provided to 

Medicare beneficiaries in 2001 was $3,888. The prices for this 

subset of K0011 power wheelchairs ranged from a low of $2,000 to a 

high of $5,995. Out of the 247 prices we collected, there were only 4 

instances where the cost to the consumer was greater than the 

Medicare reimbursement amount.

Wholesalers offered K0011 power wheelchairs to suppliers for a 

median price of $2,363. 

The prices offered by the two wholesalers ranged from a low of 

$1,713 to a high of $3,141, with a median of $2,363. Data collected 

from related OIG work was used to determine the models of K0011 

power wheelchairs actually being supplied to Medicare beneficiaries 

in 2001. We found that the median price offered to suppliers for 

these models of K0011 power wheelchairs was $2,494 with prices 

ranging from $1,785 to $3,141. 
OEI - 03 - 03 - 00460 A C OMPARISON OF P RICES FOR W HEELCHAIRS 10

FINDINGS

Suppliers were able to obtain K0011 power wheelchairs from 

manufacturers and distributors for a median price of $1,550.

We reviewed invoices and purchase orders received from suppliers 

who negotiated prices of K0011 power wheelchairs with 

manufacturers and distributors. Based on our review of 36 

individual prices from 8 suppliers, we determined that suppliers 

were able to purchase K0011 power wheelchairs for a median price 

of $1,550. The prices ranged from a low of $999 to a high of $2,161. 

We also analyzed prices for models of K0011 wheelchairs that were 

supplied to Medicare beneficiaries in 2001. The median price 

negotiated by suppliers for the subset models of K0011 power 

wheelchairs provided to Medicare beneficiaries was $1,699, with 

prices ranging from $1,150 to $2,161. 

As part of our analysis, we grouped the prices into two categories. 

One group included prices negotiated with manufacturers, the 

other group included prices negotiated with distributors. The 

median price offered by manufacturers for K0011 power 

wheelchairs was $1,392, while the median price offered by 

distributors was $1,699. 

The median price negotiated by suppliers with manufacturers and 

distributors was the lowest among the three sources reviewed. 

Similarly, when we analyzed prices for individual models of K0011 

power wheelchairs across all three sources, the prices negotiated by 

suppliers with manufacturers and distributors were the lowest. 

Appendix A shows prices obtained from all three sources for three 

models of K0011 power wheelchairs provided to Medicare 

beneficiaries. These three models alone accounted for 13 percent of 

K0011 power wheelchairs provided to Medicare beneficiaries in our 

sample. 

If the Medicare reimbursement amount was set at the prices available 

to consumers and suppliers, Medicare and its beneficiaries could have 

saved over $224 million.

If the Medicare reimbursement amount for K0011 power 

wheelchairs were set at the median price available to consumers, 

the Medicare program and its beneficiaries would have saved 

$224 million in 2002. Medicare beneficiaries alone would have 

saved $45 million in copayments. An individual Medicare 

beneficiary could have saved $287, if the Medicare reimbursement 

amount for K0011 power wheelchairs were set at the median price 

available to consumers. 
OEI - 03 - 03 - 00460 A C OMPARISON OF P RICES FOR W HEELCHAIRS 11

FINDINGS

Of the three sources reviewed, the median price negotiated by 

suppliers with manufacturers and distributors was the lowest. If 

the Medicare pr ogram based its K0011 reimbursement amount on 

this price, the program and its beneficiaries could have saved $586 

million in 2002. The actual savings to the program could be less 

than these amounts, since any potential supplier administrative 

costs related to furnishing K0011 power wheelchairs to Medicare 

beneficiaries were not included in the prices reviewed. Our 

calculations of potential savings estimates are presented in 

Appendix B.
OEI - 03 - 03 - 00460 A C OMPARISON OF P RICES FOR W HEELCHAIRS 12

We found that both consumers and suppliers could purchase K0011 

power wheelchairs at prices lower than the Medicare 

reimbursement amount. Consequently, the program and its 

beneficiaries could have realized substantial savings if the 

Medicare reimbursement amount for K0011 power wheelchairs 

more closely resembled the costs to consumers and suppliers. 

We recommend that CMS:

(1) Create a new coding system for K0011 power wheelchairs that 

accounts for the variety in models and prices for power 

wheelchairs. 

(2) Use the pricing information obtained as part of this review to 

determine whether an inherent reasonableness review for 

K0011 power wheelchairs is appropriate.

Agency Comments

CMS believes our recommendation regarding coding warrants 

further consideration. CMS is currently reviewing whether the 

need for an overall change in the coding structure for power 

wheelchairs is necessary. CMS noted that our report does not fully 

explain why additional codes are necessary, other than the fact that 

there is a wide variation in prices for the different models of K0011 

power wheelchairs.

CMS agreed with our recommendation that it consider using their 

inherent reasonableness authority to reduce the reimbursement 

amount for K0011 power wheelchairs. 

The full text of CMS’s comments is presented in Appendix C.

OIG Response

In our study we found that consumers were able to purchase K0011 

power wheelchairs from supplier Web sites for a wide range of 

prices. The lowest priced wheelchair available to consumers was 

$1,600, while the highest priced wheelchair was $16,995. The 

median price to consumers for models of K0011 power wheelchairs 

actually provided to Medicare beneficiaries was $3,888, with prices 

ranging from a low of $2,000 to a high of $5,995. In 2003, the 

median reimbursement for a purchased K0011 power wheelchair 

was $5,297. We believe that the wide range of K0011 power 

wheelchairs available and the finding that beneficiaries tend to 

receive lower priced power wheelchairs supports the need for a new 

coding system. The goal of this coding system would be to create a 

RECOMMENDATIONS
OEI - 03 - 03 - 00460 A C OMPARISON OF P RICES FOR W HEELCHAIRS 13

number of reimbursement levels for the wide range of power 

wheelchairs now included under the K0011 procedure code. 
OEI - 03 - 03 - 00460 A C OMPARISON OF P RICES FOR W HEELCHAIRS 14

Comparison of Consumer and Supplier Prices for Individual Models

The following table shows prices obtained from all three sources for three models of K0011 power 

wheelchairs provided to Medicare beneficiaries. 

Comparison of Consumer and Supplier Prices for Individual Models

Individual K0011 Power 

Wheelchair Model

Calendar Year 2003 

Medicare Median 

Reimbursement 

Amount

Supplier Web Site 

Price1

Wholesaler

 Price1

Supplier Price 

Negotiated with 

Manufacturers and 

Distributors1

Model A $5,297 $3,747 $2,661 $2,000

Model B $5,297 $2,974 $2,051 $1,775

Model C $5,297 $3,634 $1,785 $1,699

1Median price is provided when more than one price was collected f rom source.

Source: Office of Evaluation and Inspections, 2003

APPEN DIX~A
OEI - 03 - 03 - 00460 A C OMPARISON OF P RICES FOR W HEELCHAIRS 15

Calculation of Potential Savings for K0011 Power Wheelchairs

In order to calculate potential savings, we first calculated percentage differences between the prices to 

consumers and suppliers for K0011 power wheelchairs and Medicare’s reimbursement amount. We did 

this by subtracting the median price from each source from the Medicare reimbursement amount. We 

then divided this number by the Medicare reimbursement amount. We used Medicare’s calendar year 

2003 fee schedule’s median of $5,297 as the Medicare reimbursement amount. We then multiplied 

total Medicare payments ($828,887,761) for K0011 power wheelchairs in 2002 by the percentage 

differences.

Calculation of Potential Savings for K0011 Power Wheelchairs

Source:

Median 

Price

Calendar Year 

2003 Medicare 

Median 

Reimbursement 

Amount

Median Price 

Compared to 

Medicare 

Reimbursement 

Amount

2002 Payments 

for K0011 Power 

Wheelchairs

Potential 

Medicare and 

Beneficiary 

Savings

Supplier Web Sites $3,863 $5,297 27% lower $828,887,761 $224,395,894

Wholesalers $2,363 $5,297 55% lower $828,887,761 $459,119,632

Supplier Prices Negotiated with 

Manufacturers and Distributors $1,550 $5,297 71% lower $828,887,761 $586,339,898

Source: Office of Evaluation and Inspections, 2003

Note: All figures in the table have been rounded

APPENDIX APPENDIX~B
OEI - 03 - 03 - 00460 A C OMPARISON OF P RICES FOR W HEELCHAIRS 16

Centers for Medicare & Medicaid Services’ Comments

0 APPENDIX ~ C
OEI - 03 - 03 - 00460 A C OMPARISON OF P RICES FOR W HEELCHAIRS 17

APPENDIX~C
OEI - 03 - 03 - 00460 A C OMPARISON OF P RICES FOR W HEELCHAIRS 18

This report was prepared under the direction of Robert A. Vito,

Regional Inspector General for Evaluation and Inspections in 

the Philadelphia Regional Office, and Linda M. Ragone, Deputy 

Regional Inspector General. Other principal Office of Evaluation 

and Inspections staff who contributed include:

Tanaz Dutia, Project Leader

Stephanie Lattin London, Program Specialist

ACKNOWLEDGMENTS