September 09,2003

Grassley Investigates Soaring Medicare Payments for Motorized Scooters, Wheelchairs

WASHINGTON – Sen. Chuck Grassley, chairman of the Committee on Finance, isinvestigating whether Medicare is paying too much for motorized scooters and wheelchairs. SoaringMedicare costs for these items sparked Grassley’s concern.

“Any Medicare beneficiary who legitimately needs a motorized wheelchair should get one,” Grassley said. “But if companies are overselling their wheelchairs, or if doctors are approving these devices with too little scrutiny, then there’s a problem. We have to get a handle on what’s happening. Costs are out of control, and taxpayers are footing the bill.”

Grassley has taken a series of steps to investigate motorized scooter and wheelchair sales:

• Written to several motorized wheelchair companies to seek documents and information about their sales and Medicare billing practices, among other matters.

• Written a letter to Tom Scully, administrator of the Centers for Medicare and Medicaid Services, asking for an update of his progress in cracking down on any unwarrantedmotorized wheelchair payments from Medicare.

• Asked the Department of Health and Human Services Inspector General to examine the increase in electric scooters and motorized wheelchairs paid for under the Medicare program, as well as any increase in their market price since 1998.

• Asked the Federal Trade Commission to look into the representations being made bymotorized wheelchair companies to Medicare recipients to ensure the integrity of therepresentations being made in print, as well as on television and radio.

The text of Grassley’s Sept. 4, 2003, letter to Scully follows.

September 4, 2003

VIA FACSIMILE: (202) 690-8168

Mr. Thomas Scully
Centers for Medicare & Medicaid Services
Department of Health & Human Services
200 Independence Avenue, SW Room 339G
Washington, DC 20201

Dear Mr. Scully:

I read with great interest your intent to crack down on improper electric wheelchair salesthroughout the United States. Over the past number of months, my staff has been examining thisissue. It is apparent that a few unscrupulous companies have entered the arena of electric scootersand motorized wheelchairs and may be taking advantage of the Medicare program to increase salesand profits.

Medicare spent $10 million on electric scooters in 1999 and by 2002 Medicare spent $18million – a remarkable 80 % increase. During that same time frame, Medicare spent $289 millionon motorized wheelchairs and that figure rose to $845 million in 2002. Let me state unequivocally,there are some Medicare recipients who legitimately need an electric scooter or motorizedwheelchair due to a medical condition or physical disability. However, the meteoric rise in costsincurred over the past few years suggests strongly that there may be a problem here – and a big one.

Coupled with the increase in Medicare funds, I am equally troubled by some of theadvertisements and claims made by some companies. In that regard, enclosed is an advertisementreceived by one of my constituents in Waterloo, Iowa. A review of this document brings forth anumber of interesting points and representations that immediately caught my eye. For example, theadvertisement states that one free phone call can pre-qualify an individual for Medicarereimbursement and goes on to say that “we take care of everything.” Perhaps the most interestingrepresentation made in the enclosed advertisement is the following:

“Free scooter guarantee! If we pre-qualify you for a scooter or power chair and Medicaredenies your claim, we’ll give you a new scooter or power chair absolutely FREE!”

We have also been paying attention to the extensive television advertising campaign initiatedby those in the scooter business. These advertisements, along with the mailer discussed above, bringto mind that old saying, “if it looks too good to be true it probably is.”

Accordingly, and by this letter, I am requesting that the Department of Health and HumanServices, Office of the Inspector General examine the increase in electric scooters and motorizedwheelchairs paid under the Medicare program, as well as any increase in their market price since1998. By this letter I am also requesting that the Federal Trade Commission look into therepresentations being made by companies to Medicare recipients to ensure the integrity of therepresentations being made in print, as well as on television and radio.

I appreciate your intent to crack down on improper sales in the Medicare program, pleaseadvise me about any progress you have made. Thank you in advance and should you have anyquestions regarding this letter, please do not hesitate to contact my staff.


Charles E. Grassley

cc. Dara Corrigan, Acting Principal Deputy, HHSOIG
Tim Muris, Commissioner Federal Trade Commission