Medi­care over­pay­ing for erec­tion aids

The Washington Times Weekly - - Politics - BY PHILLIP SWARTS

A gov­ern­ment in­ves­ti­ga­tor found that Medi­care is pay­ing twice the amount for erec­tion as­sis­tance de­vices com­pared to pri­vate providers.

Investigators said the cost was “grossly ex­ces­sive com­pared with the amounts that non-Medi­care pay­ers pay,” and that the fed­eral gov­ern­ment could have saved $86.4 mil­lion dol­lars over the past six years.

And go­ing for­ward, “if Medi­care re­duced pay­ment to the level of non-Medi­care pay­ers, the fed­eral gov­ern­ment could save about $18 mil­lion and Medi­care ben­e­fi­cia­ries could save about $4.5 mil­lion each year,” ac­cord­ing to a re­port by the Health and Hu­man Ser­vices Depart­ment’s in­ter­nal watch­dog, the In­spec­tor Gen­eral.

Tom Schatz, the pres­i­dent of Cit­i­zens Against Gov­ern­ment Waste, said high prices have been a com­mon prob­lem for durable med­i­cal equip­ment like the erec­tion as­sis­tance de­vices.

“Any­time that Medi­care pays twice as much for any piece of equip­ment or any item for which it pro­vides cov­er­age, then tax­pay­ers should be con­cerned,” he said.

The amount Medi­care has been pay­ing for the de­vices — known as vac­uum erec­tion sys­tems (VES), which as­sist men suf­fer­ing from im­po­tence — has in­creased in the six years investigators stud­ied, from $20.6 mil­lion in 2006 to $38.6 mil­lion in 2011.

The Cen­ters for Medi­care and Med­i­caid Ser­vices has done lit­tle to cor­rect the prob­lem since 1999, the IG said, when investigators first pointed out the ex­ces­sive spend­ing. The agency has the power to de­ter­mine that the prices are ex­ces­sive and refuse to pay a cer­tain amount through a “spe­cial pay­ment limit,” but investigators said “CMS has not used that au­thor­ity to ad­just pric­ing for VES” in the past 15 years.

In a re­sponse to the re­port, CMS said they were look­ing into why costs were so high, and were tak­ing steps to re­duce waste.

A spokesper­son for CMS said the agency does not have the au­thor­ity to com­pet­i­tively bid con­tracts for the equip­ment, some­thing that could drive the price down.

“While Medi­care strives to pay ap­pro­pri­ately for items and ser­vices ... CMS does not cur­rently have the au­thor­ity to sub­ject this equip­ment to com­pet­i­tive bid­ding,” a state­ment from the spokesper­son said.

The agency would need con­gres­sional ap­proval, the spokesper­son said, adding that com­pet­i­tive bid­ding across Medi­care could save tax­pay­ers bil­lions of dol­lars over the next decade.

But the IG said there were steps CMS could have taken with­out con­gres­sional ap­proval, such as set­ting a spe­cial pay­ment limit when it deems a par­tic­u­lar item to be far too ex­pen­sive. This would mean that CMS would refuse to pay over a cer­tain amount for an item, some­thing the agency should have done, Mr. Schatz said.

“When CMS knows about some­thing like this and they could es­tab­lish a spe­cial pay­ment limit, they shouldn’t be wast­ing any time,” he said. “Its’ a prob­lem that’s been go­ing on for 14 years and they could have fixed it any­time.”

Investigators found that another agency — the Vet­er­ans Af­fairs Depart­ment — has been pay­ing fair prices and is not wast­ing money. A com­par­i­son be­tween the two showed the VA was pay­ing an av­er­age of $185 for each VES, while CMS was pay­ing nearly dou­ble that amount: $360.

As for the in­evitable eye­brow rais­ing over the gov­ern­ment pay­ing for this equip­ment, Medi­care has long cov­ered sim­i­lar med­i­cal sup­plies like Vi­a­gra, Mr. Schatz said, not­ing it’s dif­fi­cult for peo­ple not suf­fer­ing from the con­di­tion to judge whether or not the gov­ern­ment should help pay for it. Ei­ther way, it’s a sep­a­rate de­bate from the waste it is cur­rently caus­ing.

“The first step is to fix the pric­ing,” he said. “The sec­ond step is to have a more com­pre­hen­sive re­view of which med­i­cal sup­plies or pro­ce­dures would be cov­ered by Medi­care.”

The IG noted that CMS was con­sid­er­ing chang­ing some of its pay­ments for med­i­cal de­vices, which could cut the cost of some items in half, but may or may not af­fect VES.


Tom Schatz of Cit­i­zens Against Gov­ern­ment Waste says high prices are a com­mon prob­lem for med­i­cal equip­ment, in­clud­ing erec­tion as­sis­tance de­vices.

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