Department of Health and Human Services

OFFICE OF 

INSPECTOR GENERAL 

 

Daniel R. Levinson 

Inspector General 

October 2007 

OEI-04-07-00160 

 

A COMPARISON OF MEDICARE 

PROGRAM AND CONSUMER 

INTERNET PRICES FOR POWER 

WHEELCHAIRS 
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. 
 

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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 

Δ EXECUTIVE SUMMARY 
 

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EXECUTIVE SUMMARY 

Internet prices available to consumers in the first quarter of 2007. 

Medicare’s 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. 
EXECUTIVE SUMMARY .....................................i

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

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

 Fee schedule amounts exceeded consumer Internet prices . . . . . . . 8 

 Medicare and its beneficiaries could have achieved savings . . . . . 10 

 

RECOMMENDATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 

APPENDICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 

 A: Performance Requirements by Group. . . . . . . . . . . . . . . . . . . . 13 

 B: Findings by Procedure Code . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 

 C: Potential Savings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 

D: Agency Comments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 

 

ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Δ TABLE OF CONTENTS 
 

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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. 

Δ INTRODUCTION 
 

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INTRODUCTION 

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. 
 

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INTRODUCTION 

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 

wheelchair’s 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 Medicare’s 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. 
 

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INTRODUCTION 

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 (K0813–K0864). 

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. 
 

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INTRODUCTION 

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 

Medicare’s 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 1–4 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 E2360–E2365. 

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. 
 

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INTRODUCTION 

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 CMS’s “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. 
 

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INTRODUCTION 

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 President’s Council on Integrity and 

Efficiency and the Executive Council on Integrity and Efficiency. 
 

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Medicare fee schedule amounts for 

power wheelchairs exceeded 

median Internet prices by an 

average of 45 percent during the 

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. 

Medicare fee schedule amounts for power 

wheelchairs were 45 percent higher than median 

Internet prices available to consumers in the 

first quarter of 2007 

Δ FINDINGS 
 

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FINDINGS 

 

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. 

Medicare’s 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. 

Table 1: Difference Between Internet Prices and the Medicare 

Fee Schedule by Group 

Group Range of Procedure 

Codes* 

Average Percentage 

Medicare Fee Schedule 

Amounts Exceed Median 

Internet Prices 

Group 1 K0813–K0816 72% 

Group 2 K0820–K0843 43% 

Group 3 K0848–K0864 65% 

All Power 

Wheelchairs K0813–K0864 45% 

* We analyzed Internet prices for power wheelchairs in 28 of the procedure codes referred to in this 

column. 

Note: All figures in the table have been rounded. 

Source: Office of Inspector General analysis of consumer prices available over the Internet, 2007.
 

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FINDINGS 

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. 

Medicare and its beneficiaries 

could have spent less on power 

wheelchairs during the first 

quarter of 2007 had they paid 

median Internet prices. 

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 million—28 percent less than 

actual payments—had 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. 

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 

Exceeds Median Internet Price 36% 

Note: All figures in the table have been rounded. 

Source: Office of Inspector General analysis of consumer prices available over the 

Internet, 2007. 

 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 
 

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FINDINGS 

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. 
 

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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 CMS’s comments, see Appendix D. 

 

Δ RECOMMENDATION 
 

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Table 3: Performance Requirements for Power Wheelchair Groups 

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. 

Δ APPENDIX~A 
 

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Table 4: Findings by Procedure Code—A Comparison of Medicare Fee Schedule Amounts and Prices 

Available Over the Internet for Power Wheelchairs, January–March 2007 

Medicare 

Procedure 

Code

Group 

Percentage of 

Power 

Wheelchair 

Claims 

Number of 

Internet 

Prices 

Collected 

Range of Internet 

Prices 

Median 

Internet 

Price 

Medicare 

Fee 

Schedule 

Amount 

Percentage 

Medicare Fee 

Schedule Amount 

Exceeds Median 

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. 

Δ APPENDIX~B 
 

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APPENDIX B 

Table 4 (Continued): Findings by Procedure Code—A Comparison of Medicare Fee Schedule Amounts and 

Prices Available Over the Internet for Power Wheelchairs, January–March 2007 

Medicare 

Procedure 

Code

Group

Percentage of 

Power 

Wheelchair 

Claims 

Number of 

Internet 

Prices 

Collected 

Range of Internet 

Prices 

Median 

Internet 

Price 

Medicare 

Fee 

Schedule 

Amount 

Percentage 

Medicare Fee 

Schedule Amount 

Exceeds Median 

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. 
 

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Table 5: Potential Savings for Power Wheelchairs, January–March 2007

Group 

Percentage of 

Medicare 

Claims 

Medicare 

Expenditures 

Potential 

Savings to 

Beneficiaries 

Potential 

Savings to 

Medicare 

Total 

Potential 

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 

Wheelchairs 100% $138,263,001 $7,818,747 $31,274,988 $39,093,735 

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, 

January–March 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. 

Δ APPENDIX~C 
 

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AGENCY COMMENTS 

Δ APPENDIX~D 
 

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APPENDIX D 
 

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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. 

Δ ACKNOWLEDGMENTS