Steals on Wheels

Medicare recently launched a durable medical equipment competitive bidding program that could save taxpayers and patients $1 billion a year through lower prices on motorized wheel chairs, oxygen tanks and inhalers -- three major Medicare cost centers often associated with aging or disabled smokers and ex-smokers with chronic obstructive pulmonary disease.

Lower prices and lower co-pays through competition? What a radical concept. It was supposed to roll out nationwide next year.

But according to this story in The Hill, which circulates on Capitol Hill, wheelchair and oxygen tank suppliers have launched a furious campaign to get Medicare to drop the program. In traditional inside-the-beltway fashion, they've hired a lobbying/public relations firm, Quinn Gillespie & Associates, to create an astroturf patient group called the National Coalition for Assistive and Rehab Technology to lobby against the program.

If you're a corporation lobbying against competitive bidding, it's probably best if you have people in wheel chairs with oxygen tanks do it.

Folks on the Hill under pressure from these "lobbyists" might want to take a look at this new report, out today from Inspector General Daniel Levinson's office. He found that Medicare's Part B program, which reimburses physicians and some durable equipment manufacturers for drugs administered in their offices or through devices like inhalers, is getting ripped off by certain users of the program.

Three years ago, Medicare switched to a new pricing system that only paid a five percent margin over the drug manufacturer's price for drugs sold under Medicare Part B. It was called the Average Sales Price system, and it pretty much knocked the profit out of drugs administered in doctors' offices.

But the equipment makers apparently are a different story. The OIG looked at all the drugs purchased by Medicare under Part B, and found that 44 were sold to the agency at greater than the five percent margin required by law. In just one quarter, it cost the agency $16 million in excess charges. But just one drug, generic albuterol contained in inhalers, accounted for fully $9 million of those excess charges. That's a cool $36 million a year, or 14 percent of the quarter billion that Medicare spent last year on the drug.

Hill staffers should print out copies of the OIG report. And when those wheelchair-bound ex-smokers on oxygen hit their offices, they should tell them to take it back to Quinn Gillespie. The "lobbyists" should also be instructed to tell the durable equipment makers that it's time to get used to competitive bidding, and to start charging "us" a fair pass along price for drugs.

Posted by gooznews at May 6, 2008 05:56 PM