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ELIMINATING WASTE AND FRAUD IN MEDICARE: 

AN EXAMINATION OF PRIOR AUTHORIZATION 

REQUIREMENTS FOR POWER MOBILITY DEVICES 

HEARING 

BEFORE THE

SPECIAL COMMITTEE ON AGING 

UNITED STATES SENATE 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

WASHINGTON, DC 

SEPTEMBER 19, 2012 

Serial No. 112–23 

Printed for the use of the Special Committee on Aging 

( 

Available via the World Wide Web: http://www.fdsys.gov 
(II) 

SPECIAL COMMITTEE ON AGING 

HERB KOHL, Wisconsin, Chairman 

RON WYDEN, Oregon 

BILL NELSON, Florida 

BOB CASEY, Pennsylvania 

CLAIRE MCCASKILL, Missouri 

SHELDON WHITEHOUSE, Rhode Island 

MARK UDALL, Colorado 

MICHAEL BENNET, Colorado 

KIRSTEN GILLIBRAND, New York 

JOE MANCHIN III, West Virginia 

RICHARD BLUMENTHAL, Connecticut 

BOB CORKER, Tennessee 

SUSAN COLLINS, Maine 

ORRIN HATCH, Utah 

MARK KIRK III, Illinois 

DEAN HELLER, Nevada 

JERRY MORAN, Kansas 

RONALD H. JOHNSON, Wisconsin 

RICHARD SHELBY, Alabama 

LINDSEY GRAHAM, South Carolina 

SAXBY CHAMBLISS, Georgia 

CHAD METZLER, Majority Staff Director 

MICHAEL BASSETT, Ranking Member Staff Director 
(III) 

CONTENTS 

Page 

Opening Statement of Senator Bob Corker ........................................................... 1 

PANEL OF WITNESSES 

Deborah Taylor, Chief Financial Officer and Director, Office of Financial 

Management, Centers For Medicare & Medicaid Services, Baltimore, MD .... 2 

Paul Hughes, MD, Medical Director, National Heritage Insurance Company, 

Durable Medical Equipment Medicare Administrative Contractor, Jurisdiction A, Lexington, SC ........................................................................................... 11 

Stephen Peake, D.Ph., MD, Medical Director, Senior Care Division, Blue 

Cross Blue Shield of Tennessee, Chattanooga, TN ........................................... 14 

Michael Clark, JD, Chief Administrative Officer and General Counsel, The 

Scooter Store, New Braunfels, TX ...................................................................... 15 

Jerome Epplin, MD, FAAFM, Family Practitioner, Litchfield Family Practice 

Center, Litchfield, IL ........................................................................................... 17 

APPENDIX 

WITNESS STATEMENTS FOR THE RECORD

Deborah Taylor, Chief Financial Officer and the Director of the Office of 

Financial Management, Centers for Medicare & Medicaid Services, Baltimore, MD .............................................................................................................. 34 

Paul J. Hughes, M.D., Medical Director, National Heritage Insurance Company, Durable Medical Equipment Medicare Administrative Contractor, Jurisdiction A, Lexington, SC ................................................................................. 44 

Stephen T. Peake, D.Ph., M.D., Medical Director, Senior Care Division, Blue 

Cross Blue Shield of Tennessee, Chattanooga, TN ........................................... 48 

Michael Clark, J.D., Chief Administrative Officer and General Counsel, The 

SCOOTER Store, New Braunfels, TX ................................................................ 52 

Jerome J. Epplin, M.D., FAAFM, Family Practitioner, Litchfield Family Practice Center, Litchfield, IL .................................................................................... 62 

ADDITIONAL STATEMENT SUBMITTED FOR THE RECORD

Victor A. Hirth, MD, MHA, FACP, AGSF, Columbia, SC .................................... 70 

(1) 

ELIMINATING WASTE AND FRAUD 

IN MEDICARE: AN EXAMINATION OF PRIOR 

AUTHORIZATION REQUIREMENTS FOR 

POWER MOBILITY DEVICES 

WEDNESDAY, SEPTEMBER 19, 2012 

U.S. SENATE, 

SPECIAL COMMITTEE ON AGING, 

Washington, DC. 

The Committee met, pursuant to notice, at 2:38 p.m. in Room 

SD–562, Dirksen Senate Office Building, Hon. Bob Corker, presiding. 

Present: Senators Corker [presiding] and Blumenthal. 

OPENING STATEMENT OF SENATOR BOB CORKER 

Senator CORKER. I think we’ll go ahead and get started, and 

thank you very much for being here, and all of you who have come 

to this hearing. 

Instead of reading my opening statement, I’ll start by saying that 

some time ago, I don’t watch a great deal of television, but I would 

see ads on television regarding all kinds of mobility devices where 

people could, it appeared, just call up and the companies would figure out some way for this person to own these mobility devices 

with little or no money down. It almost gave the impression that 

they would ensure that you paid nothing. 

Obviously that’s taxpayer money, and it looked to me to be very 

flagrantly in the face of anything that would have value for the 

American taxpayer, and it also seemed to me that people were taking advantage of this and probably jeopardizing people who really 

do need these mobility devices down the road. 

And so our staff began looking into it. We have learned that 

CMS has an 80 percent fault rate on these. In other words, 80 percent of the people who apply for these mobility devices get turned 

down, initially anyway. So there’s a huge problem here. I think 

most Americans have seen these advertisements on TV and probably question what the Federal Government is doing. I certainly 

do. It’s actually—well, I’ll just leave it at that. 

I know that we have a new program now that, through CMS, is 

going to look at this and try to get that fault rate down from, 

again, 80 percent to some normal level. So we have a program that 

is being advertised to the American people. People are applying for 

it. Lots of people are receiving these mobility devices, but we have 

an 80 percent case of these devices not meeting standards. 
2 

So now we’ve hired contractors, I understand, to deal with this. 

These, by the way, are the same contractors we’ve been working 

with in the past on this same program. 

So the purpose of this hearing is to look into that and to ensure 

that we as a government are going to do those things that are responsible as it relates to these mobility devices. So I thank you all 

for being here. 

I might add, by the way, this is the same entity that’s going to 

be dealing with all kinds of other responsibilities, especially as we 

move forward with the new health care bill. 

So I think this is something very timely for us to look at. I thank 

you all for participating. I’m going to go ahead and mention who 

all the participants are. 

Deborah Taylor, obviously, is the Chief Financial Officer and Director of the Office of Financial Management for CMS. We thank 

you so much for being here. 

Later on Panel 2, we’ll have Paul J. Hughes, who is a physician 

and the Medical Director for the National Heritage Insurance Company, Durable Medical Equipment Medicare Administrative Contractor, responsible for Jurisdiction A, which is comprised of the 

northeastern states from Maine to Washington, D.C. 

We also have Stephen T. Peake, Ph.D., who is the Medical Director, and M.D. I might add, Medical Director for the Senior Care Division at Blue Cross Blue Shield of Tennessee. 

We have Michael Clark, J.D., the Chief Administrative Officer 

and General Counsel of the Scooter Store. I think this might have 

been the entity that I continued to see these advertisements with. 

And then Jerome Epplin, M.D., who is a family practitioner at 

the Litchfield Family Practice Center in Litchfield, Illinois, and 

also trains students at Southern Illinois University. In 2010 he received the American Geriatric Society Clinician of the Year Award. 

Now that I filibustered by introducing everybody on the front 

end, hoping that some of my colleagues would be here, if you would 

go ahead and start I would appreciate it, and certainly the meeting 

is now in order. 

STATEMENT OF DEBORAH TAYLOR, CHIEF FINANCIAL OFFICER AND DIRECTOR, OFFICE OF FINANCIAL MANAGEMENT, 

CENTERS FOR MEDICARE & MEDICAID SERVICES, BALTIMORE, MD 

Ms. TAYLOR. Sure. Good afternoon, Ranking Member Corker, and 

thank you very much for the opportunity to discuss the Centers for 

Medicare & Medicaid Services’ efforts to reduce fraud and improper 

payments for power mobility devices and to update you on the prior 

authorization demonstration, which CMS began earlier this month. 

Power mobility devices, or PMDs, have historically had high incidents of fraud and improper payments, and the suppliers of PMDs 

continue to be subject to significant law enforcement activities. 

Joint investigations by the Department of Justice and the HHS Office of Inspector General and CMS have resulted in numerous suppliers being charged with and convicted of defrauding the Medicare 

program. Recently, a Louisiana supplier was sentenced to 180 

months in prison for participating in a scheme that defrauded 

Medicare of more than $21 million for billing for power wheelchairs 
3 

and other medical equipment that was never provided to beneficiaries. 

In addition, the OIG—and you mentioned this—and our comprehensive error rate results have reported that more than 80 percent of claims for motorized wheelchairs did not meet Medicare coverage requirements. Although CMS recognizes that many improper 

payments are not the result of willful fraud, this error rate is extremely high. 

In an effort to prevent dollars from being wasted and protect the 

Medicare Trust Funds from fraud, CMS began this PMD, Prior Authorization Demo, for orders written on or after September 1, 2012, 

for Medicare beneficiaries who reside in seven states. This demonstration will employ prior authorization, a commonly-used private sector tool to protect the Medicare Trust Funds. Prior authorization, sometimes known as prior approval or pre-certification, is 

currently used by other health care programs such as TRICARE, 

some state Medicaid programs, and private insurance plans for 

many services, including PMDs. 

With prior authorization, CMS will review the medical records 

before the supplier delivers the PMD. This allows suppliers to 

know before an item is delivered to a beneficiary whether Medicare 

will pay for the PMD. The demonstration does not create any new 

documentation requirements but simply requires the medical information be provided before submitting the bill for payment. 

The demonstration can also help us develop improved methods 

for the investigation and prosecution of fraud that could ultimately 

protect the Medicare Trust Funds from fraudulent activities. This 

prior authorization demo will also help ensure that a beneficiary’s 

medical condition warrants the PMD under existing coverage 

guidelines. 

CMS did seek input from many provider and supplier groups on 

this demonstration when we originally announced it on November 

15th, 2011. We received significant feedback from the industry. In 

response to that feedback, we did delay the demonstration by nine 

months from the original January 1, 2012, start date. 

CMS also made several other changes, such as reducing the resubmission review time from 30 business days to 20 business days, 

and allowing suppliers to submit the prior authorization request on 

behalf of the physician. 

In addition, CMS conducted and will continue to conduct education and outreach activities, including Webinars, open-door forums, and in-state meetings. CMS will closely monitor the demonstration and will continue to work to ensure that suppliers, physicians and beneficiaries have up-to-date information about the 

demonstration. 

Prior authorization can be an important tool to help CMS reduce 

fraud and improper payments for PMDs, while continuing to ensure that beneficiaries have access to needed equipment. We believe this demonstration will help protect the Medicare Trust 

Funds by utilizing many of the same methods already used by private insurance plans to ensure payment accuracy. 

I’m happy to answer any questions you have. 

Senator CORKER. Thank you. What was the impetus to create 

this new pilot program that you’re now putting in place? 
4 

Ms. TAYLOR. Part of the impetus was the fact that we continue 

to do education and outreach for providers and suppliers of these 

PMDs. We have conducted lots of pre-payment review to ensure 

that they understand the policies. However, we continue to still see 

high error rates, over 80 percent, with this benefit; and as I mentioned, we continue to have fraud committed against the benefit by 

suppliers throughout the country. 

So we felt that this was the next step, that we really wanted to 

look at something the private sector uses currently to ensure that 

we’re paying for wheelchairs that are really needed. 

Senator CORKER. And I know many of the questions that whoever is here will ask will be of the second panel of people who are 

very directly involved, and I know you’re not. I know you’re trying 

to solve the problem. But 80 percent is a huge number. As a matter 

of fact, how much do we spend on PMDs annually? Do you know 

what is your estimate? We have one ourselves. 

Ms. TAYLOR. Yes. In 2011, we spent a little over $700 million on 

power wheelchairs. 

Senator CORKER. And 80 percent of the claims for those, as it 

turned out, were inappropriate as it relates to CMS standards? 

Ms. TAYLOR. Correct. On our review, documentation or additional 

information or the fact that the beneficiary did not need the PMD 

was what we found when we reviewed those claims. 

Senator CORKER. I mean, it seems like any American that would 

see one of these commercials on television, they would realize that 

something probably really bad is happening here, and you guys 

have evidence that 80 percent of the claims shouldn’t be there in 

the first place. So what is it that it takes to create huge alarm bells 

when we have this kind of money being wasted, being utilized in 

ways that it’s not supposed to be utilized? 

Ms. TAYLOR. Conversations we’ve had with beneficiary groups as 

we’ve started to roll out this demonstration. We’ve continued to emphasize to providers, as well as to beneficiaries, that the Medicare 

program under statute and by law pays for power wheelchairs for 

use in the home, for beneficiaries who need a wheelchair to get 

around their home to perform an activity, one or more activities of 

daily living, such as going to get food, going to the bathroom. And 

when we explain that to beneficiaries, I would say many of them 

are surprised that it is for use in the home, and that is by law. It’s 

under statute that that’s the use for a PMD. 

And so I do think some of the commercials may be confusing for 

beneficiaries when they see the primary use for a wheelchair outside the home. That’s not the primary benefit that we cover under 

Medicare. 

Senator CORKER. And it is my understanding we’re using the 

same contractors that we have used in the past where we’ve had 

this 80 percent error rate. We’re using the same contractors on this 

pilot program. Is that correct? 

Ms. TAYLOR. Correct. We are using our durable medical equipment Medicare contractors to do these reviews. 

Senator CORKER. Have you talked with any of the contractors 

themselves just on a one-on-one basis and asked them how in the 

world they could have an 80 percent fault rate in what they were 

doing? 
5 

Ms. TAYLOR. Yes. We actually talk to our contractors probably 

quarterly to talk about what they’re seeing, and more often if needed. I know that we have one of those contractors on the next panel. 

But most of it does come down to documentation. We require a 

seven-element form to be filled out by the physician, as well as a 

face-to-face examination. Oftentimes, one or two of those items is 

missing from the medical record. So it’s really almost impossible to 

know what did the physician see or what did they observe when 

they saw that patient. So when documentation is missing, it’s very 

difficult to determine what was going on in that examination. 

Senator CORKER. But isn’t an 80 percent rate almost beyond belief, even for the Federal Government? 

Ms. TAYLOR. It’s extremely high, yes. 

Senator CORKER. Have you—have there been any—I mean, that 

high rate would almost make one consider whether much of this is 

being done on purpose and whether there are actually other kinds 

of activities that are malicious in nature, and maybe there ought 

to be proceedings in other ways. I mean, have you all considered 

looking into that? 

Ms. TAYLOR. From our standpoint, we believe the prior authorization demonstration will be a great tool for us to look at it. Right 

now, on an annual basis, the products that are covered under this 

demonstration last year, or in 2010, we had about 200,000 claims 

billed for these products, and we looked at very few of those claims. 

We don’t have the budget or the resources to review a lot. This will 

be the first time we will have, in fact, the records and the documentation up-front for about 40 percent of those. 

So we think the prior auth demonstration will, in fact, provide 

us with a lot of information to get exactly what you’re saying, what 

are the things we should be looking for, is there patterns of fraud 

here that we should be looking for. 

Senator CORKER. So, if I understand you correctly, CMS, which 

spends billions of dollars each year on durable medical equipment, 

doesn’t have the staff or the resources actually to look at these authorizations in advance in most cases. So when people—I mean, 

sometimes you think you’re hearing folks rhetorically talk about 

the waste and fraud and abuse that takes place in Medicare. What 

you would say is that just in this one case, 80 percent of the claims 

are off, and you think it’s over $700 million. This is just one minor 

case of spending within the Medicare allotment, and you’re saying 

that CMS really doesn’t have the resources to know whether that’s 

being carried out throughout the system. Is that correct? 

Ms. TAYLOR. Correct on some level. I mean, we do look at it. We 

do look for patterns where a provider or a supplier may look aberrant. So we do focus in on that. But in the grand scheme of the 

entire Medicare program, we have to focus our efforts on the highest dollar errors first. So that is where we tend to focus our resources. We have enough money to look at less than 1 percent of 

the claims that are submitted to Medicare each year, and so we 

really do have to use those resources sparingly, and we really think 

that this prior auth demonstration will give us the opportunity to 

really look at this benefit a little closer than we have been able to 

do in the past. 
6 

Senator CORKER. So we look at 1 percent of the claims, and a 

vast amount of money. So when people talk about hundreds of billions of dollars in waste, fraud and abuse existing in Medicare, just 

this one example would lead people to believe that that really 

might well be the case. Is that correct? The number has to be huge 

if we’re finding in this one little $700 million program that 80 percent of the claims are invalid. 

Ms. TAYLOR. Well, we do an error rate each year. We do a measurement, a comprehensive error rate measurement on the entire 

program, and last year it was less than 10 percent. It was 9-something. So on the entire program, we do do a measurement. We cannot determine how much of that is fraud, but we do know that we 

do have an error rate in the Medicare program of around 10 percent. 

Senator CORKER. What would you expect would be an appropriate rate? When you get through doing this program, do you 

think there’s going to be tremendous improvements? Again, we’re 

using the same contractors in the past that have generated an 80 

percent fault rate. So we’re using the same people. We’re just using 

a little different process. I would have thought some of them, doing 

so much business with the Federal Government, would have volunteered that this is a problem, and I look forward to asking some 

of those questions later. 

But what is the rate that you expect? That 80 percent rate will 

be what rate, in your estimation? What do you think would be a 

good job, if you will, by these contractors after this pilot is in place? 

Ms. TAYLOR. We’re in the process right now of acquiring an evaluation contractor for this demonstration. We certainly are going to 

look at the quality of determinations, the quality of information 

sent in to us by providers. I don’t think we have set a threshold 

of what is an acceptable error rate. Obviously, we would want an 

error rate to be zero. That’s probably very aggressive given where 

we are now. 

But right now, we sort of need to start the program and evaluate 

it along the way to see what steps or actions we might need to take 

to tweak it. But we expect to have quarterly meetings with our contractors on what they are seeing inside the prior authorization 

demo, and we will have an evaluation contractor looking at the entire program to give us information and feedback on it. 

Senator CORKER. So we’ve set up a program to deal with an 80 

percent error rate, one that any American with any kind of ability 

to comprehend can watch on television and understand that there’s 

probably a tremendous amount of abuse taking place in this program. So we have this program that has an 80 percent error rate, 

and we put in place a prior authorization pilot, but we haven’t yet 

figured out what our goals are as it relates to an error rate, and 

we’re going to hire another contractor who is an evaluation contractor to help us figure out what that ought to be. 

Ms. TAYLOR. We are going to need some resources to help us analyze the data. So the prior authorization is one part of this. When 

you look at fraud, fraud moves. If someone believes we’re looking 

at them, they are likely to move. So the entire benefit will have to 

be evaluated under this, and at this point I think it’s too early for 

me to predict or to say what our hope is the error rate would be. 
7 

We certainly will evaluate that, and that would be certainly one 

metric of the success of this program. 

Senator CORKER. Well, first of all, I thank you. It sounds like to 

me that you understand there’s a problem, and it sounds like you 

may be under-resourced, and I look forward to digging into that a 

little bit more. I really appreciate you being here today. 

But I think by just outside observers watching this, it would be 

almost beyond belief to realize that this has been occurring this 

long and that we really don’t, in advance, have some standards. 

How would you feel about us, after we know more about this and 

dig into it a little bit more and have this hearing, how would you 

feel about us putting into law—I think the American people would 

fully stand behind this—but putting into law that if a contractor 

has an error rate above X, they are no longer a part of our program? Would you feel like that would be helpful to help reinforce 

what it is that you’re doing? 

Ms. TAYLOR. We currently do have some metrics in our contractors’ awards and the contracts that we sign with them that they 

must have efforts to reduce the error rates. We typically look at it 

as a whole, but it’s certainly something we’d consider and would be 

happy to talk to the committee about. 

Senator CORKER. So with the contractors who are getting ready 

to testify with us—and you know who is on the panel, you deal 

with them—who have an 80 percent error rate, they have in their 

contracts provisions that say that they need to help you figure out 

ways of lowering the error rate. 

Ms. TAYLOR. Correct. 

Senator CORKER. And yet we continue to re-up with them even 

though they have an 80 percent error rate. 

Ms. TAYLOR. It is extremely difficult to be able to look at every 

benefit under a contractor’s purview. We do work very closely with 

our contractors to make sure they have, you know, actions to deal 

with these and to mitigate them. So we do work very closely with 

them to make sure that they are on top of it and are taking actions 

to correct it. 

Senator CORKER. Can you understand why I’d be semi-astonished 

at where we are today? 

Ms. TAYLOR. Yes, I can. 

Senator CORKER. I think if most Americans realized that we had 

agencies of government that continued year after year after year to 

deal with people that had an 80 percent error rate, and we had in 

their contract solely that they were supposed to help us figure out 

ways of mitigating that, of lowering that, and that still hadn’t happened, and then we were putting in a prior authorization program 

now that’s a pilot using those same contractors and that we didn’t 

have yet a standard by which we felt like they should live to or not 

be a part of the program, I think people would be just incredibly 

astonished, and I just want to make sure—I know that I am now— 

that I’m not missing something here, that maybe there is something else that you would like to say. 

Ms. TAYLOR. I think for the contracts, there are many things that 

our contractors do. Error rate is one piece of the contract. We do 

expect them to do education and outreach. Unfortunately, that education and outreach is not having the impact we hoped it would. 
8 

Prior authorization is a tool that we think can help significantly 

lower the error rate and also identify and help us identify fraud 

that could be occurring inside the benefit, and help us figure out 

additional things that we may need to do to prevent it. 

Senator CORKER. One of our panelists later on is part of Blue 

Cross of Tennessee, and they have a managed care plan, a Medicare Advantage plan that has a negligible improper payment rate, 

negligible. I guess I don’t understand how they could have one 

that’s negligible—I mean, almost zero—and CMS could have an 80 

percent error rate, and we’re only checking 1 percent of the claims, 

and again we’re using the same people that are creating this problem to try to fix it. I’m just wondering if you could share with me 

some of the differences that might exist there. 

Ms. TAYLOR. I really can’t speak to the Tennessee model. But 

when we look at what other private insurers do to measure error 

rate, they typically measure it based on the claim as paid. When 

we do that same analysis, we pay appropriately based on the information that’s on the claim, 99 percent of the time correctly. It’s 

when you require or ask the physician or supplier to send in the 

underlying medical record that we find the error rate shoot up to 

the 80 percent that we’ve been talking about. 

So when the claim is submitted and the claim is paid based on 

the face of the claim—we cannot look at the underlying medical 

records for every claim—we do in fact pay very comparably, if not 

better than most private insurers. It’s really when we pull the 

claim and request the medical record and look at the underlying 

record against our policies and our coverage requirements that 

there is information missing that would cause us to deny that 

claim for payment. So that’s usually where we differ from private 

insurers. 

Senator CORKER. That’s a very good explanation, and I thank you 

for your temperament. Now that Senator Blumenthal is here, I’m 

going to turn it over to him. Again, thank you for being here. 

Senator BLUMENTHAL. Thank you, Senator Corker, and my 

thanks to you for holding this hearing today and focusing on an 

issue that I think has not only financial and fiscal implications, but 

also potential dangers for consumers and the integrity of the entire 

program, and the public confidence and trust in its integrity. And 

I want to thank Senator Kohl, as well, for his leadership on this 

issue. 

Without belaboring some of these numbers, the OIG report in 

2011 finding that 80 percent of the claims for power mobility devices did not meet Medicare coverage requirements certainly raises 

urgent concerns, not just strong but also urgent concerns, and this 

error rate represents close to half a billion dollars in improper payments at a time when we’re trying desperately to cut or reduce the 

increasing costs of health care. 

So I appreciate your being here today. I am really interested in 

what you can do and what you plan to do to address some of the 

direct-to-consumer ads. As Attorney General, I’m very familiar with 

the potential for deceptive and misleading ads to consumers, and 

especially where you have such strong financial leverage and interest, my view is that you have an opportunity and an obligation to 
9 

do more to restrict some of those potentially deceptive and misleading ads. 

Could you tell us a little bit more what you can do to exercise 

some leverage and authority? 

Ms. TAYLOR. CMS does not have authority to really oversee or to 

regulate commercial direct-to-consumer advertising by suppliers for 

power wheelchairs or really for any health care delivery. What we 

do is we encourage that they not mislead or put anything in their 

advertisements that is not correct. 

We certainly have heard, as we’ve been out talking to beneficiary 

groups, that there is confusion on the part of beneficiaries as to 

what Medicare does pay for under the power mobility benefit, and 

by statute, by law, we can only pay for power wheelchairs when it 

is needed for the beneficiary for in their home to perform one or 

two activities of daily living. 

So when advertisements do show the power wheelchair for the 

primary use of outside the home, it does create confusion for beneficiaries. But we cannot regulate the advertisements that these 

suppliers put out there. 

Senator BLUMENTHAL. When you say you can’t regulate them, I 

know you can’t order them off the air. You can’t restrain them from 

making those ads, but you can refuse to pay for power mobility devices that are produced by those companies if they result in inappropriate use or if the purchases result from inappropriate ads. 

Ms. TAYLOR. I’m not sure we can do that. If a provider or a physician sees a patient and orders the wheelchair, and it is necessary 

for the beneficiary even though there is an ad that’s not appropriate, I will and need to pay for the wheelchair that a physician 

signed an order for. 

Senator BLUMENTHAL. So in effect, you’re saying you don’t have 

the authority that exists under the FDA Act that applies to a pharmaceutical drug manufacturer. If they advertise to a consumer an 

unapproved use of a drug, they would be held accountable. You 

can’t do that. 

Ms. TAYLOR. I don’t believe I can, no. 

Senator BLUMENTHAL. Well, would you like that authority? 

Ms. TAYLOR. I really can’t speak to whether I’d like that authority or not. 

Senator BLUMENTHAL. Why not? 

Ms. TAYLOR. That’s really not my place to kind of say that. We’d 

be happy to work with the committee, but I can’t advocate for that. 

Senator BLUMENTHAL. Well, I understand your point, and I understand that you can’t speak for the agency. Let me put the question a different way. Wouldn’t that authority enable you to safeguard the use of taxpayer funds? 

Ms. TAYLOR. It certainly would help not confuse beneficiaries 

about what the benefit is under the Medicare statute. 

Senator BLUMENTHAL. Because I think a lot of taxpayers would 

be perplexed, to say the least, by payments made by the Federal 

Government for wheelchair devices that result from purchases induced by misleading ads when the government knows they’re misleading or deceptive and does nothing, and therefore is in the position of paying for those devices. I know there’s a demonstration 

project, and I know that you’re doing everything that you can, or 
10 

at least apparently so, to deal with this really very alarming problem. 

But I would like you to think about what we can do to enhance 

your power, your oversight, and your ability to intervene. I don’t 

think it’s so much a matter of regulation as simply oversight and 

stopping deceptive and misleading practices that result in waste 

and fraud. 

Thank you. 

Senator CORKER. Thank you, Senator. 

Again, I want to thank you for coming up here. I do want to say 

that, again, I thank you for your temperament. I know you’re the 

person that’s been sent up to deal with this. 

I think it’s this, again, 80 percent error rate. In any other realm 

of society, heads would be rolling everywhere. I mean, no contractors would be involved that had an 80 percent error rate, people 

involved within the institution. And I think it’s this lack of alarm, 

lack of concern, lack of people hitting the roof over an 80 percent 

error rate that probably drives the American people crazy and 

causes them to lose trust in the U.S. Government, and I would say 

rightly so. 

So this is of great concern to me, to look at this one thing that’s 

so evident to everybody in America who watches even one commercial that these people put out, that abuses are in place, and yet 

nothing really happens in a very rapid way. 

I do want to correct the record, or at least have you respond 

later. When I asked you about the error rate at Blue Cross Blue 

Shield and Medicare Advantage, and your response, it’s my understanding they obviously are listening, and other people are. I was 

just handed a note that apparently the standards that are used by 

both Medicare Advantage and you are the same. So the 80 percent 

error rate and theirs being almost none, they are equivalent in 

their mind. So if you would just for the record respond as to what 

you were saying, because it appears to me there’s a misunderstanding as to how we equate those things. 

Again, I want to thank you for coming in. But I think it just 

points to sort of a morass, if you will, when I know you’ve got to 

look at the big numbers. I mean, I know that’s where you go is 

after the big problems. But this one jumps out at you so explicitly 

on a daily basis. When we see the kind of things that people see 

on television, and yet people see these things going undone, it just 

causes people again to lose tremendous faith in our government, as 

they should when they see this, and I do hope that you will all be 

absolutely on this pilot program, and I hope that you will terminate anybody in this program that has an unreasonable error rate, 

and I hope Senator Blumenthal and myself and others will figure 

out a way to pass some legislation that says that if we have contractors who, year after year after year, have claims that are coming in to you that have an 80 percent error rate, they will be 

banned from doing business with the Federal Government. 

Thank you for coming in. 

Ms. TAYLOR. Thank you. 

Senator BLUMENTHAL. And I would, if I may, Senator, just add 

my thanks to you for being here. I know it’s a difficult—I don’t 
11 

know what you did to draw the short straw, but you’ve done very 

well, and we appreciate you being here. 

Ms. TAYLOR. Thank you. 

Senator CORKER. Thank you very much. 

Ms. TAYLOR. Thanks. 

Senator CORKER. So I think the next panel is coming up. Is that 

right? 

Let me just—I’ll tell you what. Why don’t each of you just introduce yourselves again? I introduced on the front end, filibustering 

a little bit for time, but why don’t each of you before your testimony just state who you are with and what you do. And we thank 

each of you for coming up here on this issue. Thank you very much 

and welcome to the U.S. Senate. 

Yes, sir. Paul. 

STATEMENT OF PAUL HUGHES, MD, MEDICAL DIRECTOR, NATIONAL HERITAGE INSURANCE COMPANY, DURABLE MEDICAL EQUIPMENT MEDICARE ADMINISTRATIVE CONTRACTOR, JURISDICTION A, LEXINGTON, SC 

Dr. HUGHES. I am Doctor Paul Hughes, the Medical Director for 

the Durable Medical Equipment Medicare Administrative Contractor, commonly called a DME MAC, and my geographic area of 

responsibility is Jurisdiction A. Jurisdiction A is one of the four 

DME MACs and encompasses the northeastern states from Maine 

to Washington, D.C. I have been the Medical Director for this region since 1995. I work for NHIC, which contracts with the Centers 

for Medicare and Medicaid Services, to administer this jurisdiction 

since 2006. New York is the demonstration state in our region. 

My primary responsibilities revolve around the development and 

implementation of Medicare coverage policy. This role requires that 

I be involved in many aspects of NHIC’s operations, including routine claim processing, appeals, medical review and provider education. 

I have been asked to speak briefly about the preparations NHIC 

has made to implement the Prior Authorization for Power Mobility 

Devices demonstration project. For convenience, I would like to separate the discussion into two parts, payment policy and operations. 

First, payment policy. Reimbursement for power mobility devices 

is set out in several sources. There are statutory requirements arising out of the Medicare Modernization Act implemented by CMS’ 

Final Rule in 2006. These provisions require an in-person visit and 

a medical exam in addition to specific requirements for the creation 

of the prescription, and the provision of these documents to the 

DME supplier. 

CMS’ National Coverage Policy creates the foundation for the 

medical coverage rules. It allows for the coverage of mobility assistive equipment for beneficiaries with mobility deficits that impair 

their ability to accomplish activities of daily living within the 

home. This policy guides coverage for all mobility equipment, from 

canes and crutches to walkers to manual wheelchairs, all the way 

up to power wheelchairs. To make a decision about which device 

is appropriate, CMS’ national coverage policy requires a systematic 

evaluation of the beneficiary by their treating physician in order to 
12 

determine which item optimally meets the beneficiary’s mobility 

needs. 

In addition to this CMS national policy, the DME MACs also 

have a local coverage policy for Power Mobility Devices. This local 

policy pulls together both the statutory and national policy requirements, organizes the nearly 60 individual power mobility codes into 

five groups of similar products, sets out the criteria for each group 

and explains the documentation requirements and coding guidelines. In other words, the local policy takes coverage and payment 

information from various sources, adds additional necessary details 

for proper claim submission and incorporates those into one document. 

The major concern I hear raised by suppliers is whether the 

DME MACs will be able to review the anticipated request volume 

in a timely manner. Our staff is knowledgeable and experienced in 

looking at claims for power mobility. These requirements have been 

in place, unchanged, since 2006 when CMS’ regulation took effect. 

All DME contractors have performed numerous reviews on power 

mobility devices since that time to identify problems. 

In addition to standard power wheelchairs, we have all reviewed 

many complex rehabilitation power wheelchair requests under the 

Advanced Determination of Medical Coverage, usually referred to 

as ADMC. In Jurisdiction A, we review an average of 240 requests 

per month under this program. 

These complex products must meet the same basic coverage criteria as the products covered by the demonstration project in addition to the requirements necessary to determine coverage for the 

options and accessories needed to address the needs of these patients. This demonstration project does not change any of the applicable coverage rules. Thus, we do not anticipate any issues in this 

area. 

In fact, the project’s focus only on coverage criteria for the wheelchair base simplifies the review for our staff. We do not anticipate 

that our review staff will have any difficulty in reviewing power 

wheelchairs of any type, including the numerous options and accessories used with them. 

Another issue I hear mentioned is that some suppliers and physicians may not be familiar with all of the policy requirements. The 

contractors have produced numerous educational resources about 

this policy, ranging from ‘‘Dear Physician’’ letters discussing the 

coverage criteria and the need for quality documentations, to Question and Answer documents and articles, webinars and in-person 

seminars, and CERT and medical review error analyses. In addition to the materials provided by the contractors, CMS’ Medicare 

Learning Network has also published a variety of materials addressing power mobility coverage. 

Next, I would like to discuss operations. I know that some in the 

DME supplier community are concerned that the volume of claims 

may be too large to review in the allotted time of 10 business days. 

Based upon historical claim volume in Jurisdiction A, we initially 

expect 25 to 30 new requests per day for the types of power wheelchairs included in the demonstration project. In anticipation of this 

project, we have increased our nursing staff and assigned our more 

experienced personnel to handle the anticipated volumes. 
13 

Based upon historical power wheelchair audit data, we anticipate 

that approximately 50 percent of the initial submissions will not be 

approved. Likewise, based upon appeals data, we expect that about 

50 percent of the resubmitted requests will not be approved. 

Once the demonstration project is operational and in full swing, 

we anticipate a total volume of 50 to 60 new and resubmitted requests per day from this project. We have sufficient additional staff 

to allow flexibility to deal with variations in volume. 

In the non-review areas, resources have been adjusted to allow 

for additional workload in written and telephone inquiries and in 

the production and mailing of response letters. 

Finally, I would like to discuss errors. Regardless the source of 

the audit, the types of errors are consistent. For example, our most 

recent Jurisdiction A report, published in July 2012, showed a 

charge denial rate of 54 percent. The common denial issues were: 

33 percent had insufficient documentation. This includes both a 

failure to meet the statutory requirements to perform the face-toface exam, as well as incomplete or poorly documented exams. 

Twenty-three percent had problems with the 7-element order. This 

is the statutorily required prescription. Problems include missing 

elements, illegibility, and that the prescription was created before 

the face-to-face exam was completed. Nineteen percent had problems with the specialty exam and were missing a financial relationship attestation. Fourteen percent had problems with the Detailed 

Product Description. This is a document produced by the supplier 

for the physician’s signature. It serves as the prescription for all of 

the separately billable items. Problems included no detailed product description submitted and the items billed did not match the 

items ordered. Nine percent had problems with the home assessment. Either none was submitted or was not signed and dated. 

Four percent had problems with proof of delivery. Either none was 

submitted or the delivery ticket did not match the claim. 

Many discussions of errors focus upon issues related to the quality of the physician documentation and the DME supplier’s inability to get the physician to improve. While physician documentation 

is an important factor in audit findings, it is not the only one. 

Many other errors occur. Often these others are more within the 

supplier’s direct control either because they create the documentation or because there is an opportunity to screen for mistakes and 

have them corrected before submission. In this most recent review, 

most errors fell into this latter category. 

This pattern of errors is not unique to this particular report. Our 

review experience demonstrates that errors would drop significantly if attention were directed to some of these non-medical 

record issues. 

In summary, I believe that NHIC is well prepared to perform the 

work necessary to meet the requirements of this demonstration 

project. Thank you for the opportunity to share this information. 

Senator CORKER. Thank you, sir. 

Mr. Peake. Dr. Peake. 
14 

STATEMENT OF STEPHEN PEAKE, D.PH., MD, MEDICAL DIRECTOR, SENIOR CARE DIVISION, BLUE CROSS BLUE SHIELD OF 

TENNESSEE, CHATTANOOGA, TN 

Dr. PEAKE. Ranking Member Corker, I appreciate the opportunity to appear before this Special Committee on Aging. My name 

is Dr. Stephen Peake, and I am the Medical Director of the Senior 

Care Division of Blue Cross Blue Shield of Tennessee. Currently, 

our Blue Advantage Product has approximately 30,000 enrollees, 

with an average age of 71, and we have been offering this product 

in Tennessee since 2006. 

We were established by Congress in January of 2006, and we 

must conform to guidelines which are outlined in the CMS Manual, 

Publication 100.16, which allows for increased flexibility in administering beneficiary benefits as long as they do not result in the 

beneficiary receiving less than traditional Medicare benefits. 

One aspect of this is the flexibility to perform utilization management, which allows us as an MA plan to require prior authorization 

of services. 

We feel strongly that properly applied utilization management 

protects, first and foremost, the beneficiary from unnecessary risks, 

but also helps to protect the system from fraud, waste and abuse. 

CMS has previously mentioned, has commented extensively, both 

directly and through the Medicare Administrative Contractors, on 

the documentation requirements for Power Mobility Devices. Yet 

CMS continues, as previously has been mentioned, to point out 

that the majority of claims for PMDs do not meet the documentation requirements for coverage. 

At Blue Cross Blue Shield of Tennessee, we in the Blue Advantage program require strict adherence to the documentation requirements as outlined in the CMS literature. 

For example, coverage is allowed only if the beneficiary has a 

mobility limitation that limits their ability to perform mobility-related activities of daily living in the home, such as toileting, feeding, dressing, grooming and bathing in customary locations in the 

home, not elsewhere. The documentation must indicate that the 

beneficiary’s mobility limitation cannot be overcome with an optimally fitted cane, walker, or wheelchair. In other words, do they 

require a power mobility device? 

Also, it is required that the physician perform a face-to-face examination and ‘‘shall’’ document the examination in a detailed narrative note in their chart in the format they use for other entries. 

This is a requirement that is far too often not met. 

In addition, many suppliers have created forms which have not 

been approved by CMS. The one we most commonly see is the 

Texas Academy of Family Practice Mobility Evaluation. CMS even 

commented that this form was not adequate in the excellent September 2010 Provider Update. However, we continue to see suppliers completing this form and having the physicians sign it and 

physicians utilizing this form as the face-to-face mobility examination described above. In fact, if you go to their website, it clearly 

indicates it’s not a CMS-approved form. 

In addition, the supplier must supply a detailed 7-part prescription but is prohibited in the LCD from completing any portion 

which must be completed by the prescribing physician. Yet again, 
15 

we see what appear to be disparities in the handwriting on the 

form and the prescriber’s handwriting. 

Lastly, an in-home assessment, which is often omitted, must be 

completed to make sure there is room for effective maneuverability, 

as the primary intent in obtaining a power mobility device is to alleviate barriers to the performance of mobility-related activities of 

daily living in the home, not elsewhere. 

In a one-year interval, Blue Cross Blue Shield of Tennessee Blue 

Advantage received 397 requests, the majority of which were for 

the more expensive power wheelchairs. Per CMS regulations, if the 

initial request is denied, the supplier can request a reopening with 

additional information. Both the prescribing physician and the beneficiary can appeal, and the prescribing physician can request a 

peer-to-peer discussion. By incorporating utilization management 

and requiring prior authorization of power mobility devices, 24 percent of the requests were still found not to be medically necessary. 

In 2010, and now with the updated information of 2011, which is 

that approximately $700 million was spent, based on our experience, that would be about $168 million in savings if 24 percent. We 

believe the savings could be significant. 

In conclusion, I personally applaud CMS for initiating this demonstration project and would welcome it in the great State of Tennessee. I appreciate the time you have allowed me to share on how 

we at Blue Cross Blue Shield of Tennessee’s Blue Advantage Plan 

approach our prior authorizations of power mobility devices, and I 

welcome any questions you may have. 

STATEMENT OF MICHAEL CLARK, JD, CHIEF ADMINISTRATIVE 

OFFICER AND GENERAL COUNSEL, THE SCOOTER STORE, 

NEW BRAUNFELS, TX 

Mr. CLARK. Good afternoon, Senator Corker and Senator 

Blumenthal, members and staff. My name is Mike Clark. I’m the 

Chief Administrative Officer of the Scooter Store, a nationwide supplier of durable medical equipment, including power mobility products and services. 

I have submitted extensive comments for the record and would 

like to take this opportunity to summarize those comments for the 

committee. 

PMDs allow people to retain their independence in their home 

and complete their activities of daily living safely so that they may 

age with grace and dignity inside their home. PMDs thus not only 

improve the lives of fellow citizens, but they also save significant 

health care dollars by preventing other serious injuries such as 

falls. 

In 2003, Congress decided that payment may not be made for a 

power wheelchair unless a doctor conducted a face-to-face examination of the individual and wrote a prescription for that item. The 

face-to-face examination properly places the doctor in charge of the 

patient’s care. The Scooter Store fully supports this requirement 

and applauds Congress for emphasizing the role of the medical professional when assessing power mobility needs. 

Congress’ good intentions, however, have been stymied by a review process that places arbitrary constraints upon what constitutes the patient’s medical record. For example, Medicare will 
16 

not consider attestations or letters of medical necessity provided by 

physicians who saw the patients face to face, explaining why they 

prescribed the item. The bottom line is there appears to be more 

of an interest in denying claims for technical documentation deficiencies rather than determining whether the patient actually 

needs the item. 

Private payers handle the process quite differently. For example, 

under the prior authorization process utilized by Blue Cross Blue 

Shield of Tennessee, a managed care program, 85 percent of the 

Scooter Store claims receive approval upon initial submission, with 

an additional 10 percent approved after reconsideration or appeal, 

for a total approval rate of 95 percent. In contrast, the Medicare 

prior authorization program to date has denied virtually all the 

claims submitted by the Scooter Store, although the TSS believes 

that prior authorization done right can be useful, we have several 

concerns about the program as currently structured. 

First, we believe that any prior authorization demonstration 

must be significantly smaller. Simply put, this is a bet the benefit 

proposal. By placing roughly 50 percent of the nation’s Medicare 

PMD utilization into prior authorization with no defined phase-in, 

no calibration between the physician who prescribes one to three 

a year for the most part. Calibration between the physician, supplier and CMS is exactly what’s needed. For example, we’ve had 

claims denied because the fact statements where the fax machine 

says the time and date, that there has to be a date and time, that’s 

not being read properly by the reviewers, and claims are being denied for that. It’s that type of calibration that will delay the process 

of people getting equipment for technical reasons, and at 50 percent of the market, could lead to a disaster. 

Under the current CMS claims processing system, a beneficiary 

is provided his or her PMD after a physician performs a face-toface examination. Medicare contractors then, upon review, deny 80 

to 90 percent of those claims upon review. The patient has the 

equipment in their house. What’s not being discussed right here, 

right now, is that there’s a difference between the error rate and 

then the final denial rate. Upon appeal, those denials are overturned through the waterfall of the appeals process 80 to 85 percent of the time. So the error rate that is being reported is not the 

ultimate denial rate. It’s just the error rate. 

Under prior authorization demonstration project, the 80 to 90 

percent is now going to move to the front end of the process, not 

the back end where the people already have the equipment. It now 

moves to the front end where they don’t get the equipment. This 

involves problems in that there’s no legitimate appeal right in this 

prior authorization project. You can just continue to resubmit these 

to the same reviewer. 

The doctor’s medical judgment is essential to ensure our nation’s 

elderly and disabled receive appropriate medical care. Towards 

that end, a face-to-face examination and clinical template should be 

available and sufficient for a determination of medical necessity. 

The doctor should be given the presumption that he was correct 

since he’s the only one to have seen the patient. 

The use of a clinical template is absolutely consistent with documentation practices of our nation’s health care providers. CMS has 
17 

rejected this concept. They haven’t approved any type of form to 

date. 

A face-to-face examination template designed to determine and 

establish medical necessity is necessary to establish objectivity, 

clarity and consistency in the claims processing system for all doctors, suppliers and reviewers, and to ensure access to quality 

health care for our nation’s elderly. Everybody needs to work off 

the same playbook. 

I’d like to give you a real-life example of the difficulty beneficiaries are facing with this demonstration. We have a female patient who suffered a significant decline in her resting O2 saturation 

rates. Over a 7-month period of time, 3 liters of oxygen, her O2 sat 

rates went from 97 percent down to 83 percent at rest during the 

face-to-face exam. Her PMD claim was recently denied in prior 

auth because the doctor did not conduct an O2 saturation test on 

exertion. An exertion test rate at 83 percent O2 on 3 liters would 

have significantly put her health at risk. 

These types of denials, coupled with the restraints on the medical record, clearly placed the reviewer between the doctor and the 

patient, detracting from the primary task of simply determining 

whether the patient needs the equipment. 

Again, I thank the committee for allowing the Scooter Store this 

opportunity, and I welcome any questions you may have. Thank 

you. 

Senator CORKER. Thank you, sir. 

Dr. Epplin. 

STATEMENT OF JEROME EPPLIN, MD, FAAFM, FAMILY PRACTITIONER, LITCHFIELD FAMILY PRACTICE CENTER, 

LITCHFIELD, IL 

Dr. EPPLIN. Good afternoon, Senator Corker and Senator 

Blumenthal. I would like to express my sincere appreciation on behalf of the American Geriatric Society for the opportunity to provide testimony on the issues surrounding the use of power mobility 

devices, or PMDs. 

I am Dr. Jerome Epplin, a board-certified family physician and 

geriatrician in Litchfield, Illinois, a small rural town of 7,000. I am 

also an active member and fellow of the American Geriatrics Society, a non-profit organization of 6,000 geriatrics healthcare professionals dedicated to improving the health, independence, and quality of life of all older Americans. 

Today I will briefly provide the perspective of a busy family physician and geriatrician with regard to patient evaluation for these 

devices. Many of the requests that I receive from my patients for 

power mobility devices are easy to evaluate. Some people obviously 

need them, and it is quite a pleasure to help provide them for 

them. Some patients, however, assume that these devices can be 

used merely as a convenience and not as a necessity. It is obvious 

to me that they do not need a PMD and would not qualify under 

the current Medicare guidelines. In most cases, the health of these 

patients may be compromised if they use an electronic vehicle rather than remaining ambulatory as their physical activity would be 

decreased. Preserving function and mobility is one of the hallmarks 

of geriatric care. 
18 

In cases when it is less clear, I often use our physical therapist 

to help me decide if the patient qualifies for a PMD. They have told 

me that often a representative from a company that sells PMDs 

will accompany patients for the evaluation. A representative often 

wants to help fill out the forms or instructs the therapist in how 

to fill out the forms to better ensure that the patient will obtain 

the PMD. Understandably, the therapists feel pressured in such instances. 

Often, a letter instructing how to favorably fill out the application for a PMD will accompany the application. I see this as an inappropriate attempt to circumvent or influence my objectivity and 

clinical judgment when evaluating the patient. 

A physician with whom I trade calls recently told me of a patient 

who was denied by him a request for a power operated vehicle. 

Soon thereafter he received a call from a representative of the company telling him that if he changed some of his responses, the patient could get such a vehicle. The physician refused. 

In Illinois, each nursing home is required to fill out a form on 

each resident every three months as to why the resident should not 

have a power operated vehicle. In most cases, the residents do not 

have the mental capabilities to operate such a vehicle safely. Even 

if the resident has the cognitive ability to operate the vehicle, the 

other residents walking in the facility may not have the ability to 

get out of the way safely, thus putting the other ambulatory nursing home residents in harm’s way. This could also be a liability 

issue for the nursing home. 

Unquestionably, the patients have been unduly influenced by the 

ads seen on television or received in the mail. They are told that 

all the doctor needs to do is sign the form and they will receive the 

vehicle. When the patient comes to my office, they already have 

false hope that they will qualify for a vehicle. If they are denied, 

many become very upset. I have had patients leave my practice because I denied their request for a vehicle. 

A more responsible approach would be for the ads to emphasize 

that many people who think they qualify for a vehicle may not. The 

ads could list some of the features that will cause a patient to be 

disqualified from obtaining such a vehicle and to highlight some of 

the side effects of the vehicles, such as worsening muscle weakness 

and the potential for pressure ulcers. 

As you know, Illinois is one of the seven states where CMS has 

implemented a prior authorization process for scooters and power 

wheelchairs for people with fee-for-service Medicare. The purpose 

of the demonstration is to ensure that a beneficiary’s medical condition warrants the medical equipment under existing coverage 

guidelines. 

I am hopeful that the demonstration project will better match patients who need the power operated vehicle versus those who would 

be better served by other means. However, the information which 

I have received from CMS about the demonstration project is 

lengthy and not very clear. The thick packet of materials received 

by my office was not well marked as to its contents. This increased 

the chances that many were discarded before being read or even 

being opened. 
19 

I did review the materials and, in my view, the demonstration 

needs to be better explained to clinicians in a more concise fashion. 

It would be helpful for clinicians if the application form could somehow be streamlined, as it takes at least 30 minutes to fill out after 

a lengthy examination. Perhaps a narrative could be accepted as an 

opinion. As you know, there is already a dire shortage of geriatrics 

healthcare providers, and the time spent filling out paperwork 

could be better spent providing care to patients. 

For most experienced clinicians, it is not difficult to quickly determine whether or not a patient qualifies for a powered vehicle 

under Medicare. But when further assessment is needed, clinicians 

may give additional weight to the history given to us by the patient, and there is a possibility that the patient was coached by a 

vendor or influenced by the ads as to what to say in order to qualify for a powered vehicle. 

Again, it would be helpful if the expectations of patients were not 

unduly elevated by outside sources, advertisements for one, when 

seen for their initial examination. This is an important issue as 

many older patients, often with complex and chronic conditions, 

benefit greatly from the use of powered vehicles. The challenge for 

all of us is to seamlessly get those vehicles to the appropriate patient. From a fiscal standpoint, it is also important that Medicare 

not needlessly pay for vehicles for patients who would be better 

served by more beneficial and less expensive modalities. 

Again, thank you for inviting me to today’s important hearing, 

and I look forward to answering any questions you may have. 

Senator CORKER. Thank you, and thank you all for your testimony. 

Senator, I’ll go ahead and defer to you and let you start, and 

thank you very much for being here. 

Senator BLUMENTHAL. Thank you very much, Senator Corker. 

Let me begin, if I may, with you, Mr. Clark. Just so the record 

is clear, no one has yet mentioned the 2007 settlement. My understanding is that there was a settlement of allegations with respect 

to over-payment, and there was an agreement that involved a payback schedule. Has that repayment been completed? 

Mr. CLARK. The 2007 settlement was the result of lawsuits between the Scooter Store and the government. That resulted in a 

corporate integrity agreement. I think you may be referring to an 

agreement with CMS recently, this year, in 2012. 

Senator BLUMENTHAL. There are two separate agreements; is 

that correct? 

Mr. CLARK. Well, no. There was a settlement in 2007 after a 

long—— 

Senator BLUMENTHAL. Could you provide us with the—I’m sorry. 

Mr. CLARK. After a long, protracted, many years of litigation, 

there was a settlement in 2007 that resulted in a payment, a payment of $4 million, and then there was a corporate integrity agreement that lasted for five years. The corporate integrity agreement 

just ended in 2012, in May 2012, entered into with the OIG. There 

is a separate discussion and agreement that was reached in connection with a voluntary over-payment with CMS, a voluntary refund 

of an over-payment with CMS earlier this year in 2012. 
20 

Senator BLUMENTHAL. And that was an amount between $32 

million and $63 million? Is that correct? 

Mr. CLARK. No. The amount was—the total voluntary repayment 

amount was $19.5 million, which represents—the number is big, 

but it represents 4 percent of our Medicare billings for that twoyear period of time. It was over a two-year period of time. 

Senator BLUMENTHAL. I’m sorry. The initial figure reached by 

the reviewer was between $32 and $63 million, but the agreement 

was to repay $19.5 million. 

Mr. CLARK. So there was an independent review organization. 

Pursuant to the corporate integrity agreement, the Scooter Store 

had an independent review organization that was hired and overseen by the Office of the Inspector General. The IRO, if you will, 

the independent review organization does a review of at least 250 

claims a year, and if the error rate is at or above 5 percent, they 

may analyze additional cases to come within a certain statistical 

certainty of an over-payment. In the third year of our CIA, the IRO 

came out with a 14 percent over-payment pursuant to their audit, 

much different than the 80 or 90 percent over-payment that’s cited 

by the government in their audits of the claim. 

In year 4, the error rate, if you will, the percentage of over-payment was slightly over 7 percent. 

And so based upon those two over-payments, the OIG sent the 

Scooter Store a letter saying that they thought we were in violation 

of the corporate integrity agreement, which we weren’t. We disagreed with the OIG’s interpretation of their ability underneath 

the CIA, and we felt that their only recourse was to have CMS and 

the Scooter Store review those claims, come to a decision on what 

was an over-payment or not. 

So that’s how that event finally happened, CMS and the Scooter 

Store came together, reviewed those claims. The Scooter Store then 

voluntarily repaid back $19.5 million, which represented 4 percent 

of our overall billings, and that was a payment to be perfect in an 

extrapolated scenario. 

Senator BLUMENTHAL. Has that $19.5 million been repaid? 

Mr. CLARK. It was—$5 million was paid up front, and the rest 

is in a payment schedule. 

Senator BLUMENTHAL. So the answer is no. 

Mr. CLARK. In total, no. 

Senator BLUMENTHAL. How much remains outstanding? 

Mr. CLARK. Well, $19.5 minus $5 million, and then we made 

some payments, I think somewhere around $13. And then we have 

some credits for some appeals. I don’t know exactly what remains 

outstanding. 

Senator BLUMENTHAL. Could you—I don’t want to consume a lot 

more time on this issue. 

Mr. CLARK. Right. 

Senator BLUMENTHAL. But could you commit to provide the internal documentation relating to the corporate integrity agreement, 

the repayment agreement with respect to $19.5 million, how much 

has been repaid and what amount remains outstanding? 

Mr. CLARK. So I make it clear, you want a copy of the corporate 

integrity agreement? 
21 

Senator BLUMENTHAL. Well, I want to know, on the repayment, 

how much has been repaid and the documentation that underlies 

that. 

Mr. CLARK. Yes, I can provide that to you. 

Senator BLUMENTHAL. Thank you. 

Mr. Chairman, if I may, I’d like to ask that—I understand we 

have some ads that we can play at this time. 

Senator CORKER. I understand that, yes, you all asked permission to do that, and that’s fine. 

Senator BLUMENTHAL. That’s great. 

[Video presentation.] 

Let me ask you, Mr. Clark, the second of those ads is from your 

company, is it not? 

Mr. CLARK. Yes, it is. 

Senator BLUMENTHAL. And how recently was that ad aired? 

Mr. CLARK. I don’t think that one has been aired recently. I’m 

not completely sure on that. 

Senator BLUMENTHAL. Do you have any reservations or qualms 

about that ad? 

Mr. CLARK. No. 

Senator BLUMENTHAL. You stand by everything in it? 

Mr. CLARK. Yes. 

Senator BLUMENTHAL. And how about the first ad? Do you have 

any problem with that ad? 

Mr. CLARK. No, I don’t like Hoveround’s ads. 

Senator BLUMENTHAL. Well, just as a matter of either their accuracy or—— 

Mr. CLARK. From the content of their ad, I don’t see a problem 

with it. 

Senator BLUMENTHAL. Dr. Epplin, could you give us your opinion 

of those ads? 

Dr. EPPLIN. Well, this morning I saw an ad on TV for a drug 

where at least half of the ad listed the side effects, and I’m not sure 

I’d even take that drug, nor prescribe it. 

There is nothing in these ads to suggest that actually immobility 

is not a good thing, that walking around is better, and it puts pressure—I feel like it puts pressure on me because people come in saying I can get this for free, why don’t you give it to me? I mean, 

I hear that almost verbatim from people. It puts a lot of pressure 

on me. It makes me be the bad guy. Unquestionably, there are 

some people who need them, and I have no qualms with writing 

for them to get them. But I don’t think these ads tell the whole 

story, that everybody shouldn’t necessarily have one if they’re able 

to get around. Many of them want them as a convenience and not 

as a necessity. 

Senator BLUMENTHAL. So if I can put what you just stated perhaps in slightly different terms, the requirement is that the power 

mobility device is necessary for mobility. In many cases, there may 

be mobility through the use of other devices that may, in fact, be 

better for the patient. 

Dr. EPPLIN. Very simply, for some of these people, just a regular 

standard wheelchair will suffice. If they have good strength in their 

arms, reasonable strength in their arms, they can get by very well 

with a wheelchair or a walker. 
22 

Senator BLUMENTHAL. What about the use of these devices outdoors as opposed to inside? 

Dr. EPPLIN. That’s sometimes a little bit more difficult, especially 

if the person wants to go a quarter mile or a half mile. They 

wouldn’t be able to do that if they were walking. Many of them 

couldn’t. The question is, is that a necessity that they do it, and 

could they be better served by a standard wheelchair? Not everybody can, of course. 

Senator BLUMENTHAL. And these types of ads result in what you 

referred earlier to—I think you said elevated, unduly elevated expectations. 

Dr. EPPLIN. Yes. 

Senator BLUMENTHAL. Do you know about instances of supplier 

representatives accompanying patients to their evaluation appointment? 

Dr. EPPLIN. Yes. 

Senator BLUMENTHAL. And does that happen? 

Dr. EPPLIN. Yes. 

Senator BLUMENTHAL. Has it happened to you? 

Dr. EPPLIN. Yes, and to our physical therapist. I have pretty 

much stopped filling these forms out myself. I send them to physical therapy because they take—it’s an onerous form to fill out. It 

takes a while to do that. 

Senator BLUMENTHAL. We’ve heard today also about the danger 

of falls. In your medical opinion, are there situations where a 

power mobility device may increase the risk of falling? 

Dr. EPPLIN. They can in that the potential that the person will 

not ambulate and thus get weaker can actually increase their risk 

of falls, or if they don’t learn to properly use, for example, a walker 

and depend on these power mobility devices, it could increase the 

risk of falls. There are other people where the risk of falls is very 

high and these PMDs can help. But other times, if you allow yourself, your muscles to atrophy, you’re going to increase your risk of 

falls. 

Senator BLUMENTHAL. You referred earlier in your answers here 

to ads that you saw for pharmaceutical drugs where side effects 

were advertised because they had to be under the law. 

Dr. EPPLIN. Correct. 

Senator BLUMENTHAL. The risk of falls for people who become 

overly dependent on these mobility devices may be a side effect, if 

I can characterize it as such, that perhaps should be told to consumers before they go ahead and get one of these devices. 

Dr. EPPLIN. Correct, and if they sit in them a lot, some people 

increase their risk of pressure ulcers as well. 

Senator BLUMENTHAL. I have other questions, Mr. Chairman, but 

I know I’m way over my time. 

Senator CORKER. Do you want to keep going for a minute? 

Senator BLUMENTHAL. If I may continue? 

Senator CORKER. That’s fine. 

Senator BLUMENTHAL. Let me turn to you, Mr. Hughes, if I may. 

Do you see any issues or problems with these ads? 

Dr. HUGHES. Well, I agree. I think they create an expectation 

that everybody is entitled to the wheelchair and really, at least 

from a Medicare point of view, doesn’t speak to how really very 
23 

limiting the actual Medicare coverage criteria is. All of the ads always show folks very active, almost universally outside for the majority of the activities. So I think that it creates demand. I mean, 

that’s what ads are supposed to do. So I suppose from the company’s point of view, they’re doing what they’re supposed to do. But 

they create tremendous demand and put physicians in practice in 

a difficult situation. 

Senator BLUMENTHAL. You referred in your testimony, and I’m 

going to quote, ‘‘Our review experience demonstrates that errors 

would drop significantly if attention were directed to some of these 

non-medical record issues.’’ Are these the kinds of issues that perhaps attention should be devoted to? 

Dr. HUGHES. Well, what I was referring to there is often in discussions of errors, particularly discussions led by suppliers, the attention is given to how hard it is to get a physician to write a complete and thorough and detailed examination. You heard in Mr. 

Clark’s testimony he is advocating for various forms and documents to streamline that process. 

Medicare’s view when we’re looking at medical records is that 

physicians need to document the way we’re taught to document in 

medical school, the way nurses are taught to document, completely, 

thoroughly, enough so that an independent person can come along 

and read that record and know what’s going on with the patient. 

That’s a high standard, and many, probably most physicians don’t 

consistently document to that level. 

The point I was trying to make is in addition to that problem, 

which in our most recent report was about a third of the errors, 

there are a whole variety of other errors not related to the physician’s records. Some of the records, some of the documents suppliers create, and yet when they are charged with direct responsibility for creating the records, they fail to dot all the I’s and cross 

all the T’s and so on. 

With respect to the ads, the errors I’m talking about don’t have 

anything to do with the ads, but it points to there are problems at 

a lot of levels and it’s not entirely laid at the feet of the treating 

physician and the quality of their record-keeping. 

Senator BLUMENTHAL. The treating physician in effect may agree 

to go along with prescribing or directing the use of these power mobility devices because of the demand generated by these ads. 

Dr. HUGHES. Oh, yes, or so I’ve heard from my colleagues who 

are still in practice. 

Senator BLUMENTHAL. Do you agree, Mr. Peake? 

Dr. PEAKE. Yes, I do. As a physician—— 

Senator BLUMENTHAL. I’m sorry, Dr. Peake. 

Dr. PEAKE. That’s all right. I’ve been called worse. I’d make the 

supposition that most of us went into this profession because basically we like to be affirmed by others and we want to help people, 

and we like that affirmation that comes in. And tremendous pressure is put on the daily practicing physician in my experience to 

sometimes acquiesce to these demands, and I think these ads do 

add to that pressure, as the doctor so eloquently stated from Illinois. 

Senator BLUMENTHAL. Thank you very much. 
24 

I’d like to thank you all for being here today, and I’m very hopeful that your testimony, with the excellent leadership of Senator 

Corker, may lead us to take some measures that will address some 

of the concerns that you have very compellingly raised. 

Thank you, Senator Corker. 

Senator CORKER. Thank you, Senator, for being here and participating. 

I appreciate the testimony. I think it gives really four different 

views of what’s happening here, not that they’re necessarily all inconsistent. But I’d like to understand just the identity of interest 

here. You, Dr. Hughes, you are a contractor that is hired by CMS 

to make sure that claims are valid. Is that correct? 

Dr. HUGHES. The Medicare administrative contractor is basically 

hired to process claims. That’s the vast majority of the responsibility. Our Region A is the smallest. We process a million claims 

a month. So that’s the main task. We also handle appeals, provider 

education, customer inquiries, and we have a medical review department and a medical director. The medical review department 

is the place where audits are done. 

Senator CORKER. So you process claims that are generated to you 

through the standard CMS process, and are you paid more or less 

whether they have high error rates or low error rates? 

Dr. HUGHES. I’m sorry, Senator. That’s sort of above my pay 

grade. My understanding is that the contracts are bid based on the 

projected claim volume. The payment rates and such don’t affect 

that, but I defer that to my bosses. 

Senator CORKER. So you have a contract to process the claims, 

but in essence the outcomes of the claims, based on your understanding, have no effect on what your company is paid. 

Dr. HUGHES. That’s my understanding. 

Senator CORKER. So then, Dr. Peake, you all manage—it’s a 

managed plan, and therefore claims that are inappropriate, if they 

are processed and people have asked for PMDs unnecessarily, then 

in essence your company loses money unnecessarily on the patients 

that you serve on a capitated basis or at a set price. Is that correct? 

Dr. PEAKE. That is correct. 

Senator CORKER. So your incentive is to serve your clients and 

to maintain them on your rolls, but you also don’t want to pay unnecessarily. So that might speak to the huge differences that exist 

between what Blue Cross is doing in this case and what a contractor—no offense, but really the outcome doesn’t affect them in 

any way. The outcomes you might imagine would be very different. 

Is that correct? 

Dr. PEAKE. Yes. Our first priority, obviously, is the beneficiary. 

But then we also have a fiduciary responsibility to properly manage the premium dollar so we can make sure our beneficiaries get 

the greatest benefits they can get for that premium dollar. 

Senator CORKER. But at the end of the day, you’ve got to provide 

those services at that premium dollar. Otherwise you can’t provide 

services down the road. 

Dr. PEAKE. That is correct. 

Senator CORKER. Whereas in a standard fee-for-service program, 

and certainly with contractors that have no financial incentive, 
25 

when you have an 80 percent error rate, it really doesn’t raise 

alarms. Is that correct? 

Dr. PEAKE. From what I’ve heard today, that would seem to be 

correct. Correct. 

Senator CORKER. So then, Mr. Clark, obviously your goal is to 

sell as many scooters as you can, and you all obviously are doing 

a very good job, and it sounds like you’ve been overly aggressive 

in some cases and have had to deal with some payments back to 

the Federal Government and obviously are here today testifying because of the aggressive nature, at least from our perspective, that 

your company is taking. 

For me, as I listened to the testimony today, there is either a— 

I want to use this word not in a definitive term, but there’s almost 

a fraud that’s being put on the American people because of the way 

the system is set up. There really aren’t checks and balances because, again, people aren’t paid to care what this costs in the 

standard fee-for-service program. In a program where it does matter, they have different criteria and obviously don’t have the error 

rate that exists. 

I know you’ve made the distinction between denial and errors, 

but it does appear to just a person who doesn’t know much about 

scooters that there’s a problem here, and I just want to ask you. 

I mean, would you not, based on what we’ve witnessed today and 

watched, and just the evidence of the error rate and the settlements that you’ve had with the Federal Government, would you 

want to dispel me of the notion that maybe the companies that are 

dealing with these PMDs are being a little bit overly aggressive? 

Mr. CLARK. Yes, I’d certainly like to dispel you of that perception. 

First of all, of the people that call us for power mobility devices, 

only 13 percent of those end up in a power mobility chair paid for 

by Medicare. So between us and the doctors, we screen out 87 percent of those people that call. 

The idea that we want to sell as many of these as we can is just 

not correct. We want everyone who needs one to have one. The ads, 

in my opinion, let people know that this benefit exists. It doesn’t 

say that you get to have one. In fact, Congress set up that the gatekeeper to that is the physician. I don’t sell anything to anyone that 

a doctor doesn’t prescribe, and to have the thought that a doctor 

would prescribe something he doesn’t think a patient needs because of an advertisement, or because the patient walks in and 

says he or she wants one, is troubling from my seat as to what the 

physician community is doing. 

Senator CORKER. Do you have people who go in with, as Dr. 

Epplin testified to and we’ve heard in many cases—as a matter of 

fact, what we hear a lot in the field is that the handwriting appears to be the same on massive numbers of these. In other words, 

somebody at the Scooter Store or some other entity is filling out 

many of these forms. There may be one little section that maybe 

has different handwriting. But do you have people who—— 

Mr. CLARK. Senator, I can assure you the Scooter Store is not 

pre-filling any paperwork. We don’t fill out any paperwork because 

there is not an objective, standard system that’s been created for 

this complex benefit—as testified by the good doctor from Illinois, 

this is a complicated exam with complicated criteria. Most of these 
26 

doctors do this one to three times a year. If there was a process 

set up by CMS or the carriers that allowed everyone to work off 

the same playbook, I think it would be easier for the doctors to do 

these exams and provide the information that they need. 

So what happens is a lot of paperwork comes back, and when we 

look at it, it’s not that the patient doesn’t need it, it’s that the doctor didn’t document it appropriately. That’s what’s being said 

through the whole panel. That’s what Ms. Taylor testified for. So 

we go back to the doctor and say, look, you didn’t document this 

enough; go back and explain it. But we’re not filling out the paperwork. We’re not writing what the doctor says. If his nurse writes 

something and he signs it, it doesn’t have to be in his handwriting. 

If he signs and dates it himself, then he’s attesting to that. 

But again, we screen 87 percent of the people that call us. 

There’s a gatekeeper. We sell the patient nothing. The doctor prescribes everything. We don’t fill out paperwork. We don’t sit in the 

doctor’s office, Senator. 

Senator CORKER. You don’t have any people with your company 

that ever, in order to meet sales quotas or whatever, ever accompany a patient to the physician’s office? 

Mr. CLARK. I am unaware of where any representative from the 

Scooter Store goes and sits in an examination with the patient and 

their doctor. We have doctors—we have hundreds and hundreds of 

doctors that refer their patients to us to begin the paperwork process for them to get power mobility devices. We have people in the 

field that have relationships with doctors. I don’t—I’m not personally aware of if one of my representatives, because a patient asked 

them to say would you go to the doctor’s office and sit in the lobby. 

But there’s not one of my people sitting in an exam with a patient 

and their physician. That’s between them and their physician. 

There is an enormous difference, Senator, between an error rate 

and a denial rate. 

Senator CORKER. I understand that. 

Mr. CLARK. We have a very, very low denial rate. Our ads—I 

mean, when you talk about an over-payment that was voluntarily 

paid on a 4 percent denial rate so that we could be at perfection—— 

Senator CORKER. So what would be your denial rate overall with 

the PMDs for CMS? 

Mr. CLARK. So as I go through the waterfall, they deny—just like 

all the audits, they deny—— 

Senator CORKER. I understand. But the net net net—— 

Mr. CLARK. So the net net net to me, through the governmental 

appeal process, is anywhere between—around 15 percent is what 

I end up losing because then I decided not to go to Federal court, 

where I think I would win more at a Federal court—— 

Senator CORKER. And then you give them a PMD for free? Is that 

what you’re saying? 

Mr. CLARK. Right. We’re not going to go pick them up at anyone’s 

house. 

Senator CORKER. So they’ve already been placed in their home by 

the time this all occurs. 

Mr. CLARK. Right. So then I go through 18 months of appeal to 

get 85 percent of them overturned. I spend an enormous amount 
27 

of money doing that. Now you’re moving to a prior auth standard 

with, mind you, Senator, no changes to the system, so the error 

rate stays the same. Again, we’re seeing almost a 100 percent error 

rate right now coming back from prior authorization. The individual with the O2 sat rates is a bad case, and being denied because the reviewer can’t understand the medical record or doesn’t 

know how to look at a fax stamp to find out the date that’s there. 

But, you know, because the over-payments were brought up, 

again, the IRO—we’ve had the OIG sitting over the top of us under 

the corporate integrity agreement for five years. They’ve never said 

anything about our ads. They didn’t come after us and allege any 

fraud, any misuse, any abuse, any changes to our very robust compliance program. CMS, who I’ve dealt with for years, has not done 

any of that. We’ve talked to CMS about our ads. Again, we filter 

a lot in our ads. 

Senator CORKER. Do you think that speaks to the—and I need 

to move on in just a second. But do you think—and I appreciate 

everything you’ve said. Do you think that speaks to the culture, 

though, at CMS, that they haven’t responded? I mean, would you 

think, just if you were sitting on our side of the dais and we had 

a Medicare program that was going to be totally insolvent in the 

year 2022—— 

Mr. CLARK. Exactly. 

Senator CORKER [continuing]. And we’re all trying to figure out 

a way to stave off a fiscal crisis in this nation, the world is looking 

to us, we see these advertisements on television that—on our side 

of the dais, I mean, would you not understand why that would create a little bit of concern that we have companies like yours that 

are so aggressively trying to put these PMDs into people’s hands 

and, in some cases according to testimony, in ways that actually 

hurt the patient? I mean, can you see why we would have a degree 

of concern over the testimony today, plus the marketing that’s taking place around these PMDs? 

Mr. CLARK. I could understand with not having an awareness of 

the screening process, that only 13 percent get that, with not having an awareness of the fact that the vast majority of error rates 

are overturned and don’t become denial rates. I could understand 

that one would say, wow, these ads generate a lot of utilization. 

These ads have been going on for quite some time. Everyone 

knows utilization has dropped 30 percent in the last two years. We 

don’t have the 2012 utilization, but it will be significantly less than 

2011. Utilization is going down. 

Ads don’t commit fraud; people do. Forms don’t commit fraud; 

people do. Criminals aren’t advertising. There are criminals in the 

system. There are criminals across every benefit by Medicare. 

I think the best thing that we could look to is the independent 

review organizations and their models. When they look at our 

claims Senator, they go through 190 questions on each claim over 

42 areas of the file. They found an error rate between 3 percent 

and 8 percent. 

The managed care plans that are businesses, they don’t have 

these high error rates. Nobody is judging the overturn rate and 

saying what’s wrong with the process up front on the audits? Why 

isn’t the right answer being decided up front? Because you’re look-
28 

ing to deny the claim at all costs. You’re not looking to see does 

the patient just need the equipment. 

Senator CORKER. What we understood as far as the settlement 

that took place is it wasn’t done voluntarily, that CMS threatened 

to cancel your ability to deal with them and this product, and 

therefore you made this settlement. So you’re shading it a little differently than we’ve been told as to what happened. So which happened? I mean, were they threatening? 

Mr. CLARK. So the OIG, the OIG threatened us under the CIA. 

The OIG had, in my opinion, in counsel’s opinion—we wrote the 

OIG back—they had no authority to do that. They had no authority 

to do that. We sat down with CMS—— 

Senator CORKER. But you didn’t just come forward with a settlement. You were—— 

Mr. CLARK. CMS never threatened to pull my supplier number 

or exclude me from the program. 

Senator CORKER. The OIG did. 

Mr. CLARK. That was OIG underneath their contract. CMS and 

I sat down, went over the IRO studies, and again that was an error 

rate. We went over them. We went over a bunch of files. We talked, 

and the company, if you look at the documents that came out of 

that back from CMS, they couch it as a voluntary repayment. We 

didn’t have to pay that. We wanted to work with CMS. We wanted 

to stay in good graces with them, if you will. 

Senator CORKER. I would imagine. 

Mr. CLARK. We wanted to be a good partner. 

Senator CORKER. What percentage of your business—— 

Mr. CLARK. We wanted to be a good partner, and it was 4 percent of our business. 

Senator CORKER. No, but the percent—CMS is 4 percent of your 

business? 

Mr. CLARK. No, no. The overpayment was 4 percent. 

Senator CORKER. And what is CMS as a percentage of your business, since you brought it up? 

Mr. CLARK. Roughly 75 percent of our business. 

Senator CORKER. Yes. Well, I would think the OIG threatening 

to end a 75 percent relationship would cause you to want to ‘‘voluntarily’’ settle this. 

But let me move on. And we—— 

Mr. CLARK. They just didn’t have authority to do that. 

Senator CORKER. For what it’s worth, I am so glad they did. 

Doctor, just to get identities of interest, you sound like an outstanding physician, and you sound like you care greatly about your 

patients, and I’m sure that you do. When a physician fills out the 

forms for one of these PMDs, is there any incentive for them to do 

that financially, or is that—— 

Dr. EPPLIN. You can charge Medicare for a higher level of service. It’s not a significant—for the amount of time that it takes, the 

answer is no. There’s no financial—you do it just because you have 

to do it. 

Senator CORKER. You do it because you have a patient that is 

coming to see you to do it. Most physicians, according to the testimony, do it two or three times a year. The form is long, and there’s 
29 

really no financial incentive, you say, for physicians to really want 

to prescribe these. 

Dr. EPPLIN. There’s no big financial incentive to do that. I think 

you would have to look at the specialty of the physician. I would 

think that people who are geriatricians or see a high percentage of 

their patients being elderly would have more than 1 to 3 per year. 

So if someone is seeing the broad spectrum of either internal medicine or family medicine, that may be true. But if you’re seeing a 

lot of geriatric patients, I would guess it’s probably more than that, 

and I do get requests frequently, and it’s probably only, as Mr. 

Clark says, I can probably can screen out 80 to 90 percent of the 

people just by telling them you don’t qualify. So the number that 

he gives is about what I see in my practice as well. 

Senator CORKER. I know this was really to be about the demonstration program. I want to spend just a minute on that. I know 

we got a little astray based on the testimony, which we greatly appreciate. 

But, Dr. Hughes, what, in your opinion—and I know it sounds 

like some of the forms need to be reworked, and it sounds like it’s 

very difficult. 

Dr. EPPLIN. They’re very difficult. 

Senator CORKER. And I hear all this, and certainly we’ll be corresponding with CMS over the testimony that’s come. And I know 

the error rate is different than the denial rate. But what is the appropriate error rate for this program once it gets refined? 

Dr. HUGHES. Well, I hesitate to pick a number. Our numbers, as 

far as recent audits, are down to 50 percent from the OIG study 

from a couple of years ago. I don’t think it will ever be zero, but 

I certainly would like to see it down to the single digits. 

Senator CORKER. And is that based on your experience? I know 

what you’d like to see. Based on your experience, is getting the 

error rate down to single digits something that you think is achievable if we put the right processes in place? 

Dr. HUGHES. Yes, I do, partly because of what I had in my testimony. A substantial percentage of the errors are technical things, 

as Mr. Clark points out. But I believe many of those technical errors are able to be remedied by the supplier, and that will then 

leave a nub of 20 to 30 percent of errors that have to do with the 

quality of the medical record. That gets to be subjective, but that’s 

a different set of tools that would need to be worked on that, and 

maybe a form. I don’t know what would be best for that. 

Senator CORKER. And, Mr. Clark, I know you have concerns 

about what’s happening, a 100 percent error rate now. Is it your 

view the pilot program is starting too large and should start in a 

smaller way to be more effective in figuring out the end processes 

that ought to exist? 

Mr. CLARK. Without a doubt. I think the calibration that needs 

to happen between the reviewer, the contractor, CMS; the physicians who only do these once, many of them will only do them one 

to three times a year, it’s complicated; the supplier, most of the 

time the supplier helps educate the physician. There’s a great deal 

of calibration that has to happen in order to get the error rate 

down, and to do it on a 45 percent demonstration project just sets 

up an environment where you’re betting the benefit if you have 80 
30 

to 90 percent denial rates up front, where businesses then have to 

carry that working capital, if you will. 

And particularly in this benefit that’s gone from heavy allowable 

reductions in 2007, 27.5 percent price cut, then another 10 percent 

in 2008, competitive bidding, conversion to a 13-month rental program in 2012, now having a very high error rate for technical reasons or whatever, that’s going to take 60 days because it’s 43 business days really, if you look at the 10 business days CMS has, the 

mail, then the 20 business days, if they get that, that type of working capital would drive a lot of companies out of business while the 

claims then ultimately get paid. 

So our suggestion was to roll this thing out in one city in each 

state, something similar to what was done with the competitive bid 

program in DME, where they did it in two areas, worked out all 

the kinks, and then began to grow it, like they’re doing now, that 

would be, in my opinion, the most effective way to do prior authorization. As well, it allows all parties to understand what’s expected 

of one another without the threat of 50 percent of your revenue, or 

100 percent of anyone sitting alone in Illinois or Florida, their business being subjected to that. 

Senator CORKER. So I know Dr. Peake mentioned that they use 

the same coverage determination requirements as DME MACs for 

their prior authorization protocol. So why is it different for you to 

do prior authorization at a DME MAC than it is for you at Blue 

Cross? 

Mr. CLARK. Blue Cross, most of the Blue Crosses have a prior authorization template. They have a face-to-face examination guide 

that the physician uses. So we can—we don’t do—if we’re doing 

with a managed care, whether it’s Blue Cross Blue Shield or a 

MAP plan, and the volume is smaller, we can take their face-toface exam, what they’re wanting to see the doctor do, and we can 

calibrate with them. We can educate the doctor on what Blue Cross 

Blue Shield of Tennessee requires as far as the format they want 

to see and how they want to see it. And then that leads to a better 

face-to-face exam, and then the error rates are lower. 

It’s just been my experience, Senator, that upon review, most of 

the managed care plans are more so not trying to just deny the 

claim. They’re really trying to see does the patient need it or not, 

and the error rates are significantly lower than in Medicare. 

Senator CORKER. So I think what you’re saying is that CMS in 

this pilot could learn a lot from what’s happening with some of the 

managed care plans that actually have themselves an incentive not 

just to provide very good care for the people they serve but also to 

make sure they do it in a way that’s appropriate to keeping the 

company going. 

Mr. CLARK. Absolutely. I think they would agree with me that 

the managed care plan loses a lot of money through an extended 

appeals process as well, and because they do have a business model 

and income they’ve got to deal with, they don’t want to go through 

a lengthy appeal process. So it’s best for everyone in every scenario 

to know exactly what’s expected from them, calibrate to what that 

is, and then you can effectively move forward. 

Senator CORKER. Dr. Epplin, have you—thank you. Dr. Epplin, 

do you deal with both managed care plans like Blue Cross and 
31 

also—obviously, you deal with CMS. Is there a difference for you 

in filling out the forms and doing the things that are necessary to 

get someone enrolled? 

Dr. EPPLIN. Honestly, Senator Corker, in our rural area, we have 

very few, if any, managed care plans. So I don’t deal with them in 

terms of filling that out. 

Senator CORKER. And, Dr. Peake, would you say that testimony 

from Mr. Clark is on target? 

Dr. PEAKE. We don’t have any forms, per se, and we have excellent physicians in Tennessee, like Dr. Epplin alluded to, that do 

this, that do very good face-to-face examinations. But I do support 

the documentation requirements from CMS in the fact that each 

patient is individual and I don’t think that you can put them into 

a template. I think you can give them guidelines, and I think the 

guides are pretty clearly stated. 

But as an MA plan, when I deny something, we clearly articulate 

why we denied it, and if you read our denials and you figure it out 

and the patient truly does meet it, you’ll know what you need to 

do so that beneficiary can get what they need. I talk to a lot of physicians about this subject, and I would agree with Mr. Clark. After 

a lot of our discussions, they don’t understand that you can’t get 

a power mobility device so mom can go to the park with the family. 

Senator CORKER. But you’d have that impression if you saw the 

marketing materials; is that correct? 

Dr. PEAKE. I would have that impression. Unfortunately, and 

perhaps you have too, I’ve driven all over the state of Tennessee, 

and I see many power mobility devices sitting in the front yard, sitting in the backyard, sitting out on the porch because they can’t 

get through the door, and I question how did those get there? I 

don’t know that answer. 

Senator CORKER. So the documentation issues that were being 

addressed earlier, you actually think the forms that Mr. Hughes is 

using and that CMS is requiring, you think that they’re appropriate as they’re laid out, or do you think there is some—— 

Dr. PEAKE. No, I don’t think the forms are. The forms can give 

guidance, but as has been mentioned by my physician colleagues, 

I personally feel that each patient is an individual and it needs to 

be documented, as CMS says, in the same format as the rest of the 

chart. The face-to-face examination does take time, but it’s a fairly 

complex examination, but it’s a good physical examination. That’s 

all they’re asking to be done. 

You’re right, you could probably bill it at an 05 or a 15 level. 

There is a G code that goes with that to give additional compensation. But they’re just asking you to paint a picture of a patient that 

needs a power mobility device, nothing more, nothing less, not trying to put you in the same box with me, me in the same box with 

him. It’s to look at that patient and say do you need this or do you 

not? I really compliment the doctor from Illinois for bringing up the 

fact that inactivity can lead to increased obesity, a worsening of diabetes, comorbid conditions. If they need a power mobility device, 

Blue Cross Blue Shield of Tennessee certainly supports providing 

that device. But there needs to be a clear picture that that patient 

needs it because I firmly believe as a physician that if they don’t, 

we’re not doing them a favor. 
32 

Senator CORKER. Well, I think taxpayers all across our country 

have seen abuse probably of these, and at the same time I think 

they realize that they may have a loved one at some point in time 

that really does need one, and I’m sure many people in the country 

that are using them really do need them. But it jeopardizes everyone who does have a medical necessity for one of these, and I appreciate all of you being here. 

We’re closing, and I’m the only one here, and I appreciate all of 

you coming to testify. 

I wonder if any of you would like to take just a moment, a brief 

moment, sharing with me some misperception or misconception 

that we might have after hearing the testimony today. Is there 

anything you’d like to clear up before we leave? I’ve got a feeling 

Mr. Clark might, and you’re welcome to do that. But do any of you 

have anything you’d like to say as we leave that might help us as 

we move ahead looking at this pilot? Dr. Hughes? Dr. Peake? Mr. 

Clark? 

Mr. CLARK. I would say that we are obviously working well together with Blue Cross Blue Shield of Tennessee since we have a 

95 percent payment rate with them. So again, I think most of the 

misperceptions we’ve talked about. I will not take up any more of 

your time, Senator. 

Senator CORKER. Thank you. 

Dr. Epplin. 

Dr. EPPLIN. No, thank you. 

Senator CORKER. Well, thank each of you for coming and testifying. I thank you again, all of you, also for your temperament, and 

I hope the pilot goes well and hope we get down in the single digits, as you mentioned, Dr. Hughes. 

Thank you all, again. I appreciate it. 

[Whereupon, at 4:29 p.m., the hearing was adjourned.] 
(33) 

APPENDIX 
34 

STATEMENT OF 

"E 

SEPTEMBER 19,2012 
35 

U.S. Senate Special Committee on Aging 

Prior Authorization of Power Mobility Devices (PMDs) Demonstration 

September 19,2012 

Ranking Member Corker, Chairman Kohl, and Members of the Committee, thank you for the 

invitation to discuss the Centers for Medicare & Medicaid Services' (CMS) efforts to reduce 

fraud and improper payments for power mobility devices (PMDs), which will help ensure the 

sustainability of the Medicare Trust Funds and protect beneficiaries who depend upon the 

Medicare program. I appreciate the opportunity to update you on the Prior Authorization of 

Power Mobility Devices Demonstration, which CMS began earlier this month. PMDs are a 

group of Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) 

consisting of such devices as power wheelchairs and power operated vehicles (scooters). 

Background 

DMEPOS, including PMDs, are included under the Medicare Part B benefit. Medicare covers 

PMDs when a beneficiary has a mobility limitation that significantly impairs his or her ability to 

participate in one or more mobility-related activities of daily living within the home and the 

limitation cannot be sufficiently and safely resolved by the use of a cane, walker. or manual 

wheelchair. These activities of daily living include feeding, dressing, and bathing in customary 

areas in the home. I 

A physician/practitioner may prescribe a PMD to be paid by Medicare after they complete the 

face-to-face encounter process. During this process, the physician/practitioner assesses the 

beneficiary's medical condition and mobility needs and determines whether a PMD is necessary 

as part of an overall treatment plan. The ordering physician/practitioner sends a supplier the 

prescription for a power wheelchair and documentation from the beneficiary's medical record to 

support the medical necessity of the power wheelchair. Based on the prescription and supporting 

medical documentation, the supplier recommends a type of PMD for the beneficiary; the type 

must be approved by the ordering physician/practitioner. The supplier is also responsible for 

I https:l!www.cl11s.govIOutreach-and-Education/Medicare-Learning-NetworkMLN/MLNProducts/downloads/PMDFactSheet07 Quark 19.pdf 
36 

assessing the beneficiary's home environment before or during the delivery of the PMD to verify 

that the beneficiary can adequately maneuver the item in his or her home. 

High Incidences of Fraud and Improper Payments 

PMDs have had historically high incidents of fraud and improper payments. PMD suppliers also 

continue to be subject to significant law enforcement investigation.2 Based on joint 

investigations by the Department of Justice (DOJ), eMS, and the HHS Office of Inspector 

General (OlG), in recent years numerous DMEPOS suppliers have been charged and convicted 

of defrauding the Medicare program and many have had their Medicare billing privileges 

revoked as a result of OlG investigations. Examples include the 20 DMEPOS company owners 

and marketers, most of them in the Los Angeles area, who were charged in 2009 with allegedly 

billing Medicare for more than $26 million in fraudulent claims for power wheelchairs, orthotics, 

and hospital beds.3 More recently, a Louisiana man was sentenced to 180 months in prison for 

participating in a health care fraud scheme that defrauded Medicare of more than $21 million by 

billing for power wheelchairs, leg and arm braces, and other durable medical equipment that 

were never provided to beneficiaries and/or were not medically unnecessary.4 

In addition, eMS noted in a 2011 ReportS on improper payments in the Medicare fee-for-service 

program that over 80 percent of claims for motorized wheelchairs did not meet Medicare 

coverage requirements. Although eMS recognizes that many improper payments are not the 

result of willful fraud, this error rate represents over $492 million in estimated improper 

payments. 

2 https:llwww.cms.govIResearch-Statistics-Data-and-Systems!Monitoring-ProgramsICERTIDownloadsIFRNotice.pdf 

3 http://oig.hhs.govloeilreports/oei-04-09-00260.asp 

4 http://www.justice.goy/opa/pr!2011/AugustI12-crm-I032.html 

'http://ems.govIResearch-Statistics-Data-and-SystemsIMonitoringPrograms!CER T!Dov.,T11oads!MedicareFFS20 I I CERTReport.pdf 

2 
37 

Prior Authorizatiou for PMD Demonstration 

The Affordable Care Act provided CMS with many tools to combat fraud, waste, and abuse in 

Medicare. In recent years, CMS has implemented powerful new anti-fraud tools provided by 

Congress, as well as designed and implemented large-scale, innovative improvements to our 

Medicare program integrity strategy to shift beyond a "pay and chase" approach by focusing new 

attention on preventing fraud. 

To complement these efforts, the Prior Authorization ofPMD Demonstration will develop 

improved methods for preventing fraud and will protect the Medicare Trust Funds from 

fraudulent actions and the resulting improper payments. This demonstration implements a prior 

authorization process for PMDs for people with Medicare who reside in seven States (California, 

Illinois, Michigan, New York, North Carolina, Florida and Texas). The demonstration began on 

September I, 2012 for orders written on or after that date. This prior authorization 

demonstration will also help ensure that a beneficiary'S medical condition warrants their medical 

equipment under existing coverage guidelines. While CMS recognizes there are many honest 

suppliers, given the widespread law enforcement activity associated with PMD fraud, CMS is 

taking necessary actions to address these problems. 

This demonstration employs an approach drawn from the private sector to protect the Medicare 

Trust Funds. Prior Authorization, sometimes known as "prior approval" or "pre-certification," is 

currently being used in other health care programs such as TRICARE, certain State Medicaid 

programs, and private insurance for many services and items including PMDs. However, unlike 

some other prior authorization programs, this program does will not automatically deny payment 

for a PMD if it did not go through prior authorization. With prior authorization, suppliers and 

beneficiaries will know before an item is delivered to a beneficiary whether Medicare will pay 

for the PMD. This helps ensure that Medicare pays only for PMDs that meet the longstanding 

coverage requirements thereby limiting fraud, waste and abuse. Further, suppliers and 

beneficiaries will know before the item is delivered if they will have to pay for the item. 

Currently, in many cases, if the item is not covered, Medicare beneficiaries will have to pay for 

the entire cost of the item because the PMD is delivered to the beneficiary and then Medicare 

denies the payment because the coverage criteria has not been met. 

3 
38 

Prior Authorization Process 

Under the demonstration, an ordering physician/practitioner or supplier submits a prior 

authorization request and all relevant documentation to support Medicare coverage of the PMD 

to a CMS Durable Medical Equipment Medicare Administrative Contractor COME MAC). 

Currently, these requests can be submitted via fax or mail. Beginning later this year, requests 

can be submitted electronically. After receipt of all relevant documentation, the DME MAC 

conducts a review, and sends notification of the decision within 10 days to the 

physician/practitioner, beneficiary and supplier. The DME MAC either affirms (approves) the 

request or non-affirms (does not approve) the request. To be affirmed, the request for prior 

authorization must meet all applicable rules, policies, and National Coverage Determination 

(NCD)/Local Coverage Determination (LCD) requirements for a PMD. 

If the review results in a non-affirm, the DME MAC provides a detailed written explanation 

outlining which specific coverage requirement(s) was/were not met. This notification is sent to 

the physician/practitioner, supplier and beneficiary. In the event of a non-affirm, a 

physician/practitioner or supplier may resubmit the prior authorization request an unlimited 

number oftimes. The DME MAC will make every effort to review any re-submissions within 

20 days. 

The demonstration does not create any new documentation requirements, but simply requires the 

information be submitted earlier in the claims process. CMS has worked to remind people of 

these longstanding requirements. Instead of reviewing the documentation after the item has been 

delivered, we now allow the paperwork submission prior to delivery. CMS has and will continue 

to provide extensive outreach and education to physicians/practitioners, suppliers, and 

beneficiaries to educate them about the demonstration and the prior authorization process. 

All existing appeal rights remain unchanged under the PMD demonstration. If a PMD claim 

is denied under this demonstration, beneficiaries may appeal the claim denial. Beneficiaries 

and suppliers cannot appeal a non-affirmative (non-approval) prior authorization request. 

4 
39 

However, suppliers have the option of (I) resubmitting the prior authorization request or (2) 

delivering the PMD, submitting a claim which will be denied, and then submitting an appeal. 

There is also an expedited process for practitioners to request a 48 hour review in emergency 

situations. The DME MAC conducts an expedited review when the physician/practitioner 

indicates clearly, with supporting rationale, that the 10 business day timeframe for review of the 

prior authorization request could jeopardize the beneficiary's life or health. The expedited 

request must be accompanied by the required supporting documentation. Inappropriate 

expedited requests may be downgraded to standard requests. After conducting an expedited 

review, the DME MAC communicates a decision for the prior authorization request to the 

submitter within 48 hours of the complete submission. 

Suppliers Who Do Not Submit a Prior Authorization Request 

If a supplier submits a PMD claim without first seeking prior authorization, the claim will 

undergo prepayment review. As part of the review process, the DME MAC sends letters to the 

supplier requesting all documents to support the claim. Once the supplier has submitted all the 

necessary documentation, the DME MAC conducts a review of the documentation within 60 

days. This is the standard time frame for prepayment review. If the DME MAC determines 

payment is appropriate, the payment is processed. 

Starting December 1, 2012, payments will be reduced by 25 percent for suppliers not submitting 

a prior authorization request. This reduction is not subject to appeal. The 25 percent payment 

reduction does not apply to contract suppliers in competitive bidding areas.6 If a competitive bid 

contract supplier submits a payable claim that has not been prior authorized for a beneficiary 

with a permanent residence in a competitive bidding area that is included in the supplier's 

contract, that contract supplier would receive the applicable single payment amount under its 

6 Note: Section 302 of the Medicare Modernization Act of2003 (MMA) established requirements for a new 

Competitive Bidding Program for certain Durable Medical Equipment, Prosthetics. Orthotics, and Supplies 

(DMEPOS). Under the program, DMEPOS suppliers compete to become Medicare contract suppliers by submitting 

bids to furnish certain items in competitive bidding areas, and CMS awards contracts to enough suppliers to meet 

beneficiary demand for the bid items. On January I, 2011, CMS launched the first phase this program (Round I 

Rebid) in nine major metropolitan areas for nine product categories, including Standard Power Wheelchairs, 

Scooters, and Related Accessories. The nine metropolitan areas are: Charlotte, Cincinnati, Cleveland, Dallas, Kansas 

City, Miami, Orlando, Pittsburgh, and Riverside, CA. 
40 

contract and would not be subject to the 25 percent reduction. These must stil! adhere 

to all other requirements ofthe demonstration. (See Table I). \\le do not reduce the payment to 

contract suppliers in competitive bidding areas in order to honor the contracts we with 

those suppliers. 

Table I: 

*Supplier may choose to resubmit prior authorization request 

eMS Improvements ill Response to Industry Feedback 

CMS announced this demonstration on November 1 201.1 and received signific;mt 

feedback from industry on the demonstration In response. CMS delayed the 

demonstration n'om its January 20 start date and CMS made several changes to the 

demonstration to better assist suppliers in implementation. The CMS changes include: 

.. Removal of the JOO percent Pre·Payment review phase (formerly Phase l) li·om the 

demonstration based on supplier concerns about the financial impact 

revie\v; 

.. Reduction of the target review time for resubmissions to 20 business 

.. Authorization of to the administrative function 

authorization request on behalf or tile and 

the 

6 
41 

• Provided physician/practitioners and suppliers an opportunity to comment and make 

recommendations on how to reduce provider and supplier paperwork burden associated 

with these demonstrations through a Paperwork Reduction Act (PRA) notice. 

Outreach and Education 

Prior to the demonstration start date, eMS conducted outreach and education including 

webinars, in-state meetings and other education sessions for suppliers, physician/practitioners 

and beneficiaries. In addition, physicians/practitioners and suppliers who have recently 

furnished or who have recently ordered a PMD for a beneficiary residing in a demonstration 

State were notified via certified letters about the demonstration prior to the start date of the 

demonstration. eMS published numerous educational materials to assist suppliers and 

physicians/practitioners on the policies and documentation requirements for PMDs.7 eMS 

also conducted several open door forums on these policies, as well as the process and 

requirements for the PMD demonstration. We will continue to work to ensure that suppliers, 

physicians/practitioners, and beneficiaries are educated and have up to date information 

throughout the demonstration. 

Development of the PMD Electronic Clinical Template 

eMS recognizes the importance of consistency of documentation within this benefit and is 

developing an electronic clinical template as part of a physician's/practitioner's electronic health 

records (EHR). An electronic template that is part of the EHR is a good way to allow 

physicians/practitioners to have a standard method to document a patient's medical condition. 

This may help physicians/practitioners more accurately communicate why the PMD is medically 

necessary for a particular beneficiary. However, use of an electronic clinical template would not 

be mandatory to receive payment from Medicare, nor would the use of such a template guarantee 

Medicare payment for the PMD. eMS has developed an initial draft of the suggested electronic 

clinical template with data elements for a progress note documenting a face-to-face PMD 

evaluation. Stakeholders have been providing feedback on draft electronic clinical template 

including through a series of special open door forum calls. 

7 https:!!www.cms.gov/Research-Statistics-Data-and-Systems!MonitoringPrograms!CERT!PADemo.html?redirect~/CERT!03 PADemo.asp 

7 
42 

CMS and the Office of the National Coordinator for Health Information Technology (ONC) 

intend to collaborate on the development of a strategy to develop a standard for the electronic 

clinical template for PMD progress notes. Ideally, this standard would be adopted by EHR 

vendors and, thus, enable physicians/practitioners to access the electronic clinical template as 

part of their EHR. Our goal would be for the electronic clinical template to be available in all 50 

states. 

Timing of the PMD Electronic Clinical Template- and the Demonstration 

Some have raised the issue of whether the demonstration should be delayed until a PMD 

electronic clinical template for the clinical information is available. CMS does not believe it is 

necessary to delay the PMD demonstration until we develop an electronic clinical template. The 

PMD demonstration has not changed existing medical necessity policies and documentation 

requirements for furnishing PMO to Medicare beneficiaries. CMS published numerous 

educational materials to assist suppliers, and physicians/practitioners on the policies and 

documentation requirements for PMDs. In addition, a draft of the electronic clinical template is 

available on the CMS website8 and there is nothing precluding any physician/practitioner from 

using this template as a tool to assist them in documenting the medical criteria necessary for 

CMS to approve payment for a PMO. 

Conclusion 

Prior authorization is an important tool that will help CMS reduce fraud and improper payments 

for PMOs, while continuing to ensure that beneficiaries have access to needed equipment. We 

believe this demonstration will help protect the Medicare Trust Funds by utilizing many of the 

same methods already used by private insurance plans and other programs to ensure payment 

accuracy. 

We appreciate the Committee's interest in combating fraud, waste and abuse in the provision of 

PMDs. We thank you for your support and your efforts to educate suppliers, 

8 http://www.cms.gov/Research-Statistics-Data-and-Systems/Computer-Data-andSystemsiESMD/ElectronicClinicarremplate.html 

8 
43 

physicians/practitioners and beneficiaries about the demonstration. I look forward to continuing 

to work together with the Committee to protect beneficiaries and the Medicare Trust Funds. 

9 
44 

Page 1 of 4 

17 September 2012 

Paul J. Hughes, MD 

PWC Prior Authorization Demonstration Project - Opening Statement 

I am Doctor Paul Hughes, the Medical Director for the Durable Medical 

Equipment Medicare Administrative Contractor, commonly called a DME 

MAC, and my geographic area of responsibility is Jurisdiction A. Jurisdiction 

A is one of four DME MACs and encompasses the northeastern states from 

Maine to Washington DC. I have been the Medical Director for this region 

since 1995. I work for NHIC, which contracts with the Centers for Medicare 

& Medicaid Services to administer this jurisdiction since 2006. New York is 

the demonstration state in our region. 

My primary responsibilities revolve around the development and 

implementation of Medicare coverage policy. This role requires that I be 

involved in many aspects of NHIC's operations including routine claim 

processing, appeals, medical review and provider education. 

I have been asked to speak briefly about the preparations NHIC has made to 

implement the Prior Authorization for Power Mobility Devices demonstration 

project. For convenience, I would like to separate the discussion into two 

parts, payment policy and operations. 

First, payment policy. Reimbursement for power mobility devices is set out 

in several sources. There are statutory requirements arising from the 

Medicare Modernization Act implemented by CMS' Final Rule in 2006. These 

provisions require an in-person visit and a medical exam in addition to 

specific requirements for the creation of the prescription and the provision of 

these documents to the DME supplier. 

CMS' National Coverage Policy creates the foundation for the medical 

coverage rules. It allows for the coverage of mobility assistive equipment 

for beneficiaries with mobility deficits that impair their ability to accomplish 

activities of daily living within the home. This policy guides coverage for all 

mobility equipment - from canes and crutches to walkers to manual 

wheelchairs - all the way up to power wheelchairs. To make a deciSion 

about which device is appropriate, CMS' national coverage policy requires a 

systematic evaluation of the beneficiary by their treating physician in order 

to determine which item optimally meets the beneficiary's mobility needs. 

In addition to this CMS national policy, the DME MACs also have a local 
45 

Page 2 of 4 

coverage policy for Power Mobility Devices. This local policy pulls together 

both the statutory and national policy requirements, organizes the nearly 60 

individual power mobility codes into five groups of similar products, sets out 

criteria for each group and explains the documentation requirements and 

coding guidelines. In other words, the local policy takes coverage and 

payment information from various sources, adds additional necessary details 

for proper claim submission and incorporates those into one document. 

The major concern I hear raised by suppliers is whether the DME MACs will 

be able to review the anticipated request volume in a timely manner. Our 

staff is knowledgeable and experienced in looking at claims for power 

mobility. These requirements have been in place, unchanged, since 2006 

when CMS' regulation took effect. All DME contractors have performed 

numerous reviews on power mobility devices since that time to identify 

problems. In addition to standard power wheelchairs, we have all reviewed 

many complex rehabilitation power wheelchair requests under Advanced 

Determination of Medical Coverage, usually referred to as ADMC. In 

Jurisdiction A, we review an average of 240 requests per month under this 

program. These complex products must meet the same basic coverage 

requirements as the products covered by the demonstration project in 

addition to the requirements necessary to determine coverage for the 

options and accessories needed to address the needs of these patients. This 

demonstration project does not change any of the applicable coverage rules 

thus we do not anticipate issues in this area. In fact, the project's focus only 

on coverage criteria for the power wheelchair base simplifies the review for 

our staff. We do not anticipate that our review staff will have any difficulty 

in reviewing power wheelchairs of any type, including the numerous options 

and accessories used with them. 

Another issue I hear mentioned is that some suppliers and physicians may 

not be familiar with all of the policy requirements. The contractors have 

produced numerous education resources about this policy, ranging from 

"Dear Physician" letters discussing the coverage criteria and the need for 

quality documentations, to Question & Answer documents and articles, 

webinars and in-person seminars, and CERT and Medical Review error 

analysis. In addition to the materials provided by the contractors, CMS' 

Medicare Learning Network has also published a variety of materials 

addressing power mobility coverage. 

Next, I would like to discuss operations. I know that some in the DME 

supplier community are concerned that the volume of claims may be too 

large to review in the allotted time of ten business days. Based upon 

historical claim volume, we initially expect 25-30 new requests per day for 

the types of power wheelchairs included in the demonstration. In 
46 

Page 3 of 4 

anticipation of this project, we have increased our nursing staff and assigned 

our more experienced personnel to handle the anticipated volume. Based 

upon historical power wheelchair audit data, we anticipate that 

approximately 50% of the initial submissions will not be approved. Likewise, 

based upon appeals data we expect the about 50% of resubmitted requests 

will not be approved. Once the demonstration is operational, we anticipate a 

total volume of 50 to 60 new and resubmitted requests per day from this 

project. We have sufficient additional staff to allow flexibility to deal with 

variations in volume. In the non-review areas resources have also been 

adjusted to allow for additional workload in written and telephone inquiries 

and in the production and mailing of response letters. 

Finally, I would like to discuss errors. Regardless the source of the audit, 

the types of errors identified are consistent. For example, our most recent 

Jurisdiction A report, published in July 2012, showed a charge denial rate of 

54%. The most common denials issues were: 

• 33% - Insufficient documentation. This includes both a failure to meet 

the statutory reqUirements to perform the face-to-face as well as 

incomplete or poorly documented examinations. 

• 23% - Problems with the 7-element order. This is the statutorily 

required prescription. Problems include missing elements, illegibility 

and the prescription was created before the face-to-face was 

completed. 

• 19% - Specialty exam. Missing financial relationship attestation. 

• 14% - Detailed Product Description. This is a document produced by 

the supplier for the physician's signature. It serves as the prescription 

for all of the separately billable items. Problems included nodetaile 

product description submitted and the items billed did not match the 

items ordered. 

• 9% - Home assessment. None submitted or not signed and dated 

• 4% - Proof of delivery. None submitted or delivery ticket did not 

match claim. 

Many discussions of errors focus upon issues related to the quality of 

physician documentation and the DME supplier'S inability to get the 

physician to improve. While physician documentation is an important factor 

in audit findings, it is not the only one. Many other errors occur. Often 

these others are more within the supplier's direct control either because they 

create the documentation or because there is an opportunity to screen for 

mistakes and have them corrected before submission. In this most recent 

review, most errors fell into this latter category. This pattern of errors is not 

unique to this particular report. Our review experience demonstrates that 

errors would drop significantly if attention were directed to some of these 

non-medical record issues. 
47 

Page 4 of 4 

In summary, I believe that NHIC is well prepared to perform the work 

necessary to meet the requirements of this demonstration project. 

Thank you for the opportunity to share this information. 
48 

U.S. Senate Special Committee on Aging 

"An Examination of Prior Authorization Requirements for Power Mobility Devices" 

Testimony of Stephen T. Peake D.Ph., M.D. 

Medical Director, Senior Care Division 

Blue Cross Blue Shield of Tennessee 

Chairman, Kohl, Ranking Member Corker, I appreciate the opportunity to appear before the U.S. Senate 

Special Committee on Aging to discuss prior authorization requirements for Power Mobility Devices. My 

name is Dr. Stephen Peake and I am the Medical Director for the Senior Care Division of Blue Cross Blue 

Shield of Tennessee, an independent licensee of the Blue Cross Blue Shield Association. My focus today 

will be on our Medicare Advantage product which we refer to as Blue Advantage and our strong 

commitment to utilization management and the use of prior authorizations. In particular I will be 

focusing on utilization management and the use ofthe prior authorization process for Power Mobility 

Devices. I will highlight the successful tools we have implemented through these programs. I will also 

illustrate some of the problems we have encountered while using these tools. Currently, our Blue 

Advantage Product has approximately 33, 000 enrollees with an average age of 71 of which 

approximately 55% are female and 45% are male. Blue Cross Blue Shield ofTennessee has been offering 

Blue Advantage to the citizens of Tennessee since 2006. 

Plans such as Blue Advantage were established by Congress and became a reality on January 1, 2006. 

The guidelines that we must conform to as a MA plan are outlined in the CMS Manual, Managed Care 

(Pub. 100.16) which allows for increased flexibility in administering beneficiary benefits as long as they 

do not result in the beneficiary receiving less than traditional Medicare benefits. One aspect ofthis 

flexibility is the ability to perform utilization management, which allows us as a MA plan to require prior 

authorization of services. 

1 
49 

Prior authorization allows us to determine if in fact a requested service is medically necessary and thus 

reasonable and necessary by reviewing the documentation against the hierarchical requirements set 

forth by CMS. We feel strongly that properly applied utilization management protects, first and 

foremost, the beneficiary from unnecessary risks, but also helps to protect the system from fraud, waste 

and abuse. 

I was asked to share our experience with requiring prior authorization on Power Mobility Devices. CMS 

has commented extensively both directly and through the Medicare Administrative Contractors (MACs) 

on the documentation requirements for Power Mobility Devices. National Coverage Determination 

2BO.2 Mobility Assistive Equipment ( Effective May 5, 2005), local Coverage Determination 23613 

Power Mobility Devices (Revision Effective OB/05/2011) and related Policy Article for Power Mobility 

Devices (Effective January 2009) and a Provider Update dated September 2010 POWER WHEELCHAIRS 

AND POWER OPERATED VEHICLES-DOCUMENTATION REQUIREMENTS co-signed by all 4 Durable 

Medical Equipment Medicare Administrative Contractor's Medical Directors. Also the Office ofthe 

Inspector General commented about Power Mobility Devices in the August 2009 report POWER 

WHEELCHAIRS IN THE MEDICARE PROGRAM: SUPPLIER ACQUISITION COSTS AND SERVICES. 

Yet CMS continues to point out that the majority of claims for power mobility devices do not meet the 

documentation requirements for coverage. 

At Blue Cross Blue Shield of Tennessee we in Blue Advantage require strict adherence to the 

documentation requirements for a Power Mobility Device as outlined in the above listed documents. 

For example, coverage is allowed only if the beneficiary has a mobility limitation that limits their ability 

to perform Mobility Related Activities of Daily living in the home, such as toileting, feeding, dressing, 

grooming and bathing in customary locations in the home, not elsewhere. The documentation must 

indicate that the beneficiary's mobility limitation cannot be overcome with an optimally fitted cane, 

walker, or wheelchair: in other words, do they really require a Power Mobility Device? 

2 
50 

Also, it is required that physicians perform a face to face examination and the physician "shall" 

document the examination in a detailed narrative note in their chart in the format they use for other 

entries, and that the note clearly indicates that a major reason for the visit was a mobility evaluation- a 

requirement that is far too often not met. In addition, many suppliers have created forms which have 

not been approved by CMS. The one we see most commonly is the Texas Academy of Family Practice 

Mobility Evaluation Form, a form Blue Advantage does not recognize for use in the required face to face 

examination. CMS even commented that this form was not adequate in the September 2010 Provider 

Update, referenced above. However, we continue to see suppliers completing this form and having the 

physicians sign it and physicians utilizing this form as the face to face mobility examination described 

above. In fact, if you go to the Texas Academy of Family Practice's web site www.tafp.org it clearly 

states this is not a CMS approved form. In addition, the supplier must supply a detailed 7 part 

prescription but is prohibited from completing any portion which must be completed by the prescribing 

physician -- yet again we see what appear to be disparities in the hand writing on the form and the 

prescriber's handwriting. lastly, an in-home assessment, which is often omitted, must be completed to 

make sure there is room for effective maneuverability, as the primary intent in obtaining a Power 

Mobility Device is to alleviate barriers to the performance of Mobility Related Activities of Daily living in 

the home, not elsewhere. 

In a one year interval Blue Cross Blue Shield of Tennessee received 397 request s for power mobility 

devices, the majority of which were for power wheel chairs. Per CMS regulations, if the initial request is 

denied, the supplier can request a reopening with additional information. Both the prescribing 

physician and beneficiary can appeal, and the prescribing physician can request a peer to peer 

discussion. By incorporating utilization management and requiring prior authorization for Power 

Mobility Devices, 24% of the requests were found not to be medically necessary. In 2010 CMS 

published data estimated $606 million was spent on power mobility devices. 

3 
51 

If in fact the implementation and utilization of a prior authorization program mirrored Blue Cross Blue 

Shield ofTennessee's Blue Advantage's experience the potential savings could be significant. 

In conclusion I personally applaud CMS for initiating this demonstration project and would welcome it in 

the Great State of Tennessee. I appreciate the time you have allowed me to share on how we at Blue 

Cross Blue Shield of Tennessee's Blue Advantage Plan approach prior authorizations of Power Mobility 

Devices. I welcome any questions you may have. 

4 
52 

Testimony of Michael B. Clark 

Chief Administrative Officer and General Counsel 

The SCOOTER Store, New Braunfels, Texas 

Before the US Senate, Special Committee on Aging 

On 

"Eliminating Waste and Fraud in Medicare: An Examination of Prior Authorization 

Requirementsfor Power Mobility Devices" 

September 19, 2012 @ 2:00pm 

Ranking Member Corker, Members and staff of the Senate Special Committee on Aging, 

my name is Mike Clark. I am the Chief Administrative Officer and General Counsel for 

The SCOOTER Store, a nationwide supplier of durable medical equipment (DME), 

including Power Mobility Devices (PMDs)' to the disabled and elderly who rely on this 

equipment to conduct their activities of daily living in the home. Based in New 

Braunfels, Texas, The SCOOTER Store started as a small family business in 1991 and 

now employs roughly 2300 individuals throughout the country. 

Our company is committed to regulatory compliance and providing our fellow citizens 

with the finest quality health care products and services. TSS maintains accreditation 

from an independent, third party, the Accreditation Commission for Health Care 

("ACHC"). ACHC is nationally recognized for helping companies meet customer and 

regulatory requirements, and continually enhancing their employee skills and 

efficiencies for promulgating quality management systems and processes against those 

standards. 

I would like to thank the Committee for holding this very important and timely hearing 

to discuss Prior Authorization for PMDs and the Medicare Demonstration that began on 

September 1st in seven States that cover nearly half of all Medicare beneficiaries. 

Power Mobility Devices Are Essential to Address Heath Care Needs of the 

Nation's Elderly and Disabled, and Their Use Generates Health Care 

Savings 

PMDs allow people to retain or regain their independence in the home, and complete 

their activities of daily living safely and with dignity. Innovative technology has made 

PMDs more usable by allowing the equipment to maneuver in tight spaces. illtimately, 

this keeps people in their home and out of nursing homes and hospitals. 

PMDs enhance the lives of untold thousands of people who would otherwise be left 

either bed or chair bound and unable to live their lives in dignity. Without the use of 

, PMDs include both power wheelchairs (four-wheeled motorized vehicles with steering operated by an 

electronic device or joystick to control direction and turning) and power-operated vehicles ("POVs")(three 

or four-wheeled motorized vehicles operated by a tiller) used in the home. 
53 

this equipment, seniors would be more likely to incur significant injuries simply trying 

to get from room to room. 

PMDs help prevent people from falling. The Centers for Disease Control and Prevention 

(CDC) identifies falls as the leading cause of injury and/ or death in people 65 or 

older? We also note that an April 1, 2000 Report written by George F. Fuller and 

published by the American Academy of Family Physicians, entitled Falls in the Elderly, 

concluded that "falls are the leading cause of injury-related visits to emergency 

departments in the United States and the primary etiology of accidental deaths in 

persons over the age of 65 years."3 At the time, George F. Fuller was the White House 

physician and deputy director for clinical operations. Studies estimate the direct costs 

of non-fatal falls in those 65 and older to be at least $19 billion annually.4 

Power mobility equipment not only improves the lives of our fellow citizens, but it also 

saves health care dollars by preventing worse injuries. 

Medicare Rightfully Requires a Face-to-Face Examiuatiou Prior to Paymeut 

For a Power Mobility Device 

Congress, as part of the Medicare Prescription Drug, Improvement, and Modernization 

Act of 2003 (MMA), established the physician/ treating practitioner as the gatekeeper 

when dealing with power wheelchairs covered by Medicare. Specifically, Congress set 

forth that payment may not be made for a motorized or power wheelchair unless a 

physician, a physician assistant, nurse practitioner, or a clinical nurse specialist "has 

conducted a face-to-face examination of the individual and written a prescription for the 

item." The face-to-face examination is the event established by Congress to determine 

whether a beneficiary is qualified for a power wheelchair. 

In 2004, the Centers for Medicare and Medicaid Services (CMS) convened an 

Interagency Wheelchair Working Group (IWWG) comprised of physicians, occupational 

therapists, physical therapists, researchers, and policy specialists from different federal 

agencies including the Veterans Administration, National Institutes of Health, Food and 

Drug Administration, and Department of Education. IWWG recommended that CMS 

replace the wheelchair "bed and chair confined" standard with a new functional 

standard. 

On June 3, 2005, CMS modified the Medicare National Coverage Determination 

Manual, replacing the National Coverage Determinations ("NCDs") for PMDs, power 

operated wheelchairs (§ 280.1) and power operated vehicles (§ 280.9), with a new 

'Falls Among Older Adults: An Overview, Centers for Disease Control and Prevention, available at 

http://www.cdc.gov/homeandrecreationalsafety/falls/adultfalls.html (referencing data found in the 

CDC's Web-based Injury Statistics Query and Reporting System, as accessed on November 30,2010). 

3 George F. Fuller, Falls in the Elderly, 61 American Family Physician 2159-2168 (2000). 

4 See e.g., JA Stevens, et ai., The costs o//atal and nonfatal/ails among older adults, 12 Injury 

Prevention, 290-295 (2006). 

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Mobility Assistive Equipment5 ("MAE") NCD (§ 280.3). Effective for claims with dates 

of service on or after May 5, 2005, the MAE NCD establishes that MAE is reasonable 

and necessary for beneficiaries who have a personal mobility deficit sufficient to impair 

their participation in one or more mobility-related activities of daily living (MRADLs) 

such as toileting, feeding, dressing, grooming, and bathing in customary locations 

within the home.6 This standard is thus based on the beneficiary's present abilities and 

condition at the time he or she is evaluated and equipment is prescribed and is not 

diagnosis dependent. These determinations can only be made during the face-to-face 

evaluation required by law. 

CMS regulation makes clear that a physician or treating practitioner must conduct "a 

face-to-face examination of the beneficiary for the purpose of evaluating and treating 

the beneficiary for his or her medical condition and determining the medical necessity."7 

In the preamble to the final PMD rule issued April 5, 2006, entitled "Medicare 

Program; Conditions for Payment of Power Mobility Devices (PMD), Including Power 

Wheelchairs and Power-Operated Vehicles," CMS declared that no format is required to 

document the face-to-face examinationS and the information recorded at the face-toface examination will generally be sufficient.9 

The congressionally mandated face-to-face examination properly places the 

physician/treating practitioner in charge of patient care. TSS fully supports this 

requirement and applauds Congress for emphasizing the role of the medical 

professional when assessing power mobility needs. 

Congress and the Centers for Medicare and Medicaid Services Have 

Instituted Significant Fraud and Abuse Safeguards Governing the Power 

Mobility Benefit 

As a taxpayer, I want to know that money used toward any government program is 

properly administered and dispensed. TSS applauds efforts to combat fraud and abuse. 

Toward that end, we have supported efforts by Congress and CMS to increase program 

integrity requirements in recent years including the following: 

• Accreditation for all DME suppliers. 

• CMS' issuance of new PMD billing codes. 

• Increased supplier standards for PMDs 

• Surety Bond requirement for DME suppliers. 

• Face-to-Face examination 

• Seven element prescription 

• Detailed product description 

5 "Mobility assistive equipment" includes: canes; crutches; walkers; manual wheelchairs; power 

wheelchairs; and scooters. Medicare National Coverage Determination Manual, § 280.3 (eff. May 5, 

2005). 

6 Medicare National Coverage Determination Manual, § 280.3. 

742 C.F.R. § 41O.38(c)(2) (emphasis added). 

871 Fed. Reg. 17021, 17028 (2006). 

9 ld. at 17023. 

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• Home Assessment 

These measures help ensure that only law abiding companies participate in the 

Medicare program and that only necessary equipment is reimbursed by the federal 

government. 

TSS offers additional recommendations that we believe would target real fraud and 

abuse in the industry: 

• Mandated Equipment Serial Number Tracking System. Rationale: Industry 

adoption would allow CMS and its contractors to verify that all claims submitted 

by suppliers represent supplier deliveries of real equipment obtained from 

authorized manufacturers. 

• Real Time Auditing of High-Volume Physicians who have prescribed over 50 

PMD units in a 12 month period. Rationale: Industry data indicates that most 

physicians prescribe two (2) or fewer PMDs per year. Use of physician NPI 

numbers on claims will help identify abnormalities in the Medicare program. 

We look forward to working with this Congress and CMS on these initiatives. 

Reimbursement Cuts 

There have been a number of legislative and regulatory measures that have impacted the 

power mobility benefit. 

• November 15,2006 - CMS updated PMD codes (65 codes) resulting in a 27% 

Medicare reimbursement reduction. . 

• January 1, 2009 - Comprehensive 9.5% reimbursement reduction due to 

delay in National Competitive Bidding program; 

• January 1, 2011 - all standard power wheelchairs became rental items 

pursuant to the Patient Protection and Affordable Care Act; 

• January 1, 2011 - Round 1 of the Durable Medical Equipment Prosthetics 

Orthotics and Suppliers (DMEPOS) National Competitive Bidding (NCB) 

program began in nine of the largest Metropolitan Statistical Areas (MSAs) 

resulting in a 26% average reimbursement reduction; 

• Round 2 of NCB scheduled to start in 2013 in 91 additional cities; 

All of these measures contribute to a benefit that has been subject to much regulatory 

and legislative oversight, significantly reducing the ability of those that might want to 

defraud the Medicare program. 

We note that Medicare power wheelchair utilization has dropped significantly. By our 

estimates, overall national reimbursements of standard power units declined by 20,157 

units in the first half of 2011 representing a 23.5% drop from the first half of 2010. Total 

A 
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allowed reimbursement for the first half of 2011 delivered units fell nearly $200 million 

from the same period in 2010, a 65.5% reduction in CMS allowed reimbursements. 

TSS Compliance Process 

In addition to the legislative and regulatory measures impacting the power mobility 

benefit, TSS has instituted numerous safeguards to ensure that appropriate claims are 

submitted to Medicare as well as other payers. The following are some important 

procedures established by our company. 

Our company has an extensive Medicare compliance program, headed by a Corporate 

Compliance Officer and implemented by a Compliance Department comprised of 128 

people. Through its compliance efforts, TSS seeks to ensure that its employees follow 

the procedures and policies that govern its business. TSS previously hired Steve 

Ortquist, a nationally renowned compliance expert with the Aegis Compliance and 

Ethics Center, LLP, to review TSS's procedures to be sure they are the most rigorous in 

the health care industry. 

As part of its compliance department, TSS employs 57 full time Clinician (nurses) and 

Quality Review (QR) personnel who review and assess claims independent from any 

sales channel. 

TSS also performs a Pre-Delivery In-home Assessment by Mobility Managers, who 

conduct a thorough in-home assessment for purposes of ascertaining potential or real 

equipment and safety issues. The Mobility Manager has full authority to cancel the 

potential delivery, should any irresolvable issues be uncovered, or should they discover 

for any reason that the customer does not qualify. 

As a result of the policies and procedures and extensive screening process instituted by 

our company, only 13 percent of beneficiaries who contact us for power mobility 

equipment have their claims submitted to Medicare. The fact that 87 percent of the 

persons who seek power mobility products from TSS under their Medicare benefits are 

disqualified by the company's screening process is powerful evidence of the company's 

commitment to ensuring that only legitimate claims are submitted to Medicare. 

Error Rate Reporting Does Not Tell the Whole Story 

Medicare error rates for PMDs are presented to the public but the whole story is often 

not told. Based on prior history, Medicare contractors deny nearly all PMD audited 

claims (80-90 percent) only to have a significant amount of these denied claims 

overturned during a lengthy and costly Medicare appeals process. The contractor error 

rates never take into account the denied claims overturned at the redetermination, 

reconsideration and Administrative Law Judge levels of appeal. 

A July 2011 Report issued by the Department of Health and Human Services Office of 

Inspector General Report, entitled Dep't of Health and Human Serv., Office of Inspector 

Gen., OEI-04-09-00260, Most Power Wheelchairs in the Medicare Program Did Not 

5 
57 

Meet Medical Necessity Guidelines (Report), analyzed Medicare claims for power 

wheelchairs submitted in 2007. 10 The Report did not uncover fraud but rather involved 

the second guessing by an auditor of a medical determination made by treating 

physicians. 

While the Report suggested that 61% of claims reviewed in the first half of 2007 were 

medically unnecessary or lacked sufficient documentation to determine medical 

necessity, only 9% of the total claims were deemed to be medically unnecessary. The 

Report determined that a vast majority of beneficiaries within this "medically 

unnecessary" group needed a different type of power wheelchair. In many cases, 

beneficiaries needed a more expensive power wheelchair.ll Further, the Report did not 

take into account that a large number of claims originally denied by a Medicare 

contractor are overturned during the appeals process, a process that often takes over 

eighteen months to complete. 

The Current Prior Authorization Demonstration Program For PMDs Has 

Numerous Issues That Need To Be Addressed 

I now turn to the prior authorization demonstration project underway September 1, 

2012. This demonstration project, representing the first time the agency has required 

prior authorization for DME, would apply to all Medicare power mobility device claims 

in the states of California, Florida, Illinois, Michigan, New York, North Carolina, and 

Texas (roughly 50% of Medicare PMD claims nationwide). Prior authorization would 

require a provider or supplier to submit a claim to a CMS contractor and obtain 

approval prior to delivery of the equipment to the Medicare beneficiary. 

As of the date of this testimony submission, every prior authorization claim we have 

submitted has been denied. A 100% denial rate. Several denials are related to technical 

issues unrelated to medical necessity where the Medicare contractor missed a date that 

was on a fax stamp. 

One denial was for medical necessity and is especially troubling. A female patient with a 

significant progression in the decline of her resting 02 saturation rates (over a 7 month 

period the doctor documented 02 Sat rates at 3 liters declining from 97% to 83% on the 

date of the Face-to-Face exam) was denied because the doctor did not conduct an 02 

saturation rate test at exertion. It would appear that this reviewer was merely following 

some type of check list. Clearly the reviewer did not have the medical background 

required to know that requiring the patient to take an exertion test when her resting 02 

saturation rate is 83% would have placed the her health at significant risk. Since the 

Medicare contractors have placed arbitrary constraints upon what constitutes the 

patient's medical record, this patient may have difficulty getting approved for a PMD 

without yet another trip to the doctor for a second face-to-face exam. Specifically, the 

Medicare contractors will not consider Attestations or Letters of Medical Necessity 

10 Dep't of Health and Human Serv., Office of Inspector Gen., OEI-04-09-00260, Most Power 

Wheelchairs in the Medicare Program Did Not Meet Medical Necessity Guidelines (July 2011). 

!lId. at 20. 

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58 

written by the doctor to explain his/her opinion. 12 Moreover, there is not clear guidance 

as to what entry to a chart note will be accepted if the entry occurs after the face-to-face 

exam. These types of denials, coupled with the constraints on the medical record, 

clearly place the reviewer between the doctor and the patient, detracting from the 

primary task of determining whether the patient needs the equipment. 

Although TSS believes a Prior-Authorization process "done right" can be useful, we have 

several concerns about the program as currently structured: 

• First, we believe that any prior authorization demonstration must be 

signijicantly smaller. Simply put, this is a "bet the benefit" proposal. By 

placing roughly 50% of the nation's Medicare PMD utilization into a prior 

authorization model with no defined "phase in," CMS has ensured that if 

ANYTHING goes wrong, the results will be catastrophic. There is absolutely no 

logical or justifiable reason for the initial demonstration to have a potentially 

negative impact on hundreds of thousands of Medicare beneficiaries who may 

need PMDs to perform activities of daily living. 

• Under the current CMS claims processing system, a beneficiary is provided his 

or her PMD after the physician performs the face-to-face examination. 

Medicare contractors routinely conduct audits and initially deny nearly all the 

claims (80-90 percent). A substantial amount of these denied claims are 

overturned during a lengthy and costly appeals process. The appeals process 

occurs after the patient receives the PMD. 

• Under the prior authorization demonstration project, the 80-90 percent denial 

rate will move to the front end of the process, meaning that beneficiaries will no 

longer have access to the PMD while awaiting the decision of the Medicare 

contractor. With no formal appeals process in place to challenge a Medicare 

contractor's prior authorization denial, beneficiaries will be denied access to 

PMD's up front, and legitimate law abiding health care companies will simply 

go out ofbusiness. 

• Based on our company's experience, the proposed prior authorization 

demonstration is different than other established prior authorization models 

developed by managed care companies and state Medicaid systems. Unlike 

other models, the proposed demonstration project (i) does not have aface-toface examination template and (ii) de-emphasizes the documentation generated 

from the face-to-face examination, putting the government between the doctor 

and the patient. 

12 In a guidance document entitled Power Mobility Device (PMD) Demonstration Operational Guide, 

provided on CMS' website, the agency states "physician attestation letters (e.g. Letters of Medical 

Necessity), are deemed not to be part of a medical record for Medicare payment purposes. Review 

contractors shall NOT consider this type of documentation when making a coverage/coding 

determination." Available at https:/ /www.cms.gov/Research-Statistics-Data-and-Systems/MonitoringPrograms/CERT/Downloads/PMDDemonstrationOperationaIGuide_Vll_o8282012.pdf. 

7 
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• Aface-to-face examination template must be part of any prior authorization 

program. Information recorded by a physician/treating practitioner during 

the face-to-face examination should be presumed to be valid and sufficient to 

determine medical necessity. 

The Size of the Prior Authorization Demonstration is Too Large and Should Be 

Reduced 

Traditionally, a CMS demonstration project tests a payment model on a small segment 

of the Medicare population across a limited geographic area in order to ensure 

beneficiaries are not adversely impacted on a broad scale. For example, CMS conducted 

a two location durable medical equipment competitive bidding demonstration project, 

starting in Polk County (Florida) and then proceeding on to San Antonio. After studying 

the results, Congress initiated the next phase of the bidding program in nine (9) 

Metropolitan Statistical Areas (MSAs) starting in 2011. After 3 years, the next phase of 

the bidding program is set for 2013. 

Sen. Rockefeller, in a July 2012 letter to Secretary Sebelius also expressed great concern 

over the unprecedented size of a proposed Coordinated Care Demonstration Project for 

dual eligible, stating that "this [demonstration] would greatly exceed the size of any 

previous CMS demonstration changing the way Medicare beneficiaries receive care, 

even though this demonstration is extremely complex. While it is clearly important to 

have an adequate sample size in order to evaluate demonstration programs, these 

changes appear to go far beyond what is necessary or appropriate ... ".'3 

If a smaller segment were tested initially, then the problems could be vetted and 

addressed without putting many beneficiaries and suppliers at risk. 

A Face-to-Face Examination Template Is Necessary and Proper Weight Must Be Given 

To Such Template 

A face-to-face clinical examination template is necessary to educate the 

physician/treating practitioner, supplier and beneficiary as to the exact information 

CMS believes is needed to properly document the face-to-face examination. 

The physician/treating practitioner's professional medical judgment is essential to 

ensure that our nation's elderly and disabled receive appropriate medical care. Toward 

that end, a face-to-face examination Clinical Template should be designed to be 

comprehensive and sufficient to determine medical necessity. The prescribing 

physician/treating practitioner should be given the presumption that his/her medical 

judgment determined during the face-to-face exam is valid. Only when a reviewer finds 

clear and convincing evidence to rebut any documented face-to-face examination 

findings of a physician or treating practitioner should a claim be denied. 

13 Letter from John D. Rockefeller IV, Senator from West Virginia, to Kathleen Sebelius, Secretary, U.S. 

Department of Health and Human Services (July 10, 2012). 

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60 

The use of a Clinical Template is absolutely consistent with the documentation practices 

of our nation's healthcare professionals. Physicians/treating practitioners routinely use 

forms/templates to include as part of their medical records. The American Academy of 

Family Physicians (AAFP), for example, has provided many examples of forms for use 

by physicians. A website promoting these forms states, in part, that "[i]f you write 

progress notes by hand, you may find that the forms save you time as well as improve 

your documentation and coding by helping ensure that you capture the relevant 

information in an easily retrievable format."14 Various medical record forms are also 

available to physicians from professional groups as well as private document/form 

companies that publish and sell such forms.'S Similarly, many Medicaid programs 

currently require forms as the means to satisfy coverage for mobility items. 

We note that CMS has developed a "Suggested Electronic Clinical Template Elements of 

a Progress Note Documenting a Face-to-Face PMD Evaluation" (Clinical Template).'6 

While we applaud the agency for taking this first step, this clinical template has not been 

finalized to coincide with the beginning of the prior authorization demonstration project 

for PMDs.'7 CMS recently informed the Office of Management and Budget of the 

following: 

CMS does not believe that a prior authorization requestform is necessary 

for this demonstration.'8 

CMS does not believe that a template for documenting the existing faceto-face encounter is necessary to conduct this demonstration.'9 

We respectfully disagree. A face-to-face examination Clinical Template, designed to 

determine and establish medical necessity, is necessary to establish clarity and 

consistency in the claims processing system and to ensure access to quality health care 

for our nation's elderly and disabled. Moreover, such a template will be important in an 

environment of electronic health records as more physicians move away from paper 

toward the health care system of the future. 

Beneficiaries Must Be Afforded An Appeal Right 

Under the current proposed demonstration, CMS has indicated that the beneficiary may 

resubmit the claim after receiving an initial prior authorization denial. At that point the 

reviewer will have at least 20 days to review the resubmitted claim. If denied again, it 

appears the beneficiary'S only remedy is to keep resubmitting the claim to the same 

14 American Academy of Family Physicians, available at http://www.aafp.org/fpm/2006/0900/p63.html 

15 See, e.g., DocumForms: Innovative Podiatric Forms, available at http://www.dpmforms.com. 

16 Available at https:/jwww.cms.gov /Research-Statistics-Data-and-Systems/Computer-Data-andSystems/ESMD/Downloads/SuggestedPMDElectronicClinicaITemplate.pdf. 

17 The current CMS version of the proposed electronic clinical template spans seven printed pages with 

detailed questions requiring collection of a vast amount of information. Surely, improvements could be 

made to benefit physicians/treating practitioners, suppliers, beneficiaries and the Medicare program. I. CMS-10421 Response to 60-day public comments, Centers for Medicare and Medicaid Services at 11-12 

(May 30,2012). 

19 Id. at 12. 

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Medicare contractor that has denied them access to care in previous instances. This 

process places decisions regarding the beneficiaries' access to care solely in the hands of 

a government contractor with no right of redress at a higher level. 

CMS has not developed an appropriate appeals process that will ensure proper 

safeguards for Medicare beneficiaries. Under the proposed demonstration, a prior 

authorization denial would leave the beneficiary with no right to appeal to a separate 

independent body, thus making the initial contractor the ultimate and only arbiter. 

Beneficiaries and suppliers must retain appeal rights in any system proposed by CMS. 

This includes appeals to a Qualified Independent Contractor, Administrative Law Judge, 

Departmental Appeals Board and judicial review should the beneficiary and/or supplier 

choose to pursue this course. 

Prior Authorization Recommendations 

The American Medical Association (AMA) offered significant input in a June 2011 

document entitled "Standardization of prior authorization process for medical services 

white paper".20 

In their white paper, the AMA highlighted the enormous burden associated with prior 

authorization and the resulting "detrimental health consequences for patients."21 The 

AMA offered the following recommendations: (1) The development of a standard 

uniform prior authorization form that can be submitted to and accepted by all payers; 

(2) Transparency, accessibility and consistent application of prior authorization 

requirements and restrictions, including a standard definition, are needed; (3) 

Transparency, accessibility, and consistent application of utilization review criteria and 

clinical expectations are needed; (4) There should be practical limits on medical record 

requests, which should in any event be reserved to those cases when there is difficulty 

determining medical necessity; (5) Consistent response times and processes with 

respect to prior authorizations or adverse determinations in non-urgent circumstances 

are needed to achieve administrative simplification; and (6) Industry consensus efforts 

should be aggressively pursued to automate the prior authorization processes on behalf 

of patients and physicians to reduce unnecessary costS.22 

We believe the common sense recommendations of the AMA, as well as the other 

recommendations offered in this statement, should be fully implemented prior to 

starting any prior authorization program. 

I appreciate the opportunity to provide this information to the Committee, and we look 

forward to keeping you informed as the prior authorization demonstration progresses. 

20 American Medical Association (June 20n) available at http://www.amaassn.org/resources/doc/psa/standardization-prior-auth-whitepaper.pdf. 

2lId. at4. 

22 [d. at 10-12. 

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INTRODUCTION 

STATEMENT OF 

JEROM~\iPP~lN, MD,AG'Sf 

MMI~YPHY5ItlANAND GERJATRtc:;IAISI 

.I.ITCHFI£lQ FAMU.V PRi\qICE CENTER 

. J.tTCHFtEtD.lI.UNOfS 

ON· BEHALF OF THE 

AlVlERICAN GERIATRIt;S.sO(:IETY 

BEFORE THE SPECIAL COMMITTEE ON AGING 

UNITED STATES SENATE 

SEPTEMBER 19, 2012 

Good afternoon Chairman Kohl, Ranking Member Corker and Members of the 

Committee: 

I would like to express my sincere appreciation to Senator Kohl, Senator Corker and the 

members of the Senate Special Committee on Aging for allowing me the opportunity to provide 

testimony and your willingness to address the issues surrounding the use of Power Mobility 

Devices (PMDs). This is an important and often times complex issue, with implications for 

patient care as well as to our health care system. 
63 

My name is Jerome Epplin, M.D. I am a board-certified family physician and geriatrician 

in litchfield, Illinois - a small rural town with a population of 7,000. When I started my practice 

in 1978, I saw patients of all ages, but as my practice grew, I started to focus increasingly on 

older adults and older people now make up 80% of my practice. I am also an active member 

and fellow of the American Geriatrics Society (AGS), a non-profit organization of over 6,000 

geriatrics health care professionals dedicated to improving the health, independence and 

quality of life of all older Americans. 

Today, I will briefly outline my experience as a physician caring for older patients who 

mayor may not benefit from a Power Mobility Device. 

OVERVIEW 

I offer the perspective of a busy family physician and geriatrician with regard to patient 

evaluations for Power Mobility Devices. Let me first provide you with some background on the 

role of a geriatrician. A geriatrician is a medical doctor who is specially trained to meet the 

unique healthcare needs of older adults. Illnesses, diseases and medications may affect older 

people differently than younger adults and older patients often have multiple health problems 

and take multiple medications. Geriatricians prevent, manage and develop care plans that 

address the special health problems of older Americans, which include evaluating patients for 

Power Mobility Devices. 

For a patient to obtain a PMD, which includes both Power Wheelchairs and Power 

Operated Vehicles (POVs), a physician must support the clinical need for the device. A 

significant number of patients ask about acquiring a motorized wheelchair or power scooter. In 

some cases, the patient or his friends or family believe that he or she would benefit from 

having a PMD. Over the past several years, I noticed that the majority of requests are 

prompted by ads seen on television or from mailings received by the patient from companies 

selling the vehicles. I would estimate that out of every 10 people that come to me, only one to 

two people really need a PMD. On average I send in one to two applications a month for PMDs 

on behalf of patients with a clinically justified need. 

One of the hallmarks of geriatrics care is our focus on preserving function and a key to 

that is keeping people moving. In my practice, I assess an individual's need for a PMD with a 

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64 

focus on how mobile they currently are and whether other assistive devices can help them to 

safely maintain mobility. I also consider the importance of my patients, when feasible, 

maintaining muscle mass and flexibility. 

After I make my clinical evaluation, I talk through what I've discovered with the patient 

and advise him or her as to whether or not I can complete an application. These can be difficult 

conversations but I believe that an important part of caring for people is helping them to 

understand the risks and benefits of treatment decisions. The loss of function often associated 

with aging is due in large part to physical inactivity. The old adage "Use it or lose it" is 

especially pertinent when it comes to muscle mass and flexibility and maintaining maximum 

functionality for older adults. 

Let me give you two examples of patients. The first illustrates the type of patient who 

would benefit from the use of a PMD. In the second example, use of a PMD would not be 

appropriate for the patient portrayed and, in fact, could hinder her mobility. 

PROFILE #1- A Patient that Needs a PMD 

This patient is an 80 year old woman who recently suffered a stroke, with significant 

impairment of her right arm and little to no strength in her right leg. She remains cognitively 

intact and is able to speak and swallow. She has learned to transfer from bed to chair with 

minimal assist. Prior to her stroke, she was very active with no significant impairments. She 

was the caretaker of her husband who is mildly demented and has significant osteoarthritis. 

Evaluation of her house shows that it would be feasible for her to operate a vehicle in her 

home. 

In my opinion, such a patient would benefit from a PMD. She is no longer able to walk 

on her own and does not have a strong support system at home. Without a vehicle, she would 

be a nursing home candidate, and possibly her husband may go with her. As a couple, they will 

be able to maintain their independence. Fiscally, under this scenario, federal and state health 

programs may save money. Use of a PMD would keep the patient safer in her home by 

preventing falls, a significant and often preventable cause of hospitalizations among older 

adults. In addition, the medically appropriate use of the PMD may serve to prevent or delay 

nursing home placement. 

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65 

PROFILE #2 - A Patient that Does Not Need a PMD, but Receives One Anyway 

I will now give an example of a patient whom I feel does not qualify for such a device. 

This is an 80 year old woman who recently suffered a stroke with residual moderate strength of 

her right leg. She has only mild weakness of her right arm. She is able to transfer from bed to 

chair with minimal assistance. After a course of physical therapy she is able to operate a 

standard wheelchair when going in a straight path and her husband is able to help her 

negotiate the turns in their house. In addition she has started using a walker with some 

success. 

I feel this patient is best served with a standard wheelchair and a walker, with more 

physical therapy. If she became dependent on a Power Mobility Device, her residual muscle 

strength could worsen and her risk of falls increase. In addition, her risk of pressure ulcers 

would also increase. 

REQUESTS FOR PMOs & POTENTIAL RISKS 

Many of the requests that I receive from my patients for Power Operated Vehicles are 

easy to evaluate. In many cases, it is obvious to me that a patient does not need a PMD and 

would not qualify under the current Medicare guidelines. Some patients are mistaken in 

believing that it is an easy process to qualify for such a vehicle under Medicare. These patients 

assume that these devices can be used merely as a convenience and not as a necessity. After I 

explain the purposes of a PMD, many of these patients drop their requests, although often 

reluctantly. In most cases, these patients may be harmed by use of a PMD as their physical 

activity would be decreased. 

Occasionally, I suggest to patients that they investigate the possibility of obtaining such 

a vehicle. I do so when I feel the patient would medically benefit from and qualify for the 

device, but either had not considered it, or were too proud to ask for it. 

However, I am often uncertain if my patients qualify for a PMD. In these cases, I take a 

more detailed history from the patients, trying to ascertain if the patients' complaints and 

conditions warrant a motorized vehicle. On the one hand, getting a PMD sometimes allows the 

patient easier access around the home and may delay or prevent nursing home placement. 

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I often use our local physical therapists to help me decide if the patient qualifies for such 

a vehicle. I feel they have more time than I for a thorough evaluation and often have the ability 

to give a more objective evaluation. Our local physical therapists have told me that often a 

representative from a company that sells PMDs will accompany the patient for the evaluation. 

The representative often wants to help fill out the forms, or at least instruct the therapist on 

how to fill out the forms to better ensure that the patient will obtain a Power Operated Vehicle. 

Understandably, the therapists feel pressured in such instances. 

Often a letter instructing me how to favorably fill out the application for a Power 

Operated Vehicle will accompany the application. I see this as an inappropriate attempt to 

circumvent or influence my objectivity and clinical judgment when evaluating the patient. A 

physician with whom I trade calls told me of a patient who was denied by him a request for a 

Power Operated Vehicle. Soon thereafter he received a call from a representative of the 

company telling him that if he changed some of his responses the patient could get such a 

vehicle. The physician refused. 

At least in Illinois, each nursing home is required to fill out a form on each resident every 

three months as to why the residents should not have a PMD. In most cases, the residents do 

not have the mental capabilities to operate such a vehicle safely. Even if the resident has the 

cognitive ability to operate the vehicle, the other residents walking in the facility may not have 

the ability to safely get out of the way of the vehicle. Thus, in addition to potentially decreasing 

the muscle strength of the driver of the vehicle, the other ambulatory nursing home residents 

may be in harm's way. This could also become a potential liability issue for the nursing home. 

IMPACT OF DIRECT TO CONSUMING ADVERTISING 

Unquestionably the patients have been unduly influenced by the ads seen on television 

or received in the mail. They are told that all the doctor needs to do is sign the form and they 

will receive the vehicle. When seen by me in the office, they already have false hope that they 

will qualify for a vehicle. If they are denied, many become very upset. I have had patients leave 

my practice because I denied their request for a vehicle. 

Perhaps, a more responsible approach would be for the ads to emphasize that many 

people who think they qualify for a vehicle may not qualify for one. Also the ads could list some 

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of the features that will cause a patient to be disqualified from obtaining a vehicle. The ads 

could also list some of the side effects of the vehicles, such as worsening muscle weakness. 

In summary, a Power Operated Vehicle can be very helpful and important for some 

disabled people to have. However, far more want these vehicles when, in actuality, they would 

be best served by increasing their physical activity. The ads telling patients that all their doctor 

needs to do is sign their form and they could qualify for a vehicle are misleading and can lead to 

disappointed, disgruntled and angry patients. 

MEDICARE COVERAGE & CRITERIA FOR ELIGIBILITY 

If a doctor submits a written order stating that a patient has a medical need for a PMD, 

Medicare will pay 80% of the Medicare-approved amount. After the patient has paid their Part 

B deductible, they will be required to pay 20% of the Medicare-approved amount. For 

Medicare to cover wheelchairs or scooters, the patient must meet the following conditions as 

outlined by eMS:; 

• You have a health condition that causes difficulty moving around in your home. 

• You're unable to do activities of daily living (like bathing, dressing, getting in or out of a 

bed or chair, or using the bathroom) even with the help of a cane, crutch, or walker. 

• You're able to safely operate, and get on and off the wheelchair or scooter, or have 

someone with you who is always available to help you safely use the device. 

• The dimensions of your home must be able to support the operation of a PMD. 

Furthermore, in order to document the need for a PMD there are a few specific statutory 

requirements that must be met before the prescription is written:;; 

1. An in-person visit between the ordering physician and the beneficiary must occur. This visit 

must document the decision to prescribe a PMD. 

2. A medical evaluation must be performed by the ordering physician. The evaluation must 

clearly document the patient's functional status with attention to conditions affecting the 

beneficiary's mobility and their ability to perform activities of daily living within the home. 

This may be done all or in part by the ordering physician. If all or some of the medical 

examination is completed by another medical professional, the ordering physician must sign 

off on the report and incorporate it into their records. 

3. Items 1 and 2 together are referred to as the face-to-face exam. Only after the face-to-face 

examination is completed may the prescribing physician write the prescription for a PMD. 

This prescription has seven required elements and is referred to as the seven-element order 

which must be entered on the prescription only by the physician. 

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4. The records of the face-to-face examination and the seven-element order must be 

forwarded to the PMD supplier within 45 days of the completion of the face-to-face 

examination 

5. CMS' National Coverage Determination requires consideration as to what other items of 

mobility assistive equipment (MAE), e.g., canes, walkers, manual wheelchair, etc., might be 

used to resolve the beneficiaries mobility deficits. Information addressing MAE alternatives 

must be included in the face-to-face medical evaluation. 

CMS DEMONSTRATION 

As you know, Illinois is one of the seven states where CMS is implementing a Prior 

Authorization process for scooters and power wheelchairs for people with Fee-For-Service 

Medicare. The purpose of the demonstration is to ensure that a beneficiary's medical condition 

warrants the medical equipment under existing coverage guidelines. 

I am hopeful that the demonstration project will better match patients who need the 

power operated vehicle versus those who would be better served by other means. 

However, the information which I have received from CMS about the demonstration 

project is lengthy and not very clear. The thick packet of materials arrived by mail to my office 

not well marked as to its contents. Some physician offices could have unknowingly discarded 

the package before being read or even opened. 

I did review the materials and, in my view, the demonstration needs to be better 

explained to clinicians in a more concise fashion. I am hopeful that the demonstration project 

will deter some vendors in that fraud may be easier to detect. However, abuse and misuse 

would be harder to find as clinicians will still find the application form long and onerous to fill 

out. In addition, we still are influenced by the history given to us by the patient, which has the 

possibility that the patient was coached by a vendor or influenced by the ads as to what to say 

in order to qualify for a powered device. 

RECOMMENDATIONS 

It would be helpful for clinicians if the application form could somehow be streamlined. 

A single application takes at least 30 minutes to fill out after a lengthy examination. For most 

experienced clinicians, it is not difficult to quickly determine if a patient qualifies for a powered 

vehicle. It can also be easy to determine if the patient does not qualify for one. It would be 

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helpful if somehow a narrative would be accepted as an opinion instead of filling out a lengthy 

form. As you may know, there is already a dire shortage of geriatrics healthcare providers and 

the time spent filling out paperwork could be better spent providing care to patients. In 

addition, it would be helpful if the expectations of patients were not unduly elevated by outside 

sources advertisements, for one -- when they are seen for their initial examination. 

CONCLUSION 

This is an important issue as many patients benefit greatly from PMOs. The challenge 

for all of us is to seamlessly get those vehicles to the appropriate patient. From a fiscal 

standpoint, it is also important that Medicare not pay needlessly for vehicles for patients who 

would be better served by more beneficial and less expensive modalities. 

Thank you again for inviting me to participate in today's important hearing. 

Respectfully, 

Jerome Epplin, M.D., FAAFP, AGSF 

Family Physician and Geriatrician 

, Centers for Medicare and Medicaid Services. Medicare's Wheelchair and Scooter Benefit. 

http://www.medicare.gov/publications/pubs/pdf/l1046.pdf 

ii Centers for Medicare and Medicaid Services. PMD Documentation Requirements (Nationwide). 

http://www.cms.gov/Research-Statistics-Data-and-Systems/MonitoringPrograms/CERT /PMDDocumentationReguirementsNationwide.html 

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Statement on Power Wheelchairs 

Senate Special Committee on Aging 

Statement Author: Victor A. Hirth, MD, MHA, FACP, AGSF 

Date: September 4, 2012 

Submitted by: Victor A. Hirth, MD, MHA, FACP, AGSF 

Power wheelchairs are a necessary and important device for older persons with significant mobility 

impairments. However, as the committee has discovered there is a general misunderstanding of both 

the costs and utility of these devices when applied to older disabled persons within the context of 

primary care medical practices, families and health care professionals. This misunderstanding has also 

been perpetuated by direct to consumer advertising which states, you can get your own electric wheel 

chair "at no cost to you." In our Senior Practice of 14 geriatric physicians it is not uncommon to receive 

requests, frequently from sons or daughters of patients, to start an application for a power wheelchair 

or other times we will receive these requests from a durable medical equipment supplier with no 

underlying rational or justification. 

Given the frequency with which power wheelchair applications either were deemed "medically 

unnecessary" or lacked "sufficient documentation," based on the OIG power wheelchair report, there 

clearly needs to be a change in how these requests are approved. For the vast majority of Medicare 

patients the determination that a patient is both eligible and requires a power wheelchair can be both 

anticipated and planned for well in advance of the actual need. The recent demo of a "pre-approval" 

process in several states is a step in the right direction. For those patients in whom the need for a 

power wheelchair is completely unexpected such as major trauma from a motor vehicle accident or a 

sudden major stroke then it would be reasonable to also have an expedited process for those in whom 

not having a powered mobility device would significantly and substantially affect his/her well being and 

ability to be independent. 

Another factor to consider is why has the demand for power wheelchairs increased so significantly in 

the past few years. Based on actuarial data, the rates of disability (based on Activities of Daily living) in 

the US have not changed significantly despite a substantial rise in rates of chronic disease and an aging 

population. Consequently, one would expect that the actual need for these types of devices would only 

reflect the growth in numbers of the population rather than other factors. Clearly, this has not been the 

case. It would be certainly reasonable to study the power wheelchair field to see what factors are 

contributing to the rise in requests for power wheelchairs. Is it that physicians are not properly 

evaluating patients for physical functional mobility problems? Are physicians and therapists not 

adequately treating pain and mobility limitations? Do patients understand the consequences of further 

limiting or restricting their mobility by use of power devices? . Is there sufficient physical and 
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occupational therapy capacity to properly evaluate older persons with mobility problems and are they 

being referred for evaluations when indicated? These questions and others may be identified by further 

study and then an education program could be targeted to the behaviors or beliefs that are driving this 

demand. Overall, this is a challenging problem to which reasonable solutions appear to be within reach. 

These will require an adjustment in the method by which patients are "certified" to need a power device 

as well as the payment mechanism, but also ensuring that patients have a thorough physical functional 

evaluation to address deficits that are amendable to improvement through therapy without the need of 

a powered device.