DEPARTMENT OF HEALTH &. HUMAN SERVICES Office of Inspector General

Washington, D.C. 20201

JUL 13 2009

TO: Deborah Taylor

Acting Director, Office of Financial Management

Centers for Medicare & Medicaid Services

FROM: Stuart Wright

Deputy Inspector General

for Evaluation and Inspections

SUBJECT: Memorandum Report: "Miscoded Claims for Power Wheelchairs in the

Medicare Program," OEI-04-07-00403

The Office ofInspector General (ala) is conducting a series of evaluations of Medicare's

payments for power wheelchairs supplied to beneficiaries in the first half of 2007. This report

provides information on the extent to which Medicare suppliers used correct procedure codes to

bill for standard and complex rehabilitation power wheelchairs during the first half of 2007. This

information should be viewed in the context of our other recent reports on power wheelchairs

and may also be included as part of an aggregate error rate in an OIG report on the medical

necessity of power wheelchairs. To ensure that we provide timely information, we are providing

this report on coding errors at this time. l

We discovered the coding errors identified in this report while reviewing power wheelchair

model information on manufacturer invoices, as part of a separate evaluation, to determine

suppliers' costs to purchase these chairs. Because power wheelchairs are assigned to procedure

codes based on the manufacturers' model information, we defined miscoded claims as those for

which the suppliers billed Medicare using procedure codes that did not match the model

information on the invoices of power wheelchairs supplied to beneficiaries.

We found that suppliers miscoded 8 percent ofstandard and complex rehabilitation power

wheelchair claims from the first half of 2007. Three percent ofstandard and complex

rehabilitation power wheelchair claims were upcoded, resulting in the Centers for Medicare &

Medicaid Services (CMS) overpayments to the suppliers, and 4 percent were downcoded,

resulting in underpayments to the suppliers. One percent of claims were miscoded, but the

manufacturers' invoices had insufficient model information to categorize the claims as either

upcoded or downcoded. Complex rehabilitation power wheelchair claims were miscoded more

often than standard power wheelchair claims (23 percent and 7 percent, respectively). Complex

I The medical necessity reviews will be completed in 2010.

OEI-04-07-00403 Miscoded Claims for Power Wheelchairs in the Medicare Program
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OEI-04-07-00403 Miscoded Claims for Power Wheelchairs in the Medicare Program

rehabilitation power wheelchair claims were also upcoded more often than standard power 

wheelchair claims (12 percent and 3 percent, respectively). In the first half of 2007, suppliers 

submitted over 13 times more standard than complex rehabilitation power wheelchair claims. 

Therefore, the greater number of standard power wheelchair claims strongly influenced the 

combined error rates. 

BACKGROUND 

Medicare beneficiaries are eligible to receive power wheelchairs under Medicare Part B coverage 

of durable medical equipment (DME). In 2007, approximately 173,300 Medicare beneficiaries 

received power wheelchairs at a total cost to Medicare and its beneficiaries of $686 million.2

Power wheelchairs are medically necessary for beneficiaries who cannot effectively perform 

mobility-related activities of daily living using other mobility-assistive equipment, such as a cane, 

manual wheelchair, or power-operated scooter.3 4

 Most beneficiaries who require power 

wheelchairs are unable to walk and have severe upper body weakness because of a neurologic or 

muscular condition.5

 

Beneficiaries receive power wheelchairs from DME suppliers, which bill the Medicare program for 

reimbursement. The prescribing physician provides the supplier with documentation from the 

beneficiary’s medical record to support the medical necessity of the power wheelchair, along with 

the power wheelchair prescription.6

 Based on the prescription, the supplier recommends a specific 

power wheelchair for the beneficiary. The physician must then review and approve the supplier’s 

recommendation. 

Medicare beneficiaries may choose to rent or purchase their power wheelchairs, although most 

choose to purchase them.7 In the first half of 2007, new power wheelchair purchases accounted for 

2

 OIG analysis of 2007 CMS claims data, July 2008. 

3

 CMS, “Medicare National Coverage Determinations Manual,” Pub. No. 100-03, ch.1, § 280.3. Last modified in 

August 2005. Available online at http://www.cms.hhs.gov/manuals/downloads/ncd103c1_Part4.pdf. Accessed on 

March 17, 2009. 

4

 Based on Medicare’s National Coverage Determination for Power Mobility Devices, mobility-related activities of 

daily living include toileting, feeding, dressing, grooming, and bathing in customary locations within the home. 5

 CMS’s Medicare Learning Network, “Medicare Coverage of Power Mobility Devices: Power Wheelchairs and 

Power Operated Vehicles,” April 2006. 

6

 Local coverage determinations issued by Medicare contractors require a physician or other treating practitioner to 

conduct a beneficiary examination to assess the beneficiary’s need for a power wheelchair before prescribing it. The 

supplier must also conduct an assessment of the beneficiary’s home to determine whether it is conducive to power 

wheelchair usage. A beneficiary who receives a complex rehabilitation power wheelchair must have an additional 

specialty evaluation. 

7

 Medicare covers power wheelchairs under a capped rental arrangement. Suppliers must give beneficiaries the 

option of purchasing the power wheelchairs when they first provide them. If the beneficiary declines to purchase in 

the first month, Medicare will pay for the power wheelchair on a rental basis through the 13th month. The supplier 

must transfer ownership to the beneficiary after the 13th month. 
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OEI-04-07-00403 Miscoded Claims for Power Wheelchairs in the Medicare Program

95 percent of all Medicare power wheelchair expenditures.8

 Medicare pays 80 percent of the 

supplier’s reimbursement and the beneficiary is responsible for the remaining 20 percent. 

Medicare Procedure Codes and Program Requirements 

Suppliers submit Medicare claims for power wheelchairs using Healthcare Common Procedure 

Coding System codes (“procedure codes”). Medicare determines the highest dollar amount that 

suppliers may be reimbursed for each procedure code (“fee schedule amount”). 

Accurate coding is critical to ensuring that Medicare makes proper payments. CMS’s “National 

Correct Coding Policy Manual for Part B Medicare Carriers” (the Coding Manual) provides 

guidance for the use of procedure codes. The Coding Manual requires that when submitting 

claims, suppliers should “report the [procedure] code that describes the procedure performed to the 

greatest specificity possible.”9

 

Power Wheelchair Procedure Code Assignment 

As of January 2007, Medicare covered more than 500 different power wheelchair models under 

42 procedure codes on its power wheelchair fee schedule.10 11 Medicare’s Pricing, Data Analysis, 

and Coding (PDAC) contractor conducts coding reviews of each power wheelchair model 

submitted by manufacturers to assign the model to a specific procedure code.12 Each model is 

assigned a procedure code based on the power wheelchair’s performance, patient weight capacity, 

seat type, portability, and power seating system capability.13 As of January 2007, a minimum of 

2 and a maximum of 75 models were reimbursable under individual power wheelchair procedure 

codes.14 

Each power wheelchair’s model information includes a product name assigned by the 

manufacturer. Power wheelchairs may be further differentiated by a model number. When 

multiple model numbers are associated with one product name, Medicare assigns each model 

number to a procedure code, although the same product name may appear under multiple 

procedure codes. 

8

 OIG analysis of 2007 CMS claims data, January 2009. 

9

 CMS, “National Correct Coding Policy Manual for Part B Medicare Carriers,” Version 14.3, 

p. XII-1, 2007. Available online at http://www.cms.hhs.gov/NationalCorrectCodInitEd/. Accessed on March 20, 

2009. 

10 Power wheelchair procedure codes are K0813–K0816, K0820–K0831, K0835–K0843, and K0848–K0864. 

11 Since January 2007, additional models have been assigned to power wheelchair procedure codes. As of April 

2008, Medicare covered 685 power wheelchair models. 

12 Until August 2008, the Statistical Analysis DME Regional Carrier contractor performed the activities that PDAC 

now performs. 

13 “Power Mobility Device Coding Guidelines,” Statistical Analysis DME Regional Carrier, August 3, 2006. 

Available online at https://www.dmepdac.com/resources/articles/2006/08_14_06.pdf. Accessed on April 1, 2009. 14 Two power wheelchair models were reimbursable under procedure code K0863 and 75 models were reimbursable 

under procedure code K0823 as of January 2007. 
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OEI-04-07-00403 Miscoded Claims for Power Wheelchairs in the Medicare Program

When submitting a power wheelchair claim, a supplier can use the manufacturer’s model 

information to identify the correct procedure code to bill Medicare. The PDAC provides resources 

to assist manufacturers, distributors, and suppliers with DME product coding questions. In 

addition to publishing educational articles and maintaining a call center, the PDAC posts results of 

coding decisions for power wheelchairs and other DME on the Internet through its DME Coding 

System (DMECS).15 16 Using the DMECS, suppliers can search the power wheelchair Product 

Classification List by manufacturer, product name, or model number to identify the correct 

procedure code to bill Medicare. 

 

Power Wheelchair Groups 

Power wheelchairs are divided into three groups based on their reported testing performance in 

categories such as speed, range, and height of vertical obstructions they can climb. Group 3 power 

wheelchairs must meet the highest performance requirements, while Group 2 chairs and Group 1 

chairs must meet intermediate and the lowest performance requirements, respectively. For 

example, Group 3 power wheelchairs must be able to travel at least 12 miles on a single charge of 

batteries, while the minimum distances for power wheelchairs in Groups 2 and 1 are 7 and 5 miles, 

respectively. Appendix A compares the performance requirements of the three groups. 

Power Wheelchair Types 

Standard power wheelchairs: Group 2 includes the most frequently reimbursed procedure code 

(K0823). In this report, we refer to K0823 power wheelchairs as “standard power wheelchairs.” 

Standard power wheelchairs feature an automotive-style seat and are designed to provide basic, 

daily mobility for persons weighing less than 300 pounds. These power wheelchairs cannot be 

upgraded with power options (e.g., a powered seating system) or other electronic features (e.g., a 

device to enable the user to control the chair by sipping and puffing through a straw). 

Medicare’s 2007 fee schedule amount for standard power wheelchairs was $4,024. Standard power 

wheelchairs accounted for nearly three-quarters of Medicare’s power wheelchair claims and 

expenditures in the first half of 2007.17 Seventy-five power wheelchair models were reimbursable 

under the standard power wheelchair procedure code as of January 2007.18 

Complex rehabilitation power wheelchairs: Complex rehabilitation procedure codes include all 

Group 3 power wheelchairs and Group 2 power wheelchairs that can be upgraded with power 

options. To receive a complex rehabilitation power wheelchair, a beneficiary must meet criteria 

beyond those required to receive a standard power wheelchair. For example, the beneficiary’s 

mobility limitation must be because of a neurological condition, muscle disease, or skeletal 

15 Available online at https://www.dmepdac.com/dmecs/index.html. Accessed on March 27, 2009. 16 “DMECS Guide.” Available online at https://www.dmepdac.com/docs/search/2-DMECS%20Guide.pdf. 

Accessed on March 5, 2009. 

17 OIG analysis of claims from the National Claims History File with dates of service from January 1 to June 30, 

2007, processed as of June 30, 2007. 

18 Motorized Wheelchair Product Classification List, as published by the Statistical Analysis DME Regional Carrier, 

January 2, 2007. 
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OEI-04-07-00403 Miscoded Claims for Power Wheelchairs in the Medicare Program

deformity. Complex rehabilitation power wheelchairs can be upgraded with power options and 

other electronic features to accommodate beneficiaries’ specific mobility needs. 

The 2007 fee schedule amounts for complex rehabilitation power wheelchair procedure codes 

ranged from $4,132 to $11,965. Medicare payments for complex rehabilitation power wheelchairs 

accounted for less than 7 percent of power wheelchair claims and expenditures in the first half of 

2007.19 Medicare covered 276 complex rehabilitation power wheelchair models under 

26 procedure codes as of January 2007.20 21 

Measures Employed To Prevent Improper Payments 

Medicare utilizes contractors to ensure that claims meet requirements and to prevent fraud, 

waste, and abuse. To identify potential coverage and coding errors, contractors use automated 

computer edits at the time a claim is submitted, as well as targeted prepayment and postpayment 

claims reviews. 

The DME Medicare Administrative Contractors (MAC) use automatic computer edits to ensure 

that claims that suppliers submit include all required information. The edits may deny an 

erroneous claim or suspend it for futher review.22 When submitting a claim, a supplier must 

provide information pertaining to the beneficiary, the prescribing physician, place of service, and 

type of service, among other information. However, suppliers are not required to provide the 

equipment’s model information. 

Both DME MACs and Zone Protection Integrity Contractors (ZPIC) conduct targeted claims 

reviews.23 Medicare’s “Program Integrity Manual” directs contractors to “request appropriate 

medical documentation and review cases for coverage and correct coding.”24 Medical reviews by 

DME MACs focus on compliance with coverage criteria through provider feedback. Notification 

and medical reviews by ZPICs focus on identifying potential fraud, waste, and abuse. Beneficiary 

medical records do not include information about the power wheelchair models that beneficiaries 

receive. Because power wheelchairs are assigned to procedure codes based on model information, 

Medicare contractors’ reviews of medical records will not identify power wheelchairs billed with 

incorrect procedure codes. 

19 OIG analysis of claims from the National Claims History File submitted under procedure codes 

K0835–K0864 with dates of service from January 1 to June 30, 2007, processed as of June 30, 2007. 

20 Complex rehabilitation procedure codes are K0835–K0864. 21 Motorized Wheelchair Product Classification List, as published by the Statistical Analysis DME Regional Carrier, 

January 2, 2007. 

22 CMS, “Medicare Program Integrity Manual,” Pub. No. 100-08, ch. 3.4. Available online at 

http://www.cms.hhs.gov/manuals/downloads/pim83c03.pdf. Accessed on March 20, 2009. 23 In 2008, CMS began to replace program safeguard contractors with ZPICs, which will operate in seven zones. 

Program safeguard contractors were charged with benefit integrity functions for Medicare Parts A and B. ZPICs’ 

scope of work includes Medicare Parts A, B, C, and D, including DME, home health, hospice, and dually eligible 

beneficiaries. 

24 CMS, “Medicare Program Integrity Manual,” Pub. No. 100-08, ch. 3.2. Available online at 

http://www.cms.hhs.gov/manuals/downloads/pim83c10.pdf. Accessed on April 1, 2009. 
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OEI-04-07-00403 Miscoded Claims for Power Wheelchairs in the Medicare Program

OIG Power Wheelchair Evaluation Series 

OIG is conducting a series of evaluations of Medicare’s payments for power wheelchairs supplied 

to beneficiaries in the first half of 2007. In addition to issuing this report, OIG plans to issue 

separate reports on (1) suppliers’ costs to purchase power wheelchairs and the services that 

suppliers performed in conjunction with providing the chairs; (2) suppliers’ costs to purchase 

power wheelchair batteries; (3) compliance with documentation requirements; and (4) the 

appropriateness (e.g., the medical necessity) of power wheelchair claims. We discovered the 

coding errors identified in this report while reviewing power wheelchair model information on 

manufacturer invoices, as part of a separate evalulation, to determine suppliers’ costs to 

purchase these chairs. 

METHODOLOGY 

Scope 

We reviewed the model information on manufacturer invoices for a random sample of power 

wheelchair claims that we selected to conduct the series of power wheelchair evaluations. We 

determined whether suppliers billed Medicare using correct procedure codes based on the model 

information on the invoices.25 This evaluation focuses on standard and complex rehabilitation 

power wheelchairs supplied to Medicare beneficiaries in the first half of 2007. 

Sample Selection 

Our population consisted of new, nonrental power wheelchair claims from CMS’s National Claims 

History DME Standard Analytical File with dates of service during the first half of 2007.26 Before 

selecting our sample, we removed claims associated with suppliers that were not actively enrolled 

in Medicare and claims associated with suppliers or prescribing physicians that were under OIG 

investigation.27 28 After removing these claims, the population from which we sampled included 

93 percent of standard and 91 percent of complex rehabilitation power wheelchair claims. 

25 The invoice is the itemized bill from the manufacturer or distributor, containing individual prices, the total charge, 

and sales terms. 

26 The final date to submit claims with dates of service during the first half of 2007 was December 31, 2008. We 

analyzed claims CMS processed, as of June 30, 2007. Suppliers had submitted 79 percent of claims with dates of 

service during the first half of 2007 at the time we selected our sample. 27 Pursuant to 42 CFR § 424.520(a), to maintain Medicare billing privileges after initial enrollment, suppliers must 

comply with Medicare regulations and relevant Federal and State requirements. Pursuant to 42 CFR § 424.535, 

Medicare may revoke a supplier’s billing privileges because of a felony, noncompliance with enrollment 

requirements, etc. Pursuant to 42 CFR § 424.540, Medicare also may deactivate a supplier’s billing privileges when 

the supplier does not submit a claim for a full year or when the supplier fails to report a change to the information 

provided on the enrollment application. 

28 We removed 3,430 standard and 301 complex rehabilitation power wheelchair claims because of suppliers’ 

Medicare enrollment status or an ongoing investigation. After removing these, our population consisted of 

43,133 standard and 3,001 complex rehabilitation power wheelchair claims. 
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OEI-04-07-00403 Miscoded Claims for Power Wheelchairs in the Medicare Program

We grouped the resulting population into three strata: 

1. standard power wheelchair claims submitted by low-volume suppliers (those that submitted 

fewer than 10 standard power wheelchair claims in the first half of 2007), 

2. standard power wheelchair claims submitted by high-volume suppliers (those that 

submitted 10 or more standard power wheelchair claims in the first half of 2007), and 

3. complex rehabilitation power wheelchair claims.29

We selected 375 total claims by selecting simple random samples of 125 claims from each stratum. 

Appendix B provides the number of claims, Medicare expenditures, and number of suppliers for 

the population and sample, by stratum. 

Data Collection and Analysis 

We obtained suppliers’ addresses from the National Supplier Clearinghouse and, for each claim, 

requested the manufacturer’s invoice for the supplier’s purchase of the power wheelchair.30 We 

mailed up to three requests and telephoned nonresponding suppliers to ensure that they received the 

requests. 

We removed 17 claims for which the suppliers did not submit invoices.31 We also removed five 

claims because the invoices suppliers submitted had insufficient information about the model to 

determine whether the claims were miscoded. Finally, we removed 14 claims for power 

wheelchairs that the manufacturer supplied directly to the beneficiaries because no manufacturer 

invoices existed for our review. After removing these claims, our sample consisted of 339 claims, a 

response rate of 90 percent. 

We determined whether power wheelchairs were miscoded using the manufacturers’ model 

information (i.e., product name and model number) on the invoices.32 We defined miscoded claims 

as those for which the supplier billed Medicare using a procedure code that did not match the 

model information listed on the manufacturer’s invoice (i.e., the correct procedure code). In 

addition, we ensured that the power wheelchair serial numbers for miscoded claims matched the 

serial numbers on the power wheelchair delivery records, when this information was available.33 

29 We chose to divide the standard power wheelchair population at a supplier volume of 10 claims based on the 

distribution of suppliers and claims. Only 25 percent of suppliers had 10 or more claims, and these accounted for 

83 percent of all standard power wheelchair claims. 30 We also requested supplier documentation related to other evaluations in our series of power wheelchair 

evaluations. 

31 We will forward a list of nonresponding suppliers to CMS. 32 We used Medicare’s Motorized Wheelchair Product Classification List from January 2007. We also confirmed 

that the sample claims’ models were not reassigned to different procedure codes during the first half of 2007, using 

the “effective date” field on a 2008 Product Classification List. 

33 We had serial numbers, which are unique to individual power wheelchairs, from both the invoice and the delivery 

record for 29 out of 45 miscoded claims identified. 
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OEI-04-07-00403 Miscoded Claims for Power Wheelchairs in the Medicare Program

We categorized miscoded claims as either upcoded or downcoded. Upcoded claims were those for 

which Medicare allowed more than the fee schedule amount for the correct procedure code. 

Upcoded claims resulted in CMS overpayments to the suppliers. Downcoded claims were those 

for which Medicare allowed less than the fee schedule amount for the correct procedure code. 

Downcoded claims resulted in CMS underpayments to the suppliers. 

We were unable to categorize miscoded claims that had insufficient documentation. For these 

claims, the models’ product names, but not the specific model numbers, were listed on the 

invoices. The claims were miscoded because the product names were not reimbursable under the 

procedure codes the suppliers used to bill Medicare. However, we could not determine whether 

they were upcoded or downcoded because the product names were reimbursable under multiple 

procedure codes, with fee schedule amounts that were both higher and lower than the billed 

procedure codes. 

We calculated error rates by power wheelchair type and, for standard power wheelchair claims, by 

supplier volume and projected the results.34 See Appendix C for the confidence intervals for these 

estimates. 

We calculated Medicare’s average and maximum overpayments and underpayments (“improper 

payments”) for upcoded and downcoded sample claims. We calculated overpayments and 

underpayments based on the difference between the amounts Medicare allowed and the fee 

schedule amounts for the correct procedure codes. We used the highest fee schedule amount to 

calculate improper payments for upcoded and downcoded sample claims with multiple potentially 

correct procedure codes. This approach was conservative because it resulted in the lowest 

overpayment for upcoded claims and the highest underpayment for downcoded claims. We did not 

calculate improper payments associated with miscoded claims that had insufficient documentation 

to categorize as upcoded or downcoded. 

Limitations 

We did not contact the beneficiaries associated with miscoded claims to verify that the power 

wheelchairs they received matched the model information from the manufacturer invoices that 

suppliers submitted. However, we ensured that the power wheelchair serial numbers for miscoded 

claims matched the serial numbers on the power wheelchair delivery records, when this 

information was available. 

We do not know why suppliers submitted miscoded claims. For all miscoded claims, we do not 

know whether the power wheelchairs that suppliers provided were medically necessary. 

We did not project improper payment estimates because the sample sizes associated with miscoded 

claims were not large enough to produce these estimates reliably. Therefore, this report does not 

address the impact of miscoded power wheelchair claims on Medicare and beneficiary payments. 

34 We used SAS and Survey Data Analysis software to project our sample results to the population. 
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OEI-04-07-00403 Miscoded Claims for Power Wheelchairs in the Medicare Program

Standards 

This study was conducted in accordance with the “Quality Standards for Inspections” issued by 

the President’s Council on Integrity and Efficiency and Executive Council on Integrity and 

Efficiency (now Council of the Inspectors General on Integrity and Efficiency). 

RESULTS 

Eight Percent of Standard and Complex Rehabilitation Power Wheelchairs Were Miscoded 

in the First Half of 2007 

Medicare reimbursed suppliers for 46,134 new, nonrental standard and complex rehabilitation 

power wheelchair claims in the first half of 2007.35 36 Based on the power wheelchair model 

information on the manufacturer invoices that suppliers submitted, 8 percent of these claims were 

miscoded. Suppliers billed Medicare for these claims using procedure codes that did not match the 

power wheelchairs they provided to beneficiaries. 

Table 1 compares the miscoded error rates for two power wheelchair types, standard and 

complex rehabilitation, and presents the combined error rates. In the first half of 2007, suppliers 

submitted over 13 times more standard than complex rehabilitation power wheelchair claims. 

Therefore, the greater number of standard power wheelchair claims strongly influenced the 

combined error rates. Appendix C provides the confidence intervals for all estimates. 

Table 1: Error Rates for Miscoded Standard and Complex Rehabilitation Power Wheelchair 

Claims, First Half of 2007 

Miscoded Error Rate (Percentage) 

Miscoded Error Type 

Standard Power 

Wheelchairs 

Complex 

Rehabilitation Power 

Wheelchairs 

Standard and Complex 

Rehabilitation Power 

Wheelchairs 

Upcoded 3% 12% 3% 

Downcoded 4% 4% 4% 

Insufficient documentation to 

categorize 0% 7% 1% 

Total 7% 23% 8% 

Source: OIG analysis of power wheelchair manufacturer invoices, 2009. 

35 This figure excludes claims we removed from the population because the suppliers did not have active Medicare 

enrollment status or were under OIG investigation. 

36 We analyzed claims CMS processed as of June 30, 2007. Suppliers had submitted 79 percent of claims with dates 

of service during the first half of 2007 at the time we selected our sample. 
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OEI-04-07-00403 Miscoded Claims for Power Wheelchairs in the Medicare Program

Three percent of standard and complex rehabilitation power wheelchair claims were upcoded and 

4 percent were downcoded. Complex rehabilitation power wheelchair claims were miscoded and 

upcoded more often than standard power wheelchair claims in the first half of 2007.37 

Seven percent of standard power wheelchair claims were miscoded in the first half of 2007. 

Medicare reimbursed suppliers for 43,133 new, nonrental standard power wheelchair claims in the 

first half of 2007.38 39 Based on manufacturers’ invoices, 7 percent of these claims were miscoded. 

Eleven percent of standard power wheelchair claims submitted by low-volume suppliers and 

6 percent of those submitted by high-volume suppliers were miscoded. Suppliers that submitted 

these miscoded claims provided Medicare beneficiaries with power wheelchairs other than a 

standard power wheelchair. 

 

Table 2 compares the miscoding error rates for standard power wheelchair claims by supplier 

volume. 

Table 2: Error Rates for Miscoded Standard Power Wheelchair Claims, by Supplier 

Volume, First Half of 2007 

Miscoded Error Rate (Percentage) 

Miscoded Error Type 

High-Volume 

Suppliers 

Low-Volume 

Suppliers 

All Standard Power 

Wheelchair Claims 

Upcoded 2% 5% 3% 

Downcoded 4% 4% 4% 

Insufficient documentation to 

categorize 0% 1% 0% 

Total 6% 11%* 7% 

* Column does not add to total because of rounding. 

Source: OIG analysis of power wheelchair manufacturer invoices, 2009. 

Three percent of all standard power wheelchair claims were upcoded. Five percent of standard 

power wheelchair claims submitted by low-volume suppliers and 2 percent of those submitted by 

high-volume suppliers were upcoded. 

In the first half of 2007, Medicare allowed up to $4,024 for standard power wheelchairs.40 Based 

on the sample, suppliers that submitted upcoded standard power wheelchair claims received an 

average of $437 more than the fee schedule amount to which they were entitled. Medicare’s 

37 The miscoded and upcoded error rates for standard and complex rehabilitation power wheelchair claims are 

statistically different at a 95-percent confidence level, based on a chi-square test. 38 This figure excludes claims we removed from the population because the suppliers did not have active Medicare 

enrollment status or were under OIG investigation. 

39 We analyzed claims CMS processed as of June 30, 2007. Suppliers had submitted 79 percent of claims with dates 

of service during the first half of 2007 at the time we selected our sample. 

40 In January 2009, the fee schedule amount was reduced to $3,641. 
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OEI-04-07-00403 Miscoded Claims for Power Wheelchairs in the Medicare Program

maximum overpayment for a single claim was $936. Many beneficiaries associated with upcoded 

standard power wheelchair claims received less expensive Group 1 power wheelchairs. 

Four percent of all standard power wheelchair claims were downcoded. Standard power 

wheelchair claims submitted by low- and high-volume suppliers were downcoded at approximately 

the same rate (4 percent). 

Based on the sample, suppliers that submitted downcoded standard power wheelchair claims 

received an average of $977 less than the fee schedule amount to which they were entitled. 

Medicare’s maximum underpayment for a single claim was $3,252. Most beneficiaries associated 

with downcoded sample claims received more expensive power wheelchairs in the same group as 

standard power wheelchairs (Group 2). However, two beneficiaries received Group 3 complex 

rehabilitation power wheelchairs instead of standard power wheelchairs. 

In addition, less than 1 percent of standard power wheelchair claims were miscoded, but the 

manufacturers’ invoices had insufficient model information to categorize the claims as either 

upcoded or downcoded. For each of these claims, the chair’s product name was not reimbursable 

under the procedure code the supplier used to bill Medicare. However, because the invoices did 

not include the model numbers for each of these claims, we could not determine which of several 

possible procedure codes was correct. 

Twenty-three percent of complex rehabilitation power wheelchair claims were miscoded in the first 

half of 2007. Medicare reimbursed suppliers for 3,001 new, nonrental complex rehabilitation 

power wheelchair claims in the first half of 2007.41 42 Based on the manufacturers’ invoices, 

23 percent of these claims were miscoded. Twelve percent of complex rehabilitation power 

wheelchair claims were upcoded and 4 percent were downcoded. Suppliers that submitted these 

claims billed Medicare using complex rehabilitation procedure codes that did not match the model 

information on the invoices for power wheelchairs they provided to Medicare beneficiaries. 

In the first half of 2007, Medicare fee schedule amounts for complex rehabilitation power 

wheelchairs ranged from $4,132 to $11,965.43 Based on the sample, suppliers that submitted 

upcoded complex rehabilitation power wheelchair claims received an average of $1,081 more than 

the fee schedule amount to which they were entitled. Medicare’s maximum overpayment for a 

single claim was $2,087. Beneficiaries associated with upcoded complex rehabilitation power 

wheelchair claims from the sample received less expensive power wheelchairs, including Group 1 

power wheelchairs, standard power wheelchairs, and less expensive complex rehabilitation power 

wheelchairs. 

41 This figure excludes claims we removed from the population because the suppliers did not have active Medicare 

enrollment status or were under OIG investigation. 

42 We analyzed claims CMS processed as of June 30, 2007. Suppliers had submitted 79 percent of claims with dates 

of service during the first half of 2007 at the time we selected our sample. 

43 In January 2009, fee schedule amounts for complex rehabilitation power wheelchairs were reduced by 

9.5 percent, to between $3,739 and $10,828. 
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OEI-04-07-00403 Miscoded Claims for Power Wheelchairs in the Medicare Program

Based on the sample, suppliers that submitted downcoded complex rehabilitation power wheelchair 

claims received an average of $881 less than the fee schedule amount to which they were entitled. 

Medicare’s maximum underpayment for a single claim was $1,363. 

In addition, 7 percent of complex rehabilitation power wheelchair claims were miscoded, but the 

manufacturers’ invoices had insufficient model information to categorize the claims as either 

upcoded or downcoded. For each of these claims, the chair’s product name was not reimbursable 

under the procedure code the supplier used to bill Medicare. However, because the invoices did 

not include the model numbers for each of these claims, we could not determine which of several 

possible procedure codes was correct. 

CONCLUSION 

Medicare reimbursed suppliers for 46,134 new, nonrental standard and complex rehabilitation 

power wheelchair claims in the first half of 2007.44 Suppliers billed Medicare for 8 percent of 

these claims using procedure codes that did not match the model information on the invoices for 

the power wheelchairs provided to beneficiaries. Three percent of standard and complex 

rehabilitation power wheelchair claims were upcoded and 4 percent were downcoded. One 

percent of claims were miscoded, but the invoices had insufficient model information to 

categorize the claims as either upcoded or downcoded. Complex rehabilitation power 

wheelchair claims were miscoded more often than standard power wheelchair claims (23 percent 

and 7 percent, respectively). Complex rehabilitation power wheelchair claims were also upcoded 

more often than standard power wheelchair claims (12 percent and 3 percent, respectively). 

 

We will forward information on the miscoded claims identified in our sample to CMS for 

appropriate action. In addition, our analysis indicates that suppliers may need further education to 

determine the correct power wheelchair procedure codes to bill Medicare. Our analysis also 

demonstrates that opportunities exist to improve CMS’s review of power wheelchair claims. If 

suppliers provided model information when submitting claims, CMS contractors could use this 

information to automatically determine whether the models are reimbursable under the billed 

procedure codes. In addition, if contractors included manufacturers’ invoices in their targeted 

reviews, they could determine whether billed procedure codes match the model information on the 

invoices. 

This report is being issued directly in final form because it contains no recommendations. If you 

have comments or questions about this report, please provide them within 60 days. Please refer 

to report number OEI-04-07-00403 in all correspondence. 

44 This figure excludes claims we removed from the population because the suppliers did not have active Medicare 

enrollment status or were under OIG investigation. 
Page 13 – Deborah Taylor 

OEI-04-07-00403 Miscoded Claims for Power Wheelchairs in the Medicare Program

APPENDIX A 

Power Wheelchair Performance Requirements, by Group 

Performance 

Category 

Description of 

Performance Category 

Group 1 

Requirement 

Group 2 

Requirement 

Group 3 

Requirement 

Length 40 inches 48 inches 48 inches 

Width 24 inches 34 inches 34 inches 

Obstacle height 

Vertical height of a solid 

obstruction that can be 

climbed 0.79 inches 1.57 inches 2.36 inches 

Minimum top-end 

speed 

The minimum speed 

acceptable on a flat, hard 

surface 3 miles per hour 3 miles per hour 4.5 miles per hour 

Range 

The minimum distance 

acceptable on a single 

charge of the batteries 5 miles 7 miles 12 miles 

Dynamic stability 

incline 

The minimum degree of 

slope at which the power 

wheelchair in the most 

common seating and 

positioning configuration(s) 

remains stable at the 

required patient weight 

capacity 

6 degrees 

(1:12) 

6 degrees 

(1:12) 

7.5 degrees 

(1:10) 

Source: “Power Mobility Device Coding Guidelines,” August 3, 2006. From the Statistical Analysis Durable Medical Equipment Regional Carrier. 
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OEI-04-07-00403 Miscoded Claims for Power Wheelchairs in the Medicare Program

APPENDIX B 

Population and Sample Sizes for Standard and Complex Rehabilitation Power Wheelchairs, First Half of 2007 

Population Sample 

 Stratum Definition Claims Expenditures Suppliers Claims Expenditures Suppliers 

1 

Standard power wheelchair claims 

by low-volume suppliers 7,223 $28,949,132 2,352 125 $499,152 124 

2 

Standard power wheelchair claims 

by high-volume suppliers 35,910 $144,354,060 716 125 $502,989 94 

1 and 2 

All standard power wheelchair 

claims 43,133 $173,303,192 3,068 250 $1,002,141 218 

3 

Complex rehabilitation power 

wheelchair claims* 3,001 $16,010,906 1,064 125 $665,200 113 

Total 46,134 $189,314,098 3,362** 375 $1,667,341 325** 

* Procedure codes K0835–K0864. 

** Supplier figures do not sum to totals because of overlap (some suppliers in our sample provided both standard and complex rehabilitation power wheelchairs). 

Source: Office of Inspector General analysis of Medicare power wheelchair claims with dates of service from January 1 to June 30, 2007. 
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OEI-04-07-00403 Miscoded Claims for Power Wheelchairs in the Medicare Program

APPENDIX C 

Estimates and Confidence Intervals for Miscoded Error Rates Among Standard and Complex 

Rehabilitation Power Wheelchair Claims, First Half of 2007 

Estimate Description 

Sample 

Size 

Point 

Estimate 

95-Percent 

Confidence 

Interval 

Standard and Complex Rehabilitation Power Wheelchairs 

Miscoded claims 339 7.7% 4.8%–12.1% 

Upcoded claims 339 3.2% 1.6%–6.2% 

Downcoded claims 339 3.9% 1.9%–8.1% 

Miscoded claims for which invoices had insufficient documentation 

to categorize the claims as upcoded or downcoded 339 0.6% 0.1%–2.2% 

Standard Power Wheelchairs: All Suppliers 

Miscoded claims 219 6.6% 3.6%–11.6% 

Upcoded claims 219 2.5% 0.8%–6.0% 

Downcoded claims 219 3.9% 1.8%–8.5% 

Miscoded claims for which invoices had insufficient documentation 

to categorize the claims as upcoded or downcoded 219 0.2% 0.0%–2.0% 

Standard Power Wheelchairs: High-Volume Suppliers 

Miscoded claims 105 5.7% 2.6%–12.3% 

Upcoded claims 105 1.9% 0.2%–6.7% 

Downcoded claims 105 3.8% 1.4%–9.8% 

Miscoded claims for which invoices had insufficient documentation 

to categorize the claims as upcoded or downcoded 105 0.0% 0.0%–0.0% 

Standard Power Wheelchairs: Low-Volume Suppliers 

Miscoded claims 114 10.5% 6.1%–17.7% 

Upcoded claims 114 5.3% 2.4%–11.3% 

Downcoded claims 114 4.4% 1.8%–10.2% 

Miscoded claims for which invoices had insufficient documentation 

to categorize the claims as upcoded or downcoded 114 0.9% 0.0%–4.8% 

Complex Rehabilitation Power Wheelchairs 

Miscoded claims 120 22.5% 15.9%–30.8% 

Upcoded claims 120 11.7% 7.1%–18.7% 

Downcoded claims 120 4.2% 1.8%–9.6% 

Miscoded claims for which invoices had insufficient documentation 

to categorize the claims as upcoded or downcoded 120 6.7% 3.4%–12.7%